Chattisgarh High Court
M/S Niranjan Lal Agrawal vs South Eastern Coalfiedls Limited on 9 April, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
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2026:CGHC:16346-DB
Digitally signed by
MOHAMMED
AADIL KHAN
NAFR
Date: 2026.04.13
20:20:06 +0530
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 1744 of 2020
1 - M/s Niranjan Lal Agrawal A Proprietorship Firm Having its Office At
Tulsi Marg, Korba, Through its Sole Proprietor Raj Agrawal, S/o Late
Niranjan Lal Agrawal, Aged 38 Years, R/o House No. 3, Tulsi Marg,
Korba, District Korba Chhattisgarh, District : Korba, Chhattisgarh
... Petitioner
versus
1 - South Eastern Coalfiedls Limited A Miniratna Company Subsidiary of
Coal India Limited, Through its Chairman-Cum-Managing Director,
SECL Bhawan, Seepat Road, Sarkanda, Bilaspur, District Bilaspur
Chhattisgarh, District : Bilaspur, Chhattisgarh
2 - Chief General Manager, South Eastern Coalfields Limited,
Bishrampur Area, Aamgaon Colliery, Tahsil Bishrampur, District Surguja
Chhattisgarh, District : Surguja (Ambikapur), Chhattisgarh
3 - General Manager, South Eastern Coalfields Limited, Bishrampur
Area, Aamgaon Colliery, Tahsil Bishrampur District Surguja
Chhattisgarh, District : Surguja (Ambikapur), Chhattisgarh
4 - Sub Area Manager/ Engineer- In-Charge, South Eastern Coalfields
Limited, Aamgaon Sub- Area, Bishrampur Area, Aamgaon Colleriy,
Tahsil Bishrampur, District Surguja Chhattisgarh, District : Surguja
(Ambikapur), Chhattisgarh
... Respondents
(Cause-title taken from Case Information System)
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For Petitioner : Mr. Manoj Paranjpe, Senior Advocate
with Mr. A.D. Diwan, Advocate.
For Respondents/SECL : Mr. Vivek Verma, Advocate.
Hon’ble Shri Ramesh Sinha, Chief Justice
Hon’ble Shri Ravindra Kumar Agrawal, Judge
Order on Board
Per Ramesh Sinha, Chief Justice
09-04-2026
1. By this petition under Article 226 of the Constitution of India, the
petitioners seek for the following relief(s):
“10.1 The Hon’ble Court may kindly be pleased to
call for the entire records leading to passing of the
impugned order Annexure P-1, for the kind perusal
of this Hon’ble Court.
10.2 The Hon’ble Court may further kindly be
pleased to quash the order impugned Annexure P-1
dated 09/10.04.2020 passed by the respondent
No.1.
10.3 The Hon’ble Court may also kindly be pleased
to direct the respondents to pay an amount of
Rs.64,02,397-11 ps. along with interest at the rate
of 18% per annum from the date of issuance of
work order i.e. 17.08.2014 till the date of actual
release.
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10.4 Any other relief(s)/ order(s)/ direction(s) in
favour of petitioner, which this Hon’ble Court may
deem fit and proper in the facts and circumstances
of the case, in the interest of justice.
10.5 Cost of the petition.”
2. The brief facts of the case are that, the petitioner has filed the
present writ petition challenging the order dated 09/10.04.2020,
whereby the respondent imposed a recovery of Rs.6,06,13,763.96. The
respondent had floated a tender on 28.01.2014, and the petitioner,
being the successful bidder, was awarded the work. Although the
petitioner commenced the work and had already deposited the requisite
earnest money, bank guarantee, and performance security, no formal
agreement was executed between the parties. Subsequently, disputes
arose, leading to termination of the petitioner’s work, and the
respondent re-tendered parts of the same work at the petitioner’s risk
and cost. The petitioner contends that the impugned recovery order is
arbitrary and illegal, as it was passed without properly considering the
petitioner’s objections and in violation of earlier court directions
requiring a reasoned (speaking) order. It is further alleged that the
recovery has been calculated by invoking contractual clauses, including
Clause 9.2(b) of the general terms and conditions, which were not in
existence at the time of the tender, thereby resulting in unjust and
double penalization. The petitioner also alleges mala fide conduct on
the part of the respondent, highlighting that multiple tenders for the
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same work were issued shortly after awarding it to the petitioner, and
that the respondent failed to execute the agreement despite the
petitioner’s readiness. It is argued that in the absence of a formal
agreement, the respondent could not impose such a substantial
recovery and was at best entitled to forfeit the earnest money.
Aggrieved by these actions, the petitioner has approached the Court
seeking quashing of the impugned order.
3. Learned counsel appearing on behalf of the petitioner submits that
the impugned order dated 09/10.04.2020 is wholly unsustainable in law,
being arbitrary, unreasoned, and in direct violation of the directions
issued by this Hon’ble Court in W.P.(C) No.338/2017. The Court had
categorically directed the respondents to explain the accounts, consider
the petitioner’s objections, and thereafter pass a reasoned and
speaking order. However, the respondents have failed to deal with the
petitioner’s objections and have passed the impugned order without
assigning any reasons, thereby violating the principles of natural justice.
On this ground alone, the impugned order deserves to be set aside. It is
further submitted that the very basis of the recovery is erroneous and
contrary to the contractual terms. The respondents have invoked Clause
9.2(b) of the general terms and conditions, which admittedly did not
exist at the time of issuance of the tender, and have simultaneously
applied Clause 9.6 of the same, resulting in impermissible double
penalization. The calculation of the recovery amount is arbitrary and
inflated, including unjustified additions such as diesel price escalation,
which is not applicable in the petitioner’s case and is inconsistent with
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the treatment given to other contractors. Such action is clearly
discriminatory and violative of Article 14 of the Constitution. Moreover,
the conduct of the respondents is vitiated by mala fide intent. Despite
the petitioner’s readiness, the respondents failed to execute the
agreement and, in the meantime, issued multiple tenders for the same
work, ultimately terminating the petitioner’s contract. In the absence of a
concluded agreement, the respondents could not have imposed such a
drastic penalty and were at best entitled to forfeit the earnest money as
per the tender conditions. The respondents have also taken inconsistent
stands regarding the alleged dues, which further demonstrates
arbitrariness. In light of these facts, the impugned order is liable to be
quashed.
4. On the other hand, learned counsel for the SECL/respondents
opposes the submissions made by the learned counsel for the petitioner
and submits that, the dispute herein arises purely out of contractual
obligations under a tender agreement, involving disputed questions of
fact regarding completion, quality, measurement and verification of
work, which cannot be adjudicated in writ jurisdiction under Article 226
of the Constitution. It is a settled principle that writ courts should not
ordinarily interfere in contractual matters where efficacious alternative
remedies such as arbitration or civil suit are available. He further
submits that as there is no arbitrary or mala fide action on part of the
respondents but only a procedural and contractual compliance
requirement, hence, the present writ petition seeking monetary relief is
not maintainable and is liable to be dismissed.
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5. We have learned counsel for the parties, perused the material
annexed with the petition.
6. The Hon’ble Supreme Court in the case of Tata Motors Limited v
The Brihan Mumbai Electric Supply & Transport Undertaking
(Best) and Others passed in Civil Appeal No. 3897 of 2023 vide
judgment dated 19.05.2023 held as follows :
“48. This Court being the guardian of fundamental rights
is duty-bound to interfere when there is arbitrariness,
irrationality, mala fides and bias. However, this Court has
cautioned time and again that courts should exercise a
lot of restraint while exercising their powers of judicial
review in contractual or commercial matters. This Court is
normally loathe to interfere in contractual matters unless
a clear-cut case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that today
many public sector undertakings compete with the private
industry. The contracts entered into between private
parties are not subject to scrutiny under writ jurisdiction.
No doubt, the bodies which are State within the meaning
of Article 12 of the Constitution are bound to act fairly and
are amenable to the writ jurisdiction of superior courts but
this discretionary power must be exercised with a great
deal of restraint and caution. The courts must realise
their limitations and the havoc which needless
interference in commercial matters can cause. In
contracts involving technical issues the courts should be
even more reluctant because most of us in Judges’ robes
do not have the necessary expertise to adjudicate upon
technical issues beyond our domain. The courts should
not use a magnifying glass while scanning the tenders
and make every small mistake appear like a big blunder. In fact, the
courts must give “fair play in the joints” to the
government and public sector undertakings in matters of
contract. Courts must also not interfere where such
interference will cause unnecessary loss to the public
7exchequer. (See: Silppi Constructions Contractors v.
Union of India, (2020) 16 SCC 489).
52. Ordinarily, a writ court should refrain itself from
imposing its decision over the decision of the employer
as to whether or not to accept the bid of a tenderer
unless something very gross or palpable is pointed out.
The court ordinarily should not interfere in matters
relating to tender or contract. To set at naught the entire
tender process at the stage when the contract is well
underway, would not be in public interest. Initiating a
fresh tender process at this stage may consume lot of
time and also loss to the public exchequer to the tune of
crores of rupees. The financial burden/implications on the
public exchequer that the State may have to meet with if
the Court directs issue of a fresh tender notice, should be
one of the guiding factors that the Court should keep in
mind. This is evident from a three-Judge Bench decision
of this Court in Association of Registration Plates v.
Union of India and Others, reported in (2005) 1 SCC
679.
53. The law relating to award of contract by the State
and public sector corporations was reviewed in Air India
Ltd. v. Cochin International Airport Ltd., reported in
(2000) 2 SCC 617 and it was held that the award of a
contract, whether by a private party or by a State, is
essentially a commercial transaction. It can choose its
own method to arrive at a decision and it is free to grant
any relaxation for bona fide reasons, if the tender
conditions permit such a relaxation. It was further held
that the State, its corporations, instrumentalities and
agencies have the public duty to be fair to all concerned.
Even when some defect is found in the decision-making
process, the court must exercise its discretionary powers
under Article 226 with great caution and should exercise
it only in furtherance of public interest and not merely on
the making out of a legal point. The court should always
keep the larger public interest in mind in order to decide
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whether its intervention is called for or not. Only when it
comes to a conclusion that overwhelming public interest
requires interference, the court should interfere.
54. As observed by this Court in Jagdish Mandal v.
State of Orissa and Others, reported in (2007) 14 SCC
517, that while invoking power of judicial review in
matters as to tenders or award of contracts, certain
special features should be borne in mind that evaluations
of tenders and awarding of contracts are essentially commercial
functions and principles of equity and natural
justice stay at a distance in such matters. If the decision
relating to award of contract is bona fide and is in public
interest, courts will not interfere by exercising powers of
judicial review even if a procedural aberration or error in
assessment or prejudice to a tenderer, is made out.
Power of judicial review will not be invoked to protect
private interest at the cost of public interest, or to decide
contractual disputes.”
7. Upon perusal of the judgment passed by the Hon’ble Supreme
Court in Tata Motors Limited (Supra), as the Apex Court has
categorically held that judicial review in contractual and tender matters
must be exercised with great restraint and only in cases where clear
arbitrariness, mala fides, bias or irrationality is demonstrated, in the
present case, no such exceptional circumstance is made out, and the
dispute raised by the petitioner pertains purely to recovery of alleged
contractual dues, which involves factual determination regarding part of
completion of work, compliance of contractual conditions,
measurements and verification, and therefore falls within the domain of
a civil dispute. The scope of judicial review in contractual and tender
matters is limited and the Court ordinarily does not interfere unless the
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decision-making process is found to be arbitrary, irrational or contrary to
law, which is not established in the present case. Hence, in light of the
settled legal position, the present petition seeking quashment of
recovery order under a contract is misconceived, devoid of merit, and
liable to be dismissed, leaving the petitioner to avail appropriate
alternative remedies available under law.
8. Therefore, the present petition being devoid of merits deserves to
be and is hereby dismissed.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
Aadil