ORDER
Shantanu Kemkar, J.
1. The petitioner claims to be proprietor of M/s Swastik Coal Agency engaged in the business of purchase and sale of coal.
2. On 17.3.1998 a notice inviting tender (Annexure P-1) was issued by the respondents no. 2, 3 and 4 the M.P. State Electricity Board (for short `Board’) to sale one lakh cubic meters of Mill Reject Coal, pursuant to which the petitioner submitted his tender and offered to purchase the aforesaid entire quantity of one lakh cubic meters of Coal @ Rs. 505.55 per cubic meter. His tender was accepted by the Board vide letter dated 5.9.1998 (Annexure P/2) on the terms and conditions mentioned therein. An agreement was also entered into between the petitioner and the Board to that effect on 3.11.1998 (Annexure P/3).
3. As per the terms and conditions of the agreement, the petitioner was required to lift the entire quantity of coal within a period of 16 months starting w.e.f. 20.11.1998 including rainy season in equal monthly quantity of 6250 cubic meters from the site of the Board on advance payment of the monthly quantity. The petitioner was also required to deposit a sum of Rs. 50.55 lakhs with the Board as security in the form of Bank guarantee. The petitioner, accordingly, furnished two bank guarantees for Rs. 25, 27, 500/- each.
4. Since the petitioner could not be able to lift the monthly fixed quantity of 6250 cubic meters of coal and could lift only the partial quantity of coal of the quota of first four months, that too belatedly, the Board issued letters dated 15.2.1999 (Ann. R-24) 22.4.1999 (Ann. R-25) 1.5.1999 (Ann. R-26) 3.6.1999 (Ann. R-27) to the petitioner asking him to lift the entire unlifted quantity of the coal till that period with a warning that failing which suitable action shall be taken against him. However, inspite of this the petitioner could not lift the coal and breached the terms of the contract. As a result vide order dated 2.3.2000 (Annexure P/12-A) the Board informed the petitioner that due to the breach committed by him the contract is rescinded and the security amount deposited by him is liable to be forfeited.
5. Thereafter on petitioner’s request to lift the unlifted coal in three monthly installments he was allowed to lift the same in three sub installments, but as the petitioner could not avail the benefit the Board vide letter dated 16.1.2001 (Ann. R-23) forfeited the security by encashing the Bank Guarantees. In the present petition the question is in regard to the encashment of one of the Bank Guarantees for the sum of Rs.25,27,500/-. Feeling aggrieved by the order dated 2.3.2000 (Annexure P-12-A) and the letter dated 16.1.2001 (Annexure R-23), the petitioner has filed this petition. Though in the petition the petitioner has claimed various reliefs, however, during the course of the arguments learned senior counsel for the petitioner restricted the reliefs to the extent of issuance of writ in the nature of mandamus commanding the Board to refund the amount of security in the sum of Rs.25,27,500/-forfeited by the Board.
6. Shri V. S. Shroti, learned senior counsel for the petitioner contended that after issuance of the letter dated 2.3.2000 (Annexure P-12 A) by which petitioner’s contract was rescinded, the Board issued letters dated 10.3.2000 (Annexure P-13), 13.3.2000 (Annexure P-14), 14.3.2000 (Annexure P-15) & 18.3.2000 (Annexure P-16) to the petitioner directing him to deposit the third installment and lift the coal, thereby the Board has waived the rescission of contract by conduct. He argued that the Board also directed the petitioner to extend the validity period of the Bank Guarantees and this conduct of the Board also amounts to waiver of the order dated 2.3.2000 (Annexure P/12-A) by which the contract was rescinded. He submitted that before rescinding the contract no notice was issued to the petitioner and as such the action of the Board is contrary to the terms of the contract and is violative of the principles of natural justice. He, therefore, submitted that the forfeiture of the security amount of Rs. 25,27,750/-vide order dated 16.1.2001 (Annexure R-23) on account of rescission of contract is illegal and is not sustainable.
7. Shri M.L. Jaiswal, learned senior counsel appearing for the Board has contended that the petitioner failed to lift the monthly quantity of the coal and committed breach of the terms of the contract, in the circumstances the Board has rightly rescinded the contract and has rightly forfeited the security deposit of the petitioner. He referred to the Clauses 3, 7, 9, 15 & 16 of the contract and also to the chart Annexure-R-2, R-28 and R-29 to show as to how the petitioner miserably failed to lift the monthly quantity of coal and to deposit the monthly installments. He argued that in the first four months commencing from 20.11.1998 the petitioner could lift only 3793.33, 4956.61, 3944.28 and 5591.99 cubic meters of coal respectively as against 6250 cubic meters of coal which was required to be lifted in each month. He submitted that the petitioner failed to lift the coal even though he was granted the relaxation of lifting the coal of the period 20.1.2000 to 19.2.2000 in three sub installments. In the circumstances, the Board was left with no option but to forfeit the security amount. He further submitted that the letters dated 10.3.2000 (Annexure-P/13), 13.3.2000 (Annexure P/14), 14.3.2000 (Annexure P/15) & 18.3.2000 (Annexure P/16) respectively were issued to the petitioner to deposit the third sub installment of the month 20.1.2000 to 19.2.2000 and lift the unlifted quantity of coal was granted and by these letters no extension of time to lift the monthly quota was granted. According to him, giving this facility to the petitioner cannot be construed to be waiver of the rescission of contract and cannot take away the right of the Board to forfeit the security amount. He further submitted that since the validity of the Bank Guarantees were due to expire the Board directed the petitioner to renew the same and by such letter directing the petitioner to renew the period of Bank Guarantees it cannot be construed that the Board has waived the rescission of contract or waived the right to forfeit the security amount. He argued that in view of Clause 16 of the terms of the contract (Annexure P-2) no prior notice to the petitioner for rescission of the contract was necessary.
8. Having heard the learned senior counsel for the parties, the question involved in this petition is whether the Board could have rescinded the contract without issuance of notice to the petitioner and whether the Board by its conduct has waived the rescission of contract and thereby could not have forfeited the petitioner’s security deposit.
9. Undisputedly, the petitioner was required to lift one lakh cubic meter of Mill Reject Coal in 16 equal monthly installments of 6250 cubic meters w.e.f. 20.11.1998 by paying advance price for the said monthly quantity. The petitioner after lifting part of the coal for first four months of the monthly quantity fixed requested for lifting the balance of the left over of the said period in three sub installments, however, even after extending the said facility to the petitioner he failed to lift the coal by paying the amount of the third sub instilment.
10. Clause 16 of the contract which is relevant for deciding the question involved in this petition reads thus:
16. If the work executed by the contractor is found unsatisfactorily or in case of improper execution of the work by the contractor or in any case in which the contractor commits a breach of any terms of this contract or abandon the work wholly or partly for any reasons or fails to carry out any work which he is bound to carryout under the terms of the contract, the Board or the Engineer-Incharge on behalf of the Board shall be empowered to adopt any of the following without prejudice to any other that may occur to the Board under this contract.
(i) To rescind the contract (of which rescission notice in writing to the contractor under the hand of Engineer-Incharge shall be conclusive evidence) in which case, the Security deposit of the contractor shall stand forfeited and be absolutely at the disposal of the Board without prejudice to the Board to recover any further amount by way of damage.
(ii) If Engineer-Incharge/Board adopts any of the above cources the contractor shall be in no case whatsoever have any claim for compensation for any loss sustained by him by reasons of his having purchased or procured any material or either into any engagement or made any advance on account of or with a view to the execution of the work or the performance of the contract.
(iii) In case the contract shall be rescinded under the provision aforesaid the contractor shall not be entitled to recover or to be paid any sum for any work therefore actually performed under this contract, unless and until the Engineer- Incharge will have certified in writing the performance of such work and value payable in respect thereof, and he shall only be entitled to be paid the value so certified.
11. On going through the aforesaid Clause 16 of the agreement it is clear that to rescind the contract the only requirement is issuance of rescission notice in writing to the Contractor under the hand of Engineer-in-Charge and such rescission notice shall be conclusive evidence of rescission of contract. Clause 16 also provides that on rescission of contract the security deposit of the contractor shall stand forfeited. In the present case before rescission of the contract the petitioner was issued various letters (Annexure R-24 to R-27) directing him to deposit the balance amount and to lift the balance quantity of the coal of the said period. On petitioner’s failure the order dated 2.3.2000 was issued in writing by the Engineer-in-Charge and his contract was rescinded. Again he was directed to deposit the third sub installment of which facility was already extended to him. However, inspite of several letters (Annexure P-13, P-14, P-15 and P-16) the petitioner could not deposit the third sub installment and lift the balance quantity of coal.
12. In view of the aforesaid background, it is very clear that the petitioner breached the terms of the contract and failed to lift the agreed monthly quantity of coal. Merely because after rescission of the contract the Board had given facility of lifting the balance unlifted quantity of coal by paying the third sub installment, it would not amount to waiver of the rescission of contract. In order to constitute waiver there should be conscious, voluntary and intentional relinquishment or abandonment of a known existing legal right, advantage, benefit, claim or privilege, which except for such a waiver the party would have enjoyed. The agreement between the parties in the present case is that the petitioner was required to lift one lakh cubic meters of coal in 16 months in 16 equal monthly fixed quantity of coal. The petitioner utterly failed to comply its obligation of lifting the monthly fixed quantity of coal from the very beginning. In the circumstances if the Board has shown some latitude at the initial stage of the contract by allowing the petitioner to lift the balance quantity of coal of the initial four months period it cannot be regarded as waiver of the rescission of contract. At no point of time and by not a single communication the Board had ever even impliedly expressed its willingness to withdraw the rescission of contract or to grant any relaxation to the petitioner in lifting the monthly fixed quantity of coal by extending the period of 16 months. The letters of the Board by which the petitioner was allowed to lift the coal was for allowing the petitioner to lift the coal of the months which had already passed and the quantity of which period the petitioner could not lift. The petitioner was never extended the benefit of lifting the further quantity of coal of the subsequent months after the contract was rescinded. In this view of the matter there is no distinct and intentional act done by the Board so as to hold that the Board had waived the rescission of the contract. Similarly if the Board had directed the petitioner to renew the Bank Guarantees which were about to expire, it cannot be said that the Board had waived the right of rescission of contract and the right to forfeit the security amount.
13. Although in the terms of the contract there is no provision or requirement of issuance of prior notice before rescission of the contract and the only requirement is that the rescission notice should be in writing, signed by Engineer-In-Charge, still on going through the various letters (Annexures P24 to P-27) issued by the Board before rescission of the contract it is revealed that the petitioner was warned time and again to fulfill the terms of contract by lifting the coal. Thus, there is no violation of the terms of the contract by the Board in passing the order of rescission of the contract and in forfeiting the security amount. The order of rescission and the order of forfeiture of security amount are perfectly in tune with the terms of the contract and in view of the letters (Annexure P-24 to P-27) issued to the petitioner by the Board there is no violation of principles of natural justice on the part of the Board.
14. In view of the foregoing discussion the petition deserves to be and is hereby dismissed. No order as to costs.