Writ courts will not disturb contract rescission for prolonged delay absent demonstrated arbitrariness.

The petitioner was awarded a contract in March 2011 to execute underground drainage works at T. Narasipura.

The original completion period was 15 months, and the respondents stated that the work remained incomplete even after an extension up to 31 July 2014.

The petitioner attributed delay to, among other things, non-handover of land and a shortage of sand, and claimed that approximately 80% of the work had been completed; the respondents disputed this and stated that only 58.92% was complete.

In May 2015, the Board kept an earlier rescission proposal in abeyance and allowed a further four months for completion.

A communication in June 2015 recorded that the petitioner had not resumed work despite that opportunity.

The respondents rescinded the contract on 5 October 2016 and issued a short-term tender for the balance work on 5 November 2016.

The petitioner challenged those actions and sought to restrain encashment of its performance bank guarantees.

An interim order protecting the guarantees had been made on 6 September 2016, with no material showing its extension.

1. Whether the rescission of the contract was so arbitrary or otherwise unlawful as to warrant interference under Article 226, particularly given the petitioner’s pending request for an extension of time and its explanation for delay.

2. Whether the short-term tender for completion of the balance work should be set aside as a consequence of the rescission.

3. Whether the interim protection against encashment of the performance bank guarantees prevented the respondents from acting on the contract’s rescission.

The Court applied the principles governing judicial review of administrative action under Article 226 of the Constitution.

In the context of a public contract, interference with a decision to rescind a contract and make alternative arrangements for completing public work is warranted where the decision is shown to involve patent arbitrariness, mala fides, violation of contractual stipulations, or breach of natural justice.

An interim order protecting bank guarantees during a proceeding does not, without more, confer a vested right to continue the contract or bar the authority from independently deciding questions of contractual performance.

No statutory provision or judicial precedent was cited.

The Court considered the prolonged delay beyond both the original and extended completion periods, the Board’s earlier decision to defer rescission and grant an additional four months, and the subsequent communication indicating that the petitioner had not resumed work.

The petitioner’s claims concerning land and sand shortages, and the competing estimates of work completed, raised disputed factual questions that the Court declined to determine in writ proceedings.

In that context, the later extension request did not establish a ground for interference, given the prior opportunities afforded to the petitioner.

The record did not demonstrate any of the identified grounds for judicial intervention, and the public interest in completing the drainage project supported proceeding with the balance work.

The earlier interim order concerning the guarantees did not alter that conclusion or prevent an independent decision on the contract.

Both writ petitions were dismissed and any interim order was vacated.

The Court clarified that its observations would not prejudice any independent contractual claim available to the petitioner in accordance with law.