Contract Terminated By An Awardee Following Due Process Cannot Be Subsequently Novated By Awardee Itself: Rajasthan High Court

The Court also held that an administrative order cannot set at nought a duly considered decision or adjudicated order which had bearing on the civil or business rights of contracting parties. The Rajasthan High Court has ruled that a contract terminated by an awardee following due process cannot be novated by the awardee itself. It was contended that novation of a terminated contract while terminating an earlier contract instituted after following due process, could not take place based on a telephonic conversation by passing an unreasoned administrative order. Contract once cancelled by the awardee cannot be revived The Court opined that once a contract was terminated by the awardee after following due process, it could not be normally revived by the awardee itself. The same can normally not be revived even by the court, Appellate Authority or Arbitrator, let alone by the Managing Director itself of by the Chairman of the awardee company.” Furthermore, the Court referred to the case of Indian Oil Corporation Ltd. vs. Amritsar Gas Service & Ors., in which the Supreme Court had said that arbitrator, appellate authority or any civil court could not novate the contract.