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2021 (3) TMI 249 - Tri - Insolvency and BankruptcyExtenstion of tenure of contract for transportation by the RP during CIRP - Seeking to declare that the steps taken by the Resolution Professional for inviting fresh tenders with dubious nature without following due process of law is arbitrary, illegal and the same is not in accordance of law - seeking to declare that all the steps taken by the Resolution Professional in inviting fresh tenders is vitiated by law and the same is liable to be set aside in the interest of justice - HELD THAT:- It is a fact on record that the Applicant herein was awarded a contract/work order for transportation of coal to the Corporate Debtor vide work orders for unit-I & II linkage coal vide order No. 4100124570, 4100124571 dated 18.02.2019 and e-auction coal work order for Unit-I and II vide order No. 4100124663, 4100124666 dated 07.03.2019 respectively. Now that the Applicant herein has filed the instant Application seeking relief against the action of Resolution Professional for calling of bids and seeking quotation for award of contract of supply for the year 2020-21. From a bare reading of the above clause relating to contract validity, it is clear that the contract is not automatically determinable by passing of time of one year. A plain reading given to the clause i.e., "extendable to another year i.e., from 01.04.2020 to 31.03.2021 based on your performance, unless terminated earlier in accordance with clause 6 of general terms and conditions" indicates that the contract is extended by default for one more year i.e., from 01.04.2020 to 31.03.2021 subject to fulfillment of two essential conditions (1) Performance of the Applicant (2) earlier termination in accordance with clause 6 of general terms and conditions. Thus the contract shall be extended, if it is not terminated earlier and if the performance of the contractee is satisfactory. Thus satisfactory performance and non-termination leads to automatic extension of the contract - In the instant case, the Resolution Professional has extended the tenure of the Applicant by a period of 3 months, in my opinion, obviously the Resolution Professional would not have done so, if the performance of the Applicant was not satisfactory. Therefore, it is clearly indicates that the performance of the Applicant is satisfactory. Thus both the ingredients i.e., satisfactory performance and non-termination which are essential pre-conditions for an automatic extension of the contract for a period of another one year are present here. The steps proposed to be taken by the Resolution Professional such as inviting fresh tenders etc., are not warranted - Application disposed off.
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