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MOUSHUMI BHATTACHARYA
Radhey Shyam Pandey – Appellant
Versus
Union Of India – Respondent
JUDGMENT
Moushumi Bhattacharya, J. - The petitioner seeks a direction on the North Eastern Railway to withdraw a letter of termination dated 31st March, 2021 issued by the Senior Divisional Commercial Manager, being the respondent no. 4 herein. By the said impugned communication, the petitioner's security deposit of Rs.23,02,661/- was forfeited and the petitioner was restrained from taking part in the tender of the North Eastern Railway for the next two years. The impugned letter referred to Scenario-3 of a letter dated 3rd December, 2020 which provides for termination of the contract between the Railways and the Leaseholder (petitioner).
2. The petitioner emerged as the successful bidder for a tender for lease of 23 tonnes parcel space and a Lease Agreement was executed between the petitioner and the Railways for a period from 17th January, 2020 to 16th January, 2025. The operation of the trains was suspended by the Railways by reason of the Covid-19 pandemic. The petitioner thereafter declined to accept the offer of the Railways for a substitute train for limited operation. The petitioner invoked clause 23.1 of the Lease Agreement by a letter dated 6th February, 2021 with 60 days p
The court emphasized the importance of fair play and the right to a fair hearing before imposing penal consequences or termination of a contract.
The court established that contractual termination and debarment must comply with the specific terms of the agreement and adhere to principles of natural justice.
The court established that termination of a lease contract without proper notice violates principles of natural justice and contractual obligations.
Contractual termination notice must be issued by the authorized Railway Administration, adhering to principles of natural justice.
Disputes arising from contract termination must be resolved through arbitration, not writ jurisdiction, especially when complicated questions of fact are present.
The necessity for compliance with contractual provisions regarding termination, specifically the requirement for notice and written reasons, is essential for the validity of such actions.
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