The main legal point established in the judgment is the proportionality of the penalty imposed and the court's authority to review the fairness of the punishment.

JUDGMENT :

ASHA MENON, J.

1. This appeal has been preferred by the appellant/Indian Railway Catering & Tourism Corporation Limited (for short, ‘IRCTC’) against the judgment dated 09.01.2020, passed by the learned Single Judge in W.P.(C) 36/2020 filed by the respondent/M/s.Jayanta Kumar Ghosh Outdoor Catering Pvt. Ltd. allowing the petition and setting aside the order dated 20.12.2019 whereby, the respondent/company was debarred from participating in the future projects of the appellant/IRCTC for a period of three years while upholding forfeiture of the Earnest Money Deposit (for short, ‘EMD’) for a sum of Rs.10 lakhs.

2. The brief facts as are relevant for the disposal of the present appeal are that under a new arrangement, the appellant/IRCTC was to operate certain trains, namely, Tejas Trains while paying haulage charges as also the custody charges to the Indian Railways. Catering and allied services on the Tejas Trains were also to be managed by the appellant/IRCTC, but in order to do so, it published a Notice Inviting Tender (for short, ‘NIT’) on 30.08.2019, inviting bids for Catering and Allied On-Board Services for the said Tejas Trains. The Open E-Tender No.-2019/IRCTC/CATERING/ TEJAS TRAINS dated 30.08.2019, provided for a pre-bid meeting on 09.09.2019 at 11:30 hrs.. The last date and time of submission of bids was 14.09.2019 upto 15:00 hrs. and the date and time of opening of the technical bids was 14.09.2019 at 15:15 hrs. An EMD of Rs.10 lakhs was required to be deposited by the bidders. The period of Licence Fee was two years plus one year on the Lucknow-New Delhi Tejas Express and Ahmedabad-Mumbai Tejas Express. The Instructions to Tenderers in Clause 4.0 provided as follows:-

“QUALIFYING CRITERIA

1. xxx xxx

2. The data submitted by the successful bidder, in compliance of the above eligibility conditions shall be subject to verifications by IRCTC itself or through an agency (Expert in Forensic Audit) appointed by IRCTC, for which all necessary documents shall have to be essentially provided by the bidder, if so required. If the successful bidder is found to be ineligible on such verification, the letter of award will be terminated along with forfeiture of license fee and Security deposit. In such eventuality the successful bidder will also be debarred for 3 years from participating in the future projects of IRCTC.”

3. Vide letter dated 20.09.2019, issued by the appellant/IRCTC, the respondent/company was awarded the licence for provision of “On-Board Catering and Allied Services in the Ahmedabad-Mumbai Tejas Express @ Annual Concession Fee of Rs.2,51,55,555/-”, for a period of two years, extendable further by one more year subject to the terms and conditions of the bid document. The said Licence Fee with GST @18%, thus totalling to Rs.2,96,83,555/-, was deposited by the respondent/company alongwith a Security Deposit of Rs.2 crores. However, vide letter dated 20.12.2019, the appellant/IRCTC conveyed to the respondent/company its decision to terminate the licence so granted on 20.09.2019 on the ground that it did not fulfil the mandatory eligibility criteria in respect of the net worth of the company and the disclosure made alongwith its bid to claim net worth to the extent of Rs.5.25 crores, was not supported by necessary documents, as was revealed from the reply dated 16.12.2019, submitted by the respondent/company in response to the Show-Cause Notice dated 11.12.2019, issued by the appellant/IRCTC. While so terminating the Agreement/Letter of Award dated 20.09