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IN THE HIGH COURT OF DELHI
Sanjeev Sachdeva, J.
Monty - Appellant
Versus
Union of India - Respondent
W.P.(C) 4987 of 2022
Decided On : 25-03-2022




Administrative decisions must be based on communicated grounds and consider responses to show cause notices for fairness.

Headnote:(A) Contract Law - Termination of Contract - No reasonable grounds for termination stated in the impugned letter - Failure to consider the petitioner's replies to show cause notices - Respondent's decision based on different grounds not communicated to petitioner - Validity of termination letters questioned - Court emphasizes the need for a fair opportunity to respond to allegations. (Paras 2, 3, 13, 14, 16)

(B) Procedural Fairness - An administrative order must be accompanied by reasons and consideration of the party's responses - The impugned letter was deemed unsustainable due to lack of consideration of the petitioner's arguments. (Paras 13, 16)

Facts of the case:
The petitioner challenged a contract termination letter asserting that the termination was incorrect, lacked reasoning, and was based on uncommunicated grounds. Despite filing appeals and responding to all show cause notices, the petitioner’s defense was not acknowledged by the respondent.

Findings of Court:
The court concluded that the termination letter could not be upheld as it did not address the petitioner's submissions.

Issues: The primary issues were whether the termination was reasonable and if it considered the petitioner's responses to show cause notices.

Ratio Decidendi: The court held that an administrative decision requires assessments of all relevant responses from the affected party and cannot rest merely on different or uncommunicated grounds.

Result: Termination letters dated 11.03.2022 and 27.10.2021 set aside, with direction to issue a fresh order in accordance with law.

Table of Content
1. termination of contract by letter. (Para 1)
2. petitioner argues improper grounds for termination. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9)
3. court observes lack of consideration of responses. (Para 10 , 13 , 14 , 15)
4. court sets aside termination letters. (Para 16 , 17 , 19)
5. conclusion and rights reserved for both parties. (Para 18 , 20)

JUDGMENT

Sanjeev Sachdeva, J.

CM APPL. 14821-22/2022 (Exemption)

Allowed, subject to all just exceptions.

W.P.(C) 4987/2022&CM APPL. 14820/2022 (interim dir)

1. Petitioner impugns letter dated 11.03.2022 whereby the respondent has stated that the termination of the contract of the petitioner affected by order dated 27.10.2021 is correct and holds good. Further, petitioner has been debarred from participating in the tender invited by Delhi Division for next two years.

2. Learned counsel for the petitioner submits that the impugned termination letter dated 11.03.2022 is bereft of any reasoning and does not even take into account the response given by the petitioner to the show cause notice.

3. Learned counsel further submits that earlier a termination letter dated 27.10.2021 which is also referred to the impugned communication dated 11.03.2022, was issued. However, the same was issued on ground different than the ground which was put to the petitioner.

4. Learned counsel submits that in the first show cause notice dated 19.07.2021, the only ground mentioned was with regard to alleged non-payment of the licence fee.

5. Learned counsel submits that there is a shortfall in payment of licence fee on account of the respondent not granting any remission to the petitioner in terms of the Circular of the Railway Board.

6. He submits that thereafter another show cause notice dated 18.08.2021 was given which was duly responded to on 25.08.2021. Even, in the said show cause notice, the only ground was with regard to the alleged non-payment of the licence fee.

7. Learned counsel submits that thereafter the termination letter dated 27.10.2021 was issued which was on grounds other than the grounds mentioned in the show cause notice.

8. Learned counsel submits that the petitioner had thereafter filed an appeal before the DRM, Northern Railway. He submits that even though the appeal is pending a Revised Show Cause Notice was issued to the petitioner on 01.02.2022 wherein apart from the issue of non-payment, there was a brief reference to alleged illegal parking of buses in the allotted parking-cum-stacking area.

9. Learned counsel submits that petitioner had duly replied to the said allegations by his reply dated 07.02.2022, however, in the impugned termination letter dated 11.03.2022, there is no consideration of the reply given by the petitioner to the said show cause notice.

10. Issue notice. Notice is accepted by learned counsel appearing for respondent/UOI.

11. Learned counsel for the respondent disputes that the appeal has not been disposed of by the DRM. He submits that the DRM has already disposed of the appeal.

12. With the consent of the parties, petition is taken up for consideration today.

13. Perusal of the impugned termination letter dated 11.03.2022 shows that the respondents have merely stated that the reply given by the petitioner is not tenable and devoid of any merits and have reiterated their earlier order dated 27.10.2021.

14. Perusal of the show cause notice issued prior to the order dated 27.10.2021 shows that the ground on which the said order has been passed was not put to the petitioner and petitioner has not even been asked to respond to any of the allegations that form the subject matter of the termination order.

15. Subject allegations were put to the petitioner for the first time in the show cause notice dated 01.02.2022 which was replied to by the petitioner. However, in the impugned communication dated 11.03.2022 there is no consideration of the reply given by the petitioner.

16. Consequently, the impugned termination letter /ord

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