The termination of contracts and debarment from future tenders without affording a hearing violates principles of natural justice, rendering such actions unsustainable.

ORDER :

1. The present petition has been filed assailing the impugned letter/ communications issued by the National Highway Authority of India [NHAI/respondent] including letter dated 18.03.2025 bearing no. CODIV-11036/2/2025-CO Division/Debar/12A in regard to Chilkhalikala fee plaza, Fulara Fee Plaza, Jungwani Fee Plaza and Jaitpur Fee Plaza, (Annexure-P1), letter dated 18.03.2025 bearing no. CODIV-11036/2/2025-CO Division/Debar/12B issued in regard to Saliwada Fee Plaza (Annexure-P2) and letter dated 18.03.2025 bearing no. CODIV-11036/2/2025-CO Division/Debar/12C issued in regard to Shahdol Fee Plaza (Annexure-P3).

2. Vide the above impugned letters / communications, the following action has been taken against the petitioner:

(i) the ongoing contract agreements between the parties, pursuant to which the petitioner operates the Chilkhalikala fee plaza, Fulara Fee Plaza, Jungwani Fee Plaza and Jaitpur Fee Plaza, Saliwada Fee Plaza and Shahdol Fee Plaza as the user fee collection agency, have been terminated in terms of Clause 35(3) of the Contract Agreement between the parties;

(ii) the petitioner has been debarred from participating in future tender/s issued by the respondent for a period of two years in terms of Clause 21(i) of the Contract Agreement and Clause 3.1 & 3.2 of the Request for Qualification dated 01.01.2021 (RFQ) between the petitioner and the respondent;

(iii) on the basis of the above, the performance securities/bank guarantees with respect to the contract agreements for operating each of the aforesaid fee plazas, deposited by the petitioner in terms of Clause 2.4 of the RFQ, have been sought to be encashed.

3. Learned senior counsel for the petitioner submits that the impugned action has been taken on the basis of common show cause notice issued on 25.01.2025 where, apart from a cryptic reference to an investigation by the Uttar Pradesh Special Task Force (UPSTF) resulting in an FIR No. 0017 filed on 22.01.2025 at P.S. Lalganj, Distt Mirzapur, Uttar Pradesh, no specific attribution/ lapse against the petitioner has been pointed out.

4. Further, it is submitted that a detailed response to the said show cause notice was submitted vide communication dated 31.01.2025 wherein the following points were emphasised:-

i. That there is no specific averment either in the FIR or in the show cause notices as regards the petitioner, or any attribution of any fraudulent activity against the petitioner.

ii. There is no co-relation between the petitioners and the individuals arrested by UPSTF.

iii. That the user fee collection work at the plazas is taking place strictly in accordance with the provisions of the contractual agreement between the parties and under the supervision and continuous monitoring of project directors, system integrators, M/s. IHMCL as well as the continuous monitoring of the concerned officials of the respondent, and, therefore, there is no scope for any wrong doing.

iv. It was further emphasised that there has been no violation of Clause-21 of the contract agreement between the parties.

It is submitted that the impugned letter/s fail to even notice much less deal with the elaborate submissions made by the petitioners in response to the show cause notice.

5. Further, it is brought to the attention of this Court that whereas the show cause notice sought to debar the petitioner only for a period of one year, the impugned letter purports to terminate the contract and also debar the petitioner for a period of two years.

6. It is further submitted that the show cause notice made no reference to any termination action by the respondent.

7. Lastly, it is submitted that the impugned communications have been passed in utter violation of the principles of natural justice inasmuch as no hearing whatsoever was afforded to the petitioner. This is not refuted by learned counsel for the respondent.

8. The respondent seeks to justify the impugned order on the basis of the statement made by one Mr. Alok Kumar Singh to the UPSTF. The sa