Debarment from government tenders requires issuance of a Show Cause Notice stating intended action, ensuring compliance with principles of natural justice.

JUDGMENT :

AMIT BANSAL, J.

1. The present writ petition has been filed seeking the following reliefs:-

2. At the outset, Mr. Pankaj Kumar Singh, counsel appearing on behalf of the petitioner, submits that the petitioner is confining his challenge in the present writ petition only to the extent that the petitioner has been debarred from future bid/tenders conducted by the respondent/Railways.

3. The petitioner, being the successful bidder, was awarded a Contract by the Railways for performance of services/work for “Mechanized cleaning of coaches of primary trains along with provisions of On Board Housekeeping Services (‘OBHS’) in trains including toiletries in AC coaches and depot complex cleaning at Coaching Depot, Amritsar (ASR) for period of 3 years (1095) days” on “Outcome Basis” and the work was started by the petitioner from 1^st July, 2022.

4. The petitioner deposited the requisite Performance Guarantee in the form of Bank Guarantee vide No. 04522IGL0000522 dated 21^st June, 2021 for a value of Rs. 38,82,331/- in favour Sr. Divisional Finance Manager, Northern Railway, Firozpur Cantt. The contract was to be governed by the General Conditions of Contract for Services dated January, 2018, along with latest amendments, by the Ministry of Railways, Government of India (‘GCC’).

5. During the execution of the contract, the petitioner was issued performance notices by the respondents, to which the petitioner provided explanations and hence, no action was taken by the respondent no.4.

6. On 2^nd July, 2024, another performance notice under Clause 7.4 of the GCC was given by respondent no.4 (Annexure P-14), giving the petitioner seven (7) days’ time to commence/improve the services. The notice further provided that in the event the petitioner committed default, action would be taken under Clause 7.4 of the GCC to terminate the contract. The relevant extracts from the aforesaid notice are set out below:-

“You are hereby given 07 days' notice in terms of clause 7.4 of General condition of contract to commence/improve the service to make good the default. failing which further action as provided in clause 7.4 of General condition of contract viz. to terminate your contract and complete the balance services without your participation will betaken.

If your performance does not improve, on expiry of this period, a notice for termination of the above contract shall be issued to you under which your contract shall stand rescinded and the services under this contract will be carried out independently without your participation and your performance guarantee shall also be encashed/forfeited and consequences which may please be noted.”

[emphasis supplied]

7. The aforesaid notice was replied to by the petitioner on 8^th July, 2024, giving an explanation on the issues raised in the notice.

8. A termination notice dated 11^th July, 2024 (Annexure P-1) was issued by the Senior Divisional Mechanical Engineer, Northern Railways, Firozpur Cantt/respondent no.4 (‘termination letter’), terminating the contract of the petitioner as well as debarring the petitioner from participating in the bids for work tendered by the Railways for a period of two years. For the sake of convenience, the said termination letter is set out below:-

9. Against the said termination letter, the petitioner filed an appeal on 13^th July, 2024 before Senior Divisional Mechanical Engineer, Northern Railways, Firozpur Cantt/respondent no.4. The said appeal is stated to be pending.

10. Mr. Singh submits that the debarment order passed by the respondents is ex facie illegal as the same was passed without giving any Show Cause Notice to the petitioner that showed the intention of the respondents to debar/blacklist the