Point of Law :
Railways has rightly exercised its power under the terms of the contract, in terms of the tender clauses as well as in terms of the letter of acceptance which is treated as legal and enforceable contract between the petitioner and the railways.

JUDGMENT :

Heard Mr. K.K. Mahanta, learned Senior counsel assisted by Mr. K. Sinha, learned counsel for the petitioner and Mr. B. Sarma, learned standing counsel for the Railways.

2. The case projected by the petitioner:

I. The petitioner is an approved contractor of NF Railway. The respondent No. 6 issued a tender notice being No. DY.CF/CON/JRBM/Maintenance-Water Supply/2013/17 for maintenance of security barrack and water supply arrangement including other ancillary works between Ch. 0.00 & 32.74 km under Dy.CE/CON/JRBM/I at Silchar in connection with the construction of new BG railway line from Jiribam to Tupul (Imphal).

II. The petitioner participated in the said tender process and was successful and accordingly letter of acceptance dated 08.04.2014 was issued to the petitioner.

III. Subsequently by the impugned communication dated 25.09.2014, the contract was terminated on the ground that the petitioner has failed to submit the performance guarantee as per clause 5.2 of the tender document as well as the petitioner has not honoured the letter of acceptance.

IV. By the said impugned termination notice, amongst other the petitioner was debarred from participating in the re-tender process for the same work.

V. Subsequent to this, by another notice dated 27.10.2014, a fresh tenders were called for notice was issued for the same work wherein a clause was inserted to the effect that the petitioner is debarred from participating in the re-tender.

VI. As no bidder participated in the aforesaid tender process initiated by notice dated 27.10.2014, the Railways once again issued a tender notice on 23.01.2015 for the same work.

VII. In the said tender notice dated 23.01.2015, a similar clause was incorporated debarring the petitioner from participating in the re-tender process for the work.

VIII. Though there was debarment clause, the petitioner vide his communication dated 28.02.2015 preferred a representation before the Deputy Chief Engineer, Construction Jiribam 1, NF Railways, praying for issuance of tender papers pursuant to the tender notice dated 23.01.2015.

IX. Accordingly, the petitioner was allowed to submit his tender. However, the said tender process was also discontinued / withdrawn/ discharged by communication dated 10.06.2015.

X. Thereafter, another tender notice dated 28.12.2016 was issued inviting bid for the same work. In this notice, there was no clause debarring the petitioner.

XI. Accordingly, the petitioner vide his communication dated 11.01.2017 requested the Deputy Chief Engineer, Construction 1, Jiribam to issue him tender papers and the petitioner expressed his eagerness to deposit required Rs. 5,000/-.

XII. Subsequent to this, ‘corrigendum 1’ was issued to the tender notice dated 28.12.2016 debarring the petitioner in the said process of re-tender. Accordingly, the petitioner has preferred this petition.

3. Though at the time of filing the writ petition the initial termination notice dated 25.09.2014 and subsequent debarment was not challenged, however, during the pendency of this writ petition, the writ petition was amended and the termination was challenged.

4. Ground of challenge as urged by Mr. K.K. Mahanta, learned Senior counsel: Mr. Mahanta challenges the aforesaid conduct and decision of the respondent Railways on the following grounds.

I. The Railways could not have terminated the contract taking recourse to the clause 5.2 of the tender document. According to Mr. Mahanta, the letter of acceptance reveals that the total security deposit amounting to Rs. 10,26,344/- is to be adjusted with the earnest money of Rs. 2,15,100/- and remaining amount of Rs. 8,11,244/- is to be either deposited in cash or to be recovered from the running bills of the contract as per condition of the contract. Therefore, Mr. Mahanta submits that since the execution of the work did not start and since there was a scope for the railways to recover the performance guarantee, therefore the condition precedent to exercise the power under clause 5