The court upheld the termination of the contract and forfeiture of deposits due to submission of false credentials, but deemed the five-year debarment as excessive and quashed it.

JUDGMENT :

KARDAK ETE, J.

Heard Mr. P. Mehta, learned counsel for the petitioner. Also heard Mr.A. Dasgupta, learned senior counsel assisted by Mr. G. Goswami, learned counsel for the respondent NF Railway.

2. Challenge made in this writ petition is to the termination notice dated 17.12.2020 issued by the Chief Engineer/Con-4, NF Railway, Maligaon, by which, the contract (LOA) is terminated and forfeited the Earnest Money Deposit, Bank Guarantee and Performance Guarantee to the tune of Rs.3,08,93,889.65 (Rupees three crores eight lakhs nine-three thousand eight hundred and eighty nine rupees sixty-five paise) and debarring the petitioner from participation in any and all tenders and doing business for 5 (five) years.

3. The petitioner is a registered partnership firm and claims to be involved in the execution of government infrastructure projects for the last forty years and is an active participants of various tenders issued by different authorities, particularly, in the Northeastern States and also successfully executed several government projects.

4. The case of the petitioner, in brief, is that Northeast Frontier railway issued a tender notice on 14.11.2019 for the work of earthwork in formation for making railway embankments, construction of minor bridges including blanketing work, construction of RCC drain and other connected ancillary works between the km277/0 to 298/0 between, Patiladaha (PTLD) (including)- Barpeta Road (BPRD) (including) DL Section of New Bongaigaon (NBQ) – Agthori (AGT) BG doubling projects. The petitioner participated in the said Tender process.

5. On having found responsive, the petitioner was awarded the tender vide Letter of Acceptance (LOA) dated 02.06.2020, thereby directed the petitioner to deposit Performance Guarantee before signing of the contract agreement which the petitioner had complied with by submission of Performance Guarantee vide letter dated 29.07.2020 along with Bank Guarantee dated 28.07.2020 issued by the Bank of Maharashtra in favour of the Chief Engineer/Con, Financial Advisor & Chief Accounts Officer/Con, NF Railway, Maligaon, Guwahati to the tune of Rs.2,76,70,989.65/- (Rupees two crore seventy six lakh seventy thousand nine hundred and eighty nine and sixty five paisa) only. The petitioner mobilized resources at the project site by investing an amount, which is close to Rs.1 crore, to ensure timely execution of the work awarded to him even before signing of the contract agreement, which was inexplicably delayed by the respondent, which now stands to be vain, because of the impugned termination and penalty imposed upon the petitioner.

6. It is the contention of the petitioner that after months of inactivity on the part of the respondent authorities to sign the contract and get the execution of the work, the respondent vide show cause notice dated 01.12.2020 apprise the petitioner that the document of credentials submitted by the petitioner has been, upon verification, returned as not found in the office record from the Delhi Development Authority and sought reason as to why the respondent should not forfeit the Earnest Money Deposit, Bank Guarantee and Performance Guarantee and debarred the petitioner for a period of five years from participating in any tender process and carrying out any business.

7. The petitioner responded to the said show cause notice by stating that the document was old and placed with the tender document by the petitioner’s staff which went unverified due to paucity of time in submission of their bid and thus an outdated document of credentials have been placed before the respondent. The petitioner has also offered another document of credential in the form of Certificate of Completion issued by the National Highway Infrastructure Development Corporation Limited ( in short NHIDCL).

8. The respondent authorities vide termination notice dated 17.12.2020, terminated the contract on the basis of the tender document and General Condition of Contract (GCC in short)