Blacklisting a bidder from future contracts requires adherence to principles of natural justice, including providing notice and an opportunity to be heard.

JUDGMENT

The petitioner firm was awarded the contract to operate a catering stall at the Thrissur Railway Station. As per Ext.P7 letter of award (‘LOA’), the petitioner was obliged to deposit the license fee and security deposit within 15 days from the date of the LOA. Surprisingly, by Ext.P8 communication, the Railway administration cancelled the LOA, forfeited the earnest money deposit (‘EMD’) and debarred the petitioner from participating in all the upcoming tenders of the respondents for five years. No show cause notice or termination notice was issued to the petitioner, which is against the principles of natural justice. Even though the petitioner had submitted Ext.P9 representation before the 4 ^th respondent, there was no response. The actions of the respondents are arbitrary and unjustifiable.

Hence, the writ petition.

2. The Central Government Counsel has filed a statement on behalf of the respondents stating that paragraph 3.5.2, Section B, Chapter 2 of Ext.P6 tender notification, expressly provides that if the selected bidder does not sign and return a copy of the LOA and deposits the license fee and security deposit within 7 days from the date of receipt of the LOA, the Railways have the right to cancel the LOA, forfeit the EMD and debar the selected bidder from participating in the bidding process of all catering contracts over the Indian Railways for five years. The petitioner has failed to return the signed copy of the LOA and deposit the license fee and security deposit. The tender notification does not require issuing a show cause notice. Therefore, there is no illegality in Ext.P8 proceeding.

3. Heard; Sri. Sreenath Vijayaraghavan, the learned counsel for the petitioner and Sri. T.C. Krishna, the learned Senior Panel Central Government Counsel.

4. By Ext.P7 LOA, the petitioner was awarded the contract to operate a catering stall at Thrissur Railway Station for five years.

5. The petitioner’s case is that, since he was indisposed, he could not adhere to the time period stipulated in paragraph 3.5.2, Section B, Chapter 2 of Ext.P6 tender notification. Even though he submitted Ext.P9 representation to the 4 ^th respondent for enlargement of time to comply with the above condition, the respondents failed to consider Ext.P9. The respondents have passed the impugned Ext.P8 order without issuing the petitioner a show cause notice or hearing him.

6. The respondents, on the other hand, contend that the petitioner has failed to comply with paragraph 3.5.2, Section B, Chapter 2 of Ext.P6 tender notification, which is a self-working clause. Therefore, the respondents are empowered to pass Ext.P8 order without issuing the petitioner a show cause notice or hearing him.

7. The learned Counsel for the petitioner submitted that the petitioner was confining his challenge to his debarment.

8. Paragraph 3.5.2, Section B, Chapter 2 of Ext.P6 tender notification reads as follows:

“3.5.2. After selection, a letter of award (the ‘LOAâ€) shall be issued by Railway to the Selected Bidder and the Selected Bidder shall, within seven (7) days of the receipt of the LOA, sign and return the duplicate copy of the LOA in acknowledgment thereof. In the event of the duplicate copy of the LOA duly signed by the Selected Bidder is not received by the stipulated time, Railway may, unless is consents to extension of time for submission thereof, forfeit the Earnest Money of such Selected Bidder. Thereafter there shall be re-tendering. It is clarified that in case the Selected Bidder refuses to accept the LOA, the earnest money will be forfeited and it will be debarred from participating in the Bidding process for all catering contracts over Indian Railways including IRCTC for a period of five (5) years. This is without prejudice to the rights of Railway administration under the law of contractâ€.

9. It is undisputed that the petitioner had failed