ORAL JUDGMENT

(Per: HONOURABLE MR. JUSTICE P. B. BAJANTHRI)

Date : 18-04-2023 In the instant petition, petitioner has prayed for the following relief(s):-

“(A) For issuance of an appropriate writ/writs to set aside the Contract Termination Notice dated 08-05- 2018 (annexure-8) issued by the office of Divisional Railways Manager (W), Katihar through the Sr. Divisional Engineer/ Co-ord., N.F Railway, Katihar vide W/362/18/Multi Utility Vehicles/ADEN/NJP & DHR/IV/KIR/W-2 whereby and where- under the respondent authority, mechanically without giving reasonable opportunity of hearing to petitioner terminated the contract which was executed between parties through tender acceptance letter dated 07-

03-2018 against the Tender Notice No. 03-KIR- Engg-01-2018 dated 10-01-2018 and illegally forfeited the earnest money deposit (EMD) of Rs, 1,29,010 (One lac twenty nine thousand and ten) and further debarred the petitioner from participating in re-tendering for the work.

B. For a direction to the respondent authority to return the earnest money deposit (EMD) of Rs. 1,29,010/- and Tender Documentation Cost of Rs. 5,000/- along with interest, deposited by the petitioner through online Net Banking system against Tender Notice No 03-KIR-Engg-01-2018 dated 10-01- 2018 which is illegally forfeited in contravention of section 65 of the Indian Contract Act, 1872 which casts obligation upon the respondent authority to return the aforesaid EMD amount under void agreement, or contract that become void.

C. For a direction to the respondent authority to allow the petitioner to participate in re-tendering for the works keeping in view that the contract against the Tender Notice No. 03-KIR-Engg-01-2018 dated 10-01-2018 became void in view of Section 20 of the Indian Contract Act where both the parties were under a mistake of fact as to a matter essential to the agreement.

D. And for any other reliefs/reliefs for which the petitioner are found to be entitled under the provision of law involved in the present case.”

2. The petitioner was awarded some contract for hiring multi-utility vehicle (TATA 207 DI RX Mhindra Bolero Camper (Single Cabin) for track maintenance work for SSE/P, Way/Ics under ADEN/I/NJP, ADEN/II/NJP and ADEN/DHR under Katihar Division for three years. The petitioner has not executed the work resulted in issuing a notice stating that why action shall not be taken in terms of GCC. Thereafter, on 08.05.2018 the following communication was made while terminating the contract w.e.f. 05.05.2018, forfeiting the EMD and other dues and debarred the petitioner from participating in re-tendering for the works. Impugned communication reads as under:-

3. The impugned aforementioned action is not in accordance with principle of natural justice like issuance of show cause notice as to why contract shall not be terminated, forfeiting of EMD and other dues and so also debarring the petitioner from participating in re-tendering for the works. Merely issuing show cause notice that action would be taken under GCC would not suffice in view of the principle laid by the Apex Court in the case of UMC Technologies Pvt. Ltd. v. Food Corporation of India and Anr., reported in (2021) 2 SCC 551. Apex Court in number of judicial pronouncements taken note of following points insofar as cancellation of tender, forfeiting EMD and blacklisting and etc., arising out of contract.

(i) The order of blacklisting involving civil consequences cast slur. Such an action can be taken only on the basis of objectives satisfaction of the authority concerned. The fundamental of fair play require that the person concerned should be given an opportunity to present his case before he is put on blacklisting.

(ii) The notice of blacklisting must specifically spell out the intention of blacklisting.

(iii) The order of blacklisting must be speaking order supported with reasons.

(iv) Blacklisting cannot be for an indefinite period and the period of blacklisting should be fixed based on doctrine of prop