Page No.# 1/3 vs The Union Of India And 7 Ors
2022 Latest Caselaw 1324 Gua

                                                                    Page No.# 1/31

GAHC010020912022




                       THE GAUHATI HIGH COURT
  (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                         Case No. : WP(C)/710/2022

         M/S D.G. RAJ HIGHWAY SERVICES AND ANR.
         A PARTNERSHIP FIRM HAVING ITS OFFICE AT 493/B/57, BUNGALOW NO.47
         AND 48, GROUND FLOOR, G.T. ROAD (SOUTH), P.O. AND DIST. HOWRAH,
         WEST BENGAL, PIN-711102.

         2: DADAN PRASAD
          S/O. LT. JAGANNATH PRASAD
          (A PARTNER OF THE PETITIONER NO.1 FIRM)
          R/O. 493/B/57
          BUNGALOW NO.47 AND 48
          FIRST FLOOR
          G.T. ROAD (SOUTH)
          HOWRAH
          P.O. AND DIST. HOWRAH
         WEST BENGAL
          PIN-711102. (BOTH PETITIONER ARE REP. BY THEIR POWER OF
         ATTORNEY HOLDER
          SHRI NIRAJ KUMAR RAO
          S/O. SHRI DINANATH RAO
          PERMANENT RESIDING AT-493/B/57
          BUNGALOW NO. 47 AND 48
          GT ROAD
          BIKRAM BIHAR
          OPPOSITE JAIN HOSPITAL
          P.O. AND DIST. HOWRAH
         WEST BENGAL
          PIN-711102)

         VERSUS

         THE UNION OF INDIA AND 7 ORS.
         REP. BY THE GENERAL MANAGER, NORTHEAST FRONTIER RAILWAY
         MALIGAON, GUWAHATI, ASSAM, PIN-781011.
                                              Page No.# 2/31

2:THE RAILWAY BOARD

REP. BY THE SECRETARY
MINISTRY OF RAILWAYS
GOVT. OF INDIA
RAIL BHAWAN
NEW DELHI-110001.

3:THE GENERAL MANAGER

NORTHEAST FRONTIER RAILWAY MALIGAON
GUWAHATI
ASSAM
PIN-781011.

4:THE PRINCIPAL CHIEF COMMERCIAL MANAGER

NORTHEAST FRONTIER RAILWAY MALIGAON
GUWAHATI
ASSAM
PIN-781011.

5:THE CHIEF COMMERCIAL MANAGER (FM)

NORTHEAST FRONTIER RAILWAY
MALIGAON
GUWAHATI
ASSAM
PIN-781011.

6:THE SENIOR DIVISIONAL COMMERCIAL MANAGER

TINSUKIA DIVISION
NORTH EAST FRONTIER RAILWAY
TINSUKIA
DIST. TINSUKIA
ASSAM
PIN-786125.

7:THE DIVISIONAL RAILWAY MANAGER

TINSUKIA DIVISION
NORTH EAST FRONTIER RAILWAY
TINSUKIA
DIST. TINSUKIA
ASSAM
PIN-786125.
                                                                           Page No.# 3/31

             8:THE ADDL. DIVISIONAL RAILWAY MANAGER

             TINSUKIA DIVISION
             NORTH EAST FRONTIER RAILWAY
             TINSUKIA
             DIST. TINSUKIA
             ASSAM
             PIN-786125

Advocate for the Petitioner   : MS P D NAIR

Advocate for the Respondent : SC, NF RLY




                                    BEFORE
                     HONOURABLE MR. JUSTICE DEVASHIS BARUAH

                                         JUDGMENT

Date : 21-04-2022

1. Heard Mr. P.D. Nair and Mr. G. Alam, learned counsel appearing on behalf of the petitioners and Mr. B.K. Das, the learned counsel appearing on behalf of the respondents.

2. The instant petition under Article 226 of the Constitution of India challenges the communication bearing No.CM/VP Leasing (05960/05959)/TSK/21, dated 03.01.2022, whereby the contract was terminated by the respondent authorities with forfeiture of the entire Security Deposit amounting to Rs.40,03,415/- and further imposing debarment from participating in the Parcel Leasing Tender in Tinsukia Division and over N.F. Railway for a period of 2 (two) years with immediate effect i.e. on and from 03.01.2022.

3. This Court vide order dated 08.02.2022 had issued notice and in the interim, the impugned order dated 03.01.2022, as well as the consequential E- Tender Notice No.CM/VP Leasing (15960/15959)/TSK/21-22, dated 17.01.2022, was stayed. The railway authorities on 11.03.2022 filed an Page No.# 4/31

application for modification/alteration/vacation of the interim order dated 08.02.2022 which was registered and numbered as IA(C) No.1023/2022. The said application for modification/alteration/vacation of the interim order dated 08.02.2022 came up for disposal before this Court on 04.04.2022. Taking into consideration that the disposal of the said Interlocutory Application would have an impact on the decision on merits of the writ petition, this Court heard the matter on 05.04.2022, 07.04.2022 and on 08.04.2022 for final disposal.

4. The facts of the instant case in brief is that, an E-Tender Notice No.CM/VP Leasing (05960/05959)/TSK/21, dated 25.08.2021, was issued by the Senior Divisional Commercial Manager, N.F. Railway Tinsukia (the respondent No.6 herein) for leasing of 24 Tonne 1 VPH by Train No.05960/05959, Kamrup Express Special EX-DBRG (Dibrugarh) Railway Station to HWH (Howrah) Railway Station and back on round trip basis for 5 (five) years. It is relevant to take note of that the tender documents contained 4 (four) parts and Annexures in 33 pages, the details are as herein under.

a) 1st part Tender schedule

b) 2nd part : Application & schedule of rate

c) 3rd part : Instruction to tenderers

d) 4th part : Draft agreement as instructions

e) Annexure - A, B, C, D & E

5. In the "Instruction to the Tenderers" which was the 3 rd part of the tender documents, there were various terms and conditions set out therein. It is relevant to note that the running frequency was 5 (five) days per week and the reserved price of the 24 Tonne VPH per round trip/day was Rs.2,14,020/-. Clause 7 stipulated the terms relating to the Security Deposit Page No.# 5/31

(SD)/Performance Guarantee (PG). It was mentioned in Clause 7(a) that the Security Deposit is required to be submitted by the successful bidder within 15 days from the date of issue of the Letter of Acceptance. Clause 7(c) stipulates that in case of failure of the highest bidder/Allottee of the contract to start the loading within the stipulated period, on account of over biding or failure of the lease holder to continue the loading during the contractual period without giving notice of the Railway Administration, the Security Deposit/Performance Guarantee money shall be forfeited. Clause 8 of the "Instructions to the Tenderers" is relevant for the purpose of the instant dispute and more particularly Sub-Clause (a) and Sub-Clause (b) of the said Clause; and for the sake of convenience, the same are quoted herein below.

"8. Failure of leaseholder to start or operate lease contract:

(a) On allotment of contract, the bidder (leaseholder) shall be required to commence the loading within a period of 15 (fifteen) days, failing which, the contract will be terminated and Earnest Money/Security Deposit will be forfeited.

The accepting authority shall be empowered to condone the delay on the merit of the case on written application from leaseholder and give another 15 days (maximum period) to the leaseholder for commencing the contract.

(b) If the highest bidder fails to take up or to start the lease contract, he/she/they must be debarred at least for 2 (two) years from participating in the tender in that Division/Zonal Railway."

6. A reading of the above quoted two Sub-Clauses would show that upon the allotment of the contract, the bidder (the leaseholder) shall be required to Page No.# 6/31

commence the loading within a period of 15 days, failing which the contract will be terminated and Earnest Money/Security Deposit will be forfeited. The rigors of the first part of the Clause 8(a) is relaxed by the second part whereby the Accepting Authority has empowered to condone the delay on the merit of the case on a written application from the leaseholder and give another 15 days (maximum period) to the leaseholder for commencing the contract. Therefore, Sub-Clause (a) of Clause 8 would mean that from the date of allotment of the contract the bidder/the leaseholder has to commence the loading within 15 days and this period of 15 days can be further extended to a maximum of another 15 days by the Accepting Authority.

Sub-clause (b) of Clause 8 stipulates that if the highest bidder fails to take up or to start the lease contract, the said bidder must be debarred at least for 2 (two) years from participating in the tender in that Division/Zonal Railways. The use of the words "bidder" & "highest bidder" in Clause 8(a) and 8(b) of the "Instruction to the Tenderers" assumes relevance in view of the dispute involved herein to which this Court would discuss at a subsequent stage of this judgment.

7. At this stage it may be relevant herein to mention that the said Clauses i.e. Clause 8 (a) and 8 (b) seems to be inserted on the basis of the Modified policy Guidelines on "Comprehensive Parcel Leasing Policy" dated 15.04.2014 issued by the Ministry of Railways, Govt. of India. Clause 20.1 and 20.2 are similar in content to Clause 8(a) and 8(b) of the "Instructions to the Tenderers". It is also relevant herein to mention that pursuant to the Issuance of the NIT in question but before the Issuance of the Letter of Acceptance, there was an Amendment to the Comprehensive Parcel Leasing Policy whereby Clause 20.1 was modified vide the Amendment No.13 dated 04.10.2021.

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The said modified Clause 20.1 being relevant is quoted herein below: "20.1 On allotment of contract, the successful bidder (leaseholder) shall be required to commence the loading within a period of 15 days, failing which the contract will be terminated and Earnest Money/Security Deposit will be forfeited.

The accepting authority shall be empowered to condone the delay on the merits of the case on written application from leaseholder and give another 15 days (maximum period) to the leaseholder for commencement of contract.

However, in cases when the successful bidder has not been able to start or operate the lease contract within the maximum time period (including the condoned period of delay, if any) - due to such circumstances beyond his control (such as curfew, lock-down, natural calamity, etc.), he may prefer an appeal - within 15 days of normalization of the situation - to allow him to start or operate the lease contract. On receipt of such appeal, PCCM of the Zonal Railway (on recommendation of the Division) may grant relaxation in the period for commencing the contract, up to a maximum of 30 days, duly considering the merits of the case."

8. A perusal of the Amendment shows that the rigors of Clause 20.1 of the Comprehensive Parcel Leasing Policy was further relaxed whereby a right was given to the successful bidder who has not been able to start or operate the lease contract within the maximum time period (including the condone period of delay, if any) due to circumstances beyond his control (such as curfew, lockdown, natural calamity etc.), to prefer an Appeal within 15 days of normalization of the situation to allow him to start or operate the lease contract.

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It further reveals that upon the receipt of such Appeal, the Principal Chief Commercial Manager of the Zonal Railways (on recommendation of the Division) was empowered to grant relaxation in the period for commencing the contract, up to a maximum of 30 days after duly considering the merits of the case. It is also relevant herein that the entitlement to prefer an appeal was given to the "successful bidder" which is a vital aspect for adjudication of the dispute involved herein.

9. In the backdrop of the above, the further facts of the case are that the Petitioner No.1 (hereinafter for the sake of convenience referred to as "the Petitioner Firm") submitted its bid on 21.09.2021 to the Notice Inviting Tender dated 25.08.2021 along with other bidders. The Petitioner Firm was declared to be the highest successful bidder and the Letter of Acceptance dated 08.10.2021 bearing Letter No. TINSUKIA DIVISION-COMMERCIAL/CMVP LEASING 05960- 59/10531280043107 was issued in favour of the Petitioner Firm. A perusal of the said Letter of Acceptance would also show that the total lump sum lease freight was Rs.3,29,820/- per trip and the loading shall take place 5 days in a week i.e. on Monday, Tuesday, Wednesday, Friday and Saturday. The lease freight would remains static for the first 3 years and thereupon there shall be an

escalation of the lump sum lease rate @10% per annum from the 4 th year onwards. The Security Deposit of Rs.40,03,415/- was to be deposited within 15 days from the date of issue of the Letter of Acceptance. In terms with Clause 4, the Petitioner Firm was required to execute the license agreement on non- judicial stamp paper of Rs.100/- within 15 days from the date of issue of the Letter of Acceptance and all expenses, registration, stamp duty etc. shall be borne by the Petitioner Firm. In terms with Clause 5, it was mandated that all other terms and conditions of the tender documents shall be applicable. At this Page No.# 9/31

stage, it would be relevant to mention that the Petitioner Firm duly accepted the Letter of Acceptance vide a communication bearing No.DGR/Lease of VP/Acceptance/A-577.

10. Before further stating the facts, it would be relevant to understand the effect of the issuance of the Letter of Acceptance and subsequent issuance of the Acceptance by the Petitioner Firm to the Letter of Acceptance. A contract is a bilateral transaction between two or more than two parties. Every contract passes through several stages beginning with the stage of negotiation, during which the parties discuss and negotiate proposals and counter proposals as also the consideration resulting finally in the acceptance of the proposal. The proposal when accepted gives rise to an agreement. In the facts of the instant case, pursuant to the Notice Inviting Tender dated 25.08.2021, the Petitioner Firm submitted its proposal on 21.09.2021 and the same was accepted by issuance of the Letter of Acceptance dated 08.10.2021. The issuance of the Letter of Acceptance amounts to allotment of the contract and the Letter of Acceptance having been duly accepted by the Petitioner Firm and a contract came in existence. Further to that, Clause 5 of the Letter of Acceptance dated 08.10.2021 specifically mandated that all other terms and conditions of the tender documents shall be applicable. By virtue of Clause 4 of the Letter of Acceptance, the Petitioner Firm was required to execute the license agreement which was a formal document, within 15 days, from the date of issuance of the Letter of Acceptance.

11. The Security Deposit and Licensing Agreement were required to be deposited and signed latest by 22.10.2021. The Petitioner Firm on citing certain difficulties submitted a communication dated 21.10.2021, that on account of some procedural delay at the concerned bank and the ongoing festive season Page No.# 10/31

like Durga Puja, Lakhi Puja etc., they require approx 10 days time to execute the leasing contract on submission of the requisite amount of Bank Guarantee and therefore, requested the Respondent No.6 to grant them some more time of 10 to 15 days so that the leasing work would start smoothly. The Respondent No.6 vide a communication dated 22.10.2021 informed the Petitioner Firm that the Petitioner Firm was required to submit that Security Deposit within 15 days of the issuance of the Letter of Acceptance. It was also mentioned that in terms with Para 20.1 of the Comprehensive Parcel Leasing Policy upon allotment of the contract, the successful bidder (leaseholder) shall be required to commence the loading within 15 days else the contract would be terminated and Earnest/Security Deposit would be forfeited. It was also mentioned that it is the Accepting Authority who has been empowered to condone the delay for a maximum period of 15 days. It was in these circumstances, the petitioner was asked to commence loading of the VPH by way of submitting the requisite Security Deposit at the earliest.

12. It was only on 05.11.2021, the Security Deposit of Rs.40,03,415/- in favour of FA CAO/NF Railway, Maligaon was submitted vide a communication dated 05.11.2021. In the said communication dated 05.11.2021, the petitioner requested for the draft copy of the Agreement and Work Order. The Petitioner Firm also submitted the requisite stamp paper.

13. In the meantime, as on the date in which the Petitioner Firm submitted the Security Deposit, not only the initial period of 15 days as stipulated in the first part of Clause 8(a) of the "Instruction to the Tenderers" had expired; 13 days of the permissible 15 days relaxation that can be given by the accepting authority had elapsed. At that relevant point of time, the accepting authority was on leave and by the time, the Accepting Authority joined, the condonable Page No.# 11/31

maximum period of 15 days had also elapsed. Accordingly the Petitioner Firm issued the communication dated 08.11.2021. It needs to be mentioned that the said communication is of vital importance but surprisingly neither there is mention in the writ petition nor the same was enclosed. By the said communication, the Petitioner Firm invoked the Amendment No.13 dated 04.10.2021 and requested to grant permission to start operation of the said VPH from 22.11.2021. An undertaking was given that the Petitioner Firm would be ready to start operation from 22.11.2021 in full swing.

14. On the basis of the communication dated 08.11.2021, the matter was placed before the competent authority i.e. the Principal Chief Commercial Manager, N.F. Railway. The said authority granted the relaxation for a period of 30 days, the maximum it could do and the said aspect of the matter was informed to the Petitioner Firm vide the communication dated 26.11.2021. In the said communication, the petitioner was also directed to furnish the intermediate loading/unloading points so that the allotment order could be issued to ensure commencement of lease operation at the earliest.

15. The Petitioner Firm on receipt of the said issue communication dated 26.11.2021, issued a communication dated 27.11.2021 stating inter alia that for successful operation of the leasing, the petitioner required to load to the tune of 5 Tonne perishable consignments and to allow the petitioner for platform loading to the tune of 5 Tonne of perishable consignment EX-Howrah

16. The Respondent No.6 vide a communication dated 29.11.2021 asked the Petitioner Firm to start loading of the leased out 24 Tonne VPH by Train No.15960/15959 (05960/05959) Kamrup Express by 07.12.2021 on receipt of the said allotment order, as per the commitment made by the Petitioner Firm in its application dated 08.11.2021. It was also inter alia mentioned in the said Page No.# 12/31

communication that the Petitioner Firm should start loading all the leased VPH without any further delay and also to execute the Contract Agreement in that regard.

17. The Petitioner Firm instead of starting the operation of loading by 07.12.2021 as requested vide the communication dated 29.11.2021 submitted a communication dated 06.12.2021 to the Respondent No.6. In the said communication the petitioner raised the issue that without the Contract Agreement for operating the referred Leased VPH being executed, the loaders and parcel aggregators were not willing to offer or load consignment in Leased VPH. Apart from the above, it was also mentioned that the Leased VPH would be handled at NTSK, MXN, DMV, LMG, GHY, NJP, MLDT and BWN for the purpose of intermediate loading/unloading of parcels and as such reaching the local traders on parcel aggregators for successful intermediate handling would take sometime. It is for those reasons, the petitioners requested the Respondent No.6 to grant a reasonable time of 2 to 3 weeks for starting operation of Leased VPH and in the meantime a suitable date may be fixed for Contract Agreement for operating the Leased VPH by the Petitioner Firm. It further appears from the records that on 07.12.2021 the concerned Railway Authorities again requested the petitioner to operate the lease on and from 14.12.2021 positively.

18. The Petitioner Firm instead of starting the loading operation again issued another communication dated 14.12.2021 whereby the Petitioner Firm requested for execution of the agreement and after that the Petitioner Firm would be able to operate the lease within a week therefrom. Upon receipt of the said communication dated 14.12.2021 the Respondent No.6 issued a communication on 17.12.2021 informing the Petitioner Firm that the Contract Page No.# 13/31

Agreement was ready in all respects for signing and asked someone authorized from the Petitioner Firm to attend the office on 20.12.2021 for signing of the same. However, none from the Petitioner Firm turned up on 20.12.2021 for which vide another communication dated 21.12.2021 issued by the Respondent No.6, the Petitioner Firm was again requested to attend the office on 22.12.2021 for signing of the Contract Agreement and commencing loading of the Leased VPH. Again on 22.12.2021, none from the Petitioner Firm appeared before the Respondent No.6 for signing of the Contract Agreement or had commenced the loading of the Leased VPH, for which vide another communication dated 24.12.2021, it was informed that the maximum relaxation period for commencement of loading would be expiring on 25.12.2021 and therefore the Petitioner Firm was requested to commence the loading of the Leased VPH on or before 25.12.2021. Admittedly, pursuant to the said communication dated 24.12.2021, there was no loading activity carried out on 25.12.2021. At the cost of repetition, it may be relevant herein to mention that the communication dated 24.12.2021 had categorically stated that the maximum relaxation period for commencement of loading was expiring on 25.12.2021 and the petitioner was requested to commence loading of the vessel VPH on or before 25.12.2021. There was no mention in the said communication dated 24.12.2021 that someone from Petitioner Firm shall appear on 25.12.2021 for signing of the agreement. The Petitioner Firm instead of commencing the loading as directed by the communication dated 24.12.2021, issued an E-mail to the Respondent No.6 dated 25.12.2021 stating inter alia that though the petitioner have been demanding early execution of the Contract Agreement yet the petitioner's were not able to attend the office for that purpose and as such requested that the authorized representative of the petitioner be able to execute Page No.# 14/31

the agreement on Monday i.e. on 27.12.2021 positively and thereafter shall commence loading. Accordingly on 27.12.2021 the authorised representative of the Petitioner Firm appeared in the office of Respondent No.6 but as the maximum relaxation period have been already expired, the Contract Agreement was executed. Subsequent thereto on 03.01.2022, the impugned order was passed whereby the contract with the Petitioner Firm was terminated with forfeiture of the Security Deposit and debarment of the petitioner from participating in Parcel Leasing Tender in Tinsukia Division, NF Railway for a period of 2 years with effect from 03.01.2022. Being aggrieved by the aforesaid impugned letter, the instant writ petition has been filed.

19. The learned counsels for the parties, contended as follows:

Mr. P.D. Nair, the learned counsel appearing on behalf of the petitioners submitted-

(I) Clause 4 of the Letter of Acceptance dated 08.10.2021 specifically stipulates execution of the Contract Agreement within 15 days from its issuance i.e. 08.10.2021. He submits that without execution of a Contract Agreement it was not possible on the part of the petitioners to commence the contract of loading as without a Contract Agreement, the loaders and the parcel aggregators would not offer goods for commencing the loading operation of the Leased VPH. He submitted that the petitioners had approached various loaders and parcel aggregators like Hindustan Unilever Ltd, Dumduma, E-Commerce Companies like Amazon, Flipkart and Khadim India for transporting their traffic from Howrah but they were hesitant to offer the traffic for the reason of non-execution of the agreement for operating the Leased VPH. He therefore submits that the imposition by the Railway Page No.# 15/31

Authorities to carry out the loading without the Contract Agreement was unreasonable and arbitrary and therefore violates the mandate of Article 14 of the Constitution of India

(ii) He further submits that although Petitioner Firm have been asked to sign the Contract Agreement on 20.12.2021, 22.12.2021 and on 25.12.2021 whereby the period for signing Contract Agreement was extended up to 25.12.2021 but on account of Christmas i.e. on 25.12.2021 and 26.12.2021 being a Sunday, the said Contract Agreement could not be signed as the said dates were designated holidays. The authorized person of the Petitioner Firm admittedly approached the Respondent No.6 on 27.12.2021 for signing of the Contract Agreement which was refused. He submits that when a period is prescribed for performance of any act in an office and that period expires on holidays then applying Section 10 of the General Clauses of the Act, 1897, the act should be considered to have been done within that period if it is done on the next day on which the office is open.

Drawing the attention of this Court, to official calendar of the Northeast Frontier Railway (Annexure-R/3 to the affidavit in reply filed by the petitioners), Mr. P.D. Nair, the learned counsel appearing on behalf of

the petitioner submitted that 25 th and 26th December, 2021, were the holidays and as such on 27.12.2021 the Respondent Authorities ought to have permitted the Petitioner Firm to enter into the Contract Agreement. Having not done so, the Respondent Authorities have acted arbitrarily and unreasonably which violates the mandate of Article 14 and 19(1)(g) of the Constitution of India.

(iii) Mr. P.D. Nair further drawing the attention to the Amendment Page No.# 16/31

No.13 to the Comprehensive Parcel Leasing Policy dated 04.10.2021 submitted that the maximum relaxation period of 30 days would be counted from the allotment of the contract to the Petitioner Firm on 29.11.2021 and therefore the outer limit of 30 days would expire only on 28.12.2021 and not on 25.12.2021 as alleged in the impugned letter dated 03.01.2022. He therefore submits that the presence of the petitioner in the office of the Respondent No.6 on 27.12.2021 to execute the Contract Agreement is well within the time granted under the maximum relaxation period. He submits that as a relevant aspect to the matter have not been taken into consideration, the issuance of the impugned letter dated 03.01.2022 is bad in law and same is liable to be interfered.

(iv) Mr. P.D. Nair, the learned counsel further submits that debarment from participation for 2 years and forfeiture of Security Deposit could not be done unless and until the petitioner did not sign the Contract Agreement or did not commence loading beyond the maximum relaxation period, which as per him would have expired on 28.12.2021, and as such the impugned communication dated 03.01.2022 of termination of the contract, forfeiture of the Security Deposit, debarment from participation for 2 years with effect from 03.01.2022, as well as the issuance of the Notice Inviting Tender violated Article 14 and 19(1)(g) of the Constitution of India.

20. On the other hand, Mr. B.K. Das, the learned counsel appearing on behalf of the Railway Authorities submits as follows:

(I) At the outset, the learned counsel submits that the petitioner by way of the instant proceedings are trying to mislead this Court Page No.# 17/31

inasmuch as signing of the Contract Agreement and commencement of the loading are two different aspects. He submits that Clause 8(a) of the "Instruction to the Tenderers" clearly mandates that upon the allotment of the contract, the loading has to be commenced within 15 days. This period of 15 days can be further extended by the Accepting Authority for another period of maximum 15 days by condoning the delay on the merits of the case on a written application of the leaseholder. In the facts of the instant case, the contract was allotted on 08.10.2021 and as such the Petitioner Firm was required to commence the loading within 22.10.2021 as well as also furnish the Security Deposit. Instead of depositing of the Security Deposit and commencing the loading, the Petitioner Firm on 21.10.2021 requested an extension for 10 to 15 days. The Respondent No.6 categorically informed the Petitioner Firm about the consequences vide the communication dated 22.10.2021. It was only on 05.11.2021, the Security Deposit was furnished. He further submitted that by the time the Petitioner Firm submitted the Security Deposit, the Accepting Authority was on leave and when the Accepting Authority joined the maximum condonable period of 15 days, had already expired. As the Petitioner Firm invoked the Amendment No.13 dated 04.10.2021 the Principal Chief Commercial Manager, N.F. Railway granted the maximum relaxation which was intimated to the petitioner by the communication dated 26.11.2021, which was received by the petitioner on the same date. He further submits that a perusal of the communication dated 26.11.2021 would also show that the petitioner was asked to immediately commence the loading. Subsequent thereto vide another Page No.# 18/31

communication dated 29.11.2021, the petitioner was asked to commence loading on or before 07.12.2021 as the petitioner had given a commitment in its communication dated 08.11.2021 that the petitioner would commence loading with effect from 22.11.2021. He further submits that till that day, the petitioner never raised the issue that without the Contract Agreement, it was difficult on the part of the petitioner to go ahead with the loading. It was only on 06.12.2021 that the petitioner raised the issue that without the Contract Agreement it was difficult to get the loaders and parcel aggregators agree to load their goods in the Leased VPH. He further submits that the perusal of the communication dated 06.12.2021 would also show that the petitioner for the first time mentioned about the intermediate loading stations and that the petitioner would require sometime to reach out the local traders and parcel aggregators for successful intermediate handling. Vide the said communication dated 06.12.2021, the petitioner requested for 2 to 3 weeks time for starting the operation of the lease and in the meantime a suitable date may be fixed for executing the Contract Agreement. The Railway Authorities thereafter on 07.12.2021 again requested the petitioner to start loading w.e.f 14.12.2021 positively. Instead of doing so, the petitioner issued another communication on 14.12.2021, this time the petitioner vide the communication dated 14.12.2021 stated that they require 1 (one) week time after the Contract Agreement is executed for starting the loading operation. Taking into consideration, the communication dated 14.12.2021, the Respondent No.6 asked the Petitioner Firm to appear on 20.12.2021 for signing the agreement but none on behalf of the Page No.# 19/31

Petitioner Firm appeared. Vide another communication dated 21.12.2021, the Petitioner Firm was again asked to appear on 22.12.2021 for signing the agreement and also to commence the loading of the Leased VPH. Neither the Petitioner Firm appeared for signing of the agreement nor started the commencement of the loading. Under such circumstances as the maximum relaxation period would end on 25.12.2021, the petitioner was informed by the communication dated 24.12.2021 to commence loading on or before 25.12.2021. The petitioner did not load on 25.12.2021, rather issued an E-mail on 25.12.2021 that the representative of the petitioner would appear on 27.12.2021, to sign the agreement and thereafter shall start loading. He therefore submits that the Petitioner Firm was given ample opportunities to comply with the terms and conditions of Clause 8(a) of the "Instruction to the Tenderers" and the Petitioner Firm failed even after taking into account the maximum relaxation on the basis of the Amendment No.13 to the Comprehensive Parcel Leasing Policy.

The respondent authorities were justified in terminating the contract and further taking consequential actions as mandated in Clause 8(a) and 8(b) of the "Instruction to the Tenderers".

(ii) He further submits that a perusal of Clause 8(a) would show that on allotment of the contract, the bidder was required to commence the loading within a period of 15 days failing which the contract would be terminated and Earnest Money/Security Deposit would be forfeited. He therefore submits that for the operation of Clause 8(a), what is required is the allotment of the contract. In that regard he refers that in normal practice, the Contract Agreements are signed/executed at a much later Page No.# 20/31

date as signing/execution of such Contract Agreements requires sometime. He submits that there is no bar in making operational lease contract in absence of Contract Agreement inasmuch as the Letter of Acceptance as well as the allotment order are sufficient. In that regard he refers to the various instances of similar contracts under the N.F. Railway Division. VPH (1) Tinsukia Division awarded 24.0-tonne VPH space by Train No.15960/15959 Kamrup Express in favour of M/s National Carrying Corporation, Kolkata on 20.07.2017, Loading commenced on 02.08.2017 and Contract Agreement singed on 22.02.2018.

(2) 24.0 tonne VPH space by Train No.15909/15910 Avadh Assam Express in favour of M/s Khanna Logistics, Delhi on 14.12.2017, Loading commenced on 25.12.2017 and Contract Agreement signed on 24.10.2018.

(3) 24.0-tonne VPH space awarded by Train No.22502/22501, Ksr. Bangalore Express in favour of M/s SAFE CONNECT, Bangaluru on 21.10.2021 Loading commenced w.e.f. 22.10.2021. Contract Agreement ready for signing on 13.12.2021. Party has not turned up for signing till date (22.02.2022) in spite of serving reminders.

He further submits that for operation of the contract, the Contract Agreement is not a condition precedent. In fact, a perusal of the "Instructions to the Tenderers" or various documents enclosed to the tender documents and even the Letter of Acceptance does not stipulate that a commencement of the contract would start from the date of Page No.# 21/31

signing of the Contract Agreement. He therefore, submits that the non- operationalising the lease contract by the petitioners on the ground of a Contract Agreement having not been executed is nothing but a clever ruse played by the petitioners to wriggle out from the mandatory terms of Clause 8(a) and 8(b) of the "Instruction to the Tenderers" which the petitioner accepted at the time of submission of the bid by submitting an Affidavit in Annexure-E.

(iii) He further submitted that Clause 8(a) stipulates the terms "on allotment of the contract" which would mean the day on which the Letter of Acceptance was issued as on that date, the contract was allotted to the Petitioner Firm. The period of 15 days would be counted therefrom w.e.f 08.10.2021.

(iv) He further submits that the contentions raised by the Petitioners that 25.12.2021 and 26.12.2021 were holidays for which the representative of the Petitioners appeared before the Office of the Respondent No.6 on 27.12.2021 to sign the agreement and applying of Clause 10 of the General Clauses Act, 1897, the Contract Agreement ought to have been signed are totally misconceived inasmuch as there was no impact of holidays in goods, parcel or passenger activities at the station. He further submits that 25.12.2021 was not the date fixed for signing of the Contract Agreement but was the last date after applying the maximum relaxation for commencement of loading. He therefore, submits that the petitioners in order to obfuscate the judicial proceedings are trying to mislead and confuse between signing of the Contract Agreement and the commencement of loading which are two completely different things.

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(v) He further submits that on account of the petitioners having failed to load, pursuant to the Letter of Acceptance being issued on 08.10.2022, as on date, the respondent Railway Authorities have lost revenue for an amount of more than Rs.2,56,82,400/- till date, taking the reserve price which was far less than the price quoted by the Petitioner Firm, for which the instant writ petition should be dismissed and the Railway Authorities may be permitted to restitute their losses from the Petitioner Firm. The Security Deposit so forfeited is a miniscule amount compared to the loss suffered by the respondent authorities.

21. I have heard the counsels for the parties and have also perused the materials on record. The records reveals that on 25.08.2021 the Notice Inviting Tender was issued for leasing out of 24 Tonne VPH By Train No.05960/05959 Kamrup Express Special. Various documents formed a part of the tender

documents. The 3rd part is the "Instruction to Tenderers". In the said "Instruction to Tenderers", various terms and conditions have been mentioned therein. The issue involved in the instant proceedings relates to the interpretation to Clause 8(a) and 8(b) of the said "Instruction to Tenderers". The said Clauses have already been quoted hereinabove. It has also been mentioned hereinabove that the said Clause 8(a) and 8(b) are similar in content with Clauses 20.1 and 20.2 of the Comprehensive Parcel Leasing Policy. It is also relevant herein to mention that an Amendment was made pursuant to the floating of the said tender on 04.10.2021 known as the Amendment No.13. In terms with the said Amendment No.13, Clause 20.1 of the Comprehensive Parcel Leasing Policy was amended whereby the Principal Chief Commercial Manager of the Zonal Railways upon recommendation of the Division was empowered to grant relaxation in the period for commencing of the Page No.# 23/31

contract up to a maximum period of 30 days after duly considering the merits of the case. It is also relevant herein to note that the said power entrusted upon the Principal Chief Commercial Manager of the Zonal Railways could be exercised when circumstances arises beyond the control of the successful bidder (such as curfew, lockdown, natural calamity etc.) to prefer an appeal within 15 days of normalization of the situation. The said power therefore, cannot be exercised at the whims of the authorities but has to be on the ground where the circumstances exist beyond the control of the successful bidder. The facts of the instant case would further show that the Petitioner Firm submitted its tender on 21.09.2021 at 12.41 PM. Thereupon, on 08.10.2021 the Letter of Acceptance was issued containing the various terms and conditions. Clause 3 of the Letter of Acceptance stipulates that the Security Deposit of Rs.40,03,415 was to be deposited in terms with Clause 7 of the "Instruction to Tenderers" within 15 days from the date of issue of Letter of Acceptance. Clause 4 of the said Letter of Acceptance stipulates that the Petitioner Firm was required to execute the Licensing Agreement on non-judicial stamp paper of Rs.100/- within 15 days from the date of issue of the Letter of Acceptance. Clause 5 of the Letter of Acceptance categorically mentioned that all other terms and conditions of the tender documents shall be applicable, meaning thereby Clause 8(a) and Clause 8(b) of the "Instruction to Tenderers" was applicable with effect from the issuance of Letter of Acceptance. It further reveals from the record vide a communication bearing Letter No.DGR/Lease of VP/Acceptance/A-577, the petitioners firm have duly accepted the Letter of Acceptance. Consequently, a binding contract ensured upon the petitioners for compliance with the tender conditions which included Clauses 8(a) and 8(b). A perusal of Clause 8(a) stipulates that the commencement of loading has to be done within 15 days Page No.# 24/31

from the date of allotment of the contract. As already stated hereinabove with the issuance of the Letter of Acceptance on 08.10.2021, it would be deemed that the contract in question has been allotted and this aspect of the matter was also accepted by the Petitioner Firm by accepting the said Letter of Acceptance vide the communication as above mentioned.

22. Now, in terms with Clause 8(a), the Petitioner Firm was required to commence the loading within a period of 15 days which would expire on 22.10.2021 but the Petitioner Firm did neither submitted the Security Deposit as was required in terms with Clause 7 of "Instruction to Tenderers", as well as the Letter of Acceptance dated 08.10.2021 nor commenced the loading as required under Clause 8(a) of the "Instruction to Tenderers". A day before the expiry of the period of 15 days, the Petitioner Firm issued a communication dated 21.10.2021 wherein the Petitioner Firm intimated that on account of certain difficulties faced, the Petitioner Firm was not in a position to submit the Bank Guarantee and the execution of the agreement/commencement of loading for the subject contract. The Petitioner Firm vide the said communication, requested for granting an additional period of 10 days to execute the leasing contract on submission of the requisite amount of BG. It was further requested to grant the Petitioner Firm 10 to 15 days, so that the Petitioner Firm may start leasing work smoothly.

23. Immediately on receipt of the said communication dated 21.10.2021, the Respondent No.6 vide a communication dated 22.10.2021 informed inter alia the Petitioner Firm that the Security Deposit has to be remitted by the successful bidder within 15 days from the date of issue of Letter of Acceptance. It was also mentioned that in terms with Para 20.1 of the Commercial Parcel Leasing Policy, it was the requirement that on allotment of the contract, the Page No.# 25/31

successful bidder (the leaseholder) shall be required to commence the loading within a period of 15 days, failing which the contract will be terminated and the Earnest/Security Deposit would be forfeited. In the said communication, it was also mentioned that it is the Accepting Authority who is empowered to condone the delay on merits of the case on a written application from the leaseholder and can grant another 15 days (maximum period) to the leaseholder for commencement of the contract. On the basis thereof, the Respondent No.6 therefore, requested the Petitioner Firm to commence loading of the VPH by way of submitting the requisite SD money in the form of Bank Guarantee or FDR or DD at the earliest.

24. The Petitioner Firm thereupon on 05.11.2021 submitted the Demand Draft of a value of Rs.40,03,415/- which is the Security Deposit amount. The Petitioner Firm also on 05.11.2021 submitted a Stamp Paper for execution of agreement. While doing so, vide the forwarding letter dated 05.11.2021, the Petitioner Firm also requested for providing the draft copy of the agreement and the work order. By the time the Petitioner Firm submitted the said Demand Draft, the initial period of 15 days had already expired and the subsequent period which could have been condoned by the Accepting Authority was about to expire inasmuch as the deposit of the Security Deposit was submitted 13 days after the expiry of the initial period of 15 days. The records show at that relevant point of time, the Tender Accepting Authority who was competent to condone the delay was on leave for which the Divisional Office/The Tender Accepting Authority did not have the power to condone the delay beyond the expiry of the 15 days, after the expiry of the initial period of 15 days.

25. It is in these circumstances that the Petitioner Firm issued the communication dated 08.11.2021 whereby the Petitioner Firm invoked Page No.# 26/31

Amendment No.13 of the Comprehensive Parcel Leasing Policy and thereby requested permission to start the operation of the said VPH by Train No.05960/05959 Kamrup Express Special EX DBRG to HWH Railway Station and back on round trip basis from 22.11.2021. It was categorically mentioned in the communication dated 08.11.2021 that the petitioner would be ready to start the operation from 22.11.2021 in full swing. The records further goes to show that in view of the accepting authority being on leave at that relevant point of time, the matter was placed before the Principal Chief Commercial Manager, Headquarter, N.F. Railway on 22.11.2021 for granting relaxation in the light of the liberalization guidelines circulated vide FM Circular No.22/2021 (Amendment No.13) dated 04.10.2021. The competent authority granted the maximum relaxation to the Petitioner Firm on 26.11.2021 and immediately on the said date the petitioner was duly informed that the delay in submission have been duly condoned and the Petitioner Firm was directed to commence the loading. The Petitioner Firm immediately on receipt of the said communication dated 26.11.2021 issued a communication dated 27.11.2021 raising certain issues pertaining to allowing the petitioner to load perishable consignments. At this stage it may be relevant herein to mention that 26.11.2021 was Friday and on Monday i.e. on 29.11.2021, the Respondent No.6 issued the allotment order whereby the petitioner was asked to start loading by 07.12.2021, on receipt of the allotment order. It was also mentioned that the petitioner was requested to deposit 50% of the lump sum freight i.e. Rs.1,53,978/- at each end, along with 2% development charge and 5% GST and other taxes as leviable by the Central/State Government or other competent authority. It was also mentioned that as per the commitment made by the Petitioner Firm vide communication dated 08.11.2021, the Petitioner Firm was requested to start loading of the Page No.# 27/31

Leased VPH without further delay and the petitioner was also informed to execute a Contract Agreement in that regard. At this stage it may be relevant herein to mention that the concept of issuance of allotment order for commencement of loading is nowhere to be found in terms with the "Instruction to the Bidders" or even in the Draft Agreement (which forms a part of the tender document) as well as in the Commercial Parcel Leasing Policy. A perusal of the said documents only show that the loading has to be commenced upon allotment of the contract.

26. The Petitioner Firm instead of commencing the loading operation, for the first time raised the issue that without the execution of the Contract Agreement, it would not be possible on the part of the Petitioner Firm to operate the Leased VPH, as the loaders and parcel aggregators were not allowing to offer or load consignments on the Lease VPH without the adjudication of the agreement. Vide the said communication, it was also mentioned that the Petitioner Firm would also require sometime for reaching to the local traders and parcel aggregators for the successful intermediate handling; and under such circumstances requested 2 to 3 weeks time for starting operation of the Lease VPH and in the meantime a suitable date may be fixed for executing the Contract Agreement for operating of the Lease VPH by the Petitioner Firm. At this stage it may be relevant herein to mention that neither in the "Instruction to Tenderers" nor in any part of the tender documents there is any mention that commencement of loading shall start with the execution of the Contract Agreement. Upon receipt of the said communication dated 06.12.2021, the Respondent No.6 immediately replied on 07.12.2021 asking the petitioner to commence loading of the Lease VPH with effect from 14.12.2021 positively. It was also mentioned that as far as the matter of agreement was concerned, the Page No.# 28/31

same was under process and would be executed shortly. At this stage, it is very pertinent to mention that the contract in question is a revenue earning contract of the Railways and with each day of delay in commencement of the loading, the Railway Authorities have been suffering revenue loss. It is relevant to mention that taking into account, the reserved price as was mentioned in the "Instruction to Tenderers" which was far less than the bid submitted by the Petitioner Firm, the loss which the Railways would suffer for non- commencement of the loading for each day was Rs.2,14,020/- and weekly loss was Rs.10,70,100/-. The monthly loss is 42,80.400. It is under such circumstances that respondent authorities have been insisting the Petitioner Firm to commence loading.

27. The Petitioner Firm instead of commencing the loading operation issued another communication on 14.12.2021 wherein requested the respondent authorities to execute the agreement and thereupon the petitioner shall be able to operate the lease within a week therefrom. In right earnest, the respondent authorities therefore asked the Petitioner Firm vide a communication dated 17.12.2021 to appear before office of Respondent No.6 on 20.12.2021 for signing of the Contract Agreement. The petitioner however, in spite of receipt of the said communication did not appear on 20.12.2021 for signing of the said Contract Agreement. The Respondent No.6 thereupon on 21.12.2021 again requested the Petitioner Firm to appear before the Respondent No.6 on 22.12.2021 for signing of the agreement. The Petitioner Firm again did not respond to the same in spite of receipt of the said communication. Even there is no explanation in the writ petition as to why the partners of the petitioners firm or any authorized representative could not be present on 20.12.2021 or 22.12.2021 for signing of the Contract Agreement.

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28. Situated thus on 24.12.2021, it was intimated to the Petitioner Firm that the period of 30 days which is the maximum relaxation period would be expiring on 25.12.2021 and as such the Petitioners Firm should commence loading on or before 25.12.2021. A perusal of the communication dated 24.12.2021 would clearly show that there was no request or direction to the Petitioner Firm for the purpose of signing the Contract Agreement. However, the Petitioner Firm did not take any steps for loading. On the other hand, issued a communication on 25.12.2021, intimating to the Respondent No.6 that an authorized person would be present on 27.12.2021 to sign the Contract Agreement and thereafter shall commence loading.

29. As the maximum relaxation period had expired on 25.12.2021, the respondent authorities did not enter into Contract Agreement on 27.12.2021 when the authorized respondents of the Petitioner appeared and terminated the contract on 03.01.2022 along with forfeiture of the Security Deposit and debarring the Petitioner Firm from participating in similar contracts for a period of 2 years in respect to the same Division of N.F. Railway. The above facts would clearly go to show that the respondent authorities have granted the petitioner ample opportunities to commence the loading. Clause 8(a) categorically mandates commencement of loading from the date of allotment of the contract and the issuance of the Letter of Acceptance as already stated hereinabove would be deemed to be the allotment of contract; ,more so, when the said Letter of Acceptance was duly accepted without any question. Under such circumstances the non-commencement of the loading by the petitioner violates the mandate of Clause 8(a) of the "Instruction to the Tenderers" and consequently the Railway Authorities were justified in terminating the said contract and forfeiting the Security Deposit. The petitioners clearly knew at the Page No.# 30/31

submission of their tender, that non-compliance to Clause 8(a) would result in befalling of the consequences under said Clause 8(a) and 8(b) and under such circumstances this Court does not find any illegality in passing of the impugned order.

30. The said aspect of the matter can further be seen from another angle. The instant contract in question is a revenue earning contract of the Railways and with each day of non-commencement of loading there is a revenue loss to the Railway Authorities or in other words loss to the Public Exchequer. In terms with the tender documents, the Petitioner Firm was required to start loading latest by 22.10.2021. Non-commencement of the loading operation has caused colossal revenue loss to the Railway Authorities for which the Railway Authorities were justified in forfeiting the Security Deposit.

31. Coming to the submissions made by the learned counsel for the petitioners about the applicability of Clause 10 of the General Clauses Act, 1897 and the judgments of the Supreme Court rendered in the case of H.H. Raja Harinder Singh Vs. S. Karnail Singh and Others reported in AIR 1957 SC 271; Huda and Another Vs. Dr. Babeswar Kanhar and Another reported in (2005) 1 SCC 191 and Mohd. Ayub Vs. State of Uttar Pradesh and Others reported in (2009) 17 SCC 70 , this Court is of the opinion that the said are totally misplaced in the facts of the instant case inasmuch as the petitioners were requested to attend on 20.12.2021 and 22.12.2021 for signing of the Contract Agreement. The said dates were admittedly not designated as holidays. Vide the communication dated 24.12.2021, the petitioner was only asked to commence loading and not to come for signing on 25.12.2021. Apart from what has been stated herein above, it is also relevant to take note of that signing of a Contract Agreement is one Page No.# 31/31

thing and commencement of loading operation is another thing. The respondents in the affidavit as well as also in the stay vacating application have submitted details that in various other similar contracts also commencement of loading operations started even without the Contract Agreement. The "Instruction to the Tenderers" do not in any manner stipulate that the commencement of loading shall start with effect from the signing of the Contract Agreement. It would also be seen that it was only on 06.12.2021 that the Petitioner Firm for the first time raised the said issue that without the execution of the Contract Agreement, it was not possible to start commencement of loading whereas all along, prior thereto, the petitioners had given commitment to start loading as would be very much apparent from the communication dated 08.11.2021 wherein the petitioner gave a commitment to start loading on 22.11.2021. Under such circumstances, the action of the Respondent Authorities to terminate the contract, forfeit the Security Deposit and debar the petitioner in terms with Clause 8(b) of the "Instruction to the Tenderers" cannot be said to be illegal or arbitrary or unreasonable. Consequently no interference is called for to the impugned order dated 03.01.2022.

32. In view of the above, the instant petition stands dismissed however in the facts of the instant case, this Court is not inclined to impose any costs.

JUDGE

Comparing Assistant