M/S.Hyfa Catering vs The General Manager
2021 Latest Caselaw 24780 Mad

                                                                       W.P.Nos.26968 and 26971 of 2021




                                  IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                DATED : 16.12.2021

                                                     CORAM

                                  THE HONOURABLE MR.JUSTICE M.DHANDAPANI

                                          W.P.Nos.26968 and 26971 of 2021

                     M/s.Hyfa Catering                                    ... Petitioner

                                                        Vs.

                     1.The General Manager,
                      Head Quarters Office,
                       Southern Railway, Park Town Office,
                       Chennai 600 003.

                     2.The Principle Chief Commercial Manager,
                       Head Quarters Office, Southern Railways,
                       Chennai 600 003.

                     3.The Senior Divisional Commercial Manager,
                       Southern Railways, Salem Division,
                       Salem.                                          ... Respondents

Common Prayer: Petition filed under Article 226 of the Constitution of India to issue a Writ of Certiorarified Mandamus To call for the records resulting in the Impugned order of the 3rd respondent in File Nos. SR- SA0COMM (C79) / 60 & 61 / 2020- O/o CHOS / I / Sr. DCM /SA / SR dated 22.03.2021 debarring the petitioner and forfeiting the EMD, quash the

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

same and consequently direct the 3rd respondent to grant extension of time and implement the allotment order of MSP stall vide LOA No. SAC79 / 08 / CBE / MPS / 3 and 4 / 322 and LOA No. SAC79 / 12 / TUP / MPS / 02/504, Dt. 19.03.2020 to the Petitioner.

For Petitioner in both petitions : Mr.Om Prakash, Senior Counsel Ms.T.M.Naidu and Company

For Respondent in both petitions: Mr.P.T.Ravikumar Standing Counsel for Railways

COMMON ORDER

The petitioner has filed these writ petitions seeking issuance of Writ

of Certiorarified Mandamus to call for the records resulting in the Impugned

orders of the 3rd respondent dated 22.03.2021 in debarring the petitioner

and forfeiting the EMD and quash the same and consequently direct the 3rd

respondent to grant extension of time and implement the allotment orders of

MSP stall to the Petitioner.

2. Mr.P.T.Ravikumar, learned Standing Counsel takes notice for the

respondents. Since the issue involved in the present round of litigation is

one and the same and on the consent expressed by the Learned counsel

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

appearing for either side, these petitions are taken up for final disposal.

3. The case of the petitioner is that they had participated in tender

ref.nos. SAC79 / 08 / CBE / MPS / 3 and 4 / 322 by quoting 48% for

Coimbatore stall and in tender ref.No. SAC79 / 12 / TUP / MPS / 02/504, by

quoting 67% for Tiruppur Stall and they were successful bidder vide award

dated 19.03.2020, on condition that the security deposit for license for the

awarded stall shall be deposited within 15 days from the date of receipt of

the Letter of Award (LOA). While on the performance of LOA, from

24.03.2020, a sudden nation-wide lockdown was imposed by the

Government due to COVID-19 pandemic and further while the COVID 19

infections were at its peak, the train services not been resumed in full, as on

23.12.2020. While being so, the 3rd respondent had issued a letter to remit

the first year annual license fee and security deposit in compliance with the

LOA and the petitioner vide reply dated 08.01.2021, requested the

respondents to consider the prevailing extra-ordinary situation and to grant

further time for compliance, since the petitioner was not able to meet the

contractual conditions due to pandemic situation. However, the 3rd

respondent vide letter dated 22.03.2021, rejected the request of the

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

petitioner and had arbitrarily ''debarred'' the petitioner and his firm from

participating in similar future contracts / license of all zonal railways

including IRCTC for a period of five years till 18.03.2026 and forfeiting the

EMD paid along with tender. Aggrieved by the same, the petitioner had

written to the 3rd respondent dated 31.03.2021 to relax the said order and

thereafter, vide a reply dated 28.07.2021, the 3rd respondent had ''regrettably

informed'' that the petitioners' request is not considered. Furthermore, the

petitioner had issued a clarificatory letters dated 29.07.2021 and

13.08.2021, for which no response was received till date. While awaiting a

reply, the petitioner came to know about the writ petition in

W.P.Nos.17039, 17177 and 17588 of 2021 pending before this Court,

wherein the case of the petitioners therein are of similar grievances as that

of the present petitioner and in the above said case, this Court on

24.08.2021 was pleased to grant relief to the writ petitioners therein, by

treating the orders impugned as show cause notices and the petitioners

therein were directed to submit their explanation with supportive material

within a period of two weeks. Pursuant to the order, a fresh tender was

uploaded on 15.11.2021. Since the petitioner is debarred from participating

in any tender, they were unable to participate in the said tender. Therefore,

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

in the light of the judgment of this Court, once again a representation was

made to the respondents to consider the petitioner's request, for which no

response was received. Hence, the petitioner left with no other option, is

constrained to approach this Court by filing these Writ Petitions.

4.The learned Senior counsel appearing for the petitioner submits that

the 3rd respondent without considering the extraordinary situation

prevailing during the COVID 19 pandemic, and further the fact that the

regular train services not have been resumed, had passed the impugned

order, which is illegal and arbitrary and therefore the impugned order is

clear violation of principles of natural justice, as the same was issued

without affording an opportunity and further debarring the petitioner from

participating in similar future contracts / licenses of all zonal railways for a

period of 5 years, is non est in the eye of law and hence prays for quashment

of the debarred order dated 22.03.2021.

5. Further in similar situation, on an earlier occasion, this Court in

W.P.Nos.17039, 17177 and 17588 of 2021, had passed an order, treating the

impugned order as show cause notice and thereby the petitioners therein

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

were given liberty to give explanation to the same within a period of two

weeks. Since the issue involved therein is also similar to the present case on

hand, the learned counsel prays for extension of same benefit to the

petitioner herein also.

6. The learned Standing Counsel appearing for the respondent did not

dispute the facts submitted by the learned counsel for the petitioner.

7. This Court has carefully considered the rival submissions and also

perused the materials placed on record.

8. The facts in the present case is not in dispute that the petitioner was

awarded license to run two catering stalls at Coimbatore and Tiruppur

Railway Station. It is true that one of the terms of the conditions stipulated

in tender notification entitles the railway to debar the highest bidder for five

years from participating in all catering contracts over Indian Railways

including IRCTC, if he or she withdraw or fails to take up or to start the

contract. It is also true that the letter of award issued to the petitioner dated

19.03.2020 reiterated such conditions stipulated in the tender notification.

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

The fact remains that the petitioner has not paid the security deposit within

the time originally granted and then extended by the respondents. However,

due to the COVID 19 situation, the petitioner was not able to comply with

the contractual conditions. Since, the petitioner has not paid both the license

fee and security deposit within the time stipulated, the present impugned

orders debarring the petitioner from participating in the tender for the five

years have been passed.

9. There is no doubt that the respondents are having power and right

to impose such punishment on the petitioner as per the terms and conditions.

However, the question that arises for consideration in this case is as to

whether such power was exercised by following the principles of natural

justice by putting the petitioner on notice before imposing such punishment.

The learned standing counsel for the railways submitted that the very

condition imposed in the letter of award issued to the petitioner itself clearly

indicates that such debarment will take place, if the petitioner fails to take

up or to start the contract.

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

10. Needless to say that debarring the petitioner for five years would

certainly attract civil consequences and therefore, such punishment cannot

be imposed without following the principles of natural justice. Admittedly

except the communication dated 23.12.2020, for remittance of license fee

and security deposit, the petitioner was not issued with any further notice to

show cause before debarring them. Therefore, this Court is convinced to set

aside the impugned communications and remit the matter back to the

respondents for reconsidering the matter once again and to pass fresh

orders.

11. Accordingly, these writ petitions are allowed and the impugned

communications are set aside and the matter is remitted back to the

respondents for reconsidering the whole issue, on merits and in accordance

with law, as per the following directions:

a. The petitioner as well as the respondents shall treat the impugned

communications dated 22.03.2021 as show cause notices for debarment.

b. The petitioner shall send his reply to the said notices within a

period of two weeks from the date of receipt of a copy of this order.

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

c. on receipt of such reply, the 3rd respondent shall pass fresh orders

on merits and in accordance with law within a period of two weeks

thereafter.

16.12.2021

sk Note:Issue order copy 17.12.2021.

Speaking Order/ Non Speaking Order Index: Yes/ No Internet: Yes/ No

To

1.The General Manager, Head Quarters Office, Southern Railway, Park Town Office, Chennai 600 003.

2.The Principle Chief Commercial Manager, Head Quarters Office, Southern Railways, Chennai 600 003.

3.The Senior Divisional Commercial Manager, Southern Railways, Salem Division, Salem.

https://www.mhc.tn.gov.in/judis W.P.Nos.26968 and 26971 of 2021

M.DHANDAPANI,J.

sk

W.P.Nos.26968 and 26971 of 2021

16.12.2021

https://www.mhc.tn.gov.in/judis