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Madras High Court
M/S.Core4 Engineers Pvtt. Ltd vs Union Of India on 27 February, 2026
Author: G.Jayachandran
Bench: G.Jayachandran
W.A(md)No.126 of 2026
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 25.02.2026
Pronounced on : 27.02.2026
CORAM
THE HONOURABLE DR.JUSTICE G.JAYACHANDRAN
AND
THE HONOURABLE MR.JUSTICE K.K.RAMAKRISHNAN
WA(MD)No.126 of 2026
and
C.M.P(MD)No.1370 of 2026
M/s.Core4 Engineers Pvtt. Ltd.,
Represented by its Authorized Signatory
Harsha Kumar C.D.
S/o.Dakshina Murthy.C.C,
No.12, 1st Floor,
Near Ramana Maharshi Gyana Kendra,
Mysuru-570 023.
Karnataka Appellant/Petitioner
Vs
1.Union of India,
Represented by the General Manager,
Southern Railway, Park Town,
Chennai-600 003.
2.The Senior Divisional Electrical Engineer(TRD)
Madurai Division, Division Office,
Traction Distribution Branch,
Southern Railway,
Madurai-625 016. Respondents/Respondents
1
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W.A(md)No.126 of 2026
Prayer: Writ Appeal filed under Clause 15 of Letters Patent, praying to
prefer this Memorandum of Grounds of Writ Appeal against the order of this
Court dated 03.09.21025 in WP(MD). No.23464 of 2025.
For Appellant(s) : Mr.G.Prabhu Rajadurai
for Mr.Bapat Sampath Vinayaka
For R1 & R2 : Mr.R.Murali
JUDGMENT
(Judgment of the Court was delivered by DR.G.JAYACHANDRAN,J.)
The case of the appellant herein is that, as a service provider company
specialised in overhead equipment(OHE) maintenance and breakdown
operations, when the Southern Railways issued tender notification for the
periodical maintenance and breakdown attention of OHE assets in Madurai –
Manamadurai - Virudhunagar section having 1332 tracklilometr/111 Route
Kilometer for one year period (2024- 2025) offered its bid and the same was
accepted. Contract was awarded to the appellant on 18.04.2024. However,
the agreement for the LOA was executed nearly after 6 months only on
22.10.2024. Due to various interlinked impediments, such as delay in
execution of LOA, non-registration of labour by the administration, denial of
permission to raise bills for already executed works under other LOA’s, and
labour non-availabilities the appellant was not able to commence the work
immediately. Without considering the constraints in commencing the work,
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Southern Railways issued a performance notice on 05.10.2024. Inspite of
suitable reply, the termination order was issued on 24.10.2024, just two days
after signing of LOA. The termination order not only put an end to the
particular LOA, but also debarred the appellant Company from participating
in any tenders floated by the Southern Railways of Madurai Division for a
period of two years.
2.Aggrieved by the termination order and the consequential debarment
order, the appellant company filed WP(MD)No:28694 of 2024. In the said
writ petition, this Court, vide order dated 02.12.2024, affirmed the
termination of contract, but set aside the order of debarment (black listing)
issued without notice of hearing. The Court directed the Southern Railways
to issue fresh notice for debarment and after providing opportunity of
hearing, decide whether debarment is warranted. On appeal, the order passed
in the writ court was confirmed.
3.Pursuant to the order passed in WP(MD)No:28694 of 2024
confirmed in WA(MD)No.53 of 2024, the second respondent namely the
Senior Divisional Elctrical Engineer (TRD) , Madurai Division of Southern
Railways, issued show cause notice dated 20.03.2025. For which a detailed
reply was given by the appellant on 11.04.2025. When the appellant was
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called for personal hearing on 30.06.2025, the appellant participated and
sought 15 days time to make a comprehensive reply. However, instead of
granting reasonable time to explain, passed the order dated 07.07.2025,
debarring the appellant.
4.The said order of debarment dated 07.07.2025 passed arbitrarily and
vitiated by procedural impropriety. The Clause 7.4 of the General Conditions
of Contract (GCC) for service contracts, 2018 only list out circumstances
under which a contract can be terminated. It is silent about debarment.
Hence, on the ground that the show cause notice referring clause 7.4 cannot
be put against the appellant to debar (black list), the appellant challenged the
order dated 07.07.2025 before the Writ Court in W.P(MD)No:23464 of
2025.
5.The Learned Single Judge, after considering the grounds raised
challenging the order of the second respondent dated 07.07.2025, dismissed
the writ petition tracing the power to black list to clause 4.11.18 of the
General Conditions of Contract (GCC) for service contracts, 2018, held that
clause 4.11.18 which should be read along with clause 7.8. Therefore, the
appellant being bound by terms set out in GCC 2018, and found to be failed
contractor, blacklisting is a matter of consequence.
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6.The Learned Senior Counsel appearing for the appellant submitted
that as per the terms of GCC, 2018 and the Guidelines issued by the Railway
Board debarment instruction clearly indicates that for debarment (black
listing) special reason must be assigned. The general reason for termination
of contract not sufficient. The conclusion of the learned judge that debarment
is consequential of termination of contract, therefore suffers legal infirmity.
The learned Counsel for the appellant further submitted that the non
speaking order dated 07.07.2025 contrary to the fair procedure not been
taken note by the learned Single Judge. His argument primarily on the
ground of refusal to give adequate opportunity to explain inspite of request
made to grant 15 days time to give a comprehensive explanation.
7.The Learned counsel for the appellant submitted that blacklisting
contractor is an action penal in nature and the same cannot be slapped on a
contractor without following due process of law. Debarring for certain years
from participating in the tender process tantamount to civil death resulting in
serious consequences, hence arbitrariness in any form vitiates the order of
debarment. Referring the debarment instructions issued by the Railway
Board through communication dated 09.11.2022, submitted that before
passing the order of debarment dated 07.07.2025, the second respondent
ignored to follow the guidelines issued by the Board. For that reason also the
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order of debarment requires judicial intervention.
8.To buttress the above submission, the learned Counsel for the
appellant also relies on the following judgments of the Supreme Court:-
a) Blue Dreamz Advertising (P) Ltd –vs- Kolkata Municipal
Corporation and others, reported in (2024) 15 SCC 264.
b)M/s Techno Prints –vs- Chhattisgarh Textbook Corporation and
others, reported in 2025 INSC 236.
9.Per contra, the Learned Standing Counsel for the Southern Railways
submitted that the appellant entrusted with the contract to maintain the
overhead equipments (OHE) failed to maintain it. The non-performance
admitted by the appellant and his reason for failure to perform not found
justifiable. The work entrusted to the appellant involves safety of the railway
passengers. Therefore, the special reason for imposing debarment is fully
satisfied. The second respondent, in exercise of the power under clause
4.11.18 of GCC and in reverence to the direction of the Hon’ble HighCourt,
called for explanation and after affording adequate opportunity imposed
debarment for a period of two years, which is likely to an end on 23.10.2026.
The appellant offered eight LOA during this period and only in one LOA, he
was found not performing. Hence, action initiated after issuing performance
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notice under clause 7.4 of GCC. Ultimately, the contract got terminated.
Since in the same order debarment order was also passed.This Court held
that for debarment action, separate proceedings to be initatied and after
affording opportunity, action if necessary may be taken. According, fresh
show cause notice was issued and after affording opportunity of written and
personal hearing, order of debarment dated 07.07.2025 was issued. The said
debarment is restricted to Madurai region alone. The fact, the appellant is
allowed to continue the other 7 LOA will prove that the action taken under
the impugned order dated 07.07.2025 does not suffer any arbitrariness or
malafide.
10.The Learned Counsel representing Railvways submitted that
whenever a contract is rescinded, apart from other action like forfeiture, the
failed contractor shall be debarred for a period of 2 years. In this case,
considering the safety of the public, the debarment action is taken. Regarding
the guidelines issued by the Board on 09.11.2025, submitted that this
guidelines issued for debarment of firms participating in procurement
process and not in respect of works contract.
11.The submissions placed by the respective counsels are considered.
The indisputable fact is that the contract for maintenance of OHE. The
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learned judge, while considering the submission of the writ petitioner/ the
appellant herein, had considered all the submissions now placed before us
and has held that, unmaintained OHE creates a dangerous, unreliable and
financially railway system. There can be no second view to the said
observation. Even the case of the appellant is not that he had performed the
contract. Contrarily, admits the failure to perform the contract entrusted to
him for maintaining OHE in that particular sector. The action of terminating
that contract (LOA) also been upheld by the Court and finality.
12.In the earlier round of litigation, taking note of the fact that
debarment is a separate and distinct from termination of contract, the Court
has directed the Southern Railway to issue fresh show cause notice and
decide after giving opportunity. The appellant claims that the adequate
opportunity was not given to put forth the comprehensive reply and the
impugned order of debarment in not a speaking order.
13.Persuant to the order passed by this Court in WP(MD)No.28694 of
2024 and confirmed in WA(MD)No.53 of 2025, fresh show cause notice
dated 20.03.2025 to the appellant granting 15 days time to submit reply. In
response to the said show cause notice, explanation by way of reply sent by
the appellant on 11.04.2025. The second respondent, on receipt of the reply
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through letter dated 25.06.2025, had granted further opportunity to the
appellant to appear in person on 30.06.2025 and submit its representation
with documents if any. In fact, the representatives of the appellant company
had attended the personal hearing held on 30.06.2025. After participating in
the personal hearing proceedings, the appellant had made a representation to
grant two weeks time to submit written reply and remarks against each of the
points mentioned in the “ Personal hearing” file.
14.The second respondent had considered the request and in his order
dated 07.07.2025 after detailing the facts and considering the request to grant
further time, had observed as below:-
“Though the afresaid persons are well known about this
work and dealt this work/correspondences submit the initial
stage istels, ?our firm has requested further period of two (2)
weeks from 30.06.2015 to submit a written reply and detailed
remarks in response to each of the points mentioned in the
Personal Hearing statement vide ref (9) above.
It is pertinent to mentioned here that this office has
provided several opportunities to your firm to commence the
work irrespective repeated frivolous reasons submitted by your
firm (all those reasons have been listed in the attached
statements) on each occasions. In the same manner, ever after
giving sufficient time during the show cause notice period and
also in the personal hearing meeting on 30.06.2025, your firm
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has not submitted any valid acceptable reasons for not
debarring your firm in the future tenders of MDU division for
the period of two years and simply requested for further period
of two (2) weeks from 30.06.2025 to submit a written reply. This
clearly indicates your intention to prolong the issues without
having any valid reasons.”
15.After rejecting the request to grant further time to give explanation,
the impugned order assigns seven reasons for imposing debarment as under:-
“1.The tender was awarded for periodical maintenance &
Breakdown attention of Over Head Equipments (OHE) assets
available in the single line section of Madurai (MDU)-
Manamadurai (MNM)-Virudunagar(VPT) section having 132
Track kilometer/111 Route kilometer. The main use of OHE is to
deliver high-voltage 25 kilo Volt(kV) alternating current (AC)
power from action substations to the electric locomotives. This
power is collected by a device on the train's roof called a
pantograph, which maintains constant contact with the contact
wire (the lowest wire in the OHE system). If the Over Head
Equipments (OHE) are not maintained periodically in an
electrified railway system, it leads to a cascade of severe
consequences, impacting safety of travelling public/railway
employees, reducing the operational efficiency, financial losses
to Railways and poiling the reputation of Railway. Since the
contract is also having the Breakdown attention of Over Head
Equipments, the non-attention of breakdown in OHE system will
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leads to severe interruptions in public transport services.
2.If the contact wire worn due to misalignment, has
improper tension, or its geometry is compromised, the
pantograph can lose contact or snag the wire, lending to a de-
wirement. This can exert sudden and immense forces on the
train's roof, potentially damaging the pantograph and other
rooftop equipment, and in severe cases, leading to derailment.
Further, the, pantograph and the train's roof can suffer extensive
damage, requiring costly repairs and taking the rolling stock out
of service. Moreover, the broken OHEwire can whip around with
tremendous force, potentially striking and injuring people or
damaging property.
3.Unmaintained earthing system in the railway station
yard area can creates an extreme risk of electric shock or even
electrocution for railway personnel, passengers, and the public
who might acidentally come into contact with the system. A fault
in the OHE, such as a wire break, insulator failure, or short
circuit, will trip the protection system, leading to a power outage
in that section. This immediately halts train movement.
4.Power outages, de-wirements, or OHE repairs cause
significant delays, leading to trains running off schedule, missing
connections, and ultimately, a breakdown of the entire railway
timetable. In severe cases, services may need to be cancelled.
Further, if a section of OHE is damaged, trains might have to
proceed at reduced speeds or be rerouted, significantly reducing
the line's capacity and causing further congestion.
5.Repairing of damaged OHE is often comples, time-
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consuming, and expensive specialized equipment and skilled
personnel. Replacing components, structures, or entite sections of
wire incurs significant material and labor costs. Delays and
cancellations of train services lends to lost ticket sales, potential
penalties from customers and lost cargo revenue in freight
speration
6. Moreover, accidents or injuries resulting from
unmaintained OHE can lead to costly lawsuits and compensation
payouts. Further, frequent disruptions and safety incidents erode
public trust in the raidway operation, leading to a decline in
ridership and negative media attention
7.Neglecting routine maintenance accelerates the
deterioration of OHE components, forcing premature
replacement of expensive assets that should have had a longer
service life. This increases the overall life-cycle cost of the
infrastructure.”
16.The Learned Single Judge, in his order dated 03.09.2025, had
considered the expression “failed contractor” used in clause 4.11.18 and the
others terms of GCC, particularly clause 7.4 had applied the law laid by the
Hon'ble Supreme Court in Blue Dreamz case (cited supra) and Technoprint
case(cited supra). We opine it will be superfluous to extract the relevant
clauses of GCC and the observations of the Hon'ble Supreme Court in the
judgement cited supra, except to add that the guidelines of the Railway
Board, dated 09.11.2025 issued as instruction to be followed on receipt of
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the proposals from various procuring units/vigilance. The communication
dated 09.11.2025 specifically states that this debarment instructions are
issued in supersession of earlier instructions, as guidelines on debarment of
firms from participation in any procurement process. Therefore, as
submitted by the Learned Counsel appearing for Railways, this instruction of
the Board dated 09.11.2025, is confined only to procurement contracts and
not for maintenance contract. Further, on examining the facts and peculiar
circumstances of the case in hand, we find that the spirit of fair hearing and
rendering a speaking order is complied and well exhibited in the order of the
second respondent dated 07.07.2025. Therefore, we find no violation of
natural justice or dis-proportionality in the order of debarment. Hence, the
same is upheld.
17.In the result, the Writ Appeal stands dismissed. No costs.
Consequently, connected miscellaneous petition is closed.
[G.J., J.] & [K.K.R.K., J.]
27.02.2026
Index :Yes/No
Internet :Yes
Ns
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DR.G. JAYACHANDRAN, J.
AND
K.K. RAMAKRISHNAN, J.
Ns
and
27.02.2026
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