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2022 (4) TMI 1578 - HC - Indian LawsSeeking a direction on the North Eastern Railway to withdraw a letter of termination dated 31st March, 2021 issued by the Senior Divisional Commercial Manager - HELD THAT:- Clause 23.2 of the Agreement in terminating the contract requires the Railways to give one month’s notice of termination to the Leaseholder except in cases of breach of agreement. The Railways have not sent any intimation or notice to the petitioner alleging breach of the terms. The clarification sent by the Railways on 3rd December, 2020 contains guidelines for dealing with cases relating to non-commencement of leased contract of parcel space and indicates Scenario-3 where a Leaseholder has not commenced contract corresponding Passenger Special Train service. The Railways have not alleged any breach of the contractual terms even in this letter but appears to have invoked Scenario-3 in terminating the contract by the letter dated 31st March, 2021 - It is an admitted fact that the termination was made without giving any notice to the petitioner as required under clause 23.2 of the Agreement. It should also be noted that clause 23.2 does not contain any provision for blacklisting the Leaseholder in case of violation of the terms or under any other condition. It is also significant that the termination letter was issued by the Railways only after and as a counterblast to the petitioner’s letter of 6th February, 2021 by which the petitioner served 60 days notice under clause 23.1 of the Agreement to terminate the contract and sought refund of the security deposit - The facts in the present case reflect a wholly arbitrary action taken on behalf of the Railways which also includes breach of the petitioner’s right to a hearing before such action was taken against the petitioner. The impugned letter of termination falls foul of the contractual terms between the parties. The letter of termination is also in violation of the petitioner’s right to a fair hearing before the Agreement was terminated and the petitioner’s security deposit forfeited. The action of debarring the petitioner from future tenders is highhanded, arbitrary and against the contractual terms executed between the parties. As recognised by the Supreme Court in ERUSIAN EQUIPMENT & CHEMICALS LTD. VERSUS STATE OF WEST BENGAL & ANR. [1974 (11) TMI 89 - SUPREME COURT], blacklisting has the effect of preventing a person from the privilege and advantage of entering into a lawful relationship with the Government for purposes of gains. The Supreme Court was also of the view that fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist. This Court finds the impugned letter of termination dated 31st March, 2021 liable to be revoked and set aside - Application allowed.
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