It would amount to violation of principle of Natural Justice if a tender authority passes an order upon which it did not seek to issue show cause notice: Karnataka High Court

The Karnataka High Court under Justice M. Nagaprasanna passed a judgement on 14-12-2022 in THE CAP A PIE v. The South Western Railways(Writ Petition No. 22793 of 2022) regarding termination of contract between THE CAP A PIE and South Western Railways performing work of cleaning, collection and ironing of bedroll linen supplied to AC Coach Passengers.


The respondent- South Western Railways issue a notice inviting tender for the aforesaid work which the petitioner is said to be performing on 24.05.2022. On 17.10.2022 the respondent awards the contract in favour of the petitioner. In terms of the said order of award of contract, the petitioner requests permission to execute the work at M/s. Laundry Labs India Pvt. Ltd., which was not the one that was necessary in terms of the tender conditions. Noticing the fact the petitioner did not have appropriate infrastructure and had deliberately misrepresented with regard to the laundry space issues a notice on 02.11.2022 seeking to show cause as to why the contract of the petitioner should not be terminated. Pending consideration of the reply, certain developments take place. The respondent terminates the contract between the petitioner and the South Western Railways on account of the aforesaid circumstance of the act of the petitioner being in violation of tender conditions. It later transpires that the tender itself gets cancelled. In the light of the cancellation of the tender, what remains to be considered is, whether the impugned notice of termination would be necessary to be gone into.


In terms of the notice quoted , the court said  “what can be unmistakably gathered is, the petitioner was asked to show cause as to why the contract awarded to him should not be terminated. If the show cause notice issued to the petitioner is juxtaposed with the order, it would unmistakably depict that it travels beyond the show cause notice. The order of termination blacklists the petitioner for a period of 2 years, quoting it to be “in addition”. For this “in addition” in the order, the petitioner was not put on notice. The order of blacklisting comes to the petitioner as a bolt from the blue, as he had no notice prior to the order of blacklisting. The show cause notice only contained the contents about the termination of contract and not on blacklisting.



As a result, the High Court determined that the assailed decision merits interference in as much as it amends its order to add blacklisting. The court further said “Liberty is reserved to the respondent to issue a show cause notice concerning blacklisting of the petitioner, seek a reply, consider the reply and pass appropriate orders, in accordance with law in regard to the blacklisting of the petitioner.”

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