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For every minor irregularity, a tender is not to be cancelled

In M/s Singh Caterers & Vendors & Anr. v. Indian Railways Catering And Tourism Corporation Ltd., writ petition has been filed challenging termination letter passed by Respondent-IRCTC terminating temporary license awarded to Petitioners for management of On Board Catering Services in Train on ground that, Petitioners had failed to accept award of temporary license and had not paid the security deposit and license fee within stipulated time. Respondent in terms of Clause 4.8 of tender document also debarred Petitioners from participating in future projects of Respondent, IRCTC for a period of one year and forfeited Standing Earnest Money Deposit (SEMD) of Rs.3 lakhs.

High Court is of view that cutting/overwriting in present case is not a violation of a mandatory condition and is not material as there is no ambiguity or discrepancy in bid amount. Petitioners bid despite cutting/overwriting clearly mentions the revised bid amount. In fact, revised bid amount has been mentioned clearly both in figures and in words.

It is settled law that for every minor irregularity, a tender is not to be cancelled. Petitioners cannot make a virtue out of their own mistake. However, High Court is in agreement with the learned counsel for Petitioners that punishment of debarment for a period of one year is not proportionate, especially keeping in view fact that the petitioners have been an empanelled contractor/caterer with Railways and is at the moment serving another train by way of On Board Catering Services.

The concept of proportionality of punishment is not unknown to law. The Supreme Court in Kulja Industries Limited vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited & Ors., has held permanent debarment from future contracts for all times to come may sound too harsh and heavy a punishment to be considered reasonable. Consequently, the punishment of debarment of Petitioners in the peculiar facts of present case is reduced to nine months w.e.f. 26th September, 2016.

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