(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.)

Dr. G. Jayachandran, J.

1. 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, 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 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.

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 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 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 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 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 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 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 dewirement. 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- 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 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.