Zainab Caterers vs. Union Of INDIA
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Cause title — parties, addresses and appearances
The Court made the following order:
Aggrieved by the action of the respondents in debarring the petitioner from participating in future catering tenders floated by the Indian Railways and IRCTC Limited for a period of five years, without issuing any show-cause notice and without affording an opportunity of hearing, the present Writ Petition has been filed.
Heard Sri Shaik Asif, learned counsel, representing Smt. Ayesha Azma, learned counsel for the petitioner, and Sri Arun Showri, learned Central Government Counsel appearing for the respondents.
Learned counsel for the petitioner, in elaboration to what has been stated in the affidavit filed in support of the Writ Petition, contended that respondent No.3 floated an Open Tender Notice for allotment of a licence to operate a Modular Catering Stall/General Minor Unit at Dhone (DHNE) Railway Station on Platform Nos.4 and 5. The petitioner-firm participated in the bidding process and emerged as the Highest Bidder (H1) on 03.08.2026. He further submitted that, on 12.08.2026, respondent No.3, without issuing any Letter of Award (LoA) and without any prior communication, issued a letter/order cancelling the allotment, forfeiting the EMD and blacklisting the petitioner for a period of five years with effect from the date of the said letter. The order stated that an on-site physical verification conducted on 22.07.2026 by a Commercial Inspector revealed that no commercial catering establishment was operating at the declared address, thereby classifying the petitioner’s credentials as a false declaration. He further submitted that an 4
independent inspection report dated 21.07.2026, conducted by the juri ictional authority, clearly confirmed the existence of the establishment, noting the presence of a name board, commercial vessels, domestic gas, workers and original statutory documents i.e., FSSAI, GST, PAN, Aadhar at the premises. He further submitted that respondent No.3 neither issued any show-cause notice nor called upon the petitioner to explain the alleged discrepancy, nor was the petitioner afforded any personal hearing. He further submitted that the physical verification, if any, was conducted behind the back of the petitioner. No prior intimation was given to the petitioner or her authorized representative, and a copy of the verification report dated 22.07.2026 has not been furnished to the petitioner till date. He further submitted that debarment for a period of five years across the entire Indian Railways and IRCTC Limited is a harsh and extreme measure. Even if some discrepancy in the physical appearance or functioning of the establishment at the registered address was perceived, the respondents were bound to put the petitioner on notice, consider her explanation and thereafter determine the quantum of penalty, if any, in a proportionate manner after arriving at an objective satisfaction. The impugned order/letter discloses no such application of mind. He further submitted that, pursuant to the filing of the Writ Petition, the Senior Divisional Commercial Manager, Guntakal Division, issued a show- cause notice dated 07.09.2026. Hence, prayed to set aside the impugned letter/order dated 12.08.2026. 4. On the other hand, learned Central Government Counsel, while admitting that a show-cause notice was issued after the filing of the Writ
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Petition, contended that the Railway Administration had initiated physical verification of the catering establishments prior to the opening of the price bids, specifically on account of a formal complaint received from a competing bidder against the petitioner. The complaint alleged that the petitioner was falsely claiming to operate a catering establishment, relying merely upon statutory registrations such as an FSSAI licence and GSTIN, without maintaining any actual physical catering infrastructure or carrying on catering operations at the premises. Upon conducting the verification, the allegations against the petitioner were found to be true, leading to the lawful summary rejection of the petitioner’s bid on the ground of false declaration. He further submitted that, as the tender conditions expressly mandate summary disqualification upon establishment of a false declaration during credential verification, the question of issuing a separate show-cause notice does not arise. He further submitted that the five-year debarment across the Indian Railways and IRCTC Limited is a mandatory contractual sanction under Para 3.5.1(e)(iii) of the Tender Document, intended to prevent fraudulent entities from participating in contracts relating to public amenities. The summary action was therefore taken in accordance with the tender conditions and is fully justified and lawful. Hence, prayed to dismiss the Writ Petition.
Perused the material available on record and considered the submissions made by learned counsel for the parties.
It is not in dispute that that the petitioner participated in the tender process pursuant to the Open Tender Notice issued by respondent No.3 for 6
allotment of a licence to operate a Modular Catering Stall/General Minor Unit at Dhone (DHNE) Railway Station on Platform Nos.4 and 5 and emerged as the Highest Bidder (H1) on 03.08.2026. However, by the impugned letter/order dated 12.08.2026, the allotment was cancelled, the EMD was forfeited and the petitioner was debarred from participating in catering tenders over Indian Railways and IRCTC Limited for a period of five years, on the allegation that the petitioner had made a false declaration with regard to the existence and operation of the catering establishment at the declared address.
The main grievance of the petitioner is that the said action was taken without issuing any show-cause notice, without furnishing the alleged physical verification report and without affording the petitioner any opportunity to explain the alleged discrepancy. The respondents, however, contended that the tender conditions permit summary disqualification if a false declaration is found and that the physical verification was conducted based on a complaint made by a competing bidder.
The fact remains that the consequence of the impugned action is not confined merely to rejection of the petitioner's bid. The petitioner has been debarred from participating in future catering tenders across the Indian Railways and IRCTC Limited for a substantial period of five years. Even assuming that the tender conditions empower the respondents to take action in cases of false declaration, such power cannot be exercised in an arbitrary manner. In the present case, the respondents rely upon the physical verification allegedly conducted on 22.07.2026. However, admittedly, no copy
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of the said verification report was furnished to the petitioner before passing the impugned order. The petitioner was also not called upon to explain the alleged discrepancy between the address and the physical condition of the establishment. The subsequent issuance of a show-cause notice dated 07.09.2026 by the Senior Divisional Commercial Manager, Guntakal Division, after the filing of the present Writ Petition, further shows that the respondents themselves considered it necessary to call upon the petitioner to explain the allegations. However, the notice was issued only after the impugned letter/order had already been issued. The subsequent notice cannot cure the defect in the manner in which the impugned letter/order was passed. Hence, this Court is of the view that the impugned letter/order dated 12.08.2026 cannot be sustained in law.
Having regard to the fact that the impugned action was taken without furnishing the material relied upon against the petitioner and without affording an opportunity of hearing before imposing a five-year debarment, and that the show-cause notice was issued only after the filing of the Writ Petition, this Court is of the view that the procedure contemplated under law was not followed by the respondent authorities. The petitioner was, therefore, constrained to approach this Court, which caused not only mental agony but also compelled the petitioner to incur expenditure in pursuing the litigation. Hence, this Court deems it appropriate to impose costs of Rs.25,000/- (Rupees Twenty-Five Thousand only) upon the concerned authority. Though learned Central Government Counsel vehemently opposed the imposition of costs, contending that the petitioner had made a false declaration which 8
compelled the authorities to take the impugned action, the said contention cannot justify the failure to follow the principles of natural justice before imposing a five-year debarment. Hence, this Court is inclined to pass the following order:
“The impugned letter/order dated 12.08.2026 is hereby set aside. The petitioner is at liberty to submit its explanation to the show-cause notice dated 07.09.2026. The respondent authorities concerned shall consider the explanation submitted by the petitioner and pass appropriate orders, after affording an opportunity of personal hearing, in accordance with law. Till such exercise is completed, the respondent authorities shall not finalize the tender proceedings. In view of the circumstances noticed above, costs of Rs.25,000/- (Rupees Twenty-Five Thousand only) are imposed on the concerned Senior Divisional Commercial Manager, Guntakal Division and the said amount shall be paid to the petitioner within a period of four (4) weeks from the date of receipt of a copy of this order and file a memo to the effect before the Registry.
Accordingly, the Writ Petition is allowed. There shall be no order as to costs. As a sequel, miscellaneous petitions pending, if any, shall stand closed. ___________________________ JUSTICE RAVI CHEEMALAPATI 08.09.2026 MP
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257 THE HON’BLE SRI JUSTICE RAVI CHEEMALAPATI
WRIT PETITION No.24400 of 2026 Dated : 08.09.2026
MP
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.