WP/5647/2026 of SRICO Projects Pvt. Ltd., Vs The Deputy Chief Engineer (Construction),

____________ W.P. No.5647/2026 IN THE HIGH COURT OF JUDICATURE AT MADRAS Reserved on Pronounced on 27.03.2026 08.04.2026 CORAM THE HONOURABLE MR. JUSTICE M.DHANDAPANI W.P. NO. 5647 OF 2026 AND W.M.P. NOS. 6129 & 6132 OF 2026 SRICO Projects Pvt. Ltd. Rep. by its Managing Director Mr. Mechineni Srinivasa Rao .. Petitioner - Vs - The Deputy Chief Engineer (Construction) Southern Railway No.532, 2nd Floor, Constable Road Ayanavaram, Chennai – 23. .. Respondent Writ Petition filed under Article 226 of the Constitution of India praying this Court to issue a writ of certiorarified mandamus calling for the records relating to the order of the respondent dated 10.02.2026 as disp layed in the ofÏcial portal to quash the same and to consequently direc t the respondent to accept the PBG (Performance Bank Guarantee) and to pe rmit the petitioner to continue the contract pursuant to LoA (Letter of Acceptance ) dated 15.12.2025 and to complete the same as per the time stipulated therein. 1 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 For Petitioner : Mr. L.Chandrakumar For Respondent : Mr. AR.L.Sundaresan, ASG Assisted by Mr.Ravi Meenakshisundaram, CGSC ORDER The impugned order of cancellation of the tender granted to the petitioner due to the default alleged by the respondent in not achieving the timelines prescribed in the tender has resulted in the filing of the present writ petition. 2. It is the case of the petitioner that on the basis of the tender floated on 8.7.2025 for augmentation of infrastructure facilities at the Carriage and Wagon Works, Perambur, the petitioner participated in the same by submitÝng his tender on 31.7.2025 on which date the technical bid was op ened and on being fully satisfied with the technical bid offered by the petitioner, the respondent had requested to extend the bid validity upto 30.11.2025 and as a sequel thereof, the same was extended by the petitioner before the period of expiry of the tender. 3. It is the further averment of the petitioner that the reafter on 6.11.2025, the financial bid was opened in which also the petitioner was successful and once again, extension was sought for by the respondent, as th e respondent could not 2 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 finalise the bid and once again the same was extende d upto 15.12.2025. Thereafter, Letter of Acceptance (for short ‘LoA’) was issue d on 15.12.2025 and the process stood completed and validated in favour of the petitioner. The petitioner was directed to submit Performance Bank Guaran tee (for short ‘PBG’) on 8.1.2026, which was received on 12.01.2026. Barring the abov e, there was no communication between the petitioner and the respondent. Howev er, as PBG was not issued by the petitioner, in the absence of any commu nication between the parties, seven days’ notice was issued on the ofÏcial porta l of the respondents on 27.1.2026, which the petitioner was unaware of. However, the petitioner’s ofÏcial team visited the ofÏce on 4.2.2025 wherein 4 8 hours notice was served upon the petitioner and immediately, the petition er issued the PBG through its banker on 6.2.2026. Thereafter, to know about the progress of the work relating to the tender, the ofÏcials of the petitioner vi sited the respondent along with the original PBG on 9.2.2026 and 10.2.2026 and the respondent, including the Director (Technical) were appraised of. 4. It is the further averment of the petitioner that to its utter shock and surprise, a termination notice dated 10.2.2026 was served on the petitioner to which the petitioner submitted its request for withdrawal of the termination by 3 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 pointing out that there was no violation. It was also point ed out that though the petitioner had been successful and had followed all the proced ures and complied with all the formalities without there being any violations, however, the authority has exercised the power arbitrarily without recourse t o the Tender Transparency Act and the Rules and has cancelled terminated the tender. 5. It is the further averment of the petitioner that the impugned order would reveal that it is manifestly arbitrary inasmuch as it would disclose that it has been issued on extraneous consideration coupled with bia s, both administrative and pecuniary, which have played a pivot al role in issuance of the said order of termination and that it is flagrant violation of the Act and Rupes. 6. It is the further averment of the petitioner that the remarks made in the impugned order dated 10.2.2026 would clearly establish tha t it has been issued in total misconception and misconstruction of the confirmation of t he contract through LoA and inspite of the PBG having been issued b y the petitioner on 6.2.2026, the same was not received and acknowledged except for a reference to the letter dated 5.2.2026. Therefore, left with no efÏcacious remedy, the present writ petition has been filed. 4 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 7. Learned counsel appearing for the petitioner submitted tha t though as per the tender process, the petitioner has to submit the PBG within 60 days from the date of issuance of LoA, which falls on 14.2.2026, but the petitioner had obtained the PBG prior to the last date, but without c onsidering the same on 10.2.2026 the termination order was passed for non-compliance of the tender conditions is bad. 8. It is the further submission of the learned counsel that though the petitioner had taken steps to submit the PBG on 6.2.2026, howev er, the respondent failed to receive and acknowledge the same and, therefore, the act of the respondent in not receiving the PBG cannot be faste ned on the petitioner to mulct the petitioner with delay in compliance. 9. It is the further submission of the learned counsel that though the petitioner has complied with all the conditions prescribed in the LoA, however, without properly appreciating all the facts and the compliance made by the petitioner, the impugned order of termination had come to be passed which is wholly unsustainable. Accordingly, he prays for allowing the writ petition. 5 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 10. Per contra, learned Addl. Solicitor General appeari ng for the respondent submitted that the main timelines, which were p rescribed in the LoA was not complied with by the petitioner which has led to t he termination of the tender. It is the further submission of the learned A ddl. Solicitor General that a programme chart was to be submitted within 15 days of issu ance of LoA, but the same has not been submitted by the petitioner inspite of the petitioner being put on notice. 11. It is the further submission of the learned Addl. Soli citor General that despite issuance of notice dated 8.1.2026, and further notice on 27. 1.2026 as mandated under Clause 62 of the General Conditions of Contra ct, the petitioner failed to commence the work and show any progress. Furthe r, even after the 48 hour notice, the petitioner had not commenced work and the prog ramme chart was also not submitted by the petitioner, which is violation of the conditions of the tender. 12. It is the further submission of the learned Addl. Soli citor General that non-submission of PBG is only one of the violations and not the sole reason for 6 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 termination of the tender of the petitioner, as in all spher es of the conditions stipulated, there have been violation by the petitioner and in particular, the learned Addl. Solicitor General placed his submissions on the clauses in the LoA to submit that there has been gross violations by the pe titioner and, therefore, left with no viable alternative, after following the due process, the tender issued in favour of the petitioner was terminated as per the term s and conditions stipulated in the LoA and, therefore, no interference is warranted with the same. 13. This Court gave its careful consideration to the subm issions advanced by the learned counsel appearing on either side and pe rused the materials available on record. 14. The facts with regard to award of tender is not in dispute. The timelines prescribed in the LoA and the action of the petition er for complying with the timelines alone have resulted in the termination of the tender. Therefore, the relevant portion of the LoA, which has a be aring on the present case is pivotal for deciding the issue and, therefore, t he same is quoted hereunder :- “You are requested to submit Performance Guarantee in the form as given in Clause 24 of Tender document part A to C. 7 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 equivalent to 5% of the contract value amounting to Rs. 17328051.89 (Rupees One Crore Seventy-Three Lakh Twenty- Eight Thousand And Fifty-One Rupees And Eighty-Nine Paise Only) within 21 days from the date of issue of Letter of Acceptance, valid up to stipulated date of completion plus 60 days so that contract agreement can be executed . However, a Penal Interest of 12% per annum shall be charged for the delay beyond 21 (Twenty One) days, i.e. from 22nd day of afte r the date of issue of LOA. Further, if the 60th day happen s to be a declared holiday in the concerned ofÏce of the Railway. submission of PG can be accepted on the next working day. In all other cases, if the Contractor fails to submit the req uisite PG even after 60 days from the date of issue of LOA, the contract is liable to be terminated. In case contract is terminated, Railway shall be entitled to forfeit Earnest Mon ey Deposit and other dues payable against that Contract. In case a tenderer has not submitted Earnest Money Deposit on th e strength of their Registration as a Start up recognized by Department of Industrial Policy and Promotion (DIPP) under Ministry of Commerce and Industry, DIPP shall be informed t o this effect. The failed Contractor shall be debarred from participating in re-tender for that work. The PG should be submitted after the LOA has been issued, but before signin g of the contract agreement This PG shall be initially valid up to the stipulated date of completion plus 60 days beyond that. In case the time for completion of work gets extended, the contractor shall get the validity of PG extended to cove r such extended time for completion of work plus 60days. The PG has 8 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 to be executed in favour of the President of India acting through Financial Advisor & Chief Accounts OfÏcer, Construction, Southern Railway, Egmore, Chennai-8 only. The Bank Guarantee towards PG should be sent to Dy. Chief Engineer, Construction, Near My Lady's garden, Park Town, Chennai 600 003 by the issuing bank under Registered Post (AD). This LOA is the due notice for submission of PG and t hat no further communication will be sent to you reminding for submission of PG. In case of failure to submit PG within stipulated date, action taken under Clause 16(4) of GCC is final and binding. The entire work shall be completed within 24 month from the date of issue of Letter of Acceptance. You should submit a suitable programme for achieving the mile stones, within 15 days of receipt of this letter in consultation with the Asst. Executive Engineer in charge, failing which a PENALTY of Rs.50,000/- (Rupees Fifty Thousand only) will be levied . You should carry out the work as per the Mile-stone Stateme nt furnished in the scope of work / enclosed to this Letter of Acceptance, and as per the agreed program. You are expecte d to adhere to the progress of work as per Mile-stone S tatement mentioned above and in case of your failure in achieving first 2 mile stones, the contract is liable to be terminated at yo ur cost in addition to the Penalty to be imposed for delays at the discretion of the Engineer-in-charge.” (Emphasis Supplied) 9 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 15. Even a bare perusal of the conditions stipulated in the L oA clearly reveals that the PBG should be submitted within 21 days from the date of issue of LoA. The LoA was issued on 15.12.2025 and reckoning 15 days time from the said date, by 4.1.2026, the PBG ought to have been issued. Howeve r, it is not disputed by the petitioner that PBG was taken only on 6.2.202 6 and sought to be produced before the respondent. Though the petitioner claim s that seven day notice and 48 hour notice were issued for submission of PBG, h owever, the time for reckoning the date for submission of PBG starts from th e date on which the LoA was issued, which is clearly evident from the LoA a nd the time cannot be elasticized to 14.2.2026 merely on the ground that notices have b een issued. Further, the basis on which the time limit for submission of PBG as 14.2.2026 has been fixed by the petitioner is not clear, as it is even t he case of the petitioner that LoA was issued on 15.12.2025 and, therefore, for all purpose s, the 21 days time starts ticking from the date the LoA was issued. Ther efore, clearly there is no compliance of the condition relating to submission of LoA. 16. Secondly, the LoA provides that within 15 days of rec eipt of LoA, a suitable programme for achieving the milestone ought to be submitted by the petitioner and failure of the same will result in a penalt y. Further, the petitioner 10 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 had been directed to adhere to the progress of the wor k as per the decided milestone. However, it is the specific case of the respondent that the programme for achieving the milestone has not been submitted by the petitioner. 17. In this regard, reference can be had to the letter dated 8.1.2026 of the respondent in which there is a clear statement that the submission of programme chart as also deployment of graduate enginee r and site ofÏce, as mandated in Condition 51 of the Special Conditions of Contract have not been complied with by the petitioner. The respondent has also poi nted out that the non-compliance of the said terms results in imposition of penalty. 18. Further, in the very same letter, the respondent has pointed out that the petitioner ought to have submitted the PBG within 21 day s of the issuance of LoA, viz., on 4.1.2026, however till date of the letter, viz., 8.1.2 026, the petitioner has not submitted the PBG. It is the admitted case of the petitioner that the PBG was issued only on 6.2.2026 and that being the case, there is a clear violation of the terms of the LoA. Further, there is no material evidencing the fact that there is compliance of the other terms, viz., submission of program me chart and deployment of graduate engineer for work and to maintai n a site ofÏce. In view 11 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 of the conspicuous absence of material to establish that t he violations pointed out are not made out, necessarily it has to be held tha t the conditions prescribed in LoA have been clearly violated/not complied with. 19. Further, reference can also be had to the letter da ted 27.1.2026 of the respondent relating to the 7 days notice issued, wherein, in categorical terms the respondent has pointed out that the petitioner has failed t o abide by the instructions to commence the work and to show adequate pr ogress of work and to commence the work and to show adequate progress faili ng which further action including termination of contract would follow. However, no only the said letter has not been acted upon, the respondent was force d to issue the letter dated 4.2.2026 in which the non-compliance of the various it ems of work, which were mandated in the LoA have been pointed to have no t been complied with. Curiously, there is no whisper from the petitioner with regard to their compliance at the relevant point when the said letters dated 27.1.2026 and 4.2.2026, viz., the notices, were issued to the petitioner. 20. In this backdrop, the letter of 5.2.2026 of the petitioner assu mes significance as vide the said letter, which drawing reference to the 48 hour notice 12 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 dated 4.2.2026, the petitioner had submitted that while they ha ve complied with the programme chart and deployment of graduate engine er and site ofÏce, however, the petitioner has submitted that the change of bank er of the petitioner had resulted in the delay in issuance of PBG, wh ich, the petitioner, submits vide the letter dated 5.2.2026 will be submitted wi thin 2 to 3 days of the said letter. From the above, there is a clear acceptan ce by the petitioner that there has not been scrupulous compliance of the terms of LoA. 21. It has been the consistent ratio laid down by the Courts that time is the essence of the contract and when a particular time frame i s spelt out in the contract for doing a particular work, it has to be done w ithin the said time frame, unless otherwise accepted. In this regard, useful ref erence can be had to the decision of Constitution Bench of the Apex Court in Chand Rani (Smt) (Dead) by LRs – Vs – Kamal Rani (Smt) (Dead) by LRs (1993 (1) SCC 519, wherein, the Apex Court has held thus :- “19. It is a well-accepted principle that in the case of sale of immovable property, time is never regarded as the essen ce of the contract. In fact, there is a presumption against time being the essence of the contract. This principle is not in a ny way different from that obtainable in England. Under the law of equity which governs the rights of the parties in the ca se of 13 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 specific performance of contract to sell real estate, law looks not at the letter but at the substance of the agreement . It has to be ascertained whether under the terms of the contra ct the parties named a specific time within which completion was to take place, really and in substance it was intended that it should be completed within a reasonable time. An intention to make time the essence of the contract must be expressed in unequivocal language.” (Emphasis Supplied) 22. In the present case, the LoA has clearly spelt out t he time within which certain acts have to be done by the successful tendere r. Therefore, time is the essence of the contract and infraction of the same, the au thority is vested with power to revisit the contract. When the petitioner has not done the acts within the time specified in the LoA, such a submitÝng the programm e chart and deployment of graduate engineer, establishing site ofÏce and not submitted the PBG within the time prescribed under the LoA, that too inspite of grant of extended time by issuance of notice by the respondent, necessa rily, the respondent cannot be expected to give the petitioner inter minable time to comply with the conditions prescribed in the LoA and, the refore, the termination of the contract cannot be said to be arbitrary or erroneous. 14 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 23. Further, it is to be pointed out that the scope of in terference with a tender process and also the award of tender is very l imited and under the guise of judicial review, this Court cannot step into the shoe s of the authority while interpreting conditions and providing safeguards. The scope of judicial review is only to the limited extent of seeing that there is no perversity or arbitrariness in the act of the authority. The materials, which have b een pointed out above, unerringly point to the petitioner as the person, who has not complied with the conditions imposed in the LoA and such being the admitted position, there is clear non-compliance of the conditions imposed in the LoA and for the said non- compliance, the respondent had decided to terminate the tender and had issued the impugned order of termination, the same does not req uire any interference at the hands of this Court. 24. For the reasons aforesaid, there is no perversity, in firmity or arbitrariness in the order passed by the respondent, wh ich is impugned herein and finding no proper and acceptable reason placed befor e this Court by the petitioner, this Court holds that no interference is warra nted with the impugned order. Accordingly, the writ petition fails and the same i s dismissed. 15 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 Consequently, connected miscellaneous petition is closed. There shall be no order as to costs. 08.04.2026 Index : Yes / No VSI-2/GLN To The Deputy Chief Engineer (Construction) Southern Railway No.532, 2nd Floor, Constable Road Ayanavaram, Chennai – 23. 16 https://www.mhc.tn.gov.in/judis ____________ W.P. No.5647/2026 M.DHANDAPANI, J. GLN PRE-DELIVERY ORDER IN W.P. NO.5647 OF 2026 Pronounced on 08.04.2026 17 https://www.mhc.tn.gov.in/judis