Hukam Chand Security Agency vs Food Corporation Of India And Ors.

Court
Delhi High Court

$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
th
% Date of Decision: October 28 , 2026
# CNR No. DLHC010414642021
+ W.P.(C) 34/2022 & CM APPL. 61/2022
HUKAM CHAND SECURITY AGENCY .....Petitioner
Through: Mr. Shanti Prakash, Ms.
Shulaka Singh & Mr. Alok
Kumar Tiwari, Advs.
versus
FOOD CORPORATION OF INDIA AND ORS.
.....Respondents
Through: Mr. Manoj & Ms. Aporna
Sinha, Advs. for R-1 & 2.
Mr. Farman Ali, CGSC, Ms.
Ayushi Agarwal & Ms. Usha
Jamnal, Advs.
CORAM:
HON'BLE MR. JUSTICE AMIT MAHAJAN
AMIT MAHAJAN, J. (Oral)
1. By the present petition, the petitioner seeks the following
reliefs:
“(a) issue a writ of certiorari, or any other writ, order or direction
to quash the notification No.28 (75)/2020-D(Res-1) dated
·13.05.2021 issued by Ministry of Defence ; and
(b) issue a writ of mandamus, order or direction to the respondents
to release the outstanding dues of the Petitioner @ 14% service
charge in consonance with the terms of tender and sponsorship;
(c) issue a writ of mandamus, order or direction to the respondents
to pay the service charge @ 14% for the bills likely to accrue in
furtherance of the contract ;”
2. As recorded in the order dated 21.03.2023, the petitioner
contended that it would not press prayer (a) and primarily prayed for
Signature Not Verified
W.P.(C) 34/2022 Page 1 of 5
Signed By:HARMINDER
KAUR
Signing Date:30.10.2026
16:23:32

the release of the outstanding dues in terms of prayer (b) as quoted
supra.
3. Briefly, the petitioner is a licensed security agency and
provides security services at various government depots. The
petitioner registered with Respondent No. 3 in the year 2019.
Thereafter, the petitioner, vide letters dated 29.06.2020 was sponsored
for providing Security Services to the FCI property and personnel.
Subsequently, on 31.07.2020, appointment letter was issued to the
petitioner as a DGR sponsored security agency for providing security
services to the FCI Property and personnel at Narela at the rate of 14%
for a period of one year with effect from 01.08.2020 to 31.07.2021.
Before the expiry of the said term, on 22.07.2021, the initial period of
one year was further extended for another one year from 01.08.2021
to 31.07.2021.
4. In the meantime, OM No. 28(75)/2020-D(Res-1) was issued by
Respondent No. 3 on 13.05.2021 which provided that the security
agencies would be paid service charges as approved up to a maximum
of 10% of the total bill as opposed to the earlier position of 14%. The
petitioner was initially being paid service charges at 14% of the total
bill, however, post the issuance of the OM dated 13.05.2021, the
respondent authorities only sanctioned bill at 10% and not 14% of the
total bill as originally provided in the appointment letter. Aggrieved
by the same, the petitioner has preferred the present petition.
5. The learned counsel for the petitioner has emphasised that the
petitioner is entitled to payment of service charge at 14% and not 10%
of the total bill. It has been argued that the sponsorship and the
Signature Not Verified
W.P.(C) 34/2022 Page 2 of 5
Signed By:HARMINDER
KAUR
Signing Date:30.10.2026
16:23:32

contract of the petitioner were executed prior to the issuance of the
OM dated 13.05.2021. It has consequently been urged that the OM
cannot be applied retrospectively to the detriment of the petitioner.
6. In that regard, learned counsel for Respondent No. 3 submits
that a clarification has already been issued pertaining to the Service
Charges payable in respect of DGR Security Agency Scheme.
Attention of this Court has been drawn to the Clarification issued by
Respondent No. 3 on 30.07.2021 which provides the following:
“1. The Hon'ble High Court of Delhi had as an interim measure,
stayed the execution of Para 13(g) (ii) of the new MoD OM dated
13 May 2021.
2 Subsequent to that, a corrective measure was adopted and a
corrigendum was issued which made the retrospective application
of revised rates of service charges as amended to the previous
rates of service charge, i.e. 14% (fixed). The condition of stay
therefore was met by way of administrative action & measures. In
the course of hearing the Hon ble High Court had taken note of the
amendment to retrospective levy of service charges.
3 .⁠ ⁠Apropos, in light of the above, Status quo ante will be
maintained in respect-of Service charges, @ 14% for all
sponsorships made prior to the issue of the new MoD OM dated
13 May 2021. (For all cases where the contracts are already
operational, under tendering and which have been sponsored prior
to 13 May 2021-as per Hon'ble High Court of Delhi interim order
dated 21 Jun 2021).
4. Service charges for all cases sponsored 13 May 2021 onwards
will be at 10% (fixed) till migration of DR Security Schemes to
GeM Portal.”
7. The said position has also been materialised in the Affidavit of
Respondent No. 3 which provides that the aspects of OM dated
13.05.2021 are not applicable retrospectively and the same applies
only to sponsorships made after 13.05.2021. The affidavit further
elaborates that the petitioner is covered under the OM dated
09.07.2012 wherein the service charges are fixed at 14%.
Signature Not Verified
W.P.(C) 34/2022 Page 3 of 5
Signed By:HARMINDER
KAUR
Signing Date:30.10.2026
16:23:32

8. The said position has been opposed by Respondent Nos. 1 – 2.
It has been sought to be impressed upon this Court that the initial
appointment of the petitioner was only for a period of one year from
01.08.2020 to 31.07.2021, and the said period was extended only after
the issuance of the OM dated 13.05.2021. It has consequently been
urged that the applicable service charges in the present case would
also be 10% and not 14%.
9. After having considered the rival contentions of the parties, this
Court is unimpressed by the ground agitated on behalf of Respondent
Nos. 1-2.
10. As noted above, a clarification was issued by Respondent No. 3
on 30.07.2021 providing that the OM dated 13.05.2021 would not be
applicable retrospectively. Further, as is manifest from a perusal of the
Affidavit on behalf of Respondent No. 3, it has further been
elaborated that the OM dated 13.05.2021 is not applicable
retrospectively, and the petitioner having been sponsored on
29.06.2020 (prior to the issuance of OM dated 13.05.2021) is covered
by the OM dated 09.07.2012 wherein the service charges are fixed at
14%. Consequently, once the issuing authority being Respondent No.3
has itself clarified the scope, contours and the applicability of the OM
dated 13.05.2021, the contentions advanced on behalf of Respondent
Nos. 1-2 are rendered untenable and cannot be countenanced.
11. Consequently, in view of the limited relief sought by the
petitioner, the respondent authorities are directed to release the
outstanding dues of the petitioner @14% service charge in terms of
prayer ‘b’ in the present petition.
Signature Not Verified
W.P.(C) 34/2022 Page 4 of 5
Signed By:HARMINDER
KAUR
Signing Date:30.10.2026
16:23:32

12. The present petition along with pending application stands
disposed of in the aforesaid terms.
AMIT MAHAJAN, J
OCTOBER 28, 2026
“SK”
Signature Not Verified
W.P.(C) 34/2022 Page 5 of 5
Signed By:HARMINDER
KAUR
Signing Date:30.10.2026
16:23:32