MS GERON ENGINEERING PVT LTD vs STATE OF UTTARAKHAND
- Court
- Uttarakhand High Court
2026:UHC:3580-DB
IN THE HIGH COURT OF UTTARAKHAND
AT NAINITAL
HON’BLE THE CHIEF JUSTICE SHRI MANOJ KUMAR GUPTA
AND
HON’BLE SHRI JUSTICE SUBHASH UPADHYAY
TH
11 MAY, 2026
WRIT PETITION (M/B) No. 338 OF 2026
M/s Geron Engineering Pvt. Ltd.
…Petitioner
Versus
State of Uttarakhand and others.
…Respondents
Counsel for the petitioner.
: Mr. Himanshu Pal, learned counsel.
Counsel for the respondent no. 1. : Mr. B.S. Parihar, learned Additional Chief
Standing Counsel with Mr. Y.C. Tiwari,
learned Standing Counsel for the State of
Uttarakhand.
Counsel for respondent nos. 2 &
3.
: Mr. Yogesh Pacholia, learned counsel
JUDGMENT : ( per Shri Manoj Kumar Gupta, C.J.)
1. The present writ petition has been filed assailing the
order dated 08.04.2026 passed by respondent no. 2-Nagar
Nigam, whereby the contract executed between the petitioner-
Company and Nagar Nigam, Almora, for biomining of legacy
waste from a dump site in Almora, has been terminated; the
Security Deposit of the petitioner-Company has also been
forfeited; and the petitioner-Company has further been
debarred from participating in future tenders, in respect of
contracts of Nagar Nigam, Almora.
2. The facts, in brief, are that respondent no. 2, i.e.
Municipal Corporation, Almora, floated a tender for bio-mining
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of legacy waste at the dump site in Almora. The petitioner was
the successful bidder, and, accordingly, an Agreement was
executed between the parties on 02.02.2026, whereunder the
date of commencement of the work was fixed as 02.02.2026,
and date of completion as 01.02.2027.
3. The case of the petitioner is that, after execution of
the Agreement, it conducted a site survey, and found that the
actual waste available at the site was 97097 metric tonnes, i.e.
more than three times the quantity specified in the BOQ. The
further case of the petitioner-Company is that, after carrying
out the site survey, it sent an e-mail, on 11.03.2026, to the
respondent-Nagar Nigam, highlighting the said fact. The
petitioner also alleged that even after execution of the
Agreement, the respondent-Nagar Nigam continued dumping
waste at the site, thereby rendering the scope of work vague
and indefinite. On the same date, it is alleged that respondent-
Nagar Nigam issued a warning notice to the petitioner-
Company, requiring it to forthwith commence the work of
removal of legacy waste, failing which the Agreement would be
terminated, and the petitioner-Company would be blacklisted.
4. The case of the petitioner-Company is that the said
notice was issued to it without considering its e-mail. The
respondent-Nagar Nigam, thereafter, issued another notice on
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23.03.2026 threatening to terminate the Agreement and forfeit
the Security Deposit. It was followed by passing of the
impugned order dated 08.04.2026, terminating the Agreement;
forfeiting the Security Deposit; and debarring the petitioner-
Company from participating in future tenders.
5. The submission of learned counsel for the petitioner-
Company is that the petitioner-Company was not given any
show-cause in respect of blacklisting, and, therefore, the
impugned order is in breach of principles of natural justice. It
is further contended that the action of the respondent-Nagar
Nigam, in not mentioning the correct quantity of legacy waste
available at the site while inviting the tenders, amounts to
misrepresentation by a State instrumentality, and the blame
cannot now be shifted upon the petitioner-Company for not
commencing the work in time. The petitioner-Company raised
the said issue by its e-mail so that the respondent-Nagar Nigam
could identify and clarify the actual quantity of waste required
to be removed, but no action was taken thereon by the
respondent-Nagar Nigam, and, on the other hand, it has
proceeded to terminate the agreement in a wholly arbitrary
manner. It is further submitted that the order, debarring the
petitioner-Company from applying for any future contracts with
Nagar Nigam, has serious civil consequences, and without a
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proper show-cause notice in that regard, no such order could
have been passed. In support of the said submission, learned
counsel for the petitioner-Company has relied upon the
judgment of the Allahabad High Court in WRIT-C No. - 15363 of
2022, “ M/s Bcits Pvt. Ltd. v. Purvanchal Vidhyut Vitran Nigam
Ltd. And Another .”
6. On the other hand, Mr. Yogesh Pacholia, learned
counsel appearing on behalf of the respondent-Nagar Nigam
submits that it was one of the terms of the Notice Inviting
Tender (NIT), that the intending tenderer would visit the site,
satisfy itself about the factual position, and also upload
photographs of the site along with the bid documents, so that
no dispute, of the nature now sought to be raised by the
petitioner-Company, may arise subsequently. It is further
submitted that, under the Agreement, the respondent-Nagar
Nigam had the right to terminate the agreement on account of
negligence and non-performance of the contractual obligations
by the contractor. It is further submitted that in the instant
case, the petitioner-Company had submitted a detailed
approach and methodology of work, wherein it gave definite
timelines for completion of different stages for successful
completion of the work. However, the petitioner failed to
adhere to the said timelines. The petitioner was given first
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notice on 20.02.2026, wherein it was specifically pointed out
that the petitioner had not started any work at the site, and it
was required to start the work forthwith. It was further
cautioned that, in case it fails to start the work, action, as per
the terms of the Agreement, would be taken against it.
However, the petitioner-Company still did not start the work
and, therefore, another notice was given to it on 11.03.2026,
requiring it to commence the work within a week, failing which
the Agreement would be cancelled, and fresh bids invited. Yet
again, a further notice was given on 23.03.2026, requiring it to
forthwith start the work, failing which the Agreement would be
cancelled, and security amount forfeited. Even thereafter, as
the petitioner-Company failed to commence any work,
respondent-Nagar Nigam was left with no other option, but to
terminate the agreement by impugned order dated 08.04.2026.
7. It is thus submitted that the respondent-Nagar Nigam
had given repeated notices to the petitioner-Company, but still
the petitioner did not start the work. The work in question was
of significant public importance, and the timelines prescribed
were to be strictly adhered to in order to ensure completion of
work within specified time. The work was being supervised by
the National Green Tribunal, as it related to the preservation of
environment. Since the petitioner failed to commence the
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work, the respondent-Nagar Nigam was well within its right to
terminate the contract. The further submission is that, under
the contract, there is remedy of arbitration and therefore it is
open to the petitioner-Company to avail the said remedy. The
issue sought to be raised by the petitioner-Company, regarding
the quantity of legacy waste at the site is a disputed question
of fact, which would require evidence to be led, and this Court,
in exercise of its writ jurisdiction, may not undertake the said
exercise.
8. We have considered the rival submissions, and
perused the material on record.
9. The Agreement for removal of legacy waste was
entered into between the parties on 02.02.2026. The work
thereunder was to be commence on 02.02.2026 and conclude
on 01.02.2027. In order to complete the work in time, the
petitioner had filed a detailed document specifying the
approach and methodology it would follow in performing the
contract. Thereunder, the petitioner-Company, in paragraph
no. 7, has specified the timelines, which it would follow to
ensure timely execution of the work under the contract.
10. Clause 5 of the Request for Proposal stipulated that it
would be the responsibility of the bidder, at its own risk, to visit
the site and obtain all necessary information. One of the
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conditions of the bidding process was that the bidder should
conduct a site visit of the dump site, submit a declaration along
with geo-tagged photographs of the dump site, and furnish a
work plan with the technical bid based on the details gathered
during such visit. The petitioner-Company, admittedly, visited
the site and also submitted a declaration affirming that it had
complied with the aforesaid condition.
11. The petitioner-Company raised the issue of having
found a larger quantity of legacy waste at the site, much after
entering into the contract, although one of the conditions of the
bidding document required the petitioner-Company to visit the
site and satisfy itself regarding the site condition before
submitting its bid.
12. The issue in question, apart from the facts noted
above, also requires appreciation of evidence. Admittedly, the
remedy of arbitration is available under the agreement. In fact,
the petitioner, itself, in paragraph no. 21 of the writ petition
has stated as follows :-
“21. That disputes have thus arisen between the parties in
relation to illegal termination, forfeiture of performance
security and blacklisting, which are required to be adjudicated
through arbitration in terms of the arbitration clause 8.2.4
contained in the RFP.”
13. In paragraph no. 23, it is stated as follows :-
“23. That the Petitioner is taking steps to invoke arbitration
proceedings.”
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14. Further, in paragraph no. 24, it is stated as follows:-
“24. That the present Petition is being filed for urgent
protection to safeguard the rights of the Petitioner which are
outside the scope of Section 9 of the Arbitration & Conciliation
Act, 1996, as the courts exercising powers under Section 9 do
not have power to set aside the black-listing of the Petitioner.”
15. In view of the above admission by the petitioner,
regarding existence of arbitration clause and its invokation by
the petitioner, we leave it open to the petitioner to get the
dispute regarding termination of the contract adjudicated
through the process of arbitration.
16. As regards violation of principles of natural justice,
we also do not feel impressed by the submissions made by
learned counsel for the petitioner-Company. Clause 7 of the
Agreement confers right in favour of the respondent-Nagar
Nigam to terminate the Agreement for negligence and non-
performance of the duties by the contractor. It is as follows :-
“7. If it is found that the work of Nagar Nigam Almora is
getting affected due to negligence and non-performance of
duties by the contractor then Municipal Commissioner, Nagar
Nigam Almora reserves the right to terminate the
agreement based on behavior and breach of work contract.”
17. In the tender document, Clause 2.6, relating to
Termination, is as follows :-
“ 2.6 Termination
2.6.1 By the
Authority
The Authority may terminate this
Contract, by not less than thirty (30)
days written notice of termination to the
Service Provider, to be given after the
occurrence of any of the events specified
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in Bid documents
(a) if the Service Provider does not
remedy a failure in the
performance of its obligations
under the Contract, within thirty
(30) days after being notified or
within any further period as the
Authority may have subsequently
approved in writing;
(b) if the Service Provider become
insolvent or bankrupt; or goes into
liquidation other than for a
reconstruction or amalgamation;
(c) if, as the result of Force Majeure,
the Service Provider is unable to
perform a material portion of the
Services for a period of not less
than sixty (60) days; or
(d) if the Service Provider, in the
judgment of the Authority has
engaged in Fraud and Corruption
during execution and bidding.”
18. In the instant case, the event of non-performance
occurred from the very first date the parties entered into the
contract, i.e. 02.02.2026, as admittedly the petitioner-
Company did not start any work, though on the ground that at
the site it found more quantity of legacy waste dumped. As per
the provision in the bidding document, 30 days’ written notice
was to be given to the petitioner-Company to remedy the
failure, failing which the Agreement could be terminated.
19. In the present case, it is not disputed that first notice
of default of the obligation of the petitioner-Company under the
agreement was given to it on 20.02.2026, followed by notices
dated 11.03.2026 & 23.03.2026, and ultimately the contract
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was terminated on 08.04.2026. The petitioner-Company was,
thus, given much more than 30 days time to remedy the
default. The notice specifically required the petitioner-
Company to remedy the breach, but which according to the
respondent-Nagar Nigam, was not remedied, and consequently,
as per the Agreement, the respondent-Nagar Nigam had
proceeded to terminate the Agreement.
20. As we have held that the petitioner-Company has
remedy of approaching the Arbitrator, therefore, although,
prima facie , we do not find much force in the contention that
principles of natural justice have been violated, but we do not
want to express any final opinion on the said issue, as we feel
that the said issue should also be left open for being raised
before the Arbitral Tribunal.
21. Finally we take up the contention regarding
debarment of the petitioner-Company from future contracts.
None of the notices referred to above, which have been given
to the petitioner, required the petitioner to show cause against
the proposed action of debarment or blacklisting. The notices
merely indicate that action in accordance with the contract
would be taken. The law, in regard to debarment from future
contracts, is well settled. A notice in this regard must be
specific, disclosing the intention of the authority not only to
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terminate the contract but also to blacklist or debar a person
from future contracts and requiring it to show cause. The
noticee should be given proper opportunity to file his reply, and
only after considering the reply, any order for debarment or
blacklisting could be passed. As the said procedure has not
been followed in the instant case, therefore, the impugned
order, to the extent it directs debarment of the petitioner-
Company, is, hereby, quashed. In respect of the said action,
liberty is reserved in favour of respondent-Nagar Nigam to give
proper notice, and then proceed in accordance with law.
22. The writ petition stands disposed of accordingly.
23. All pending applications stand disposed of
accordingly.
______________________
MANOJ KUMAR GUPTA, C.J.
___________________
SUBHASH UPADHYAY, J.
th
Dt: 11 May, 2026
Rahul
Digitally signed by RAHUL PRAJAPATI
DN: c=IN, o=HIGH COURT OF UTTARAKHAND,
ou=HIGH COURT OF UTTARAKHAND,
2.5.4.20=aa4fa3bee6691397758b14516ed3e66e61
bf4c848741983ed8c39e4145cf1dab,
postalCode=263001, st=UTTARAKHAND,
serialNumber=303B55CC3063D34AC45BF8A192F
CAD15C390A1AAD7B39857D2540AE4C28A4898,
cn=RAHUL PRAJAPATI Date: 2026.05.13 17:23:25 +05'30'
RAHUL
PRAJAPATI
11