Authority: High Court (Justice Krishna Rao, J.)

Order Date: 17 July 2026

Case Overview

  • Petitioners: Texmaco Rail & Engineering Limited & Anr.
  • Respondents: Union of India & others (railway authorities).
  • Petition filed under WPA 17226 of 2026 challenging the order dated 14 July 2026 whereby the respondents terminated the contract with the petitioners, debarred them from further tender participation, and ordered forfeiture of security deposit and encashment of performance guarantee.
  • Railway tender conditions cite Clause 63.1, requiring the contractor to make a representation to the General Manager (GM); the GM must decide within 120 days, except for “excepted matters” listed in the contract, which are non‑arbitrable.
  • Clause 62.1 of the General Conditions of Contract classifies the dispute as an “expected matter,” thereby precluding arbitration and mandating recourse to the GM under Clause 63.1.
  • Petitioners sought permission to approach the GM immediately and requested the court to direct the GM to decide sooner than the stipulated 120‑day period.

Final Outcome

  • The Court affirmed that the contract termination was effected pursuant to Clause 62.1 and that the petitioners must follow the procedure in Clause 63.1.
  • Petitioners are granted liberty to submit a written representation, together with supporting documents, to the General Manager within one week from the date of this order.
  • The General Manager is directed to decide on the representation as early as possible, preferably within four weeks of receipt, overriding the standard 120‑day timeline.
  • If the petitioners request any interim relief pending the GM’s decision, the GM shall consider such requests on merit and may grant relief.
  • The Court expressly states it has not examined the merits of the termination; the matter is left to the GM’s discretion.
  • WPA 17226 of 2026 is hereby disposed of.
  • Urgent certified copies of this order may be supplied to the parties upon compliance with requisite formalities.

Topics: Contract Dispute, Railway Procurement