- 1 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 3RD DAY OF JULY 2025 BEFORE THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR WRIT PETITION NO. 103193 OF 2025 (GM-RES) BETWEEN: C.S. HERUR, TRANSFOSYS LOGISTICS, BY ITS PROPRIETOR, CHANNAVEERAPPA S. HERUR, SINCE SUFFERING FROM MENTAL DISORDER, REPRESENTED BY HIS NEXT FRIEND, SMT. DHANESHWARI W/O. CHANNAVEERAPPA HERUR, AGED ABOUT 45 YEARS, YERESHIVINI ONI, HAVERI DISTRICT-581110. …PETITIONER (BY SRI. M.L. VANTI, ADVOCATE) AND: 1. THE GENERAL MANAGER, FOOD CORPORATION OF INDIA, REGIONAL OFFICE, NO.10, EAST END MAIN ROAD, 4TH T BLOCK, JAYANAGAR, BENGALURU-560041. 2. DIVISIONAL MANAGER, FOOD CORPORATION OF INDIA (CONTRACT KTK), DIVISIONAL OFFICE, HUBBALLI-580009. 3. DIVISIONAL MANAGER, FOOD CORPORATION OF INDIA (CONTRACT KTK), DIVISIONAL OFFICE, SHIVMOGA-577201. 4. DIVISIONAL MANAGER, FOOD CORPORATION OF INDIA (CONTRACT KTK), DIVISIONAL OFFICE, MYSORE-570001. …RESPONDENTS (BY SRI. V.S. KALASURMATH, ADVOCATE AND SRI. DINESH RAO, ADVOCATE) VIJAYALAKSHMI M KANKUPPI Digitally signed by VIJAYALAKSHMI M KANKUPPI Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2025.07.14 12:36:29 +0530 - 2 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO i. ISSUE A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION AND QUASH THE CORRESPONDENCE DATED 9/1/2025 BEARING NO. ROKA-32.0027.0/1/2024-CON-RO KA ISSUED BY THE RESPONDENT NO.1 PRODUCED AT ANNEXURE-J AND ACCEPT THE FORECLOSE OF HANDLING AND TRANSPORT CONTRACT OF PETITIONER’S HUSBAND BY DISCHARGING HIM, IN THE INTEREST OF JUSTICE AND EQUITY. ii. ISSUE A WRIT IN MANDAMUS OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION DIRECTING THE RESPONDENT NO.1 TO RELEASE THE SECURITY DEPOSIT AND BANK GUARANTEE SUBMITTED BY THE HUSBAND OF PETITIONER PURSUANT TO AWARDING OF CONTRACTS AS PER ANNEXURE- B TO B5 (ALL 6 WORK ORDERS), IN THE INTEREST OF JUSTICE AND EQUITY. iii. ISSUE A WRIT IN MANDAMUS OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION DIRECTING THE RESPONDENTS TO PAY ALL THE ARREARS/BILLS OF THE PETITIONER’S HUSBAND WITH 18% INTEREST IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. THIS PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 ORAL ORDER (PER: THE HON'BLE MR. JUSTICE PRADEEP SINGH YERUR) Heard learned counsel for the petitioner and the learned counsel for respondents. 2. Petitioner is a proprietary firm represented by its Proprietor. Due to mental disorder of the Proprietor is now represented by the next friend none other than the wife of the Proprietor. 3. It is the case of petitioner that petitioner was running Proprietorship in the name C.S.Herur Transfosys Logistics from several decades that he had obtained certain contracts for transportation of food grains to various places. While fulfilling the terms and conditions of the contract, the petitioner had deposited certain security deposit with the respondent/Corporation. The petitioner contends that the firm was providing unblemished services to various organizations including the respondent/ Corporation. Unfortunately, after the contract were - 4 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 obtained, in the midway, the petitioner Sri.C.S.Herur developed major health problems including major depressive disorders, low vision problem and he has been diagnosed as a 40% vision disability and Medical Certificate to that effect has been produced. Petitioner further contends that due to the mental, physical disability and inability to continue or perform the remaining part of the contract, made a representation to the respondents requesting to foreclosure of the contract as per the work orders issued as per Annexure-B. 4. Learned counsel for the petitioner contends that the correspondence so made by the petitioner for foreclosure has not been accepted and the same is refused by the respondent. While refusing the request of the petitioner, the respondents have infact warned the petitioner of consequences of forfeiture of security deposit and realization of the Bank guarantee. - 5 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 5. Petitioner is aggrieved by the issuance of Annexure-J dated 09.01.2025, which is a rejection of the request for foreclosure of the contract due to medical, physical and other disability and inability to perform the contract. Learned counsel for the petitioner contends that if not for the medical and physical disability and inability to perform the contract, there would have been no occasion for the petitioner to seek for foreclosure of the contract, which is quite remunerative and financially helpful, but in view of his physical condition, where he is unable to perform the activities and 40% of vision disability, it has become impossible to perform the contract, thereby causing financial hardship to perform the contract which he had undertaken. 6. Learned counsel relies upon Clause VIII (iii) of ‘Period of Contract’ for ‘Foreclosure’ mentioned in the “Terms and Conditions Governing Contracts” in support of his case which reads as under: - 6 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 “ VIII. Period of Contract (iii) Foreclosure- If due to the change of circumstances there is no likelihood of any work during the remaining period of contract, the concerned contractor may apply for the foreclosure of Contract. The General Manager (Region) shall examine the representation and may recommend foreclosure of the contract at any time before expiry of the normal period of contract to the concerned Executive Director (Zone). The decision of Executive Director (Zone) shall be final, conclusive and binding on the Contractor. The foreclosure of the contract under this clause shall be treated as successful completion of the contract.” 7. On these grounds he contends that the rejection of the foreclosure request and correspondence made may be quashed and a direction be issued to the 2nd respondent-Food Corporation and the respondent authorities to accept the foreclosure and permit him to do work for reasonable time and in the meanwhile issue a fresh tender for the remaining contract which was given to the petitioner and consequently to release the security deposit and the bank guarantee so made while obtaining of the contract. - 7 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 8. Per contra, learned counsel Sri. V.S. Kalasoormath, representing the respondents contends that the petition itself is not maintainable, as the petitioner had voluntarily opted, entered into the bid and was a successful bidder and he was given the contract and he has been working and running all six contracts in various places in the State. It is further contended that the petitioner is executing the work contract with different associates at 3 different locations. It is further contended that, the contract period of FSD Bommapur (Hubli) is getting over in the month of November 2025 and hence it is in the verge of completion. The remaining two contracts also would be completed by February 2026 and three other tenders are due for completion in March 2026 for which the respondents have initiated process of floating a new tender. 9. Learned counsel for the respondent denies and does not accept the reasons stated by the petitioner for the foreclosure of the contract on the ground that the - 8 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 petitioner has taken up fresh tender contract on 02.01.2025. Therefore, the say of the petitioner that he is unable to perform the contract is only a flimsy reason put forth by the petitioner, which cannot be believed or accepted. Therefore, the learned counsel for the respondents contends that the petitioner can complete the contract and fresh process would be initiated for future contract, no hardship would be caused, as the petitioner has got associate contractors to perform the contract. Under these circumstances, he seeks dismissal of the petition. So also on the ground that the respondents have been continuously paying the contract charges as and when the work is done by the respondents. 10. I have heard the learned counsel for the petitioner and the learned counsel for the respondents. 11. There is no dispute with regard to the petitioner being a successful tenderer and having performed the contract to certain extent, but has fallen sick, adding to the mental and physical disability so also 40% vision - 9 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 disability which he has produced documents to substantiate, though the same is not appreciated by the respondent . There is a procedure for foreclosure of the contract as per Clause VIII of the Terms and Conditions Governing Contract which is extracted hereinabove. The discretion is given to the General Manager to examine the representation and recommend foreclosure of the contract at any time before expiry of the normal period of contract to the concerned Executive Director and the decision of the Executive Director shall be final and binding. When this being the position and when the petitioner has clearly stated that he is unable to perform the contract for the reason that he is mentally and physically not in a position to complete the contract and having also suffered 40% vision disability, it would be in the interest of both the parties that the contract be foreclosed and fresh process be initiated for continuation of the contract. 12. In view of the above facts and circumstances, it may not be possible for the authorities to immediately - 10 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 float or allot the contract to another successful bidder. The same would require certain amount of time. Therefore, the petitioner will have to continue with the contract for a reasonable time and so also this Court deems it appropriate to give the petitioner some breathing time to close the contract to certain extent and also give some breathing time to the respondent to float fresh tender, call for other bidders to perform the remaining unfinished work of the petitioner, which will be in the interest of both the parties. 13. Under the circumstances, I pass the following order: i. The petition is partly allowed. ii. The communication dated 09.01.2025 issued by respondent No.1 rejecting the foreclosure of the contract is hereby set aside. iii. Writ of mandamus is issued directing respondent No.1 to consider the case of the petitioner sympathetically on the ground of - 11 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 medical inability and disability to continue with the remaining contract work. The petitioner shall perform and continue the work contract for a period of 45 (forty five) days from the date of receipt of copy of this order in all the places of work undertaken from respondent No.1 and after the period of 45 days, the obligation and liability of the petitioner would come to an end. iv. Respondent No.1 shall permit the petitioner to complete the work for the next 45 days in the areas of work contract assigned and make necessary payments for the contract work so done and clear all the bills of the petitioner on the basis of the work so done. v. Respondent No.1 in the meanwhile shall be at liberty to issue fresh tender calling the bidders to undertake the remaining part of the contract which shall not be objected to by the petitioner or claim any equity to that effect. vi. Respondent No.1 shall also release the bank guarantee and the security deposit on completion of 45th day without causing any - 12 - HC-KAR NC: 2025:KHC-D:8328 WP No. 103193 of 2025 hindrance or obstacle in favour of the petitioner. Sd/- (PRADEEP SINGH YERUR) JUDGE CKK Kmv from para 6 to end CT-MCK