The main legal point established in the judgment is that contractual disputes raised by a contractor cannot rule out a debarment order if the action is based on a stipulated deficiency or default, and that a blacklisting or banning order can follow even in the presence of contractual disputes.

JUDGMENT

S.C. Gupte, J. - Heard learned Counsel for the Petitioners and learned Counsel for the Respondent Bank. The subject matter of controversy in the present petition concerns debarment of Petitioner No.1, who was the Respondent bank's contractor for e-surveillance of over 10,000 ATMs of the bank spread all over the Country.

2. The Request For Proposal (RFP) for surveillance solutions, under which Petitioner No.1 submitted its bid and, in response to which it was declared as the successful bidder and awarded the contract, clearly mentions a stipulation under which Earnest Money Deposit (EMD) submitted by the bidder was liable to be forfeited inter alia if the successful bidder failed to sign the contract or furnish performance bank guarantee within the period specified in the RFP/Purchase Order. If EMD was forfeited for that reason, the concerned bidder was liable, in the sole discretion of the bank, to be debarred from participating in the RFPs floated by the bank in future.

3. It is not in dispute that though Petitioner No.1 was the successful bidder, it failed to furnish a performance bank guarantee. In its affidavit, Petitioner No.1 has come up with reasons why the performance bank guarantee could not be furnished by it, claiming that these reasons amounted to an adequate justification for not furnishing the guarantee. The fact remains that though there may be contractual disputes raised by the Petitioners concerning the Respondent bank's action of termination of the contract as well as debarment of Petitioner No.1 from participating in future RFPs floated by the bank, there is nothing to indicate that such action was actuated either by malafides or amounted to a colourable exercise or a capricious or arbitrary act. The bank has not only given due opportunity to Petitioner No.1 to show cause to its proposed action of debarment and considered submissions made in response, it has passed a detailed speaking order dealing with each of the submissions made by the Petitioners. It has inter alia been considered by the Respondent bank that the performance bank guarantee not only was not submitted within the stipulated time, but there were several opportunities given to the Petitioners to submit the same. The Respondent bank has referred to the letters, such as letters dated 23 January 2020, 26 February 2020, 13 March 2020, 17 June 2020, 20 July 2020 and 6 October 2020, in addition to the meetings held by the Petitioners with senior officials of the bank, calling for the guarantee. In other words, what the bank has considered is that despite making various requisitions for furnishing of a performance bank guarantee and giving time to Petitioner No.1 to do so, the same was not furnished by the Petitioners. Additionally, the Respondent bank has considered that due to the default on the part of the Petitioners, which inter alia resulted into termination of the contract, about 8075 ATM sites of the bank were subjected to risk and that this amounted to a serious lapse or default requiring a stringent action on the part of the Respondent. Despite the Petitioners' default, the debarment order is only in respect of the Respondent bank, which is not intended to affect the Petitioners' dealings with the other banks. Besides it is operative only for a period of two years. In other words, the bank does not appear to have exercised its discretion in a capricious or arbitrary manner or exhibiting any malafides, even whilst proposing the action. If that is so, there is no case for the writ court to interfere with such action in a judicial review under Article 226 of the Constitution of India.

4. Mr. Jagtiani, learned Senior Counsel for the Petitioners, relies upon the judgment in the case of J.K. Surface Coatings Pvt. Ltd. vs. Oil and Natural Gas Commission, (2016) 6 AIRBomR 679 (2016 SCC OnLine Bom 9281 :) to contend that a banning order cannot be passed merely due to contractual disputes. The Division Bench of our Court deciding that case has h