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2019 Supreme(Del) 2107
IN THE HIGH COURT OF DELHI AT NEW DELHI
NAVIN CHAWLA, J.
East African (India) Overseas — Appellant
Versus
Govt Of National Capital Region Of Delhi And Another — Respondent
Writ Petition (Civil) No. 9580 of 2019
Decided on : 03-09-2019
Advocate Appeared:
Ashish Prasad, Adv., Mukta Dutta, Adv., R. Singh, Adv., Chirayu Jain, Adv.
The court emphasized the importance of proportionality in determining the period of suspension/debarment and recognized the power of the respondent to blacklist the petitioner as per the notarized Undertaking.
Headnote:
Blacklisting - Government Contracts - Clause 4 of the Invitation of E-Tender for the Supply of Medicines/Consumables - [Clause 4 of the Invitation of E-Tender for the Supply of Medicines/Consumables] - The court discussed the power of the respondent to blacklist the petitioner in case of bid withdrawal, as per the notarized Undertaking. The court also considered the proportionality of the suspension period and directed the respondent to reconsider the period of suspension/debarment keeping in view the attendant facts and circumstances.
Fact of the Case:
The petitioner challenged an order suspending them from submitting bids for contracts with the Government of NCT of Delhi for three years due to bid withdrawal and subsequent actions by the respondent.
Finding of the Court:
The court found that the respondent had the power to blacklist the petitioner as per the notarized Undertaking and recognized the proportionality principle in determining the period of suspension/debarment.
Issues: The issues involved bid withdrawal, forfeiture of Earnest Money Deposit (EMD), and the proportionality of the suspension period.
Ratio Decidendi: The court held that the respondent had the power to blacklist the petitioner as per the notarized Undertaking and directed the respondent to reconsider the period of suspension/debarment keeping in view the attendant facts and circumstances.
Final Decision: The petition was disposed of with directions for the respondent to reconsider the period of suspension/debarment and to take a fresh decision within four weeks.
JUDGMENT :
Navin Chawla, J.
CM 39443/2019
Exemption allowed, subject to all just exceptions.
WP(C) 9580/2019 & CM 39442/2019
1. By the present petition, the petitioner challenges the order dated 14.08.2019, issued by the respondent no.2 whereby the petitioner has been suspended from being eligible for submitting any bid for contracts with the Government of NCT of Delhi for a period of three years from 22.07.2019.
2. The brief facts giving rise to the Impugned Order are that the petitioner had submitted a bid pursuant to the Tender bearing No.17_03 for Piperacillin 4 gm+Tazobactum 500 mg 4.5 gm, Vial Item Code 4000491.
3. The said bid was accepted by the respondent no.2 on 02.11.2017. However, by the letter dated 09.11.2017, the petitioner withdrew its bid stating that it had quoted the price of Rs.70.50 for item code 4000491 without GST. It also stated that as per the tender conditions, it was ready to pay the amount of Earnest Money Deposit (EMD) for the above product.
4. The respondent no.2 considered the request of the petitioner and by the letter dated 30.05.2018, called upon the petitioner to deposit a sum of Rs.6,58,854/- as EMD which shall be forfeited by the respondents. This amount was deposited by the petitioner on 28.03.2019.
5. The respondents issued a show cause notice to the petitioner calling upon it to show cause as to why the petitioner be not blacklisted/debarred from participating in the tenders of the Government of NCT of Delhi. The petitioner duly submitted its reply to the show cause notice dated 08.07.2019, however, the respondents by the impugned communication dated 14.08.2019 has suspended the petitioner for a period of three years from being eligible to submit any bid for contracts with the Government of NCT of Delhi with effect from 22.07.2019.
6. The respondent no.2 has also returned back the demand draft of EMD to the petitioner on 07.08.2019.
7. Counsel for the petitioner submits that in terms of Clause 1.1 read with Clause 1.2 of Section IV, General and Special Conditions of the tender document, incase of petitioner's withdrawal of the bid, the only penalty was in the form of forfeiture of the EMD. Blacklisting was to be resorted to only where the product of the petitioner fails the Quality Test.
8. He submits that in true interpretation of these terms, the respondent no.2 rightly demanded from the petitioner deposit the EMD which the petitioner duly complied with and deposited. He submits that therefore, the respondents could not have suspended/blacklisted the petitioner from its future contracts.
9. Learned counsel for the petitioner submits that even assuming that the respondent no.2 has the power to blacklist/suspend the petitioner, however, having exercised its option of demanding the EMD, it could not have thereafter resorted to this remedy.
10. The learned counsel for the respondents, however, places reliance on Clause 4 of the Invitation of E-Tender for the Supply of Medicines/Consumables of the Tender document which requires the bidder to deposit the EMD and a notarized Undertaking. In the notarized Undertaking, the bidder undertakes that incase the bidder does not deposit the EMD, it may be suspended for a period of three years from being eligible to submit bids for contracts with the Delhi Government when it withdraws or modifies the bids. The learned counsel for the respondents submits that, therefore, the respondents have the power to suspend the petitioner from its future contracts incase the petitioner withdrew from its bid.
11. I am unable to agree with the submission of the learned counsel for the petitioner.
12. Admittedly, the petitioner has submitted an undertaking with the respondent no.2 which empowers the respondent no.2 to blacklist the petitioner incase it withdraws from its bid. This power de hors the contractual provisions was also recognized by the Supreme Court in its judgment in Kulja Industries Ltd. vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Ltd. & Ors.
