Compliance with tender conditions, sustainability of termination reasons, procedural fairness in blacklisting.

JUDGMENT

Vibhu Bakhru, J. - The petitioner has filed the present petition under Section 9 of the Arbitration and Conciliation Act, 1996 (hereafter the "A&C Act"), inter alia, praying that the operation of the letter dated 22.04.2021, whereby the respondent has rejected the petitioner's tender and blacklisted it for a period of one year from participating in any CPWD tenders, be stayed.

2. The disputes between the parties stem from the tender floated by the respondent for "Comprehensive Maintenance Work at CGO Complex Lodhi Road, New Delhi 2020-23 (SH: Civil and Electric work)". On 03.12.2020, the respondent (hereafter the "CPWD") issued a Notice Inviting Tenders (NIT) for providing comprehensive maintenance of the CGO Complex, which houses offices of various organisations of the Central Government. The petitioner's bid was the lowest and by a Letter of Acceptance dated 30.12.2020 (hereafter the "LoA"), CPWD accepted the petitioner's tender at a value of Rs.18,31,33,102/-.

3. In terms of the NIT, the successful bidder was required to submit a Performance Guarantee within a period of seven days from the date of the LoA. The petitioner was also required to submit documents from the Associated Specialized Agencies/OEM/Authorized Service Provider of Specialised E&M Services along with the bid. The NIT also expressly provided that if the same were not furnished prior to or at the time of submission of the tender, the same could be submitted along with the Performance Guarantee after the tender was accepted. However, an undertaking to the aforesaid effect was required to be submitted along with the tender. An agreement/ understanding with the Specialised Agencies that they would continue to extend support and provide spares, was essential as the same was necessary for maintenance of equipment sourced from them.

4. The relevant clause of the NIT requiring the petitioner to submit an undertaking is set out below:-

"An undertaking that if "I/We shall become the lowest tenderer then I/We shall submit the documents of Associated specialized Agencies/OEM/Authorised service provider of the specialized E&M services as per the eligibility criteria mentioned in the "special conditions of NIT for association of specialized agencies" after acceptance of tender alongwith Performance Guarantee otherwise department may reject my/our tender & may forfeit the deposited EMD absolutely & debar me/us from re-tendering for this work"

5. There is no dispute that the petitioner had submitted an undertaking in terms of the aforesaid clause of the NIT.

6. The controversy in the present case relates to the submission of the MoUs/Letters of Consent by the two OEMs - M/s Cummins Sales and Services Pvt. Ltd (hereafter referred to as "Cummins") and M/s OTIS Elevator Company (India) Ltd. (hereafter referred to as "OTIS")

7. In terms of the NIT, the Performance Guarantee was required to be furnished within a period of seven days of the LoA and therefore, the petitioner was also required to submit the MoUs/Letters of Consent from the OEMs - including OTIS in respect of elevators, and Cummins in respect of DG Sets - within a period of seven days from the LoA.

8. Undisputedly, the petitioner submitted the Performance Guarantee within the said period of seven days from the date of LoA. The allegation against the petitioner is that it did not submit the MoUs in respect of certain Specialised Agencies, in particular Cummins and OTIS within the stipulated time.

9. It is the petitioner's case that the MOUs with OTIS and Cummins could not be submitted within the specified period as the said OEMs claimed that a large sum was payable and outstanding against the maintenance work performed by them for a period, which accrued prior to the tender. Thus they were reluctant to enter into an MoU to provide maintenance services in respect of facilities for which payments due to them had not been cleared by CPWD.

10. The said issue was escalated with the concerned Executive Engineer, CPWD (here