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2021 Supreme(Del) 1510

IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
Geeta Jeena - Appellant
Versus
Govt Of NCT Of Delhi & Ors. - Respondents
Civil Writ Petition No. 3441 of 2021, Civil Miscellaneous Application No. 27841, 37124 of 2021
Decided On : 10-11-2021

Advocates appeared:
Seema Bengani, Advocate, Gautam Narayan, Advocate, Asmita Singh, Advocate

Debarment or blacklisting must be proportionate to the default committed by the bidder. Proper reasons must be provided for blacklisting, and the principles of natural justice must be followed. Blacklisting orders are amenable to judicial review and can be judged on the standard of proportionality.

Headnote:

Forfeiture of EMD and debarment were imposed based on Clause 4.7 of the Notice Inviting Tender (NIT). The clause required payment of license fees and other charges, and failure to deposit the same would result in forfeiture of EMD and debarment from participating in the tender for the current and next four financial years. The court examined the clause and its application in the present case.

Fact of the Case:

The petitioner challenged the forfeiture of the Earnest Money Deposit (EMD) and the debarment for the current and four financial years. The petitioner submitted a bid for a shop at Maharana Pratap ISBT, Kashmere Gate, Delhi but failed to make the payments. The EMD was forfeited and the petitioner was debarred from bidding for the present financial year and the next four financial years. The petitioner argued that the penalty was excessive due to her ill health and the impact of the kisaan andolan (farmer protest).

Finding of the Court:

The court examined Clause 4.7 of the Notice Inviting Tender (NIT), which provided for forfeiture of EMD and debarment for non-payment. The court found that the petitioner consciously submitted the bid and was aware of the ground reality in the ISBTs. The court held that the forfeiture of EMD was justified as the bid was not honored. However, the court found the debarment for more than four years to be disproportionate to the non-payment. The court restricted the debarment to a period up to 31st May, 2022.

Ratio Decidendi: Debarment or blacklisting must be proportionate to the default committed by the bidder. The court considered the principles of natural justice and the doctrine of proportionality in determining the validity of the debarment. The court also emphasized that blacklisting has serious consequences and should be supported by proper reasons.

Result: The debarment of the petitioner from participation in the tender is restricted to a period up to 31st May, 2022.

JUDGMENT

Prathiba M. Singh, J. - This hearing has been done through hybrid mode.

2. The present petition has been filed by the Petitioner challenging the forfeiture of the Earnest Money Deposit (hereinafter, "EMD") and the debarment for the current and four financial years, in terms of Clause 4.7 of the Notice Inviting Tender (hereinafter "NIT").

3. The Respondent No.3/DTIDC had invited bids for licensing of shops/sites/spaces at Maharana Pratap ISBT, Kashmere Gate, Delhi in March, 2020. The last date for submission of bids was 18th June, 2020. However, due to the Covid-19 pandemic and the consequent lockdown, the date was extended from time to time. The Petitioner had submitted her bid for Shop No.41, ISBT, Kashmere Gate, Delhi in December, 2020. She was declared a successful bidder and a letter of acceptance dated 2nd February, 2021 was issued by the department to her. The Petitioner could not make the payments in terms of the bid which was submitted by her. The ground for the said non-payment as has been stated in the writ petition, was the ill health of the Petitioner, in view of which she sought time for 24 days to complete the formalities. In view of the fact that the extension of time that was requested was not granted to the Petitioner, the letter dated 16th February, 2021 was issued against her, forfeiting the EMD, and debarring her from bidding for the present financial year and the next four financial years, in terms of Clause 4.7 of the NIT. The relevant extract of the said letter reads:

    "LIST OF DEBARRED BIDDER/PERSON

    Name of Tender:- Licensing of Shops/ Sites/ Spaces at Maharana Pratap ISBT Kashere Gate, Delhi, March, 2020 for commercial utilization.

    NIT NO. DTIDC/ MARCH/2019-20/1216

    The successful bidders have failed to complete the formalities for the respective licence premises as stipulated in the LOA letter dated 02.02.2021:-

    S.No

    Name & Address of the successful Bidder

    EMD amount

    Shop No./ Licence premises

    1.

    Ms. Geeta Jeena W/o Sh. Tara Singh Jeena, R/o H. NO. L-50-B, Gali No. 35/38, Sadatpur Extn., Karawal Nagar, North East Delhi, Delhi-1100094

    Rs.3,00,000/-

    Shop No.41, Departure Block, ISBT, Kashmere Gate, Delhi

     The EMD of above successful bidders is hereby forfeited and the concerned successful bidders are debarred from taking participation in Tender/RFP of DTIDC for this financial year and next four financial year in terms of NIT condition No.4.7. This issues with prior approval of MD, DTIDC."

    4. This matter was first listed before this Court on 17th March, 2021. On the said date, ld. Counsel for the Respondents/GNCTD had submitted that the Respondents are willing to give an extension of time for making the payment, so that the Petitioner can honour the bid. However, at that stage, the Petitioner opted not to honour the bid, relying upon the prevalent circumstances including the kisaan andolan. In view of the said position on 17th March, 2021, no interim order was granted and the following observation was made by this Court:

      "8. In view of the above, since there is an admitted default on the part of the Petitioner by not honouring the bid submitted by her and despite extension for payment being offered today, which was sought by the Petitioner herself, the Petitioner does not wish to avail of the same, no interim order is being granted at this stage. The Petitioner cannot firstly seek extension on medical grounds and now cite other reasons such as kisan andalon for not honouring her bid. The application for stay being CM APPL. 10459/2021 is accordingly rejected at this stage. However, the period of blacklisting and whether both forfeiture of EMD and blacklisting can be simultaneously imposed, deserves consideration. If there is any future tender called by the Respondent, the Petitioner is given liberty to approach the Court."

      5. The pleadings have been completed in the matter. Ld. Cou

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