The duty of honest performance and the importance of maintaining the integrity of the tendering process were central to the court's decision.

JUDGMENT

Sanjeev Narula, J. The Appellant is the proprietor of one M/s Goel Medicos, who entered into a contract with Respondent No. 3 for supply of medicines to the Sonipat Wellness Centre of Central Government Health Scheme ["CGHS"]. However, the contract was later terminated and the performance security was forfeited on the ground of corrupt and fraudulent practices. In addition, M/s Goel Medicos was declared ineligible for a period of two years from participating in any tender or contract awarded by the CGHS, across India. Dissatisfied with this decision, the Appellant filed a writ petition challenging the termination as well as debarment. While the Appellant has achieved partial success as the Learned Single Judge, by way of judgement dated 11th July, 2023 [hereinafter, "impugned judgement"], has set aside the debarment order, he remains aggrieved with rejection of his prayer against forfeiture of Performance Bank Security [hereinafter, "PBS"]. In that light, Appellant has preferred the present appeal against the impugned judgment, assailing the PBS forfeiture.

The facts presented by the Appellant

2. M/s Goel Medicos is a well-established and renowned entity in the business of retail pharmacy, pharmacy distribution, and institutional supply of medical/pharmaceutical products. They are also empanelled with CGHS as an authorized local chemist and are responsible for supplying allopathic medicines to certain wellness centres situated in the Delhi-NCR region.

3. Respondents issued a tender on 08th April, 2020 for the appointment of an Authorized Local Chemist for eight wellness centres of CGHS. M/s Goel Medicos, owned and controlled by the Appellant, emerged as the successful bidder for the wellness centre at Sonipat. Amidst the tender process, Ms. Usha Goel, who was the previous proprietor of M/s Goel Medicos, executed a Gift Deed on 31st July, 2020, thereby transferring the ownership, assets, and all interests and liabilities of the establishment to the Appellant [Mr. Basant Goel]. Immediately thereafter, on 04th August, 2020, the Respondents communicated their acceptance of M/s Goel Medicos' offer, which was responded to by the Appellant on the same day. Consequent thereto, M/s Goel Medicos proceeded to complete the formalities under the tender, which included execution of an Agreement with Respondent No. 3. During this process, an old employee, Mr. Akash Jain, unintentionally and mistakenly obtained a Power of Attorney ["PoA"] dated 18th August, 2020 from the previous proprietor - Ms. Usha Goel, instead of the Appellant, which authorized him to handle the tender formalities on behalf of M/s Goel Medicos.

4. In pursuance of the aforesaid PoA, Mr. Akash Jain signed an Agreement with Respondent No. 3 on 19th August, 2020 for supply of medicines under the tender, for a period of three years [hereinafter, "the Agreement"]. A formal empanelment order was issued by Respondent No. 3 on 26th August, 2020, which concluded the tender process. M/s Goel Medicos then commenced supplying medicines to the Sonipat centre w.e.f. 01st September, 2020. The business transactions between the parties progressed smoothly and as per Respondents' standards.

5. Later, M/s Goel Medicos submitted their bids for the tenders floated by Respondent No. 3 for wellness centres in the South, North, and East Zones of Delhi-NCR on 04th January, 2023, and emerged as the successful bidder for 38 such centres. During the scrutiny of the bid documents submitted in furtherance of the aforesaid tenders, Respondent No. 3 issued two show-cause notices to M/s Goel Medicos in respect of Dilshad Garden, Ghaziabad and Sonipat wellness centres, where M/s Goel Medicos had already been appointed as an Authorized Local Chemist under previous tenders. As per these notices, M/s Goel Medicos failed to bring the Gift Deed dated 31st July, 2020 to the Respondents' notice, which amounted to misrepresentation of facts and indulgence in corrupt or fraudulent practice under the ten