IMPORTANT POINT
The imposition of debarment requires a clear Show Cause Notice specifying the penalty and grounds, ensuring adherence to principles of natural justice.

JUDGMENT :

(Tara Vitasta Ganju, J.)

CM APPL. 63019/2024 [Stay]

1. The Petitioner has filed this Petition seeking to quash letter dated 10.05.2024 which was issued by Respondent/NHAI debarring the Petitioner from participating in any tender issued by the Respondent/NHAI for a period of 2 years. The Petition also impugns a communication dated 25.04.2024 issued by the Respondent/NHAI wherein a contract which was awarded to the Petitioner by the Respondent/NHAI, was withdrawn by the Respondent/NHAI.

2. By way of the present Application, the Petitioner is seeking grant of interim relief of stay of the letter dated 10.05.2024 [hereinafter referred to as “Debarment Letter”] debarring the Petitioner either individually or jointly from participating in any tender issued by the Respondent/NHAI in a consortium with any other entity or in any capacity or in any manner whatsoever.

3. The Application also seeks a stay on the operation of the letter dated 25.04.2024 [hereinafter referred to as “LoA withdrawal letter”] wherein the Letter of Award dated 31.03.2023 [hereinafter referred to as “LoA”] has been withdrawn by the Respondent/NHAI.

4. Learned Counsel for the Respondent/NHAI opposed the grant of interim relief and stated that he would make his submissions without filing a formal reply. Both parties thereafter sought time to file additional documents, which were filed by them.

5. Accordingly, at the request of the parties, the application for interim relief was heard on different dates by this Court.

6. At the outset, learned Senior Counsel for the Petitioner, on instructions from the Petitioner, in its Rejoinder arguments, has submitted that so far as concerns the prayer for stay of the operation of the LoA withdrawal letter, the same is not being pressed before this Court. The statement of the Petitioner is taken on record.

7. In view of this concession, this order examines only the grant for interim relief against the Debarment Letter and proceedings emanating therefrom.

8. Briefly, it is the case of the Respondent/NHAI that the Petitioner has concealed information about the filing of charge-sheet in the Delhi Excise case against M/s Trident Chemphar Ltd. [hereinafter referred to as “Trident”] which is the sister/associate concern of the Petitioner, thereby, violating terms and conditions of the notice inviting bid and the Request for Proposal dated 27.07.2022 [hereinafter referred to as “RFP”] and accordingly, the LoA has been withdrawn and a penalty of debarment and blacklisting has been imposed on the Petitioner.

9. Learned Senior Counsel, Mr. Mukul Rohatgi, Mr. Neeraj Kishan Kaul, Mr. Rajiv Nayar and Mr. Sudhir Nandrajog have been heard on behalf of the Petitioner. Several contentions raised by the learned Senior Counsel for the Petitioner which include those enumerated below.

9.1 The Petitioner has contended that the LoA withdrawal letter and Debarment Letter would lead to a complete civil death of the Petitioner as ever after the lapse of 2 year period of debarment, the Petitioner would not be able to participate in tenders issued by the Respondent/NHAI. The debarment is although for 2 years, would be stigmatic forever. The learned Senior Counsel has placed reliance on recent judgment of the Supreme Court in Blue Dreamz Advertising Pvt. Ltd & Anr. v. Kolkata Municipal Corporation & Ors., 2024 SCC OnLine SC 1896, wherein Doctrine of Proportionality, has been explained including on jurisprudence developed in USA. It is contested, that debarment should be utilized, if it is the “only” way to stop the harm or potential harm caused by the offending entity. The present circumstances, do not justify the blacklisting.

9.2 It is contended that more than 170 contracts worth thousands of crores which the Petitioner intended to perform are impacted in view of the debarment. The Petitioner’s employs more than 800 persons and its entire business, will come to a stand still if the Debarment Letter is permitted to continue.

9.3 The Debarment Letter was not