Debarring from tender participation without following natural justice principles is invalid; disputes arising under the contract should be resolved via arbitration, not through writ jurisdiction.

JUDGMENT

Manoj Kumar Ohri, J. The present petition has been filed under Article 226 of the Constitution of India read with Section 151 CPC on behalf of the petitioner, assailing the decision dated 04.08.2020 of the respondent No. 1/Council and communication of same vide letter dated 06.11.2020, whereby the petitioner has been debarred from participating in the NDMC tenders for a period of 3 years with effect from the date of the decision i.e., 04.08.2020.

2. It is claimed by the petitioner that being the lowest bidder, it was awarded the tender by respondent No. 1/Council for the redevelopment work of Bapu Samaj Sewa Kendra, Panchkuian Road, New Delhi. The value of the work awarded was Rs.24,66,00,663/-, which was later on modified to Rs.24,54,00,633/-. In terms of the letter of acceptance dated 07.02.2018, the petitioner furnished Performance Guarantee(s) to the Council in the form of Bank Guarantee(s) as security for due performance of the contract which was to be completed within a period of 18 months with effect from 22.02.2018, i.e., the date of the start of work.

3. According to the petitioner, when it proceeded to the project site to commence the work, the site was found to be occupied and via letter dated 29.03.2018, it requested the Council to handover the project site free of all occupation. Eventually, the site was handed over to the petitioner after much delay, which in turn delayed the commencement of work. Even during the course of construction, the petitioner faced various difficulties, which inter-alia included, faulty drawings provided by the respondents, non-supply of structural drawings of beam and basement slab, stoppage of the use of batch mix plant at construction site by the CPWD, delay in approval of design mix etc. It is the petitioner's grievance that due to various reasons attributable to respondents, the work awarded to it was delayed.

4. The petitioner claims that until the termination of contract, it had completed works amounting to Rs.6,71,83,639/- for which it raised its bills on 21.09.2019 that are still outstanding.

5. Learned counsel for the petitioner has argued that the Council vide its letter dated 11.11.2019 had first arbitrarily extended the time for completion of contract till 31.05.2020, and thereafter, the contract was terminated arbitrarily vide letter dated 15.11.2019. He has further submitted that the impugned decision of debarring the petitioner from participating in NDMC tenders for a period of 3 years was passed without complying with the principles of natural justice, as neither any Show Cause Notice nor any opportunity of hearing was granted to the petitioner prior to passing of the order. It is contended that the petitioner had rightly requested for termination of the contract, as the respondent failed to fulfil its obligations of handing over the vacant site and drawings to the petitioner, which prevented the completion of works within the stipulated time.

6. The petitioner has placed reliance on the decisions of the Supreme Court in Erusian Equipment & Chemicals Ltd. v. State of West Bengal and Another reported as (1975) 1 SCC 70 and Patel Engineering Limited v. Union of India and Another reported as (2012) 11 SCC 257, as well as the decision of this Court in Prakash Atlanta JV & Ors. v. National Highways Authority of India & Ors. reported as 2010 SCC OnLine Del 471 to contend that where after termination of contract, further action of debarring/blacklisting is taken during th