Debarment orders must be communicated and reasoned to uphold principles of natural justice; lack of such communication invalidates the debarment.

JUDGMENT :

SACHIN DATTA, J.

1. The present petition has been filed by the petitioner being aggrieved with a communication dated 10.04.2023, whereby the Letter of Award (LOA) dated 14.02.2023, issued to the petitioner by the respondent has been revoked/withdrawn.

2. The aforesaid LOA was issued in the backdrop of a Request for Proposal (RFP) issued by the Ministry of Road Transport and Highways (MoRTH) on 06.12.2021, for the project titled “Widening and Strengthening from KM. 0.000 to KM. 38.853 of NH-330D (Sitapur to Kurain Section) to two lanes with paved shoulder configuration under EPC mode”.

3. The technical bids were opened on 24.03.2022, and upon evaluation of the technically qualified bidder, the financial bids were opened on 03.06.2022. Pursuant thereto, the petitioner was declared as the L-1 bidder.

4. Subsequently on 04.10.2022, the respondent issued a Show Cause Notice (SCN) to the petitioner, alleging violation of the Integrity Pact. The petitioner submitted its reply on 10.10.2022, refuting the allegations. Subsequently, the representatives of the petitioner attended a personal hearing before the MoRTH on 07.12.2022 and made its submissions.

5. It transpires from the counter-affidavit filed on behalf of the respondent that the matter thereafter remained pending for consideration as to whether debarment action should be taken or not. Vide Note #181 (No.201537), the file was sent to the Additional Secretary (Highways) on 21.11.2022 for directions on the issue of LOA. The file was returned by the Highway Section vide Note #200 on 27.01.2024 with comments: “The debarment case/matter of M/s SRSC is under consideration in File No. NH- 24036/43/2022-H-Part(1) (e-215001). As soon as the decision is taken, the same may be conveyed to Roads wing in this file.” Pursuant thereto, no communication regarding debarment was received in the office of CE-RO Lucknow. Therefore, LOA was issued by the answering respondent vide letter no.CE-RO/LKO/NH(O)/14/NH-330D/2021-22 dated 14.02.2023.

6. It has been brought out by the respondent that thereafter, an e-mail was received from the Highway Section on 17.03.2023 conveying the Ministry’s OM No.NH-24036/43/2022-H dated 17.03.2023, whereby it was conveyed that the petitioner has been debarred vide Ministry’s order dated 07.02.2023 for a period of three months from the date of issue of the said order.

7. In view of the debarment letter, the respondent issued a letter (bearing No.CE-RO/LKO/NH(O)/14/NH-330D/2021-22) dated 10.04.2023, in terms of which the LOA in favour of the petitioner was withdrawn. The said communication, inter-alia, reads as under:

“2. Whereas Ministry vide O.M. No. NH-24036/43/2022-H dated 17.03.2023 has conveyed that M/s SRSC Iinfra Pvt. Ltd. has been debarred vide Ministry’s order dated 07.02.2023 for a period of 03 months from the date of issue of the order.

3. Whereas Department of Expenditure (DoE) vide O.M. No. F20/56/2022-PPD dated 31.08.2022 has stated that bids from only those firms shall be considered for placement of contract which are neither debarred on the date of opening of tender nor debarred on the date of contract, and that no contract should be placed on such debarred firms.

4. Whereas, in view of the above Ministry’s O.M. No. NH- 24036/43/2022-H dated 17.03-2023 and DOE’s O.M No. F.20/56/2022-PPD dated 31.08.2022 the LOA issued vide letter no.CE-RO/LKO/NH(O)/14/NH-33OD-2021-22 dated 14.02.2023 is withdrawn and the award stands cancelled.”

8. In the above background, the present petition has been filed seeking that the aforesaid communication dated 10.