A Firm Debarment Notice is invalid if issued by an unauthorized party and violates the principles of natural justice by considering factors not stated in the initial notices.

JUDGMENT :

Devashis Baruah, J.

Heard Mr. G.N. Sahewalla, the learned Senior Counsel assisted by Mr. M. Sahewalla, the learned counsel appearing on behalf of the petitioner. Mr. B. Gogoi, the learned Additional Advocate General who is also the Standing Counsel of the Health Department appears on behalf of the respondents.

2. The petitioner herein by way of the present writ petition has assailed the Firm Debarment Notice bearing e-File No. 556245/11872 dated 11.03.2025.

3. The facts of the present case are that the petitioner is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing and supplying of various products ranging from active pharmaceutical intermediate, finished formulations, food supplements, biotechnology products, pharmaceutical machinery, etc.

4. A tender bearing No. 345545/2838 dated 01.08.2023 and a Corrigendum No. 1 bearing No. E-345545/2266 dated 18.08.2023 was issued by the Managing Director of the Assam Medical Services Corporation Limited i.e. the respondent No. 3 for supply of essential drugs. The petitioner participated in the said tender process. In pursuance to that, a Letter of Intent was issued bearing ECF No. 34556 dated 31.10.2023 thereby empanelling the petitioner for supply of essential drugs for a period of 3 (three) years with an option of extension for a further period of 1 (one) year.

5. A perusal of the said Letter of Intent dated 31.10.2023 reveals that it contains various terms and conditions. It is mentioned at Clause E of the said Letter of Intent that a successful bidder shall execute an agreement on non-judicial stamp paper of the value of Rs. 100/- within 10 (ten) working days from the date of intimation from the Tender Inviting Authority informing that his tender has been accepted. The specimen form of the agreement is at Annexure-XIII of the bid document.

6. Clause L of the Letter of Intent dated 31.10.2023 refers to the Penalty for Delayed Service Delivery. The said Clause being relevant is reproduced herein under:

“L. Penalty for Delayed Service Delivery:

In case there is delay in delivery beyond the stipulated period as mentioned in the purchase order, there shall be penal deduction @ 2.0% of the value of delayed goods per week of delay or part thereof subject to a maximum of 10% of the total order value. Once the maximum price reduction is reached, termination of the Purchase Order will be considered.

In case alternate purchase is made, the incremental/ additional cost, if any incurred for such purchase shall be recovered from the defaulter.”

7. Clause M of the Letter of Intent dated 31.10.2023 is of relevance for the purpose of the instant proceedings inasmuch as the said Clause relates to Debarment/Blacklisting for failure in execution of supply/non-supply/default in supply. The said Clause M being relevant is reproduced herein under:

M. Debarment/Blacklisting for failure in execution of supply/non-supply/default in supply:

1. Product debarment: In case of non-supply or incomplete supply (i.e. less than 90% of the total ordered quantity) by the approved manufacturer / importer (Firm) within agreed delivery period including the delay penalty period or any such extended delivery period then the empanelment for that particular product shall be cancelled and the manufacturer/importer (Firm) shall be debarred for participating in any bid called by the Authority for a period of 5 years from the date of debarment for that item. In case the manufacturer/importer (Firm) supply 90% or more of the ordered quantity but fails to supply the entire quantity within the allowed delivery period then the firm shall be levied a penalty @ 10% of the value of the short-supplied item and same shall be adjusted against the payment for supply.

2. Firm Debarment: The firm shall be blacklisted and debarred from participating in any tender by the TIA or procuring agency for 3 (three) years if the company is debarred for all the items (where it has empanelm