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C. S. DIAS
P S Enterprises Represented By Syed Najmuddin – Appellant
Versus
The Union of India – Respondent
JUDGMENT
The petitioner firm was awarded the contract to operate a catering stall at the Thrissur Railway Station. As per Ext.P7 letter of award (‘LOA’), the petitioner was obliged to deposit the license fee and security deposit within 15 days from the date of the LOA. Surprisingly, by Ext.P8 communication, the Railway administration cancelled the LOA, forfeited the earnest money deposit (‘EMD’) and debarred the petitioner from participating in all the upcoming tenders of the respondents for five years. No show cause notice or termination notice was issued to the petitioner, which is against the principles of natural justice. Even though the petitioner had submitted Ext.P9 representation before the 4 th respondent, there was no response. The actions of the respondents are arbitrary and unjustifiable.
Hence, the writ petition.
2. The Central Government Counsel has filed a statement on behalf of the respondents stating that paragraph 3.5.2, Section B, Chapter 2 of Ext.P6 tender notification, expressly provides that if the selected bidder does not sign and return a copy of the LOA and deposits the license fee and security deposit within 7 days
Blacklisting a bidder from future contracts requires adherence to principles of natural justice, including providing notice and an opportunity to be heard.
Debarment from future tenders without a hearing constitutes a violation of natural justice and is treated as blacklisting requiring a specific show cause notice.
Debarment from government tenders requires issuance of a Show Cause Notice stating intended action, ensuring compliance with principles of natural justice.
The court upheld the termination of the contract and forfeiture of deposits due to submission of false credentials, but deemed the five-year debarment as excessive and quashed it.
Debarment or blacklisting must be proportionate to the default committed by the bidder. Proper reasons must be provided for blacklisting, and the principles of natural justice must be followed. Black....
The Petitioner's suppression of a material fact and approach to the Court with unclean hands led to the dismissal of the Petition.
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