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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
G.S. Sandhawalia, C.J. Jiya Lal Bhardwaj, J.
M/s Zenith-Event & Services and another - Petitioners
Versus
State of HP and others - Respondents
CWP No. 6271 of 2024
Decided On : 27-02-2026
| Table of Content |
|---|
| 1. petitioners complied with tender terms fully (Para 1 , 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9) |
| 2. encroachment warrants contractual penalty (Para 10 , 11 , 12 , 13) |
| 3. no notice violated natural justice (Para 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 4. state action requires hearing opportunity (Para 21 , 22 , 23 , 24 , 25 , 26 , 27) |
| 5. audi alteram partem in forfeitures mandatory (Para 28 , 29 , 30 , 31 , 32 , 33) |
| 6. arbitrary forfeiture quashed refund ordered (Para 34 , 35 , 36 , 37) |
JUDGMENT :
G.S. Sandhawalia, C.J.
Petitioner No. 1, which is a partnership firm, duly registered with the Directorate of Industries, Government of Himachal Pradesh who by the medium of the instant petition, seeks quashing of impugned orders having endorsement dated 09.02.2024 (Annexure P-14) and impugned action/order of respondents No. 2 and 3 forfeiting the performance security and earnest money as contained in the noting sheet and further to release the earnest money/security amount deposited by the petitioners in compliance of the terms and conditions of notice inviting tender dated 12.09.2023 published in daily newspaper, i.e., The Tribune dated 13.09.2023 (Annexure P-4). By virtue of the impugned order dated 09.02.2024 (Annexure P-14), the respondents have forfeited a sum of Rs.15,67,597/- out of this sum of Rs.16,00,000/- of Security Deposit/Earnest Money and refunded only Rs.46,887/- on account of being the proportionate amount of unauthorized encroachment surrounding the German Hangers occupied by the petitioner as reported by the possession/Encroachment Removal Committee.
2. Apparently respondent No.2 issued notice inviting tender dated 12.09.2023, (Annexure P-4) for the allotment of space, including complete erection and installation of FOUR GERMAN HANGERS in Dussehra Mela (Sports), Ground Dhalpur for Dussehra festival, 2023 which was to be submitted in the office of respondent No.2 on or before 28th September, 2023 upto 2.00 pm with clearly marked on the top of envelope "Bid for allotment of space, including complete erection and installation of German Hanger No..." bids respectively along with German Hanger number applied for in block letters”, as per the terms and conditions contained in Annexure P-5 (colly). It was also provided that the bids will be opened on the same day at 2.30 pm at DRDA Hall, Kullu in the presence of bidders and tender committee. The application forms could be downloaded from the official website of Deputy Commissioner office Kullu and tender fee was to be submitted along with technical bid in the shape of demand draft in favour of Deputy Commissioner-cum-Vice Chairman, Dussehra Festival Committee. Earnest money of Rs. 1.00 (Rs. One Lakh) per German Hanger in the shape of bank draft/FDR in favour respondent No.2 was required to be attached along with technical bid and the bid, without earnest money would be summarily rejected. Respondent No.3 is stated to have also issued addendum dated 19.09.2023, (Annexure P-6) containing further instructions/terms and conditions for the subject tender.
3. The petitioners filed their bid for allotment of space, including complete erection and installation for Four ODAY \German Hangers in Dussehra Mela Ground Dhalpur for Dussehra festival, 2023. The bids of the petitioners were approved by the respondents/Dussehra festival Committee as petitioners were the highest bidders. The petitioners were allotted four numbers of German Hanger No.1, 2, 3 and 4 vide letter of approval dated 06.10.2023 Annexure P- 7) for Rs.2,03,22,615/-.
4. The Committee constituted under Dussehra Festival-2023 is stated to have allocated space for four No(s) German Hangers (Dome) to the petitioners, who were the highest bidders, after completion of all the codal formalities. The petitioners had deposited security amount in the form of 04 FDRs of Rs. 1.00 lakh each and one FDR of Rs. 12.00 lakh pledged by the petitioner No.1 in favour of respondent No.2. As per terms and conditions of the tender, the petitioners w
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Tender bid valid 180 days from submission; post-expiry forfeiture of EMD and debarment invalid without extension. Debarment requires prior show cause notice per natural justice principles.
(1) Breach of reciprocal contractual obligations – A commercial document ought not to be interpreted in a manner that arrives at a complete variance with what may originally have been intention of pa....
Banning orders require proof beyond reasonable doubt of misconduct; otherwise, natural justice demands adherence to procedural fairness, especially in cases invoking penalties like forfeiture.
The court emphasized the necessity of adhering to principles of natural justice, ruling that no one should be condemned unheard, and set aside the forfeiture of the Earnest Money Deposit.
The demand for misc. expenses, development charges, and lease money was illegal and non est in law as the Guidelines governing the auction did not authorize the respondent-Board to realize these amou....
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