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.

JUDGMENT :

Jiya Lal Bhardwaj, J.

The petitioner, by way of present petition, has challenged the order dated 21.03.2025 (Annexure P-6), whereby respondent No.2 has forfeited amount of the Earnest Money Deposit (EMD) of the petitioner-firm and further debarred it from participating in the tender of the Department of Health & Family Welfare Government of Himachal Pradesh for a period of three years. Further, directions were also issued to the Indenting Officer not to issue supply orders to the petitioner-firm and initiate action as per Clause 5 of the tender document.

2. Precisely, the facts of the case are that the respondents-State initiated tender process vide Annexure P-1 for inviting applications for supply of medicines and drugs for the period of a rate contract of one year and the last date of which was 15.05.2023. Later on, the respondents-State issued corrigendum and last date for submission and uploading of filled-in tender documents was extended upto 23.05.2023. Since the petitioner was fulfilling the eligibility as contained in the tender document, it submitted its bid by duly filling up the tender documents. The petitioner deposited an amount of Rs.2,00,000/- as earnest money as required under the tender document.

3. It was argued by learned senior counsel that after 23.05.2023, the petitioner did not receive any communication from the respondents-State for a period of 271 days from the last date of bid submission i.e. 23.05.2023 and respondent No.2 addressed a letter dated 19.02.2024 (Annexure P-4) informing the petitioner that the rates quoted by its firm for procurement of medicines as per list enclosed have been found L-1 for four products and the petitioner was called upon to confirm the approved rates. Further, the petitioner was asked to give consent for extension of bid validity period upto award of contract. On receipt of letter dated 19.02.2024 the petitioner addressed an e-mail on 22.03.2024, (Annexure P-5) stating that the validity of its bid had already expired, in view of passage of more than 180 days from the last date of bid submission and, therefore, it is not possible for it to extend the validity of its bid.

4. The petitioner did not receive any further communication from respondent No.2 for a period of one year, however, on 21.03.2025, respondent No.2 issued the impugned order Annexure P-6, stating that the petitioner had not complied with the terms and conditions of the tender document and, therefore, as per decision taken by the State Level Store Purchase Committee in its meeting held on 19.02.2025, the earnest money deposited by it is forfeited and the petitioner is debarred from participating in the tender of the Department of Health and Family Welfare of Govt. of H.P. for a period of three years.

5. The petitioner after receipt of the impugned order dated 21.03.2025 addressed an e-mail to respondent No.2 on 28.03.2025 (Annexure P-7) stating that the validity of bid has expired way beyond 180 days and the petitioner had anticipated that the tender is likely to get cancelled as there was no response at their end. On receipt of the said e-mail, respondent No.2 had addressed a letter dated 10.04.2025 (Annexure P-8) to the petitioner that as per Clause 5(F) of tender document that if the successful bidder fails to sign the agreement and to deposit the performance security as prescribed and scheduled or withdraws its bid within its validity after award of contract, the EMD would be forfeited and the firm would be debarred from participating in the tender of the Department of Health & Family Welfare Government of Himachal Prad