The court examined the validity of the order debarring the petitioner from participating in future tenders of the Food Corporation of India and found that the order was passed in accordance with the conditions of the contract.

ORDER :

V.K. SHUKLA, J.

The petitioner has invoked the writ jurisdiction under Article 226 of the Constitution of India for quashment of the order dated 9-1-2019, terminating the contract of the petitioner and debarring it from participating in future tenders of the respondent Food Corporation of India for a period of 5 years.

2. The facts enumerated in nutshell are that the respondents vide notice dated 25-11-2016 invited online bids for appointment of a recruitment agency in order to conduct a recruitment process for vacancies for the post of Watchman in their office. The petitioner participated in the said tender process and submitted its bids on 21-12-2016. The technical bids were opened on 3-01-2017 and thereafter the price bids were opened on 1-2-2017. The petitioner emerged as a successful bidder/lowest bidder in the said tender process. The tender work i.e. conducting examination/tests of eligible aspirants was for the vacant post in the respondent/corporation. The period for execution of tender work was 2 years w.e.f. 14-2-2017 to 13-2-2019. The respondents vide letter dated 14-2-2017 selected and appointed the petitioner as an agency for recruitment process and other related activities as envisaged in the Bid Document. By communication dated 10-4-2018, the respondent informed the petitioner that on 1-4-2018, they were informed by the Special Task Force that around 50 people have been arrested in Gwalior purportedly along with some papers which prima facie appeared to be question papers related to the written examination conducted by the petitioner. It was further stated in the communication dated 10-4-2018 that the STF has seized the documents in which there were hand written questions relating to the examination for recruitment of Watchman in Food Corporation of India conducted on 1-4-2018. Thus, it was alleged that the petitioner has committed breach of conditions postulated in the tender form governing the appointment of the petitioner agency. A show cause notice dated 10-4-2018 was issued. The petitioner filed the reply to the said communication dated 12-4-2018. After taking into consideration the reply filed by the petitioner, by the impugned order dated 9-1-2019, the respondents terminated the contract with the petitioner in accordance with Clause 42.1(II). Further in exercise of powers conferred under Clause No. 10.1 and 10.2, the petitioner was debarred from participating in any future tenders of the Corporation for a period of 5 years. It was further directed that the security deposit was also stood forfeited as per Clause 15.6 of the tender conditions.

3. Learned counsel for the petitioner contended that the order debarring the petitioner from participating in future tenders is without jurisdiction. There is no clause in the tender conditions conferring the powers on the respondents to debar the petitioner from participating in further tenders. It is further contended that the respondents have failed to consider the explanation offered by the petitioner. To bolster his submissions, he relied on the judgment passed by the Apex Court in the case of Gorkha Security Services vs. Government (NCT of Delhi) and others, (2014) 9 SCC 105.

4. The Supreme Court in the case of Erusian Equipment and Chemicals Ltd. vs. State of W. B., reported in (1975) 1 SCC 70 held that the blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting therefore, the relevant authority is to have an objective satisfaction. The Court held as under : -

“20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fai