Forfeiture of earnest money is valid before contract execution if tenderer provides false information, without invoking Sections 73 and 74 of the Contract Act.

JUDGMENT ORDER

1. Heard Mr. N. Gunedhor, learned counsel appearing for the petitioner and Mr. W. Darakishwor, learned senior panel counsel appearing for the respondents.

The present writ petition had been filed challenging the legality and sustainability of the order dated 29.06.2020 issued by the authority of the FCI thereby disqualifying the tender bids submitted by the petitioner's firm and forfeiting the EMD amounting to Rs. 20,80,512/-(Rupees Twenty Lakh eighty thousand five hundred and twelve only) and also black listing the petitioner's firm for a period of three years from participating in FCI tenders.

2. The legal question which has arisen is whether, upon there being a material non-disclosure or a material concealment, the forfeiture clause under Clause No. 13 of the General Information to tenderer can be invoked thereby resulting in issuance of the impugned order.

3. The relevant facts of the present case in a nutshell is that the FCI issued a notice dated 21.02.2020 inviting E-Tenders from eligible and interested contractors for appointment of contractor for transportation of food grains and alike materials, etc, from FSD/CWC, Dimapur to FSDBishnupur for a period of two years.

Along with the said NIT, a comprehensive General Information to tenderers containing altogether 15 Clauses was also notified. Under Clause (4) of the said General Information, the conditions for disqualification are given. One of the conditions for disqualification as provided under Clause (4) (III) is that tenderer whose Earnest Money Deposit and /or Security Deposit had been forfeited by the FCI or any Department of Central or State Government or any other public sector undertaking, during the last five years, will be, ineligible. UnderCaluse (6) of the said General Information, it is provided that each tender must be accompanied by an earnest money @ 2% value of the contract amounting to Rs. 20,80,512/- (Rupees Twenty Lakh, Eighty Thousand Five Hundred and Twelve Only). Under Clause (11) of the said General Information, it is provided that Food Corporation of India reserved the right to reject any or all tenders without assigning any reason and that the successful tenderer will be intimated of the acceptance of his tender by letter/telegram/fax/e-mail. Under Clause (13) of the said General Information, it is provided that if the information given by the tenderer in the Tender Document and its Annexures and Appendices is found to be false/incorrect or has violated/breached any of the terms conditions of the contract, at any stage, FCI shall have the right to disqualify/summarily terminate the contract, forfeit the Earnest Money Deposit/SD/BG, make good any other loses cause to the corporation and black list the party for three years without prejudice to any other rights that the Corporation may have under contract and law.

4. Pursuant to the said NIT, the petitioner's firm submitted its tender bids along with a forwarding letter marked as Appendices-II and a Tender Submission Undertaking dated 13.03.2020.In the said forwarding letter, the petitioner stated that he had thoroughly examined and understood all the terms conditions as contained in the Tender Document, invitation to tender/information to tender and its annexure and appendices and agreed to abid by them and that he had deposited EMD amounting to Rs. 20,80,512/- (Rupees Twenty Lakh Eighty Thousand Five Hundred and Twelve Only). In the said letter, the petitioner also made a declaration that no Earnest Money Deposit and/or Security Deposit had been forfeited or adjusted against any compensation payable, in a case of any contract entered into by him with the Food Corporation of India for any other public sector undertaking or any Government during the las