J U D G M E N T

TUSHAR RAO GEDELA, J.

1. Present appeal has been preferred under Clause X of the Letters Patent Act, 1866, assailing the judgment dated 19thJuly, 2024, passed by the learned Single Judge of this Court dismissing the W.P.(C) 8630/2024 titled “J Duncan Healthcare Pvt. Ltd. vs. Central Medical Services Society” filed by the appellant, on the ground that the respondent’s decision to blacklist the appellant on account of contractual breach and to debar the appellant from participating in tender process cannot be said to be arbitrary.

2. The facts germane to the present appeal, shorn of unnecessary details and as culled out from the appeal, are as under:

a) Appellant claimed to be a manufacturer, supplier and exporter of pharmaceutical products and submitted its bid against various Notice Inviting Tenders (NITs) issued by the respondent. It had emerged as successful bidder on several occasions and various Letters of Award (hereinafter referred to as “LOA”) for the supply of medicines, have been issued in its favour.

b) With a view to augment its financial resources, the appellant decided to sell 50% of its shares to the erstwhile ‘Vivimed Specialty Chemicals Private Limited’, now known as ‘M/s Mizuna Biosciences Pvt. Ltd’, under the Shareholders Agreement dated 8th April, 2023.

c) It is the case of the appellant that due to LOA requirements, the appellant had to make security deposits amounting to 3% of the total value of the respective LOA, necessitating submission of several Performance Bank Guarantees (hereinafter referred to as “PBGs”). The appellant claimed that the Authorized Representative of M/s Mizuna Biosciences offered to issue PBGs in favour of the respondent on behalf of the appellant, as this amount was to be adjusted in the purchase amount for 50% shares of the appellant. Consequently, PBGs dated 19th September, 2023, 21st September, 2023, 7th December, 2023 and 5th February, 2024 were issued by M/s Mizuna Biosciences or through its associate company’s account to the respondent on behalf of the appellant and the same were duly accepted by the respondent. The appellant stated that it paid a cumulative amount of Rs.1,06,00,000/- to M/s Mizuna Biosciences towards bank charges for the issuance of these PBGs.

d) The appellant stated that the Purchase Orders (POs) were issued to the appellant between September, 2023 and June, 2024, each with specified delivery schedules divided into tranches. The appellant sought extensions for the supply of medicines in Tranches I and II due to unavailability of APIs, delayed inspection by the respondent, shortage of excipients, production issues, machine breakdowns and festive holidays. The respondent granted these extensions but often with significant delays, effectively reducing the extension periods. The appellant stated that it is an admitted position as per the facts of the case, that against a total extension sought for 67 days, only 25 days were granted by the respondent and apart from PO no. 10282300100, there has been no delay in any other PO by the appellant.

e) The respondent issued the first Show Cause Notice dated 4th April, 2023, to the appellant detailing repeated delays in supplies and the appellant was asked to submit its reply by 8th April, 2024. Accordingly, the appellant sent its reply on 8th April, 2024, citing delays that were largely attributable to respondent. Subsequently, respondent vide Notice-cum-Order dated 29th April, 2024 decided to short close the unsupplied quantity under Tranche II for PO no.10282300100 and to forfeit the PBG worth Rs.

12,16,95,056/- for two PO’s under the same tender, i.e., Tender No. 21. It is the case of the appellant that it was further directed to continue supply of Tranches III and IV.

f) The appellant stated that having received the order dated 29th April, 2024, to prevent cascading effects of having its PBG forfeited, it transferred a total sum of Rs. 19,34,83,991 to the respondent via RTGS against 4 PBGs in lieu of seven