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2025 Supreme(Online)(Gau) 8053

HIGH COURT OF GAUHATI
MR. JUSTICE KARDAK ETE
M/S SATYA BUILDERS – Appellant
Versus
NORTHEAST FRONTIER RAILWAY – Respondent
WP(C) / 2964 / 2021



BG doubling projects. The petitioner participated in the said Tender process.

5. On having found responsive, the petitioner was awarded the tender vide Letter of Acceptance (LOA) dated 02.06.2020, thereby directed the petitioner to deposit Performance Guarantee before signing of the contract agreement which the petitioner had complied with by submission of Performance Guarantee vide letter dated 29.07.2020 along with Bank Guarantee dated 28.07.2020 issued by the Bank of Maharashtra in favour of the Chief Engineer/Con, Financial Advisor & Chief Accounts Officer/Con, NF Railway, Maligaon, Guwahati to the tune of Rs.2,76,70,989.65/- (Rupees two crore seventy six lakh seventy thousand nine hundred and eighty nine and sixty five paisa) only. The petitioner mobilized resources at the project site by investing an amount, which is close to Rs.1 crore, to ensure timely execution of the work awarded to him even before signing of the contract agreement, which was inexplicably delayed by the respondent, which now stands to be vain, because of the impugned termination and penalty imposed upon the petitioner.

6. It is the contention of the petitioner that after months of inactivity on the part of the respondent authorities to sign the contract and get the execution of the work, the respondent vide show cause notice dated 01.12.2020 apprise the petitioner that the document of credentials submitted by the petitioner has been, upon verification, returned as not found in the office record from the Delhi Development Authority and sought reason as to why the respondent should not forfeit the Earnest Money Deposit, Bank Guarantee and Performance Guarantee and debarred the petitioner for a period of five years from participating in any tender process and carrying out any business.

7. The petitioner responded to the said show cause notice by stating that the document was old and placed with the tender document by the petitioner’s staff which went unverified due to paucity of time in submission of their bid and thus an outdated document of credentials have been placed before the respondent. The petitioner has also offered another document of credential in the form of Certificate of Completion issued by the National Highway Infrastructure Development Corporation Limited ( in short NHIDCL).

8. The respondent authorities vide termination notice dated 17.12.2020, terminated the contract on the basis of the tender document and General Condition of Contract (GCC in short) stating that the petitioner has admitted the previous documents of credential to be false, thereby, terminating the contract vide LOA and forfeited the earnest Earnest Money Deposit, Performance Guarantee and Bank Guarantee cumulatively amounting to Rs.3,08,93,889.65/- and debarring the petitioner for five years from participating in any tender process and carrying out business.

9. It is the contention of the petitioner that the respondent authorities without considering the completion certificate issued by NHIDCL and on the basis of wrong interpretation of the tender document and provision of the GCC, thereby illegally stating that the petitioner has admitted the previous document of credential to be false has resorted to above actions by terminating the contract with a consequential forfeiture of Earnest Money Deposit, Performance Guarantee and Bank Guarantee cumulatively and also debarred the petitioner for five years from participating in any tender process and carrying out business. The petitioner contends that a representation dated 29.01.2021 has been submitted before the respondent authorities seeking release of the Earnest Money Deposit, Performance Guarantee and Bank Guarantee cumulatively amounting to Rs.3,08,93,889.65/- which has been duly received by the respondent authorities. However, they chose to feign ignorance and to not respond to the same.

10. Mr. P. Mehta, learned counsel for the petitioner, submits that the respondent authorities have failed to verify the authenticity of

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