O R D E R

28^th June 2022 Per Shree Chandrashekhar, J.

By an order dated 13^th June 2018, W.P(C) No.2254 of 2018 challenging the order of termination of contract and debarment for five years was allowed.

2. Food Corporation of India (in short, FCI) has questioned

legality of the findings recorded by the writ Court that (a) clause 7(i)(a) of NIT is not mandatory and (b) the order of debarment was bad in law inasmuch as no notice/opportunity of hearing was afforded to the writ petitioner who is respondent before us.

3. At the outset, we may indicate that pursuant to the writ

Court's order dated 13^th June 2018 passed in W.P(C) No.2254 of 2018 the respondent was permitted to carry on the work under contract for 24 months and payments have been made to him in lieu thereof.

4. A tender notice was issued on 11^th January 2018 for appointment of HTC Contractor for handling and transportation work between RH Madhupur to PEG Giridih – both sides – and for handling work at RH Madhupur and at inside PEG Giridih. The respondent was declared successful bidder and Letter of Acceptance dated 28^th February 2018 was issued to him and he was requested to arrange payment of security deposit of Rs.61,60,000/-. The case pleaded by FCI is that as per condition under clause 7(i)(a) of NIT the successful bidder is required to furnish atleast 5% of the security deposit within fifteen working days from 28^th February 2018. There is no dispute that by 22^nd March 2018 which was the last date for depositing security deposit the respondent could not furnish a deposit equivalent to 5% of the total value of the contract as mandated under clause 7(i)(a) of NIT. The stand taken by the respondent was that he had deposited Rs.61,60,000/- at Samastipur Branch of Union Bank of India for transfer of the said amount through RTGS to FCI, however, due to some technical problem wired transaction was unsuccessful. The respondent further pleaded that Union Bank of India sent a communication which was received by him on 21^st March 2018 informing him about failure of the transaction and, accordingly, he made arrangements for transfer of security deposit on 23^rd March 2018 which was the next working day – 22^nd March 2018 being a public holiday. However, on 26^th April 2018 the order of termination of the contract and debarment of the respondent for five years was communicated to him.

5.

The writ Court held that clause 7(i)(a) of NIT was not mandatory and the order of termination and blacklisting was passed by FCI with predetermined mind.

6. The writ Court has held as under:

“32. The aforesaid conditions of the tender provide that the security deposit should be furnished within 15 days of issuance of the Letter of Acceptance or within the extended period. In case the successful bidder fails to comply with the said requirement, it will be a sufficient ground for the respondent-FCI to cancel the awarded work. Apart from the termination of contract, additional right is reserved with the respondent-FCI to blacklist/debar the bidder in future tenders for a period of five years.

33. Since the condition of the contract itself provides for furnishing security deposit within fifteen days of issuance of the Letter of Acceptance or within extended period, in my considered view, the same referred herein above is not a mandatory condition and as such, the respondent-FCI should not have terminated the contract awarded to the petitioner for delay of merely one day, in exercise of its discretionary power. Moreover, admittedly, even after the lapse of the said period of 15 days, the respondents enquired from the bank about the true fact with regard to the explanation made by the petitioner for non-furnishing the security deposit and thus, it reflects that the respondents had not treated the said time frame for furnishing