Gujarat High Court
J.M. Vaghasiya Through Its Partner Shri ... vs Gujarat Water Supply Sewerage Board on 8 April, 2025
Author: Umesh A. Trivedi
Bench: Umesh A. Trivedi
NEUTRAL CITATION
C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 21197 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE UMESH A. TRIVEDI
and
HONOURABLE MR. JUSTICE CHEEKATI
MANAVENDRANATH ROY
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Approved for Reporting Yes No
✔
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J.M. VAGHASIYA THROUGH ITS PARTNER SHRI
DIPAKKUMAR DEVCHANDBHAI MANGROLIYA
Versus
GUJARAT WATER SUPPLY SEWERAGE BOARD & ORS.
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Appearance:
PARAS K SUKHWANI(8284) with MS HONEY H. THAKKAR
for the Petitioner(s) No. 1
MR KEYUR GANDHI WITH ISA HAKIM with MS NITYA
JOSHI
for GANDHI LAW ASSOCIATES(12275) for the Respondent(s)
No. 1
MS MEGHA CHITALIYA, AGP for the Respondent(s) No.
NOTICE SERVED BY DS for the Respondent(s) No. 2,3
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CORAM:HONOURABLE MR. JUSTICE UMESH A. TRIVEDI
and
Page 1 of 57
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NEUTRAL CITATION
C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025
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HONOURABLE MR. JUSTICE CHEEKATI
MANAVENDRANATH ROY
Date : 08/04/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE UMESH A. TRIVEDI)
1. By way of this petition under Article 226 of the Constitution of India, petitioner has challenged an order dated 09.08.2023, which is at Annexure 'E' to the petition, whereby, Earnest Money Deposit (EMD), produced by way of Bank Guarantee, was ordered to be encashed and deposited with the Gujarat Water Supply and Sewerage Board (herein after referred to as "the Board") on account of suppression of factum of debarment when Form 'H' and a separate Undertaking submitted along with bid, which is in breach of Terms of the Tender, which empowers "the Board" to forfeit the EMD. At the same time, the petitioner has challenged an order dated 05.10.2023, whereby, the petitioner is debarred for a period of three years from the date of order, to participate in the Tender issued by GWIL, "the Board" as also Water and Sanitation Management Organization (WASMO). At the same time, order dated 16.09.2023, which is referred to in the impugned order, which is passed against Page 2 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined the petitioner - M/s. J. M. Vaghasiya - Joint Venture of Maruti Enterprise, Rajkot, came to be cancelled.
The petitioner, which is a registered partnership firm and carries on a business as Government approved contractors, is having turnover of more than Rs.43 crores per annum for the past five years. As projected in the petition, petitioner has also taken lead in constructing a significant number of Water Treatment Plant and Sewage Treatment Plant Project within Amrut Yojana initiated in the State of Madhya Pradesh and petitioner has served millions of residents across more than five States through out the Nation. As claimed in the petition, the petitioner has completed number of projects in the State of Gujarat as well as through out the Nation without any litigation.
1.1 The petitioner participated in an online Tender which was invited by Tender Notice No. 3/2023-24 for the Project of A-2, Regional Water Supply Scheme based on Dholka Branch Canal Part- 1 (Telav Group) Package-1, District Ahmedabad, copy of which, is annexed as Annexure 'A' to the petition. The name of the work was Page 3 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined Design and Construction of various sizes RCC Sumps and RCC ESR, Providing, Supplying, Lowering, Laying and Jointing of DI & PVC Pipeline for Rising Main/Gravity Distribution Pipeline Network including Providing, Supplying, Erecting and Testing Pumping Machinery at main HW and Sub-HW at village level Sub- stations, RCC Road, Staff quarters, Compound Wall, Electrification Work and other Head Work Development Works at main HW and Sub-HW and Operation and Maintenance of all types of Civil and Mechanical Structures. The estimated contract value was Rs.64,55,82,477.03. The period of completion was 24 months. The bid document downloading start date was 29.05.2023 and the bid document downloading end date was 27.06.2023, upto 18:00 hours. 1.2 By Corrigendum dated 16.06.2023, last date and time for submission of bid was revised. The petitioner submitted the Tender online on 26.06.2023. The bid validity period was 180 days and Preliminary Stage Bid Opening date was 28.06.2023, Technical Stage Bid Opening date was also 28.06.2023. The petitioner, in the Joint Venture of Maruti Enterprise, Rajkot (stake 60:40), submitted online Tender along with EMD of Rs.64,55,825/- in the form of Page 4 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined Bank Guarantee dated 23.06.2023 issued by Kotak Mahindra Bank Limited, Ahmedabad.
1.3 As coming out from the petition itself, the petitioner participated in online Tender process of Bihar Urban Infrastructure Development Corporation Ltd. (BUIDCO), invited vide Tender Notice No. 33 dated 27.09.2022 for Barahia I&D & STP. There, the petitioner again submitted Tender by Joint Venture partner M/s. Jainam Construction (Now Jainam Engicon Private Limited). The petitioner states that said M/s. Jainam Construction (Now Jainam Engicon Private Limited) has submitted two Experience Certificates for Contract dated 11.04.2020, allegedly issued by the Executive Engineer, Nagar Parishad, Beawar. The Chief General Manager, BUIDCO sent these Certificates for verification to the office of the Executive Engineer, Beawar. The Executive Engineer, Beawar informed the Chief General Management, BUIDCO that no such work was executed by M/s. Jainam Construction (Now Jainam Engicon Private Limited).
1.4 Therefore, by an Office Order dated 20.06.2023, Chief General Manager, BUIDCO blacklisted Joint Venture lead partner Page 5 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined M/s. J. M. Vaghasiya i.e. the petitioner herein and M/s. Jainam Construction (Now Jainam Engicon Private Limited) for a period of ten years. Copy of blacklisting order passed by the BUIDCO is annexed with the petition at page 14 of the compilation. 1.5 As coming out from the order itself, despite notice issued prior to passing of blacklisting order though M/s. Jainam Engicon Private Limited through e-mail informed that within 10 days, comprehensive and detail response would be submitted, however, neither the Joint Venture nor M/s. J. M. Vaghasiya i.e. the petitioner individually filed any reply to the blacklisting notice issued by BUIDCO. 1.6 As revealed in the petition, in the present case, for submission of online Tender pursuant to Tender Notice No. 3/2023-2024 for which Bank Guarantee obtained on 23.06.2023, at that time, because of short time, Office Order dated 20.06.2023 passed by Bihar authority blacklisting the petitioner Joint Venture for a period of ten years, skipped and inadvertently, required information about blacklisting by other Government could not be provided in the present Tender.
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NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 1.7 Thus, though the knowledge of the petitioner in respect of passing of blacklisting order prior to furnishing details before online Tender submitted in the present case, despite that, petitioner himself, as an authorized person of Joint Venture with Maruti Enterprise, Rajkot, submitted false Undertaking in Form 'H' as also a separate Undertaking which are at page 73 and 75 of the petition. 1.8 The petitioner further submitted that in fact they had not submitted any false or fabricated document to BUIDCO and the petitioner being a lead partner of Joint Venture, was also served with Office Order dated 20.06.2023 which is the blacklisting order passed by the BUIDCO. It is further submitted that by a communication dated 08.08.2023, the Managing Director of BUIDCO was apprised by the petitioner with the facts of bid submission with the request to review the case and reconsider the decision of debarment based on authenticate document submitted by the petitioner. However, since the department did not respond, the petitioner filed a Civil Writ Jurisdiction Case No. 12494 of 2023 in the High Court of Judicature of Patna and vide order dated 01.09.2023 Division Bench of High Court stayed the impugned order dated 20.06.2023 till the next date Page 7 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined of hearing. It is further submitted that thereafter, vide order dated 06.11.2023 said order dated 20.06.2023 (wrongly mentioned date as 28.06.2022 in the order of the Patna High Court) came to be set aside directing the authority to issue fresh show-cause notice with a particular period of blacklisting or debarring the petitioner. 1.9 It is further submitted that vide communication dated 09.08.2023 an order came to be passed forfeiting the EMD in view thereof, Bank Guarantee was presented to encash the same and to be credited into the account of the respondent authority. The said order is annexed at page 24 of the petition. Pursuant to that order of forfeiture of EMD, encashing the Bank Guarantee vide communication dated 14.08.2023, the respondent authority informed the bank encashing the same and credit the said amount into the account of the respondent authority. The petitioner requested vide communication dated 14.08.2023 to the Chief Engineer, Technical Cell, Jal Seva Bhavan, Gandhinagar to exempt from forfeiture of Bank Guarantee as letter dated 20.06.2023 blacklisting/debarring the petitioner Joint Venture by BUIDCO came to be noticed after submission of the bid and therefore, as per Tender clause, Page 8 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined information could not be provided. The petitioner, in the said letter, reiterated that because of constituent partner of Joint Venture, who produced false documents, order came to passed to blacklist/debar the petitioner Joint Venture along with M/s. Jainam Engicon Private Limited. He has further informed that since action of producing false documents was by the constituent partner of Joint Venture, petitioner claimed to be wrongly debarred and therefore, he made a representation to the BUIDCO and its name was removed from the list of debarred parties, which is available on the website of BUIDCO. However, such release order would be received within a short time. Therefore, vide said letter, it claimed amount of EMD be refunded back to him.
1.10 It is further submitted that vide show-cause notice dated 23.08.2023 issued to the petitioner, calling for the explanation for submitting misleading, containing wrong facts in Form 'H' with a view to get qualified in the present Tender and therefore, as per the Terms of the Tender Document, why no action for breach thereof in the form of disqualification, forfeiture of EMD and debarment for 3 years should not be initiated against the petitioner. Page 9 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025
NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 1.11 Vide order dated 16.09.2023, though explanation called for is submitted on 29.08.2023, the respondent authority passed an order debarring the petitioner Joint Venture with Maruti Enterprise, Rajkot for a period of 3 years for participation in tenders by GWIL, GWSSB as also WASMO. As further coming out from the petition, the constituent partner of Joint Venture Maruti Enterprise, Rajkot vide letter dated 20.09.023, addressed to respondent No. 2 herein the circumstances under which the Office Order dated 20.06.2023 was passed by BUIDCO, wherein, the petitioner was a lead partner of Joint Venture. The said communication is at Annexure 'K', page 45 of the petition. It requested that since the order of debarment passed by BUIDCO is stayed by the Patna High Court, and it is not involved in misleading or fraudulent statement, the order debarring Maruti Enterprise also along with M/s. J. M. Vaghasiya is required to be reconsidered.
1.12 Surprisingly, the respondent authority passed an order dated 05.10.2023 debarring only M/s. J. M. Vaghasiya, the petitioner herein for the breach of Terms of the Tender Notice for a period of 3 years as stated herein above and simultaneously, cancelled the order Page 10 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined dated 16.09.2023, referred into that order at serial No. 4 in the reference, where by M/s. J. M. Vaghasiya, Joint Venture with Maruti Enterprise, Rajkot came to be debarred. Thus, the day on which present petition came to be filed, M/s. J. M. Vaghasiya, the petitioner herein was blacklisted/debarred vide order dated 05.10.2023, which is challenged by the petitioner along with an order dated 09.08.2023, whereby, EMD in the form of Bank Guarantee, came to be encashed by the respondent Board.
2. Pursuant to issuance of notice by this court, affidavit-in-reply on behalf of the respondent authority came to be filed contending that vide letter dated 29.08.2023, maybe pursuant to notice for blacklisting/debarment, the petitioner admitted its mistake of filing a false Undertaking as also in a Notice issued by the petitioner through its Advocate dated 10.11.2023, order of blacklisting/debarment dated 20.06.2023 received through e-mail on 24.06.2023 i.e. before submission of Form 'H' and the Undertakings at page 73 and 75 without disclosing and deliberately suppressing the order of debarment, though known to it, so that it's Tender be accepted. It is further submitted that for the breach of Terms of the Tender upon Page 11 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined which petitioner is expected to make its offer considering the conditions therein, which entails action in disqualifying, forfeiture of EMD as also blacklisting in case any false facts are stated in Form 'H' or false declaration is filed pursuant to Notice Inviting Tender (NIT). It is further contended in the affidavit-in-reply that subsequent grant of stay order or quashing of the order passed by a reasoned order, remitting the matter back to the authority for specifying the period of proposed debarment in the show-cause notice, is of no consequence as the order of debarment was already in existence when the petitioner filed Form 'H' as also the Undertaking at pages 73 and 75 signed before the Notary Public. 2.1 It is further disclosed in the affidavit-in-reply that revoking the order of blacklisting against the petitioner Joint Venture in case of Maruti Enterprise, Rajkot, cannot be used by the petitioner to claim parity since the two are not similarly situated, claiming that Maruti Enterprise, Rajkot has not been blacklisted by any agency. An attempt is made by the respondent Board to justify their action of revoking the order of blacklisting against Maruti Enterprise, Rajkot. Page 12 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025
NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 2.2 The petitioner filed affidavit-in-rejoinder to the reply submitted by the respondent herein reiterating that due to shortage of time, the order debarring the petitioner dated 20.06.2023 by BUIDCO skipped and inadvertently, required information about blacklisting by any other government could not be provided. It is further claimed that the petitioner has not submitted any false, fabricated document to BUIDCO. It was asserted that Tender was submitted by Joint Venture and the petitioner being Lead partner of Joint Venture, it was also served with the Office Order dated 20.06.2023. It is further claimed that BUIDCO vide communication dated 25.01.2024, set aside the order dated 20.06.2023 and decided to seek the explanation from the petitioner and accordingly, Notice has been served on 12.02.2024 to the petitioner, to which, reply has been given by the petitioner. However, the said fresh show-cause notice came to be issued by BUIDCO pursuant to order passed by the High Court of Judicature at Patna. By way of further rejoinder affidavit, the petitioner has placed on record an order dated 16.05.2024 passed by BUIDCO claiming that it has released the order of debarment and also released the EMD. By Additional Page 13 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined Affidavit, the petitioner has quoted certain clauses of the tender document for consideration.
2.3 Yet there is Additional Affidavit-in-reply on behalf of the respondent authority stating therein that the respondent Board has decided to take steps against the Joint Venture constituent of the petitioner by issuing show-cause notice dated 06.03.2025 to Maruti Enterprise, Rajkot, who was the part of Joint Venture along with petitioner that participated in the Tender. The respondent also placed on record show-cause notice dated 06.03.2025 wherein, the constituent partner Maruti Enterprise, Rajkot is also informed that it is proposed to recall the order dated 05.10.2023 lifting the blacklisting imposed upon Maruti Enterprise, Rajkot to that extent. 2.4 Pursuant thereto, Maruti Enterprise, Rajkot has submitted its reply.
3. On the aforesaid pleadings, the learned advocate for the petitioner has made submissions extensively which are recorded here under.
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NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 3.1 Mr. Paras Sukhwani, learned Advocate submitted that the order of debarment dated 16.09.2023, which is at page 42 of the compilation, is passed against M/s. J. M. Vaghasiya, Joint Venture with Maruti Enterprise, Rajkot. Order dated 05.10.2023, which is at page 48 of the compilation, passed only against the petitioner, whereas, the respondent authority has revoked the order dated 16.09.2023 against the constituent partner of Joint Venture Maruti Enterprise, Rajkot, which is discriminatory and in breach of Article 14 of the Constitution of India. He vehemently submitted that if constituent partner of Joint Venture is to be exonerated, no action could be taken either for debarring or for forfeiture of EMD only against the petitioner.
3.2 He has further vehemently submitted that since the order of debarment/blacklisting is the harshest punishment, which deprives the petitioner of its business leading to civil death, maybe for a particular period, the alternative thereof by disqualifying the petitioner, if at all any Undertaking or an Affidavit is found to be false, should have been resorted to.
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NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 3.3 It is further submitted that even forfeiture of EMD, to the extent of nearly 64.50 lakhs and odd, could also have been avoided as there appears no apparent loss of anything to the respondent authority and therefore, an order of forfeiture of EMD is also bad in law.
3.4 He has further submitted that even reply submitted by him offering the explanation is also not considered by the respondent authority and therefore also, the order passed by it, is bad in law. 3.5 He has further submitted that the order of blacklisting is passed for a maximum period of 3 years, which is provided in the Terms of the Tender, and this duration can be branded as disproportionate to the wrong committed by the petitioner. 3.6 It is vehemently submitted that since the EMD has already been forfeited, less drastic step already implemented, blacklisting could have been avoided by the respondent authority. 3.7 He has further submitted that even subsequent events may also be considered by this Court while hearing the challenge to the order Page 16 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined of blacklisting/debarring, as for the so-called false disclosure in Form 'H' and filing a false Undertaking, action is taken against the petitioner based on an order of debarment dated 20.06.2023 passed by the BUIDCO, has come to be quashed and exonerated the petitioner from blacklisting, with a refund of EMD therein, this Court may interfere with, at least with the period of blacklisting, as for a period of nearly one and a half years, the petitioner has been deprived of participating in any Tender process, and it should be treated as sufficient punishment to the petitioner. Accordingly, the order of blacklisting should be modified. He has further submitted that since the respondent authority is gracious enough to consider the request of constituent partner Maruti Enterprise, Rajkot, and cancel the order dated 16.09.2023 blacklisting it for a period of 3 years, similarly, the petitioner was not guilty of submitting any false documents before BUIDCO, and as on date, BUIDCO has also revoked that order of blacklisting and refunded the EMD, no such harsh action of blacklisting could have been passed. It is further submitted that since the very bid in which the petitioner participated is already cancelled, the order dated 05.10.2023 passed by the Page 17 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined respondent herein blacklisting the petitioner for 3 years, requires to be reconsidered and be quashed and set aside in the interest of justice.
3.8 Reliance has been placed on a decision in the case of Gorkha Security Services v. Govt. of NCT Of Delhi & Ors, reported in (2014) 9 SCC 105, more particularly paragraphs 1 and 16 thereof. He submitted that a show-cause notice must mention that action for blacklisting is proposed, or it should be possible to draw a clear inference to this effect from the notice. Referring to the show-cause notice dated 23.08.2023, it is submitted that certain Clauses of the Tender Conditions are mentioned in it, and therefore it is not discernible that any action for blacklisting is envisaged by the said Notice as operative portion of the show-cause notice refers to resorting to action as per Clause 21.7 of the Tender Notice. 3.9 Relying on a decision in the case of M/s. Techno Prints v. Chhattisgarh Textbook Corporation & Another, rendered in Civil Appeal No.2362 of 2025, arising out of SLP (C) No. 10042/2023, more particularly, paragraphs 25 to 30 and 34, it is submitted that Page 18 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined even a show-cause notice pertaining to blacklisting came to be quashed by the Supreme Court as the authority, with pre-judged mind, issued such show-cause notice, with a view to passing an order of blacklisting, and therefore, seeking an explanation by issuance of such a notice is a mere ritual.
3.10 Reliance is also placed on a judgment and order passed by this Court in the case of M/s. Aquafil Polymers Co. Pvt. Ltd. v. Gujarat Urban Development Company Limited, rendered in Special Civil Application No. 11731 of 2018 and connected matters by the Division Bench of this Court, more particularly, paragraph 5.3 thereof, wherein the word "bidder" is applied in the Tender Document in question, interpreted to mean the individual petitioner itself as the tenderer. Strictly speaking, as mentioned in the decision, the petitioner was not the tenderer in the Rajasthan Project. Therefore, it was concluded that, it cannot be said that it was not the petitioner entity who was debarred and blacklisted there. Therefore, when the information in the instant Tender was to be furnished about the bidder, the non-mention on the part of the petitioner about the joint venture bidder in Rajasthan having been treated as debarred, Page 19 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined could not be said to be fatal for the petitioner to get his bid reconsidered, nor could it be said to be suppression to prejudicially affect the petitioner.
3.11 Reliance is placed on a judgment and order passed by this Court in the case of M/s. M. V. Omni Projects (India) Ltd. v. Vadodara Municipal Corporation through The Commissioner, rendered in Special Civil Application No. 8175 of 2021. It is submitted that for the non-consideration of the reply or representation answering every query or allegation made in the show-cause notice, the order of debarment came to be quashed and the matter was remitted back to the respondent Corporation for undertaking entire exercise afresh and to pass fresh order if thought fit.
3.12 He has further relied on a decision in the case of M/s Kulja Industries Limited v. Chief General Manager, W.T. Project, BSNL & Others, reported in AIR 2014 SC 9, more particularly, paragraphs 20 and 21 thereof, whereby, the guidelines stipulated therein, the factors that may influence the debarring official's decision, came to Page 20 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined be enumerated. It is submitted that there is no actual or potential harm or impact that results or may result from the failure to disclose correct facts. Therefore, according to him, if those guidelines are to be followed, the respondent authority could not have resorted to an order of blacklisting, as the very bid was cancelled subsequently and the EMD was already forfeited by encashing the Bank Guarantee. In view thereof, the action of blacklisting is required to be interfered with.
3.13 He has further relied on a decision of the Supreme Court in the case of The Blue Dreamz Advertising Pvt. Ltd. & Another v. Kolkata Municipal Corporation and Ors., reported in 2024 SCC OnLine SC 1896, more particularly, paragraphs 24, 25, and 35 thereof, wherein the Supreme Court has also considered its earlier judgments, including that of Kulja Industries Limited (supra), and others on the issue of blacklisting, and quoted the paragraphs wherein, the Supreme Court has held that, where the case is of an ordinary breach of contract and the explanation offered by the person concerned raises a bona fide dispute, blacklisting/debarment as a penalty ought not to be resorted to. It is further held that, too Page 21 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined readily invoking debarment for ordinary cases of breach of contract, where there is a bona fide dispute, is not permissible. It is further held in paragraph 35 of the said decision that, the invocation of the penalty of blacklisting should be justified with reasons, considering whether the penalty is proportionate, which should be the real question.
3.14 Decision in the case of Royal Infra Engineering Pvt. Ltd. v. Surat Municipal Corporation and 1 Other, rendered in Special Civil Application No. 10412 of 2018, more particularly, paragraphs 20 to 38 on the doctrine of proportionality for taking action in blacklisting, is relied on by the learned advocate for the petitioner. 3.15 Relying on aforesaid decisions and arguments as aforesaid, Mr. Paras Sukhwani, learned advocate for the petitioner, contended that the petitioner has learnt a lesson and, since no stay was granted, and nearly one and a half years have already passed, in view of subsequent developments, revoking the order of blacklisting by BUIDCO dated 20.06.2023 in respect of the present petitioner, if at all the Court comes to the conclusion that no case is made out to Page 22 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined challenge the order of blacklisting, at least the period for which it is ordered should be limited, applying the doctrine of proportionality. Therefore, he submitted that this petition deserves consideration and therefore, it is required to be admitted and allowed.
4. As against that, initially Mr. Krunal Vyas and thereafter, Mr. Keyur Gandhi for M/s. Gandhi Law Associates for the respondent vehemently submitted that as per the Terms of the Tender Notice, it is expected from every bidder that they should disclose true and correct facts in their bid. Therefore, certain Terms and Conditions mention consequences of submitting false/incorrect or misleading facts so as to disqualify, forfeit the EMD and blacklist the bidder.
4.1 He has further submitted that petitioner, through, it's authorised person on behalf of Joint Venture who signed this petition, has also signed the bid and each and every document required under the bid, submitted its bid dated 26.06.2023, maybe, it should be 27.06.2023 as Undertaking in Form 'H' is filed which discloses that, their firm are not listed under a declaration of Page 23 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined ineligibility for corrupt or fraudulent practices presently not blacklisted and terminated in any of the Central or State Government Bodies, State or Central Government Undertakings and State or Central Semi Government Bodies or Organizations. Not only that, an Undertaking at page 75 is also filed recognizing right of the respondent authority to forfeit the EMD and blacklist the firm in case of any information submitted in the bid is found to be incorrect or misleading.
4.2 He has further submitted that not only the relevant Clauses of the Tender Notice based on which the petitioner participated in the Tender mention clearly in the show-cause notice for action mentioned therein, the action of forfeiting the EMD as also blacklisting, is also clear and apparent in the said Terms and Conditions, referred to in the show-cause notice. He has further submitted that even relevant portion thereof, which provides for, also mentions that it would be for a period of 3 years. Thus, according to his submission, the show-cause notice is very specific in respect of breach committed by the petitioner and the proposed action as per the Tender Conditions/Terms, resultant action in respect thereof. Page 24 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025
NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined Therefore, show-cause notice cannot be termed as vague, not containing the required details so as to render it invalid as contended by the learned advocate for the petitioner.
4.3 Drawing attention of the Court to the Representation dated 29.08.2023 submitted by the petitioner, which is at page 39, Annexure 'I' to the petition, wherein in second unnumbered paragraph, it is stated by the petitioner that, debarment by the BUIDCO was executed on 20.06.2023 and subsequently, posted on its website without a direct prior intimation to the petitioner. However, it is specifically stated that, "we were informed of our debarment through an email on 24th of June 2023, while the deadline for document submission for present tender was the 26th of June 2023. This time frame left petitioner with only a brief two day window to respond and therefore, unintentional oversight in not being promptly informed about the debarment led to the inadvertent submission of the affidavit". Thus, according to submission of the learned advocate for the respondent authority, the day on which bidder filled in Form 'H' as also the Undertaking, that too, before a Notary Public, when it is affirmed, the order of debarment by the Page 25 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined BUIDCO is already known to it and, that too, to the authorised person who has signed the bid on behalf of the petitioner as also who has signed this petition as well, a bold statement in Form 'H' that, presently not blacklisted and terminated in any of the central or State Government Bodies as also acknowledging the Terms of the Tender Notice claiming that all the details are true and the respondent authority have right to forfeit the EMD and blacklist the firm if any information is incorrect or misleading. Therefore, according to the submission of learned advocate for the respondent, not only there is a suppression in Form 'H', when it is not disclosed that the petitioner was blacklisted by BUIDCO, as also conscious knowledge of consequences of submitting incorrect or misleading facts in the bid, a petition challenging the said consequence should not be entertainment.
4.4 He has further submitted that though initially on a Representation made by the constituent partner Maruti Enterprise, Rajkot, the order of debarment, so far as it, is concerned, came to be revoked, when respondent authority realized that each constituent partner of Joint Venture are equally responsible for all their deeds, Page 26 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined fresh show-cause notice for initiating action in blacklisting against it, is already issued and a copy thereof, is also produced along with the affidavit-in-reply. Therefore, according to his submission, there is no merit in the contention that constituent partner is exonerated from blacklisting and therefore, no action could have been taken against the petitioner either forfeiting the EMD or blacklisting it alone, has no legs to stand.
4.5 Relying on a decision in the case of Gujarat Construction Company v. Gujarat Water Supply and Sewerage Board, rendered in Special Civil Application No. 19025 of 2023, it is submitted that after taking into consideration the Supreme Court's decision as also interpreting similar such Terms and Conditions of Tender therein by the very present respondent authority, similar challenge came to be rejected by this Court.
4.6 On the aforesaid submissions and precedent relied on by the learned advocate for the respondent, it is submitted that this petition is without any merit and therefore, it is required to be rejected. Page 27 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025
NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined
5. Having heard the learned advocates for the appearing parties and going through the documents annexed along with the petition and the precedents cited by the parties for the determination of this petition, Terms of the Tender Notice would be profitable to be referred to as coming out from the show-cause Notice itself:
"GUJARAT WATER SUPPLY & SEWERAGE BOARD AHMEDABAD (A WHOLLY OWNED GOVERNMENT OF GUJARAT UNDERTAKING) VOLUME - IA SECTION-II INSTRUCTIONS TO BIDDERS A. GENERAL 1.0 xxx 1.1 Special Attention:
(i) This tender consists for the work "Design & Construction of Various Sizes RCC Sumps & RCC ESR, providing, supplying, lowering laying and jointing of DI & PVC pipeline for Rising main/ Gravity distribution pipeline network including providing, supplying, erecting and testing Pumping Machineries at Main HW & Sub HW & Village Level Pumping Stations, RCC Road, Staff quarter, Compound Wall, Electrification work and other headwork development works at Main HW & Sub HW and Operation & Maintenance of All type Civil & Mechanical Structures, Machineries & Page 28 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined Pipeline Network for 10 Yrs. for A2 Augmentation Regional Water Supply Scheme based on Dholka branch canal : Part-I (Telav group) : Package 1, Taluka : Bavla & Sanand District:
Ahmedabad"
(ii) A pre-bid conference for the works, open to all intending bidders, shall be held on the date & venue as mentioned in the Tender Notice.
(iii) All Bidders are urged to submit a written request immediately upon receipt of the tender documents for the matter where clarification and/or additional information are desired, along with the details of work. The request shall be submitted not less than four days in advance of the pre-bid conference.
(iv) The tender document shall be submitted as per procedure laid down in Section-II, Para No. 26, for submission of tender.
(v) Earnest money deposit details & scanned copy shall be submitted as prescribed on line and after submission online, in form specified shall be submitted in office of "Executive Engineer. P.H. Works Division, GWSSB, Ahmedabad" as per details given online in sealed envelope. If earnest money deposit is not received within prescribed time limit the bid shall be rejected.
(vi) Tender shall be opened as per procedure laid down in this Section-II, clause 28 and as per detailed tender notice.
(vii) All Bidders are cautioned that e-tender containing any deviation from the contractual terms and conditions, specifications or requirements shall be rejected as non-
responsive.
(viii) Conditional offer will be out right rejected. No condition shall be included in tender.
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NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined
(ix) Alternative tenders are not acceptable.
(x) Qualification of bidder will be done whose tender is considered responsive and meets the specified evaluation and qualification criteria as per tender conditions.
(xi) Bidders shall have to declare regarding the tender submitted in the prescribed format.
(xii) The department reserves the right to qualify/disqualify any applicant without assigning any reason thereof.
(xiii) The bidder shall be disqualified if;
a. The bidder had made misleading or false representation in the forms, statements and attachment submitted in proof of qualification requirements and/or b. A record of poor performance such as abandoning the work, not properly completing the contract, inordinate delays in completion, litigation history or financial failures etc. c. The Bidder has been blacklisted by any Government / Non-Government / Private agencies / Organizations/ Institutions/ Government Undertakings and funding Agencies in the last 03 years.
The bidder should provide accurate information on litigation and / or arbitration resulting from contract completed or under execution by him over the last five years. A consistent history of arbitration awards / judgments against the applicant or any partner of a joint venture may result in disqualification for proposed work. If the details of litigation history is hidden by the applicant and later on it comes to knowledge of the employer the bidder shall be disqualified for the proposed work and other appropriate actions shall be Page 30 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined taken against the bidder.
The bidder should submit undertaking on non-judicial e-stamp paper of Rs.300/- duly attested by notary public regarding documents submitted, are true. Board would have the right to forfeit the EMD and blacklist to the bidder if any of the information given by the bidder is found faulty or incorrect or misleading.
(xiv) to (xix) xxx (xx) Bidder shall not be listed under a declaration of ineligibility for corrupt or fraudulent practices issued by the central / state govt. in accordance with sub clause 45.1 (c) or not in the list of black listed contractors announced by Government (State / Central), Board, Corporation, and Government Undertaking / Organizations of state & central government including all Public Sector Units.
(xxi) to (xxxii) xxx
GENERAL DESCRIPTION OF THE WORK
xxx
21. BID SECURITY:
21.1 to 21.5 xxx
21.6 The bid security may be forfeited;
(a) If the bidder withdraws its bid, during bid validity period specified.
(b) If any document submitted by the bidder are false and fraudulent
(c) if the successful bidder fails Page 31 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined i. To furnish security deposit in accordance with the relevant clause in the bid.
ii. To sign the contract within time limit specified in the bid.
21.7 In case of forfeiture of EMD, Bidder shall be disqualified and shall not be allowed to bid for further works under GWSSB/GWIL for three years.
22 to 24 xxx
25. ACCOMPANIMENTS TO TENDER 25.1 to 25.8 xxx 25.9 Scanned copy of all the prescribed Forms & Annexure mentioned in Section-III, also in physical form in separate sealed cover by RPAD/Speed Post/ Hand Delivery in the office of The Executive Engineer as mentioned in the Tender Notice. 25.10xxx 25.11The bidder should submit undertaking on non-judicial e- stamp paper of Rs.300/- duly notarized regarding document submitted, are true. Board would have the right to forfeit the EMD and black list to the bidder if any of the information given by the bidder is found faulty or incorrect or misleading. 25.12to 25.13 xxx 26 to 28 xxx
29. EVALUATION OF TECHNICAL BIDS 29.1 xxx 29.2 Even though the bidder meets the above qualification Page 32 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined criteria, he shall be disqualified if:
a. The bidder had made misleading or false representation in the forms, statements and attachment submitted in proof of qualification requirements and/or b. A record of poor performance such as abandoning the work, not properly completing the contract, inordinate delays in completion, litigation history or financial failures etc. c. Bidder has been blacklisted by any Government / Non- government / Private agencies / Organizations / Institutions / Government Undertakings and funding Agencies in the last 05 years.
The bidder should provide accurate information on litigation and / or arbitration resulting from contract completed or under execution by him over the last five years. A consistent history of arbitration awards / judgments against the applicant or any partner of a joint venture may result in disqualification for proposed work. If the details of litigation history is hidden by the applicant and later on it comes to knowledge of the employer the bidder shall be disqualified for the proposed work and other appropriate actions shall be taken against the bidder.
The bidder should submit undertaking on non-judicial stamp paper of Rs.300/- dully attested by notary public regarding document submitted, are true. Board would have the right to forfeit the EMD and black list to the bidder if any of the information given by the bidder is found faulty or incorrect or misleading.
29.3 to 29.4 xxx
30. to 40. xxx
41. CORRUPT OR FRAUDULENT PRACTICES:
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NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 41.1 The GWSSB requires that bidders/ suppliers/ contractors have followed the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy:
(a) Defines for the purposes of this provision, the terms set forth below as follows:
(i) xxx
(ii) "Fraudulent practice" means a misrepresentation of facts in order to influence a procurement process or the execution of a contract to the determination of the Borrower, and includes collusive practice among bidders (prior to or after bid submission) designed to establish bid prices at artificial non-competitive levels and to deprive the borrower of the benefits of free and open competition;
(b) xxx
(c) Will declare a firm ineligible, either indefinitely or for a stated period of time, to be awarded a contract if it at any time determines that the firm has engaged in corrupt and fraudulent practices in competing for, or in executing, a contract.
If at any stage it is found that bidder had hidden material information or had submitted information which is false and fraudulent shall be debarred from bidding in GWSSB/GWIL tender for three years and EMD shall be forfeited. The matter shall also be brought to notice to the registration authority of the contractor.
42. xxx 43.0 DECLARATION FORM: (FORM-H) Page 34 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 43.1 In conjunction to Sub Clause 'C' under "29. Evaluation to Technical bids" the bidder should submit undertaking as per Form-H on non-judicial stamp paper of Rs.300/- dully attested by notary public regarding document submitted, are true. GWSSB would have the right to forfeit the EMD and blacklist the bidder if any of the information given by the bidder is found faulty or incorrect or misleading. xxx"
5.1 Pursuant to the aforesaid Tender Notice, the petitioner as Joint Venture with Maruti Enterprise, Rajkot participated in the bid. The authorised signatory who is the partner of the petitioner firm was also authorised to submit all the required documents signed and attested by him, for participation in the bid. He submitted at page 73 and 75 required Undertakings to the effect that their firm are not listed under a declaration of ineligibility for corrupt or fraudulent practices presently not blacklisted and terminated in any of the Central or State Government Bodies, State or Central Government Undertakings and State or Central Semi Government Bodies or Organizations. At the same time, Undertaking at page 75, duly signed and attested before the Notary Public by the authorised signatory of the Joint Venture, who was also authorised to sign the bid documents, stated that, bidder has submitted all details, which Page 35 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined are true and GWSSB/GWIL have right to forfeit the EMD and blacklist the firm in case of any information is incorrect or misleading. Both Undertakings, at page 73 and 75, bear date 26.06.2023, attested and signed before the Notary Public on 27.06.2023.
5.2 Despite the petitioner as constituent partner, perhaps the lead partner, of M/s. J.M. Vaghasiya, (Joint Venture) + M/s. Jainam Engicon Private Limited vide order dated 20.06.2023 declared to be blacklisted for a period of 10 years and the said order, is received by the petitioner through e-mail as admitted in the reply / representation dated 29.08.2023, which is at page 39, Annexure 'I' to the petition, on 24.06.2023, whereas the Undertakings at page 73 and 75 signed before the Notary Public on 27.06.2023, very order of blacklisting known, it came to be boldly suppressed claiming to be an inadvertent mistake as the deadline for document submission of the present Tender was 26.06.2023 getting over, this time-frame left them with only 2 days' window to respond. The said bold suppression is stated to be an unintentional oversight in not being promptly informed about the debarment led to the inadvertent Page 36 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined submission of the affidavit. It is claimed to be purely a mistake of fact rather than a deliberate attempt to mislead. 5.3 If the order of blacklisting passed by BUIDCO is seen, Joint Venture partner of the present petitioner firm M/s. Jainam Engicon Private Limited deliberately produced forged and fabricated Experience Certificates, as per the requirement of the bid, before that authority. Not only it had provided an e-mail address for the purpose of verification of the same and an e-mail sent to the address revealed that it is issued by that authority. However, it is only on physical verification, the authority at Beawar, Rajasthan informed that no such work, Certificates of Experience which are produced, was ever allotted to M/s. Jainam Engicon Private Limited. There again, once the petitioner as also the constituent Joint Venture partner held to be blacklisted for a period of 10 years by the BUIDCO, subsequently, the petitioner represented to it that the petitioner is not responsible for production of forged documents and therefore, no order of blacklisting could be passed by the authority. As stated and produced by the petitioner, BUIDCO has relieved the petitioner from blacklisting order and has also ordered to refund the Page 37 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined EMD. Though, that order is also required to be ascertained by the respondent authority, whether it is done or not, when bid is filed on behalf of the Joint Venture, each constituent partner of it, is responsible for all the acts done by any one of them. They are equally responsible for incurring any liability thereof for a deed or misdeed by any one of them. Be that as it may, that order relieving the petitioner from blacklisting order, is not challenged here before this Court, we put at rest that scrutiny of it here. But the fact remains that when Form 'H' and undertakings signed, affirmed and submitted with bid order of debarment was in existence and it is suppressed.
5.4 Be that as it may, so far as present case is concerned, partner of the petitioner firm, who is also authorised to sign and submit the bid, himself has filed Undertakings which are found to be false and misleading. The day on which, the Undertakings at page 73 and 75 were filed, fact remains that the petitioner was blacklisted by BUIDCO, that too, for a period of 10 years. Therefore, it was expected from the bidder Joint Venture, that too, authorised signatory of the petitioner, who, as an authorised signatory of bidder, Page 38 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined signed those Undertakings, to correctly disclose any order of blacklisting passed by the Central or State Government or its Bodies, Undertakings or Organizations. Instead of regretting for suppressing this most material and important fact, it has been assertively argued that subsequently, that order is recalled so far as it relates to the petitioner firm as also the bid itself is cancelled; authority could not have passed an order of blacklisting, that too, for a period of 3 years. The said assertion is misconceived in facts as also in law. The Undertakings required to state true and correct facts obtaining on that day. It never envisaged any subsequent event to be stated in it. It was expected from the authorised signatory of the petitioner to disclose true and correct fact.
5.5 The bidders had to file their bids keeping in mind the conditions mentioned in the NIT subject to which, they have to place their offer for consideration. With an open eye, the bidder i.e. the petitioner had accepted the Terms that any information submitted in any Declaration or Undertaking is found to be incorrect or false, it shall be debarred from bidding in GWSSB/GWIL Tender for three years and EMD shall be forfeited. Not only that, they have Page 39 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined acknowledged the right of the respondent authority by submitting the Undertaking on Non-Judicial Stamp Paper of Rs.300/-, duly attested by a Notary Public, regarding document submitted are true as also, the Board would have a right to forfeit the EMD and blacklist the bidder if any of the information given by the bidder, is found faulty or incorrect or misleading. It was expected from a bidder to provide accurate information on litigation and/or arbitration resulting from contract completed or under execution by him over the last five years. Though, there is no accurate information on the litigation while Undertakings are filed by the bidder, it was aware and acknowledged that in case of forfeiture of EMD, bidder shall be disqualified and shall not be allowed to bid for further works under GWSSB/GWIL for three years as per Clause 21.7 of the Tender Conditions. So, not only there is a condition for participation in the bid, expected to be true and correct in each and every respect, submitting inaccurate or false particulars or details may lead to not only disqualification of the bidder but forfeiture of EMD as also blacklisting for a period of three years. With an open eye, accepting such conditions, Undertakings on oath before Notary Public filed by Page 40 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined the petitioner, which is found to be false and as a consequence for it, action in disqualification, forfeiture of EMD as also blacklisting for a period of three years is to be passed by the authority. 5.6 Neither disqualification nor forfeiture of EMD or taking action for blacklisting is alternative to each other. It is the consequence of wrong doing by the bidder and such conditions are accepted by the bidder while submitting their bid with an open eye for consideration of their offer, whether any loss is suffered by the authority, whether any damage is caused to the authority, pales into insignificance. Forfeiture of EMD and order of blacklisting when it is made for breach of Tender Conditions at a pre-contractual stage, when no contract has yet come into existence, it does not infringe any statutory right under the Indian Contract Act, 1872 since EMD is taken in such cases to ensure that a contract comes into existence. At the same time, such condition of order of blacklisting is provided for submitting inaccurate or false details, is with a view to see that only genuine bidders participate in the bid process. Absence of any Terms forfeiting of EMD may lead to a situation where even bidders who do not have capacity or intention of entering into the contract, Page 41 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined venture into the bidding process for, at times, extraneous reasons. The purpose of such a Clause providing for forfeiture of EMD is only with a view to see that only genuine bids are received. Equally, the condition of blacklisting, if any information, undertaking or affidavit found to be incorrect or false, is to dissuade ingenuine bidders since State authorities want to enter into commercial transactions with responsible and honest bidders. If a bidder is not hesitating in supplying false or incorrect facts before the authority, he cannot be relied on for a work to be carried out under a Tender, that he will act very honestly and will not suppress true and correct facts.
5.7 Action of forfeiture of EMD and blacklisting are taken for making false claim/declaration while submitting bid as a consequence of express breach of Terms of Tender based on which, bidder made his offer, which employer took into consideration. Knowing fully well such conditions that EMD would be forfeited and order of blacklisting would be passed, if information supplied in bid documents / undertakings found to be false or inaccurate, bidder participated in the Tender, then he cannot complain about sufferance Page 42 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined of such consequences provided. Then, it is a contract in itself. Even if it is not a contract, it is consequence of false declaration/undertaking, different from taking any action for breach of contract executed while work being carried out. 5.8 With a view to see that honest bidders come for contract with the employer and to weed out all dishonest attempts of the bidders at the threshold, such is the consequence for the apparent/bold false statement/undertaking being made by them.
5.9 Submission based on Article 14 of the Constitution of India i.e. discrimination, pressed into service by the learned advocate for the petitioner on the ground that constituent partner of Joint Venture is relieved of blacklisting order on its representation, even if it is true, cannot be pressed into service for the reason that on that ground, the petitioner cannot be relieved of the action which is taken for breach of the Terms of the Tender which he agreed while submitting his offer for consideration. At the same time, as brought on record by an additional affidavit by the respondent authority, it has already issued a notice against even the constituent partner of the Page 43 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined Joint Venture for taking action of blacklisting it for submission of false/inaccurate/incorrect details in Undertaking filed on behalf of the Joint Venture, the said submission, based on breach of Article 14, falls to the ground.
5.10 The submission made by the learned advocate for the petitioner that since there is no actual loss to the respondent authority or a damage caused to it, EMD, which runs into lakhs of rupees, could not have been forfeited, is again required to be rejected for the reason that it is not forfeited for any loss or damage caused to it, but it is forfeited as a consequence of filing false details with regard to blacklisting, that too, on oath before a Notary Public and only on that condition, bidders had to submit their bids. When breach thereof is committed, it is the consequence of the same and not as either penalty or loss caused to the authority. 5.11 The decision in the case of Gorkha Security Services (supra), relied on by the learned advocate for the petitioner is of no help to the petitioner as from the show-cause notice, it is possible to draw clear inference about taking action in breach of Clause mentioned Page 44 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined therein, which states about taking action of forfeiting EMD as also order of blacklisting for a period of three years. It is in case of non- mentioning of blacklisting or forfeiture, it cannot be possible to draw clear inference from it, in that case, the ratio laid down therein, would be pressed into service. Mentioning the clauses in the show- cause notice for the proposed action for the breach thereof, when petitioner with an open eye, knowing each and every Clause of the Tender Notice, submitted a bid, he would very well understand that these Clauses are for the purpose of forfeiture of EMD and passing an order of blacklisting for submitting false/incorrect Undertakings while submitting bid. It is sufficient and adequate and meaningful opportunity to the petitioner who could even file reply claiming that it is inadvertent mistake because of short time, which could never be countenanced.
5.12 As coming out from the order of blacklisting passed by the BUIDCO, prior to the order dated 20.06.2023, show-cause notice came to be issued not only to the petitioner but also M/s. Jainam Engicon Private Limited, Joint Venture partner, to which, the petitioner had not even responded at all. Therefore, it is clear that he Page 45 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined was aware of action in blacklisting being taken by that authority. Not only that, as admitted by him in his written Representation, the order of blacklisting dated 20.06.2023 came to be intimated to the petitioner through e-mail on 24.06.2023 i.e. even prior to Undertakings filed and affirmed before the Notary Public. Therefore, it can be easily inferred that it is nothing but a deliberate and bold decision of the petitioner to suppress material fact of blacklisting order passed by the BUIDCO while submitting the bid. 5.13 The decision in the case of M/s. Techno Print (supra), where, show-cause notice issued for blacklisting came to be quashed on the facts stated therein. No such facts obtained in the present case and it is not even at the stage of show-cause notice. For anything to be explained, an opportunity was available to the petitioner, which he explained and admitted to knowledge of it prior to submitting bid, in view of his own admission, it incurred an order of blacklisting. Therefore, the decision in the case of M/s. Techno Print (supra), cannot be pressed into service by the petitioner. 5.14 The decision in the case of Blue Dreams Advertising Pvt. Ltd. (supra), if considered, action of blacklisting initiated for breach Page 46 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined of Terms of contract where, even penalty is also provided for. There appears to be a dispute/issue between the parties to be resolved by the arbitrator and that Clause was invoked by the appellant therein; authority could not have initiated order of blacklisting passed on that issue when it was pending adjudication before the arbitrator. 5.14.1 Not only that, the day on which appeal was determined by the Supreme Court, the arbitrator had already declared its award which went in favour of the appellant. Though, it may be a subsequent event, the principles laid down by the Supreme Court in that case is suggestive of the fact that where the case is of an ordinary breach of contract and the explanation offered by the person concerned raises a bona fide dispute, blacklisting/debarment as a penalty ought not be resorted to. Similarly, too readily invoking the debarment for ordinary cases of breach of contract where there is a bona fide dispute, is not permissible.
5.14.2 Here, it is not a case that blacklisting is resorted to for a bona fide dispute for ordinary breach of contract. Forfeiture of EMD and action in blacklisting are resorted to for breach of Terms Page 47 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined of Tender, which is a consequence of breach thereof, requiring no adjudication or even a bona fide dispute to be explained. In any case, false disclosure in the Undertakings is evident from the Representation of the petitioner itself, where it is admitted that the day on which, such Undertakings were filed, order of blacklisting passed by BUIDCO was known to it and despite that, it has not been mentioned in any of the Undertakings though it was a condition precedent to be mentioned. In that view of the matter, the aforesaid decision of the Supreme Court in the case of Blue Dreamz Advertising Pvt. Ltd. and Another (supra), is also not applicable to the facts of the present case.
5.15 The decision in the case of Kulja Industries Ltd. (supra), is also on the same line and which is considered by the Supreme Court in the case of Blue Dreamz Advertising Pvt. Ltd. and Another (supra). Therefore, no separate reference thereof is required.
5.16 In the judgment and order of Co-ordinate Bench of this Court in the case of M/s. M. V. Omni Projects (India) Ltd. (supra), since detailed reply submitted to the show-cause notice answering every Page 48 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined query or allegations made in the show-cause notice, did not notice by the authority, in the peculiar facts and circumstances of that case, order of blacklisting came to be set aside remitting the case back to the respondent Corporation for undertaking exercise afresh. However, from the impugned order, it is very clear that its written representation/reply not only quoted in it, but consideration thereof is also very specific in the order itself.
5.17 The decision in the case of M/s. Aquafil Polymers Co. Pvt. Ltd. (supra), relied upon by the petitioner is of no avail to it, as noted in paragraph 5.3 of the said decision, the term "bidder" in relation to and as applied to in the instant Tender document, would mean the individual petitioner itself as tenderer. The petitioner was not the tenderer in the Rajasthan Project, where, Joint Venture came to be blacklisted. Therefore, it is stated that it cannot be said that it was not the petitioner entity who was debarred and blacklisted there. Therefore, information in the said Tender was to be furnished about the bidder, the non-mention on part of the petitioner about the joint venture bidder in Rajasthan having been treated as debarred could not be said to be fatal for the petitioner to get its bid considered, nor Page 49 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined it could be said to be a suppression to prejudicially affect the petitioner. Not only that, the order of blacklisting dated 06.11.2015 therein, came to be set aside by the Rajasthan High Court allowing Civil Writ Petition No. 6375 of 2017.
5.18 Decision in the case of Royal Infra Engineering Pvt. Ltd. (supra), relied on by the learned advocate for the petitioner is a case where all the decisions in respect of blacklisting from the case of Erusian Equipment & Chemicals Ltd. and Kulja Industries Ltd. etc. were considered by the Division Bench of this Court in detail and the principle for the same culled out and enunciated by the Division Bench, there is no dispute. The doctrine of proportionality in punishment cannot be invoked in the present case as it is not for any loss or damage caused to the respondent authority which could be assessed in terms of money. Here, if at all it is to be considered as a punishment, an order of blacklisting came to be passed for breach of Terms of the Tender Notice which expected the petitioner to place true and correct facts by way of Undertakings at the time of submitting its bid. Not only that, pursuant to the said Tender Notice, when petitioner has submitted its offer for consideration, he was Page 50 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined aware about the consequence of submitting false information or incorrect information and therefore, forfeiture of EMD and action of blacklisting is the consequence of that act of suppression which is the only option available and it has been resorted to. All the decisions, so far as doctrine of proportionality is concerned, speak about punishment should be proportionate to the wrong committed. Here, there is no question of finding out any proportion as for disclosure of incorrect and false information, forfeiture of EMD is the consequence. No other option is left with the authority because before submitting its offer, the petitioner was aware of the said condition and despite that, petitioner ventured into submission of false details in its bid.
5.19 Reliance placed on the decision in the case of Gujarat Construction Co. Ltd. (supra) by the learned advocate for the respondent authority. Similar Tender Conditions of the very respondent authority when resorted to, passing of order of blacklisting and forfeiture of EMD came to be considered and the challenge made therein fail holding that respondent Board has acted in accordance with the Tender Clauses and has complied with the Page 51 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined requirements of principles of natural justice and after considering even the explanation offered by the petitioner therein, by assigning reasons for passing the impugned order therein. The aforesaid decision of the Co-ordinate Bench of this Court is also confirmed as SLP preferred thereagainst came to be dismissed vide order dated 12.08.2024 passed by the Supreme Court in Special Leave to Appeal (C) No. 17105 of 2024.
5.20 While dictating the judgment, we came across two of the decisions of the Supreme Court on the issue closely connected with the present petition and the contentions raised on behalf of the petitioner.
5.20.1 The first decision in line in the case of National Highways Authority of India v. Ganga Enterprises and Another, reported in (2003) 7 SCC 410 recognizing every right of revoking a proposal /offer at any time before the communication of its acceptance as provided under Section 5 of the Indian Contract Act, 1872, but where a person made an offer to undertake a certain work on a condition that the earnest furnished by him would be forfeited Page 52 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined for not entering into a contract or for non-performance of the some act, Section 5 of the Indian Contract Act, 1872 would entitle a person to withdraw the offer but not entitle him to claim refund of earnest in case of withdrawal of his offer before its acceptance. 5.20.2 Similar analogy can be applied in the present case when Terms of Tender Notice stipulates that bidder may be disqualified, Earnest Money Deposit may be forfeited and /or blacklisting would be ordered, on certain exigencies when bidder submits its bid for consideration on such terms, which is nowhere prohibited under the Indian Contract Act, 1872, it can never be heard to say that any action, which is taken as a consequence of that breach of the Tender Terms, any actual loss or damage should be shown for the purpose of forfeiture of a bank guarantee or incurring any disqualification or blacklisting though blacklisting may be a harshest action with a view to see that only genuine bidders participate. With a view to dissuade bidders from submitting false, incorrect, incomplete details when such condition is stipulated in the Tender Notice itself, which is not even contrary to any law, with an open eye on that terms if bid is submitted for consideration, authority is right and justified in taking Page 53 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined action for breach of the same. All the precedents cited on behalf of the petitioner on the issue of blacklisting pertains to blacklisting, where Blacklisting is being ordered for breach of Terms of contract, which is already executed where even penalty may be provided for or a compensation is also provided for, if that alternative is available after execution of a contract. If such precedents incorporating those Terms of contract are already executed, it cannot be applied with same force where conditions are imposed to incur such liability as a consequence for the breach thereof, and therefore, no such actual loss or damage caused to the authority is to be shown for forfeiting the Earnest Money Deposit. The condition in the Tender Notice that any bidder or its partner, Director etc. to mention in the bid whether they are blacklisted by any State Government or Central Government or Public Sector undertaking etc. is for the purpose that only genuine, efficient and honest bidders participate in the bid. Not only that, participation by a bidder boldly stating that no such order is passed by any State Government, Central Government or Public undertaking and when it is found that it was passed by the authority mentioned therein, there is no option for the authority but to initiate Page 54 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined action for the breach of the Terms of the Tender Notice inviting their offer on reading and understanding the very same Terms that in breach thereof an action would be taken against the bidder. 5.20.3 Yet there is another decision of the three Judge of the Supreme Court in the case of National Thermal Power Corporation Limited v. Ashok Kumar Singh and Others, reported in (2015) 4 SCC 252, wherein decision in the aforesaid case has not only considered earlier decision of the Supreme Court in Ganga Enterprises (supra) but other three decisions of Supreme Court, wherein, it held that forfeiture of Earnest Money when it is made for breach of auction/tender conditions at pre-contractual stage, when no contract has yet come into existence, it does not infringe any statutory right under the Indian Contract Act, 1872 since the Earnest Money/security is given and taken in such cases only to ensure that a contract comes into existence. The tenderer has a right to withdraw his offer, but he will have no right to claim refund of Earnest Money, if said offer is subject to condition that Earnest money will be forfeited if offer is withdrawn. Therefore, though right of the bidder to withdraw its offer is recognized under the Indian Contract Act, Page 55 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025 NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined but when that offer is made subject to incurring liability of forfeiture of Earnest Money, withdrawal of offer is permitted but subject to incurring liability of forfeiture of the earnest money deposited by the bidder.
5.21 The contention that since one and half years are passed from the date of blacklisting the petitioner from participating in bid floated by the respondent authority, the Court may substitute the period of blacklisting as ordered by the respondent authority with the period already undergone as on date. We are afraid that this Court would have any such discretion, that too, while exercising powers of judicial review, to substitute by its own discretion to the period of blacklisting as already ordered by the authority. The said period and resorting to the blacklisting is provided as a Terms, as aforesaid, to dissuade any ingenuine bidder, who tries his luck by submitting false details before the authority.
6. For the forgoing reasons, we see no reason to entertain this petition and it is hereby rejected, with no order as to costs. Notice is discharged.
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NEUTRAL CITATION C/SCA/21197/2023 JUDGMENT DATED: 08/04/2025 undefined 6.1 At this stage, Ms. Honey Thakkar, learned advocate for Mr. Paras Sukhwani, learned advocate for the petitioner prays for stay of this order for a period of four weeks, to which Mr. Hakim, learned advocate appearing on behalf M/s. Gandhi Law Associates for the respondent objected to the same.
6.2 Since, from the date of filing of the petition in the year 2023 itself, there is no stay granted by this Court, we do not deem it fit to grant the same at this stage.
[ Umesh A. Trivedi, J. ] [ Cheekati Manavendranath Roy, J. ] hiren/SB-I-1tss9&15425 Page 57 of 57 Uploaded by HIREN MER(HC00351) on Mon Apr 21 2025 Downloaded on : Sat May 03 01:27:59 IST 2025