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TMI Blog2017 (7) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... otment till 11.01.2017. This was more than 20 days after 21.12.2016 (the date of the petitioner‟s letter requesting for such further time). It is also relevant to note that even during the course of the present proceedings, DTIDC had offered to allot the shops to the petitioner on the terms of the bid submitted by him - it is apparent that the petitioner is not willing to stand by his bids. It is plainly evident that the petitioner either had second thoughts regarding his bids or otherwise did not have the necessary funds to make the payments; in either event, the petitioner cannot escape the liability as expressly indicated in the NIT. Thus, DTIDC was well within its right to forfeit the EMD in terms of the NIT. It is also well settled that the bidder cannot challenge the tender conditions after it has participated in the tender. Whether DTIDC was required to give any notice before debarring the petitioner from further contracts or blacklisting the petitioner? - HELD THAT:- On this question, the law is well settled. In M/s Erusian Equipment [ 1974 (11) TMI 89 - SUPREME COURT ], the Supreme Court had authoritatively held that fundamentals of fair play require that a per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated at ISBT Kashmere Gate. In terms of the NIT, the last date and time for submission of bids was 14:00 hours on 27.10.2016 and tenders were to be opened at 14:30 hours on the same day. The bids were to remain valid for a period of 120 days from the date of submission. 3. The petitioner submitted bids for two shops - shop nos.41 and 47 - at the departure block of ISBT Kashmere Gate and also furnished the EMD of ₹3 lacs in respect of each bid (₹6 lacs in aggregate). 4. The bids submitted by the petitioner were accepted and DTIDC issued a Letter of Acceptance (LOA) dated 15.12.2016 in respect of shop no.41 and called upon the petitioner to furnish interest free security deposit equivalent to six months‟ licence fee and also other maintenance charges at the rate of ₹30 per square feet per month along with applicable service tax, water charges, etc. The petitioner was called upon to furnish the aforesaid amounts within a period of 7 days from the issue of LOA to avoid forfeiture of EMD. A similar LOA dated 19.12.2016 was issued in respect of shop no.47 as well. 5. On receipt of the aforesaid LOAs, the petitioner sent a letter dated 21 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion, no longer survives. Ms Bengani has limited her arguments in the present petition to impugning the forfeiture of the EMD and debarring the petitioner from further participating in tender / RFPs for the specified period. Submissions 12. Ms Bengani advanced arguments essentially on three fronts. First, she had submitted that the action of DTIDC in forfeiting the EMD is wholly arbitrary and unreasonable. She contended that the petitioner had merely sought additional time to complete with the formalities as he was indisposed and in the circumstances, denial of further time was wholly unreasonable and unfair. 13. Second, she contended that the NIT inasmuch as it provides for forfeiture of the EMD and for blacklisting of a bidder who is unable to accept the LOA, without further hearing, was arbitrary and unreasonable and thus the order dated 11.01.2017 was liable to be set aside. Third, she submitted that debarring the petitioner from participating in further tenders floated in the financial year (FY 2016-17) and four succeeding financial years, without offering any opportunity to the petitioner of being heard was arbitrary and unreasonable and contrary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elected tenderer shall follow the following time lines: Stage of Activity Time Period Payment of Advance License Fee Within 07 days of issue of Letter of for three months, maintenance Acceptance (LOA) charges, taxes and Interest Free Security Deposit/ Performance Security to DTIDC by Licensee Vacant Shops to be handed over to Within 07 days of making the due Selected Bidder/Tenderer payments in accordance with LOA. Signing of License Agreement Within 07 days from date of payment of due as per LOA 18. The NIT expressly provided that the bidder would be required to pay advance licence fee for three months, maintenance charges, tax and interest free security deposit / performance security within a period of seven days of the issuance of LOA. Paragraph 4.7 of the NIT also expressly provided that failure on the part of the bidder to deposit the aforesaid amounts within the specified period (seven days of issue of LOA) would result in forfeiture of the EMD and the bidder would also be debarred from participating in tenders of DTIDC for the financial year and next four financial years. Paragraph 4.7 of the NIT is set out below:- 4.7. License Fees (and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the petitioner. Thus, in terms of the NIT, the petitioner was required to make the necessary payments and take possession of the shops in question. Concededly, the petitioner did not do so and sought further time of 20 days to fulfil the formalities on account of his ill health. It is clear from the record that DTIDC did not take any steps for cancellation of the allotment till 11.01.2017. This was more than 20 days after 21.12.2016 (the date of the petitioner‟s letter requesting for such further time). It is also relevant to note that even during the course of the present proceedings, DTIDC had offered to allot the shops to the petitioner on the terms of the bid submitted by him. Even at the time of final hearing, Mr Gautam Narayan had unequivocally stated that DTIDC was still ready and willing to licence the shops in question to the petitioner. However, it is apparent that the petitioner is not willing to stand by his bids. It is plainly evident that the petitioner either had second thoughts regarding his bids or otherwise did not have the necessary funds to make the payments; in either event, the petitioner cannot escape the liability as expressly indicated in the NI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As noticed in Gorkha Securities Services (supra), such an order is also stigmatic in nature. A person who is excluded from participating in tenders floated by DTIDC may also on the basis of being debarred by DTIDC, be disqualified from participating in tenders floated by other authorities or government bodies/agencies. It is, thus, necessary that such a punitive measure be not taken mechanically. 25. In the present case, the NIT provides for a bidder, who either withdraw his bid within the validity period or defaults in paying the amounts in terms of the LOA, to be visited with the consequences of forfeiture of EMD / bid security and also be debarred from participating in tenders/RFPs issued by DTIDC for a period exceeding four years (the current financial year and four succeeding financial years). Ex facie such provision of debarring a bidder is harsh and may in certain circumstances be wholly inequitable. The period of blacklisting is also significantly long. In the circumstances, it would be necessary for DTIDC to examine the proportionality of such measure in the context of the facts of each case. In a given case, a bidder may have been prevented by reasons completel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the principle that the authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc . 29. However, the exercise of such powers cannot be arbitrary or unreasonable and must take into account the doctrine of proportionality and fair play. Thus, although paragraph 4.7 of the NIT expressly provides that the failure on the part of the bidder to pay advance licence fee and security deposit within seven days of the receipt of LOA would result in the bidder being debarred for the specified period; this Court is not persuaded to accept that the said punitive measure would follow automatically and without affording the bidder a chance to represent against the same. The provisions to debar the bidders on account of any default must be read as only enabling DTIDC to take such action. Such provision also serves as a notice to the bidders that their default could invite such measures. However, the bidders ought to be given a right to represent against the imposition of such punitive measures and it is necessary for DTIDC to consider the same before imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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