[Cites 5, Cited by 0]
Chattisgarh High Court
M/S Ramraja Minerals And Construction ... vs State Of Chhattisgarh on 22 April, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
Digitally signed
2026:CGHC:18294-DB
by SAGRIKA
SAGRIKA AGRAWAL
AGRAWAL Date:
2026.04.23
10:44:22 +0530
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 1898 of 2026
M/s Ramraja Minerals And Construction Pvt. Through Its Director Shri
Jayendra Singh Bhandari, Aged About 48 Years, S/o Shri Man Singh
Bhandari, Having Office At Ramraja House Plot No. 289/197, Vip Road, Post
Mana, Amlidih, Distt. Raipur, Chhattisgarh. 492015.
... Petitioner(s)
versus
1 - State Of Chhattisgarh Through Principal Secretary, Department Of Urban
Administration And Development, Indrawati Bhawan, Block D, Fourth Floor,
Atal Nagar, Raipur, Chhattisgarh.
2 - Municipal Corporation Raipur Through Its Commissioner, Distt. Raipur,
Chhattisgarh.
... Respondent(s)
For Petitioner(s) : Mr. Adarsh Patel, Advocate appearing through
virtual mode and Mr. Amit Singh, Advocate
For State-authority : Mr. Praveen Das, Addl. A. G.
For Respondent No. 2 : Mr. Pankaj Agrawal, Advocate
Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri Ravindra Kumar Agrawal, Judge
Order on Board
Per Ramesh Sinha, Chief Justice
22/04/2026
1. Heard Mr. Adarsh Patel, learned counsel for the petitioner appearing
through virtual mode and Mr. Amit Singh, Advocate. Also heard Mr.
Praveen Das. Addl. Advocate General as well as Mr. Pankaj Agrawal,
learned counsel for Respondent No. 2.
2. The present writ petition has been preferred under Article 226 of the
Constitution of India calling in question the legality, validity and
propriety of the order dated 31.12.2025 passed by Respondent No. 2,
whereby the tender bearing No. 177070 dated 06.10.2025 has been
cancelled, the petitioner has been debarred/blacklisted for a period of
one year, and the Fixed Deposit Receipt (FDR) amounting to Rs.
1,50,000/- submitted by the petitioner has been forfeited.
3. The present petition has been filed by the petitioner seeking the
following reliefs:-
10.1 To issue a writ of certiorari and to quash and
set aside the order dt. 31.12.2025 (Annexure-
P/4) passed by Respondent no. 2 by which the
tender allotted in favor of the petitioner has been-
cancelled and blacklisting/debard for a period of
one year has been directed.
10.2 To issue a writ of mandamus to direct the
respondent No.2 allowing the petitioner to
continue with the work and to adjust the
additional performance bank guarantee with the
outstanding dues.
10.3 To issue a writ of mandamus and to direct
the respondent no. 2 to consider the pending
representation submitted by the petitioner and
pass a reasoned order.
10.4 Any other suitable relief deemed fit in the
facts and circumstances of the case may also
kindly be granted together with the cost of this
Petition."
4. The brief facts of the case as emerges from the pleadings of the
petition are that, the Petitioner Company, a duly incorporated entity
engaged in execution of public infrastructure and road construction
works, through its Director, challenging the arbitrary and illegal action
of Respondent No. 2 in cancelling the tender, forfeiting security, and
debarring/blacklisting the Petitioner for a period of one year. The
Respondent No. 2 had issued NIT No. 117/15 FC/NAPANI/2025 dated
06.10.2025 inviting bids for road repair and BT topping works, pursuant
to which the Petitioner participated in accordance with the prescribed
tender conditions and was declared the L-1 bidder at 21.35% below
SOR. Subsequently, while issuing the Letter of Acceptance, the
Petitioner was directed to deposit an additional performance guarantee
of Rs. 24,17,550/-, however, instead of refusing compliance, the
Petitioner made a bona fide request for adjustment of the said amount
against its admitted outstanding dues of Rs. 1,64,40,496.90/- payable
by the Respondents under a prior agreement. Despite such reasonable
request and without issuing any show cause notice, granting
opportunity of hearing, or considering the adjustment request, the
Respondent No. 2 passed the impugned order dated 31.12.2025
cancelling the tender, forfeiting the FDR of Rs. 1,50,000/- and
debarring/blacklisting the Petitioner for one year. The Petitioner
immediately submitted a detailed representation dated 03.01.2026
seeking reconsideration, highlighting that no loss was caused to the
Corporation and that the request was bona fide, however, the same
was not considered or decided by a reasoned order. The impugned
action, passed in violation of principles of natural justice, has resulted
in grave civil consequences including financial loss, reputational
damage and complete exclusion from participation in future tenders
across departments, thereby rendering the present petition necessary.
5. Learned counsel for the petitioner would submit that the impugned
order dated 31.12.2025 is ex facie arbitrary, illegal and violative of the
settled principles of natural justice, and is therefore liable to be
quashed. The Respondent No. 2 has proceeded to cancel the tender,
forfeit the security deposit and impose the extreme penalty of
blacklisting without issuance of any show cause notice or affording an
opportunity of hearing to the Petitioner. It is a settled position of law
that any action entailing serious civil and commercial consequences
must strictly adhere to the principle of audi alteram partem. In the
present case, the Petitioner had neither refused compliance nor
abandoned the contract rather, it had made a bona fide and
commercially prudent request for adjustment of the additional
performance guarantee against admitted outstanding dues payable by
the Respondents themselves. Despite this, the Respondents failed to
consider the said request and proceeded in a mechanical and punitive
manner, without recording any reasons, quantifying any loss, or
demonstrating any prejudice caused to the public exchequer. The
impugned action, therefore, is not only disproportionate but also suffers
from complete non-application of mind.
6. It is further submitted that the blacklisting/debarment of the Petitioner
for a period of one year, without any independent show cause notice
proposing such action, is wholly unsustainable in law and violative of
Article 14 of the Constitution of India. In the present case, the alleged
lapse pertains merely to timing of deposit of additional performance
guarantee, for which the Petitioner had already sought adjustment
against admitted dues; thus, imposition of such a harsh and stigmatic
penalty is grossly disproportionate and arbitrary. Moreover, the
Respondents have failed to consider the Petitioner's detailed
representation dated 03.01.2026, further demonstrating non-
application of mind and reinforcing the illegality of the impugned order.
Hence, the impugned action deserves to be set aside in the interest of
justice, fairness and equity.
7. Per contra, learned State counsel submits that impugned order dated
31.12.2025 is lawful, justified and passed strictly in accordance with
the terms and conditions of the tender as well as settled principles
governing public procurement. The Petitioner, despite being declared
L-1, failed to comply with a mandatory condition of the Letter of
Acceptance, namely, deposit of the additional performance guarantee
within the stipulated time, which constituted a fundamental breach
going to the root of the contract. The so-called request for adjustment
of dues was unilateral, dehors the tender conditions and not
permissible in law, as contractual obligations cannot be substituted by
self-serving proposals. In such circumstances, the Respondent
Authority was well within its jurisdiction to cancel the tender, forfeit the
earnest money/security and take consequential action including
debarment, in order to maintain discipline, transparency and sanctity of
the tender process. It is further submitted that in matters of contractual
and commercial decisions, the scope of judicial review is limited, and
unless arbitrariness or mala fide is established, the decision of the
tendering authority ought not to be interfered with. The impugned
action being based on non-compliance of essential tender conditions
and taken in public interest, does not warrant interference by this
Court.
8. Learned counsel for Respondent No. 2/Municipal Corporation would
submit that the impugned order dated 31.12.2025 has been passed in
a fair, transparent and lawful manner, strictly in accordance with the
terms and conditions of the tender and in larger public interest. The
action of debarment has been taken in exercise of administrative
powers to maintain integrity and credibility of the tendering process,
and cannot be termed arbitrary or disproportionate in the facts of the
present case. The Municipal Corporation, being a public body
entrusted with execution of essential civic works, is required to act
decisively against non-compliant bidders to prevent delays and ensure
timely completion of public projects. Hence, the impugned order calls
for no interference under writ jurisdiction.
9. We have heard learned counsel for the parties and perused the
material annexed with the petition.
10. It is well settled that blacklisting entails serious civil and commercial
consequences and cannot be imposed without strict adherence to the
principles of natural justice. The Hon'ble Supreme Court in Gorkha
Security Services v. Govt. of NCT of Delhi, (2014) 9 SCC 105 has
categorically held that a valid show cause notice must not only contain
the allegations but must also clearly specify the proposed action of
blacklisting, so as to enable the notice to effectively respond. Similarly,
in UMC Technologies Private Limited v. Food Corporation of India
(AIR 2021 SC 166), it has been reiterated that blacklisting, being
punitive in nature, requires a meaningful opportunity of hearing and
strict compliance with principles of fairness. In the present case, it is an
admitted position that no specific show cause notice proposing
blacklisting was issued to the Petitioner, nor any opportunity of hearing
was afforded prior to passing the impugned order. The impugned order
is also non-speaking and does not disclose any independent reasons
justifying such extreme penalty.
11. However, insofar as the action of cancellation of tender and forfeiture
of security deposit is concerned, this Court is of the considered opinion
that the scope of judicial review in contractual matters is limited. The
Hon'ble Supreme Court in Jagdish Mandal v. State of Orissa, (2007)
14 SCC 517, has held that interference is warranted only when the
decision-making process is arbitrary, mala fide or intended to favour
someone. In the present case, the petitioner admittedly did not deposit
the additional performance guarantee within the stipulated period,
which constituted non-compliance of a material condition of the Letter
of Acceptance. Though the petitioner sought adjustment against
alleged outstanding dues, such request was not accepted by the
Respondent authority. In absence of any established mala fides or
arbitrariness in the decision-making process, this Court is not inclined
to interfere with the cancellation of tender and consequential forfeiture.
12. Accordingly, in view of the aforesaid analysis, the writ petition is partly
allowed. The impugned order dated 31.12.2025 (Annexure-P/4)
passed by Respondent No. 2 insofar as it relates to blacklisting and
debarring the petitioner from participating in future tender processes is
hereby quashed.
13. With respect to the remaining claims, the petitioner is at liberty to avail
appropriate remedy, including invocation of the arbitration clause, if so
advised.
14. No order as to costs.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
sagrika
