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Delhi High Court
Vectra Advanced Engineering Pvt Ltd & ... vs Union Of India & Anr on 19 February, 2026
Author: C.Hari Shankar
Bench: C.Hari Shankar
$~26
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LPA 252/2020 & CM APPL. 22796/2020
VECTRA ADVANCED ENGINEERING
PVT LTD & ANR. .....Appellants
Through: Mr. Atul Nanda, Sr. Adv. with
Ms. Rameeza Hakeem, Mr. Balaji
Subramanian, Mr. Akash Kundu, Ms. Vartika
Aggarwal, Mr. Aditya Rajagopal, Ms. Sakshi
Bagdi and Ms. Jea Saran, Advs.
versus
UNION OF INDIA & ANR. .....Respondents
Through: Mr. Rakesh Kumar, SPC with
Mr. Sunil, Adv.
CORAM:
HON'BLE MR. JUSTICE C.HARI SHANKAR
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT (ORAL)
% 19.02.2026
OM PRAKASH SHUKLA, J.
1. This is a Letters Patent Appeal filed by the appellants assailing
judgment dated 18.07.2020 in W.P.(C) No. 4443 of 2020 passed by the
learned Single Judge of this Court, whereby the writ petition preferred
by the Appellant was dismissed.
2. The appellants, who were petitioners before the learned Single
Judge, have submitted that Appellant No.1 has been supplying Skid
Steer Loaders to the Government of India and the Indian Army since
2007. It has been further submitted that in November 2012, Respondent
No. 1 issued a tender for purchase of 1,820 Skid Steer Loaders and
along with the tender, it issued a Request for Proposal (RFP) which
mandated every bidder to sign a Pre-Contract Integrity Pact (PCIP).
3. Apparently, PCIP was meant to be an anti-corruption agreement
between the Government and the bidder by which the Government
assured that its officials will not demand or accept bribes, and the bidder
assured that it will not offer bribes or use any unfair or illegal means to
obtain the contract. In addition, every bidder was required to submit an
Integrity Pact Bank Guarantee along with its commercial bid as security
for compliance with the PCIP.
4. The PCIP stipulated three Independent External Monitors and as
per the terms mentioned therein, Respondent No.1 was to refer any
complaint about any bidder to the said Monitor.
5. As far as the present case is concerned, the PCIP was to be
supported by an Integrity Pact Bank Guarantee of ₹3 crores. Appellant
No.1 contends that it duly complied with the requirements and
furnished the bank guarantee. The Appellant alleges that on 01.10.2015,
Respondent No.1 informed them that they had provisionally qualified
in field evaluation trials, and the execution of the contract would
proceed subject to vigilance clearance.
6. However, in the interregnum, dispute arose on 20.07.2020 when
the Appellant did not receive vigilance clearance and Respondent No.
1 alleged that Appellant No. 1 had violated the PCIP and consequently,
sought invocation of the bank guarantee.
7. The reason for invoking the bank guarantee and violation of PCIP
was disclosed in their counter-affidavit, according to which the
vigilance clearance had been withheld due to two FIRs1 registered by
the Central Bureau of Investigation (CBI) against an individual, namely
Mr. Ravinder Kumar Rishi, who was purportedly associated with the
Appellant No.1.
8. The appellants' case before the learned Single Judge was that
Show Cause Notice was not issued prior to the decision of invocation
of bank guarantee. According to the appellants, neither of the two FIRs
were against Appellant No. 1 and in any case, in one of the two alleged
FIRs, a closure report was filed and in the other, although a charge sheet
was filed, Mr. Rishi was not named as an accused. Thus, according to
them, there was no valid occasion for the Respondent No.1 to withhold
the vigilance clearance and thus, the Bank Guarantee could not have
been invoked in any circumstance.
9. By the impugned judgment, the learned Single Judge dismissed
the writ petition holding that since a similar issue had arisen in the year
2014 and the Appellant No. 1 had not challenged invocation of the bank
guarantee in those proceedings, the Appellant was not entitled to
challenge the present invocation of the bank guarantee either.
10. Aggrieved by the aforesaid, the appellants approached this Court
by way of the present intra court appeal.
11. We have heard Mr. Atul Nanda, learned Senior Counsel for the
appellants at great length on 04.02.2026.
1 First Information Reports
12. The primary contention of Mr. Nanda is that the impugned
judgment proceeds on the premise that since the alleged basis for the
PCIP violation in 2020 was the same as that in 2014, issuance of a Show
Cause Notice in 2020 was not necessary. Mr. Nanda contends that this
does not account for the fact that Respondent No. 1 treated the two
instances separately and did not pass both orders at the same time.
13. He further submits that in the absence of a Show Cause Notice,
Appellant No. 1 was not afforded an opportunity to explain why the
facts relied upon by Respondent No. 1 did not constitute a breach of the
PCIP. According to him, the consequence is that the allegation of
breach of the PCIP has not been examined on merits by any Respondent
No. 1 or the learned Single Judge, and therefore the Appellant No. 1 has
been denied a fair opportunity of hearing, contrary to principles of
natural justice.
14. As recorded in the order dated 04.02.2026, this Court put a
specific query to Mr. Rakesh Kumar, learned SPC on behalf of
Respondent No.1 as to whether any reason was communicated to the
appellants before invoking the bank guarantee or the clauses of the
PCIP.
15. No satisfactory reply had been forthcoming from Mr. Kumar and
it appears that there was none. Even the letter dated 20.07.2020
addressed to the concerned Bank does not state the reasons for invoking
the PCIP.
16. In the aforesaid peculiar circumstances, this Court, in its Order
dated 16.02.2026, recorded the following observation:
"1. We have cursorily glanced through the official
records granted to us. We have called upon Mr. Rakesh Kumar to
take instructions as to whether his clients would be agreeable to a
remand of this matter to the learned Single Judge."
17. Mr. Rakesh Kumar, learned Counsel for the Respondent, on
instructions submits that his client is agreeable to a remand of this
matter to the learned Single Judge.
18. Thus, on consent of both the parties and for the aforesaid reasons,
we are remitting the matter to the learned Single Judge. Both sides may
appear before the learned Single Judge on 13.03.2026.
19. The learned Single Judge would consider the matter de novo,
uninfluenced by this order and the impugned order.
20. We make it clear that we have not expressed any opinion on the
merits of the case and the parties are at liberty to agitate any grounds as
may be permissible to them as per law.
21. The appeal is disposed of in the aforesaid terms.
OM PRAKASH SHUKLA, J.
C.HARI SHANKAR, J.
FEBRUARY 19, 2026/gunn
