Gujarat High Court
Parthrajsinh Balvansinh Jethva vs State Of Gujarat on 21 April, 2025
Author: Umesh A. Trivedi
Bench: Umesh A. Trivedi
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4980 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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PARTHRAJSINH BALVANSINH JETHVA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
H P BAXI(9459) for the Petitioner(s) No. 1
SHIVANI R MODI(9280) for the Petitioner(s) No. 1
MS MEGHA CHITALIYA, AGP for the Respondent(s) No. 1
AISHVARYA(8018) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE UMESH A. TRIVEDI
and
HONOURABLE MR. JUSTICE CHEEKATI
MANAVENDRANATH ROY
Date : 21/04/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE UMESH A. TRIVEDI)
1. This petition is filed by the petitioner challenging order
dated 8/9.5.2019 against the petitioner, whereby earnest
money deposit of Rs.3,00,000/-, wallet money of Rs.2,54,000/-,
as also security deposit of Rs.29,72,000/- came to be forfeited,
as also the petitioner is put on the blacklist for future work.
The total amount, which is forfeited, is claimed to be refunded
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to the petitioner, with 12% interest from the date of deposit till
its realization.
2. Pursuant to notice issued, respondent appeared and filed
reply to the petition at page 105. Vide order dated 27.2.2024,
petition was permitted to be amended in terms of draft
amendment dated 5.8.2023, as there was no objection by
learned advocate for the respondent. On 2.4.2025, arguments
were concluded and the matter was posted for dictation of
judgment and order, on various dates. Since we could not
spare time for dictating the judgment and order on earlier
occasions, we deem it fit to take up this matter for dictation of
judgment today, as all admission board matters are over.
3. As coming out from the petition, respondent-Corporation
invited tender to supply materials to mid-day meal centers and
anganwadi centers by reverse E-auction system for the year
2019-2020. Tender notice inviting offers from bidders in all the
districts of Gujarat for door-step delivery of foodgrains and
other essential commodities (district wise) was notified on
11.2.2019, last date of submission of bid was 4.3.2019 and
reverse E-auction was held on 7.3.2019. By communication
dated 30.3.2019, respondent-Corporation accepted the offer
made by the petitioner and it was decided to allot the work for
door-step delivery for Ahmedabad city to the petitioner,
subject to the terms and conditions mentioned in the tender
document. Vide communication dated 1.4.2019, work order
came to be issued for door-step delivery for Ahmedabad city to
the petitioners' sole proprietorship concern, directing the
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petitioner to start work with effect from 1.4.2019, though, no
such communication signifying the acceptance of the offer
made by the petitioner has been produced along with present
petition.
4. As claimed in the petition, petitioner deposited
Rs.29,72,000/- by RTGS/NEFT on 10.4.2019 as security deposit
and Rs.3,00,000/- is deposited as earnest money deposit and
further deposited Rs.2,54,000/- towards wallet money.
According to the assertion made in the petition, this fact is
undisputed.
5. It is further asserted in the petition that City Manager to
the Gujarat State Civil Supply Corporation Limited had directed
the petitioner to execute written contract, as per condition of
tender on stamp paper of Rs.120/-, but as the petitioner,
Parthrajsinh Balwantsinh Jethwa and Kirpalsinh
Ghanshyamsinh Chudasama, administrator of Ashapura
Roadways, Gondal, both were sick and Mr.Kirpalsinh
Chudasama was suffering from stone in bladder and swelling
on sweat gland, he was admitted in the hospital. Therefore, the
petitioner requested respondent Corporation to extend the
period to execute written contract along with medical
certificates issued by the doctors. However, according to the
petitioner, General Manager of respondent-Corporation, vide
notice dated 10.4.2019 has not considered the sick reports and
medical certificates and called upon the petitioner to deposit
the amount of security deposit and to execute written contract
and to start doorstep delivery. Again vide notice dated
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20.4.2019, General Manager of the respondent-Corporation
had called upon the petitioner to remain present in the office
of Managing Director of the respondent-Corporation. On
29.4.2019, again a notice came to be issued to the petitioner
to execute a contract, failing which necessary procedure as per
law will be followed. All the three notices are produced by the
petitioner, at pages 70 to 76 collectively.
6. According to the assertion of the petitioner in the
petition, all the three notices are vague. Neither of the notice
reflects that for default in executing a contract, petitioner will
be blacklisted and the amount of security deposit, earnest
money deposit and wallet money will be forfeited. Therefore,
according to the petitioner, impugned order dated 8/9.5.2019
could not have been passed against the petitioner.
7. The petitioner, in the petition, contended that there has
to be a detailed unambiguous, valid and legal show cause
notice, with grounds and proposed penalty/action, should be
served to the petitioner and then only order of blacklisting can
be passed against him. In the petition, petitioner has relied on
a decision in the case of Erusian Equipment & Chemicals
Limited v. State of West Bengal and Another reported in
(1975) 1 SCC 70, Raghunath Thakur v. State of Bihar
reported in (1989) 1 SCC 229 and UMC Technologies
Private Limited v. Food Corporation of India reported in
(2021) 2 SSC 551.
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8. It is the assertion of the petitioner in the petition that,
before adjudication, the authority concerned should give notice
of the case against him so that he can defend himself. It is
further submitted that such notice should be adequate and
grounds necessitating action and the penalty/action proposed
should be mentioned specifically and unambiguously and order
traveling beyond the bounds of notice is impermissible and
without jurisdiction. If these conditions are not satisfied, the
person cannot be said to have been granted any reasonable
opportunity of being heard. Relying on a decision in the case of
Daffodills Pharmaceuticals Limited and Another v. State
of U.P. reported in (2020) 18 SSC 550, it is contended that
before taking a harsh action of debarring/ blacklisting a person,
it is necessary that an opportunity of hearing and
representation against proposed action is to be given to the
party likely to be affected.
9. Relying on a decision of this Court in the case of Royal
Infra Engineering Private Limited v. Surat Municipal
Corporation reported in 2022 (1) GLH 483, it is submitted
that blacklisting has the effect of preventing a person from the
privilege and advantage of entering into a lawful relationship
with the Government for the purpose of gain. It is further
submitted that it would be unreasonable and arbitrary to visit
every contractor, who is in breach of his contractual
obligations with the consequences of blacklisting. There are
other decisions of the Supreme Court and this Court, which are
also relied on by the petitioner, as stated in the petition.
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10. During the course of oral hearing, it was submitted that,
since there was no concluded contract between the parties,
security deposit or earnest money deposit could not have been
forfeited by the respondent-Corporation. Highlighting the fact
that pursuant to the work order and request to execute an
agreement/contract in the proforma prescribed, since no
contract came to be executed by the petitioner, it is contended
that there is no concluded contract at all and, therefore,
forfeiture of the security deposit or earnest money deposit
along with wallet money could not have been ordered.
11. It is further submitted that it is only because the
petitioner and his administrator both fell sick, they could not
execute the contract and start the work pursuant to work order
and requested for extension of time. Therefore, it is submitted
that the respondent-Corporation could not have taken harsh
action of forfeiting every sort of deposits, including wallet
money. It is reiterated, in oral submission, that as per section 7
of the Contract Act, there is no concluded contract between
the petitioner and the respondent-Corporation, petitioner is
compelled to revoke the proposal by unavoidable supervening
circumstances, which were beyond its control and, therefore,
since no contract came into existence, it is no concluded
contract between the parties, therefore, decision to forfeit the
deposits, as aforesaid, is illegal.
12. It is further asserted that there was no intention of the
petitioner not to carry out the work and execute the contract,
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which is evident from the fact that on work order having been
issued, he deposited the security deposit before the
respondent authority. It is only because his health did not
permit him, contract could not be executed, which was beyond
his control and, therefore, invoking Section 36 of the Contract
Act is not valid. It is submitted that supervening circumstances
did not permit him to carry out the work or execute the
contract and, therefore, there being no concluded contact
between the parties, for no fault of him, no deposits could have
been forfeited, as done by the respondent authority.
13. For the submission that forfeiture is permissible only
when a concluded contract has come into being and not prior
thereto, learned advocate for the petitioner has relied on a
decision in the case of Maula Bux v. Union of India reported
in AIR 1970 SC 1955 and Saurabh Prakash v. DLF
Universal Limited reported in (2007) 1 SCC 228. For the
very same proposition, decision of the Supreme Court in the
case of Unitech Limited and Others v. Telangana State
Industrial Infrastructure Corporation (TSIIC) and Others
reported in (2021) 16 SCC 35, for a proposition that for no
loss to the respondent Corporation, only Court has jurisdiction
to award such sum as it considers reasonable as compensation
and party cannot forfeit the amount so deposited as held in the
case of Fateh Chand v. Balkishan Dass reported in AIR
1963 SC 1405.
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14. Relying on a decision in the case of Kailash Nath
Associates v. Delhi Development Authority reported in
(2015) 4 SCC 136, it is submitted that for no breach of
contract on the part of the petitioner and respondent
Corporation not having been put to any loss, it would be
arbitrary to allow to appropriate the entire amount of deposit
without any loss being caused. The State action being in the
contractual realm must abide by Article 14 of the Constitution
of India, will not relieve State of its obligation to comply with
the requirements of Article 14. The petitioner has relied on a
decision of the Supreme Court in the case of Madras
Aluminum Company Limited v. Tamil Nadu Electricity
Board and Others reported in (2023) 8 SCC 240, Gas
Authority of India v. M/s.Indian Petrochemicals
Corporation Limited and Others reported in (2023) 3 SSC
629, it is submitted that even writ jurisdiction can be exercised
when State fails to exercise degree of fairness or practices any
discrimination even in contractual dealings.
15. It is further contended by learned advocate for the
petitioner that for filing a writ petition under Articles 226 and
227 of the Constitution of India, no limitation is prescribed,
however, present writ petition is filed within reasonable time
and, therefore, according to his submission, this petition is not
barred by delay and latches, as contended by learned
advocate for the respondent. It is further submitted that the
petitioner has challenged orders dated 8/9.5.2019 and
15.9.2021 whereby the petitioner is discriminated by recalling
the order of forfeiture of earnest money deposit, as also order
of blacklisting having been revoked. There appears, according
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to the submission of learned advocate for the petitioner, no
delay in filling the petition, which is registered as filling
number on 15.10.2022 and, ultimately, it was numbered in the
year 2023. Relying on a decision of the Supreme Court in the
case of Babasaheb Raosaheb Kobarne v. Pyrotek India
Private Limited in Special Leave Petition No.2522 of
2022 decided on 9.5.2022, considering the outbreak of
Corona, a particular period is excluded from period of limitation
and, therefore also, present petition can be said to have been
filed without any delay and laches. In short, it is contended
that for challenging an illegal order of State authorities, by way
of a petition under Article 226 of the Constitution of India, and
unless it is hopelessly suffering from delay and laches, it
should be entertained. On the ground of delay also, petitioner
has relied upon certain other decisions. While concluding his
submissions, Mr.Baxi, learned advocate for the petitioner
submitted that since the order of blacklisting is not preceded
by precise notice, calling upon the petitioner to answer why he
should not be blacklisted, no order of blacklisting could have
been passed against the petitioner, that too, for all time to
come. It is further submitted that since there is no concluded
contract between the parties and no loss is suffered by the
respondent-Corporation, the action of forfeiting security
deposit as also earnest money deposit is without any authority
of law, therefore, he has submitted that this petition be
admitted and allowed quashing and setting aside the
impugned order made by the authority dated 8/9.5.2019,
directing the respondent authority to refund the same with
12% interest thereon.
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16. As against that Ms.Aishvarya, learned advocate for the
respondent-Corporation, submitted that the impugned order is
made by the respondent giving ample opportunity to the
petitioner to start the work immediately, as it pertains to
doorstep delivery of foodgrains to the needy persons. Without
any excuse, he should have undertaken the said exercise once
work order is issued to him, pursuant to which he even
deposited the security deposit for the performance of the
contract.
17. However, despite issuance of work order immediately, as
it pertains to public distribution system for doorstep delivery of
foodgrains, he should have, at once, carried out the same
without sowing any excuses. She has further submitted that,
since the time was essence of the contract, he should not have
wasted the time under the excuse of his illness, which is not,
as such, unable to carry out the work through someone.
18. She has drawn attention of the Court to the affidavit in
reply and annexure annexed along with it, which contains
communication dated 1.4.2019 to the petitioner, not only to
start execution of work from that very day pertaining to
doorstep delivery but directing him to deposit the security
deposit of Rs.29,72,000/-. He was further asked to execute a
contract in writing with the City Manager, Ahmedabad City, on
a stamp paper of Rs.120/- before Notary public. Since he failed
to do so, further opportunity was given to him, vide
communication dated 9.4.2019, it was informed to the
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petitioner that extension of time, asked for and granted, is to
expire on 10.4.2019, after that period is over, if he fails to
execute the contract, he is supposed to pay penalty of
Rs.2500/- per day and, that too, for a further period of 7 days
only. Therefore, he was again informed on that day to start
executing the work and also make payment towards security
deposit and execute the contract. Pursuant thereto, security
deposit of Rs.29,72,000/- came to be deposited by the
petitioner on 10.4.2019. Again vide E-mail communication
dated 16.4.2019, he requested that not only the petitioner but
his administrator is also sick and hospitalized, and therefore,
he is unable to carry out the work for a month at least and he
may be exempted for the same, since he has already
deposited the security deposit. By a further communication
dated 20.4.2019, petitioner was informed about his failure to
execute an agreement and undertaking to carry out all the
work of doorstep delivery, which he failed to do so, and
therefore, he was asked to appear before the General
Manager, there also he failed. Thus, there was no option for
the authority but to get the said work done at the cost and risk
of the petitioner. He was also cautioned about the same, vide
communication dated 20.4.2019. Therefore, again the
petitioner was asked to appear through his authorized
representative to appear before General Manager on
22.4.2019.
19. She has further contended that, the offer made by the
petitioner, subject to terms and conditions in notice inviting
tender, and the work order dated 1.4.2019 issued by the
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respondent Corporation, concluded contact came into
existence. Drawing attention of the Court to condition No.3.6 of
the general guidelines and condition No.5 of the general
conditions, on acceptance of the tender, the tenderer would
have to submit the performance security deposit and execute
the undertaking within a period of seven days, and failure to
do so, would entail certain consequences. According to her
submission, on that very terms, the petitioner submitted his
offer for consideration, and when it is considered, on failure to
execute an agreement, earnest money deposit is liable to be
forfeited and he incurs dis-qualification for future work and the
said work was to be carried out at the cost and risk of the
petitioner. Filing of an undertaking was a condition subsequent
to the contract and not condition precedent. Failure on the part
of the successful bidder to submit an undertaking would be a
breach of contract itself, therefore, according to her
submission, the contention raised by the petitioner that there
was no concluded contract is incorrect. Drawing attention of
the Court to the communication made by the petitioner, as
dealt with in the affidavit-in-reply, the petitioner has sought for
extension for performance of the work under the contract and
not for extending the time for executing the undertaking.
20. Therefore, it is submitted that action of the respondent
Corporation taken in pursuance of breach of contract, due to
non performance of the work by the petitioner, would fall
within the realm of private law and, therefore, the petitioner be
asked to avail remedy available under the law instead of
petition under Article 226 of the Constitution of India.
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According to her submission, writ jurisdiction cannot be
invoked to avoid contractual obligations or interpretation of
contractual terms and conditions, and that in the case of
contract entered into between the State and any State
Authority and an individual or entity, pursuant to offering of
tender, mutual rights and obligations and liabilities of the
parties are governed by the terms of contract and law relating
to contract, as there was no compulsion on anyone to enter
into this contact and it was voluntary on both the sides.
21. It is further asserted that remedy for breach of contract,
being purely in the realm of contract, are to be dealt with by
the Civil Courts. The public law remedy by way of a writ
petition under Article 226 of the Constitution of India is not
available to seek damages for breach of contract or specific
performance of contract.
22. It is further contended that the petitioner was well aware
of the terms of the bid document, which categorically stated
that non-submission of undertaking and non-performance of
the work would entitle the respondent-Corporation to forfeit
the security deposit, to get the work completed by another
entity at its cost and risk. When the petitioner did not perform
the contract and did not execute the undertaking, the
respondent-Corporation was left with no option but to issue the
impugned order dated 8/9.5.2019.
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23. It is further submitted that the petitioner was required to
deliver essential commodities to centers under various
Government schemes and due to non-performance of the
work, implementation of schemes was negatively affected.
Since the petitioner was a single bidder, it was under such
circumstances that the respondent-Corporation was
constrained to hold another reverse E-auction on 24.6.2019
(wrongly mentioned in the reply as 7.3.2019) to allot work
(which was to be performed by the petitioner) to another
entity.
24. So far as discrimination under Article 14, pressed into
service by the petitioner, by citing instance in the case of
M/s.Subhlakshmi Transport was also blacklisted on similar such
ground, following failure to non-deposit of security deposit and
executing an agreement, which was to be done within a period
of seven days of depositing security deposit. In case of non-
execution of an agreement within a period of 7 days, it could
be extended for a further period of 7 days, carrying liability per
day of Rs.2500/- as penalty. It is submitted that since the order
of forfeiture of earnest money deposit and carry out the work
at the cost and risk of that bidder along with blacklisting him is
concerned, came to be passed within permissible period, it
came to be revoked vide order dated 15.09.2021. However, as
contended by the learned advocate for the respondent, it is
clear that so far as it relates to blacklisting is concerned, it
came to be revoked. But forfeiture of earnest money deposit
and the condition of carrying out the assigned work to the
concerned Transporter, at its cost and risk, was not revoked at
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all. Therefore, it is submitted that there is no question of any
discrimination at the end of the respondent herein meted out
with the petitioner.
25. It is further submitted by learned advocate for the
respondent that despite repeated opportunities were made
available to the petitioner to carry out his part of obligation by
submitting undertaking, as required under the terms of tender,
to deposit security deposit and executing an agreement with
the respondent-Corporation, petitioner has failed to do any of
the things, except depositing the security deposit, and
therefore, as a last resort, after several opportunities,
impugned order dated 8/9.5.2019 came to be passed. She has
further submitted that the petitioner, vide
representation/appeal dated 16th May 2019, by raising all such
similar issues along with decisions of the Supreme Court,
requested the authority to review and/or set aside illegal,
unauthorized and without jurisdiction order dated 8/9.5.2019.
However, vide communication dated 03.06.2019,
representation/appeal came to be rejected with a clarification
that if reverse E-auction, which is to be conducted because of
fault of the petitioner, carries higher price for doorstep delivery
for the year 2019 - 2020 of Ahmedabad City, the amount of
cost towards difference would be recovered from the wallet
money and security deposit and remaining amount may be
refunded to the petitioner. Thus, according to the submission
of learned counsel for the respondent-Corporation, the
impugned order came to be modified on a written
representation/ appeal filed by the petitioner, so far as it
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relates to amount lying in E-wallet as also security deposit is
concerned, therefore, by way of impugned order, now only
earnest money deposit of Rs.3,00,000/- is to be forfeited and
order blacklisting him as also disqualifying him for future came
to be confirmed, including carrying out the contractual work
from other contractor at the cost and risk of the petitioner.
26. Ms.Aishvarya, learned advocate for the respondent-
Corporation submitted that, with an open eye, the petitioner
agreed to the notice inviting tender, based on which he placed
his offer for consideration and which was considered by the
respondent authority, which contains a clause for forfeiture of
earnest money deposit, in case a bidder fails to provide
security deposit within a period of 7 days and execute an
agreement in a format with District Manager (Grade-1) and
District Supply Officer/City Manager. When the petitioner fails
to deposit the security deposit within time stipulated, as also
failed to execute the agreement, even as on today, it is the
consequence of terms of tender, based on which he
participated in the tender process, which requires no
interference so far as it relates to forfeiture of earnest money
deposit is concerned.
27. Ms.Aishvarya, learned counsel for the respondent-
Corporation, with all humility to her command, attempted to
sustain the impugned order by submitting that when the
contract was for supply of doorstep delivery of essential goods
to the needy persons, as per the public distribution system of
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the Government, any bidder, who fails to fulfill that obligation
must meet with the consequence of blacklisting for all time to
come. In the case of Dresser Rand S.A. v. Bindal Agro
Chem Limited reported in (2006) 1 SCC 751, more
particularly para 40 thereof, it is submitted that work order
itself dated 1.4.2019 is a letter of intent addressed to the
petitioner with a further direction to carry out the work as it
affects public distribution system, that too, for door step
delivery of food grains to the needy persons, it can be termed
as a letter of acceptance resulting in a concluded contract
between the parties. Therefore, it is submitted that, not only
action for breach of terms of notice inviting tender, so far as it
relates to blacklisting can be taken, for breach of contract also,
said action can be taken against the petitioner.
28. Ms.Aishvarya, learned counsel for the respondent-
Corporation relied on a decision in the case of Pimpri
Chinchwad Municipal Corporation and Others v. Gayatri
Construction Company and another reported in (2008) 8
SCC 172, for a proposition that writ petition in contractual
matters may not be lightly invoked and Courts may not readily
entertain such petitions, wherein even notice inviting tender
provides for remedy in case of any dispute, including making
appeal/ representation, as also approaching Managing Director
of the respondent-Corporation, in case of any interpretation of
the terms of notice inviting tender. On similar line, she has
relied on a decision of this court in the case of M/s.Ravi
Associates v. Rajkot Municipal Corporation rendered by a
Division Bench of this Court in Special Civil Application
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No.3729 of 2020, more particularly paragraph-7 thereof,
where relying on a decision of the Supreme Court, this Court
concluded that not only is the writ jurisdiction of this Court
invoked in a purely contractual matter, having no colour of
public law, and writ remedy is thus not maintainable, but even
otherwise the law with respect to interference by the Courts in
forfeiture of security deposit has been sufficiently well settled.
Therefore, petition challenging the same, so far as it relates to
security deposit is held to be not maintainable by the co-
ordinate Bench of this Court in the aforesaid decision.
29. In line, there is another decision relied upon by learned
advocate for the respondent in the case of Union of India
and others v. M/s.Puna Hinda reported in (2021) 10 SCC
30. On the aforesaid submissions, Ms.Aishvarya, learned
advocate for the respondents submitted that the petition being
without any merit requires to be rejected.
31. Having heard Mr.Baxi, learned advocate for the
petitioner, Ms.Aishvarya, learned advocate for the respondent-
Corporation and having gone through the memo of petition, as
also annexures annexed with it, and the affidavit-in-reply,
amended petition as also affidavit-in-reply to the amended
petition, we have been called upon to decide whether petition
challenging the impugned order made by the respondent
authority dated 8/9th May 2019, whereby the petitioner not
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only came to be blacklisted by disqualifying him for future
work, along with forfeiture of earnest money deposit, wallet
money and security deposit, can be made or not.
32. Though Mr.Baxi vehemently submitted that since there is
no concluded contract, there cannot be forfeiture of any
deposits, may be a security deposit, earnest money deposit or
even wallet money, the said submission should now be
restricted to only forfeiture of earnest money deposit as also
order of blacklisting for all time to come and disqualifying the
petitioner from future work is concerned, having come to be
modified on an appeal/representation dated 3.6.2019. Against
the impugned order of authority, petitioner himself made
representation/ appeal which came to be partly allowed and so
far as forfeiture of wallet money and security deposit is
concerned, order appears to have been revoked, but out of
said amount, the amount, which respondent-Corporation had
to spend for awarding a contract for failure of the petitioner to
execute the same, which was ordered to be at his cost and
risk, so far as any difference in prices for fresh contract to be
awarded for failure of the petitioner to execute the same, it
has been kept as deposit to be adjusted and remaining amount
is to be refunded, if anything remains to be paid after
adjustments.
33. Mr. Baxi, learned advocate for the petitioner relied on the
decisions in the case of Maula Bux (Supra), Fateh Chand
(Supra) as also Kailash Nath Associates (Supra) in support
of submission that since there is no concluded contract,
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earnest money deposit cannot be forfeited cannot be
entertained in view of the decision of the three Judge Bench of
the Supreme Court in the case of Authorised Officer,
Central Bank of India Vs. Shanmugavelu reported in
(2024) 6 SCC 641, more particularly, referring all the
judgments aforesaid in paragraph nos.75 to 77 and conclusion
recorded after so many other decisions of the Supreme Court
in paragraph 90 as under:
"90. Therefore, it is clear that the forfeiture can be
justified in the terms of the contract are clear and
explicit. If it is found that the earnest money was paid in
accordance with the terms of the tender for the due
performance of the contract by the promisee, the same
can be forfeited in case of non-performance by him or
her."
34. In the present case as per the terms of the tender on
intimation about acceptance of his tender and carrying out the
work, the petitioner was to pay security deposit as also
execute the contract with respondent herein, which he failed to
do so, though security deposit is submitted. Thus, failure to
execute the contract as per the terms of tender, which entails
forfeiture of earnest money deposit, and therefore, there is
nothing wrong in forfeiting the earnest money deposit in view
of the aforesaid decision.
35. Therefore, so many decisions relied on by the learned
advocate for the petitioner with regard to concluded contract,
any loss or damage caused and forfeiture of any amount may
be any deposit is concerned, are not required to be dealt with
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in detail as forfeiture of earnest money deposit does not
require any concluded contract or even contract to be
executed by the petitioner. As such notice inviting tenders
stipulates a term at Clause 3.6, page 28, that failure to provide
security deposit within time stipulated and executing
agreement in a proforma would entail forfeiture of earnest
money deposit as also bidder would be disqualified for future
work and it would be executed at his cost and risk.
36. As such, there is no dispute that the petitioner has
provided security deposit but has failed to execute agreement,
as required under the terms of notice inviting tender, which
entails consequences, as forfeiture of earnest money deposit,
disqualifying the petitioner for future work to be carried out, as
also work to be carried out at his cost and risk.
37. Therefore, when the petitioner with an open eye
submitted his offer, subject to that condition, very well read by
him in notice inviting tender, that if he fails to execute the
contract in proforma within stipulated time, earnest money
deposit would be forfeited, for consideration of his offer when
he fails to execute the agreement, as required on
communication of acceptance of his tender and carrying out
the work, consequence would follow, forfeiting his earnest
money deposit. Therefore, it is not for the breach of contract
to be executed, it is forfeited for the breach of terms and
conditions of tender, based on which he provided his offer for
consideration and when it is considered and accepted, earnest
money deposit can be forfeited by the authority. It requires no
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concluded contract so far as forfeiture of earnest money
deposit on the aforesaid terms, when the petitioner himself
made an offer for consideration before the authority.
Therefore, we do not find any reason to interfere in the order
impugned, so far as it relates to forfeiture of earnest money
deposit is concerned.
38. However, the order disqualifying the petitioner for future
work and blacklisting the petitioner, that too, for all time to
come, requires to be examined as, prima facie, it appears to
be made without any prior notice to the petitioner of the action
of blacklisting him, that too, for all time to come.
39. As held by the Supreme Court in catena of decisions,
which require no reference to be made in this judgment, no
order of blacklisting could be passed without issuance of
notice, that too, for all time to come, which entails civil death
and deprive the bidder of having business with the respondent
authorities.
40. In the present case, from the order impugned, we fail to
see any notice having been issued for purported exercise of
blacklisting the petitioner, issued prior to passing of an order.
Not only that, disqualifying the petitioner for future work is
nothing but equivalent to blacklisting him permanently to work
with the respondent-Corporation. On a specific query to
learned advocate for the respondent to show any notice issued
to the petitioner before passing an order of disqualifying the
petitioner for future work as also blacklisting, that too,
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permanently, she is unable to show, even on inquiring with the
respondent, any notice issued prior to passing of impugned
order dated 8/9th May 2019.
41. Not only that respondent authority has miserably failed to
correct their mistake, when appeal/representation made by the
petitioner came to be considered but they continued with the
said mistake, deliberately or not, we do not know, blacklisting
the petitioner, that too, permanently, and disqualifying him
from future work. As such, during the course of hearing,
respondent authorities were provided an opportunity, through
learned advocate for the respondent to improve upon their
order of their own, if they want, but respondent has even failed
to respond to such proposal of the Court. Therefore, officer at
the helm of affairs, appears to be passing such order without
any application of mind, having no knowledge of any
precedents on the issue, having authority to determine such
representation/ appeal departmentally in cases of grievance of
any bidder in respect of any terms of tender.
42. So far as order in respect of Shubhlaxmi Transport is
concerned, which is pressed into service by the petitioner,
arguing discrimination is concerned, again it is clear from the
order dated 15.9.2021 passed again by General Manager of
the respondent-Corporation, which is at page 101, revoking the
order of blacklisting in case of Mr.Ramesh Gehlot of
Shubhlaxmi Transport, which came to be passed, again for
failure of him to provide security deposit and execute the
agreement in prescribed proforma, the only reason explained
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in the affidavit-in-reply that said order was passed, without
waiting, for 14 days for depositing the security deposit, it came
to be revoked. However, said reason is not palatable, for the
reason that so far as blacklisting is concerned, it is again
provided for non-payment of security deposit as also non-
execution of the contract in proforma. From the order, it
appears that neither security deposit is deposited by
Mr.Ramesh Gehlot of Shubhlaxmi Transport nor any agreement
is executed by him, whereas case of the petitioner is better
than even the case of Mr.Ramesh Gehlot of Shubhlaxmi
Transport, as the petitioner had already provided security
deposit of Rs.29,72,000/- showing his intention to execute
even an agreement, may be he has not executed the same,
whereas person, who failed on both counts, even the authority
has revoked his order of blacklisting, which shows that the
respondent-authority is aware of the reasons and pros and
cons of order of blacklisting. Therefore, action of the
respondent-Corporation is in clear violation of Article 14 of the
Constitution of India.
43. Since said order is passed in the year 2019, pursuant to
which petitioner is deprived till today of doing business with
the respondent-Corporation, we hereby quash and set aside
the impugned order dated 8/9 th May 2019, so far as it relates
to disqualifying the petitioner for future work as also putting
him in blacklist, that too, permanently without even issuing
notice for the same, imposing cost upon the then General
Manager, who passed the impugned order, quantified at
Rs.25,000/- to be paid to the petitioner from his personal
pocket within a period of four weeks from today.
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44. In view thereof, this petition is partly allowed and stands
disposed of to the aforesaid extent. Any dispute between the
petitioner and the respondent, so far as it relates to impugned
work carried out at the cost and risk of the petitioner is
concerned, the respondent-Corporation is to pass specific
order thereof and refund the amount of wallet money as also
security deposit, if any, which they have kept with them for
adjustment of cost, if any such order is already passed, the
petitioner is free to agitate the same before appropriate
authority/Court.
(UMESH A. TRIVEDI, J)
(CHEEKATI MANAVENDRANATH ROY, J)
R.S. MALEK
