Punjab & Haryana HC: Debarment of contractor for 5 years upheld—Failure to execute contract at quoted rates amounts to withdrawal of bid

Case Name: M/s Shiv Shakti Transport Company v. Food Corporation of India & Ors.
Date of Judgment: January 9, 2020
Citation: CWP No. 286 of 2020
Bench: Hon’ble Chief Justice Mr. Justice Ravi Shanker Jha & Hon’ble Mr. Justice Arun Palli

Held: The Division Bench upheld the Food Corporation of India’s decision terminating the petitioner’s contract and debarring it for 5 years from future tenders. The Court held that once the petitioner had quoted rates, signed the tender documents, and certified acceptance of terms, it was bound by them. Its refusal to execute the contract at the approved rates amounted to modification/withdrawal of the bid, attracting the penal consequences under Clause 6(i) of the Model Tender Form (MTF).

Summary: The petitioner was declared L-1 in a 2017 FCI tender for handling and transport contract at Madlauda Centre. Despite repeated reminders, it failed to sign the final MTF and power of attorney, and instead sought “final rates” from FCI even though it had already quoted them. FCI terminated the contract and blacklisted the petitioner for 5 years. Its appeal before the Grievance Redressal Committee was rejected. In writ, the petitioner argued that its erroneous bid entry (245% below ASOR for labour operations) was accidental, and termination was harsh. The Court noted that tender documents gave 21 days for scrutiny, the petitioner had certified acceptance of all conditions, and its stance showed unwillingness to execute at quoted rates. Clause 6(i) of the MTF expressly mandated forfeiture of EMD and 5-year debarment in such cases. The Court found no arbitrariness or mala fides in FCI’s action.

Decision: Writ petition dismissed. Order of termination and 5-year debarment upheld as a lawful and necessary consequence of withdrawal from quoted bid.