Case: Shree Shyamji Transport Company Vs. F.C.I.

Conditions ……… (III) Tenderer whose Earnest Money Deposit and/or Security Deposit has been forfeited by Food Corporation of India or any Department of Central or State Government or any other Public Sector/Undertaking, during the last five years, will be ineligible. ?Clause 5. Details of Sister Concerns. …….. (i) The blacklisted parties by FCI or Govt./Quasi Govt. Organization will not be qualified. (ii) The parties whose EMD is forfeited by FCI will not be qualified. (iii) Food Corporation of India reserves the right not to consider parties having any dispute with Food Corporation of India in order to protect its interest.? 8. According to the respondents, EMD of the appellant- Shree Shyamji Transport Company was forfeited in the earlier tender of Road Transport Contract (RTC) -Hathin-Rajasthan, making the appellant ineligible to bid in the MLC tender and therefore, the bid of the appellant for MLC was rightly rejected by the respondents-FCI by Order dated 21.3.2012. 9. Insofar as RTC tender for Hathin–Rajasthan is concerned, it appears from the record and the observations of the High Court in CWP No. 21694/2011 that there was no intentional lapse on the part of the appellant and the delay in furnishing the security and the bank guarantee appeared to be on account of failure of banking operations. As per Clause 7 (iii) of MTF, the successful tenderer within fifteen days of acceptance of its tender, must furnish security deposit for the due performance of his obligation under the contract. While dismissing the writ petition CWP No. 21694/2011 on 6.3.2012, High Court observed that respondents-FCI did not have any intention to invoke that part of Clause 7 of the MTF indicating that the respondents-FCI preferred not to debar the appellant for the contract period. For proper appreciation of the contention of the parties, it is relevant to refer to the order of the High Court in CWP No.21694/2011 which reads as under:- ?In so far as the argument of the learned counsel for the petitioner apprehending debarment under clause 7 of the MTF is concerned, we are of the view that there is nothing in the impugned order dated 05.11.2011 (P- 16) which may indicate that the respondents have any intention to invoke that part of clause 7 against the petitioner. The reason for not invoking clause 7 of the MTF appears to be that there is no intentional lapse committed by the petitioner and the delay in furnishing the security and the bank guarantee appears to be on account of failure of banking operations. Therefore, we appreciate the respondents for not having invoked clause 7 of the MTF to debar the petitioner for the contract period. Therefore, the apprehension of the petitioner expressed through their counsel is ill founded.? 10. The respondents-FCI, in fact, filed Civil Miscellaneous Application No.4480/2012 seeking modification of the above order dated 6.3.2012 and prayed to hold that Clause 7(iii) of the MTF includes the debarring of the contractor and its partners i.e. the appellants from participating in any future tender of the FCI for a period of three years. By order dated 2.4.2012, the Division Bench of the High Court disposed of the said application and other applications reiterating its earlier order dated 6.3.2012 that FCI in its order dated 5.11.2011 (pertaining to RTC Hathin–Rajasthan) did not indicate any intention to invoke that part of Clause 7 of MTF to debar the appellants? firm for the contract period. The said Order of the High Court dated 2.4.2012 reads as under:- ?It is thus evident that this Bench has taken the view that in the order dated 05.11.2011 (P-16), the respondents did not indicate any intention of invoking that part of clause 7 of MTF which could debar the petitioner. The reason for adopting the aforesaid course has also been noted by the Division Bench by observing that there was no intentional lapse committed by the petitioner and the delay in furnishing the security and the bank guarantee was on account of failure of banking operations. The Bench, in fact, appreciated the respondents for not invoking the part of clause 7 of the MTF to debar the petitioner for the contract period.? 11. Insofar as RTC Hathin–Rajasthan is concerned, finding of the High Court that there was no intentional lapse on the part of the appellant and that delay in furnishing the security and bank guarantee was on account of failure of banking operation had attained finality. In response to appellants? apprehension of debarment under Clause 7 of MTF, Division Bench has recorded its finding that it appreciates that FCI has not invoked Clause 7 of the MTF to debar the appellants for the contract period. It appears that apprehension of debarment of appellants invoking Clause 7 was brought to the notice of the Court and the High Court did consider the same as a necessary point. In our view, the finding of the Court on the same is binding on FCI. Inspite of FCI?s modification petition, the finding that there was no intentional lapse on the part of the appellant-Shree Shyamji Transport Company, was neither modified nor set aside. That being so, while considering the appellant?s tender for MLC, FCI was not justified in invoking Clause 4 (III) of the MTF on the ground that the tender of the appellants pertaining to RTC Hathin–Rajasthan was earlier rejected and that appellant?s EMD was forfeited. High Court, in our view, has not properly appreciated its own observations in CWP No.21694/2011 that FCI has not invoked Clause 7 of the MTF to debar the appellants for the contract period. 12. The impugned tenders pertain to Mandi Labour Contract (MLC) for which the appellants submitted their bid on 2.3.2012 and the appellants have already suffered debarment for about three years. Considering the facts and circumstances of the case and in the light of High Court?s observation made in CWP No.21694/2011, in our view, the debarment of the appellants is not justifiable and the impugned order of the High Court cannot be sustained. 13. In

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Insofar as RTC Hathin–Rajasthan is concerned, finding of the High Court that there was no intentional lapse on the part of the appellant and that delay in furnishing the security and bank guarantee was on account of failure of banking operation had attained finality. In response to appellants? apprehension of debarment under Clause 7 of MTF, Division Bench has recorded its finding that it appreciates that FCI has not invoked Clause 7 of the MTF to debar the appellants for the contract period. It appears that apprehension of debarment of appellants invoking Clause 7 was brought to the notice of the Court and the High Court did consider the same as a necessary point. In our view, the finding of the Court on the same is binding on FCI. Inspite of FCI?s modification petition, the finding that there was no intentional lapse on the part of the appellant-Shree Shyamji Transport Company, was neither modified nor set aside. That being so, while considering the appellant?s tender for MLC, FCI was not justified in invoking Clause 4 (III) of the MTF on the ground that the tender of the appellants pertaining to RTC Hathin–Rajasthan was earlier rejected and that appellant?s EMD was forfeited. High Court, in our view, has not properly appreciated its own observations in CWP No.21694/2011 that FCI has not invoked Clause 7 of the MTF to debar the appellants for the contract periodThe impugned tenders pertain to Mandi Labour Contract (MLC) for which the appellants submitted their bid on 2.3.2012 and the appellants have already suffered debarment for about three years. Considering the facts and circumstances of the case and in the light of High Court?s observation made in CWP No.21694/2011, in our view, the debarment of the appellants is not justifiable and the impugned order of the High Court cannot be sustained