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

The appellants are partnership firms having five partners. Respondent No. 2 - FCI invited tenders for Mandi Labour Contract (MLC) for its centres at Uchana, Sonepat, Narwana and Safidon and the appellants applied for the tender. The tender consisted of two parts - technical bid and price bid. As per the procedure, on successfully qualifying the technical bid, the price bid was to be opened. The appellants were eligible in technical bid thereby making themselves qualified for opening of price bid. The said price bid was opened on 2.3.2012. The appellants? bid was not considered by FCI, in view of the fact that in the earlier tender of Road Transport Contract (RTC) of Hathin–Rajasthan, the appellants had failed to deposit the security deposit and bank guarantee within the stipulated period as required and the Earnest Money Deposit (EMD) of the appellants had been forfeited vide Order dated 5.11.2011 and hence, the appellants? MLC tender was rejected invoking sub clause (III) of Clause 4 of the Disqualification Conditions. According to the appellants, earlier tender of the appellants was rejected by an Order dated 5.11.2011 invoking Clause 7 of the Model Tender Form (MTF). The appellant-Shree Shyamji Transport Company challenged the said Order dated 5.11.2011 by filing CWP No.21694/2011 which was disposed of by Order dated 6.3.2012 in which the Court observed that FCI had not invoked Clause 7 of the MTF to debar the appellant-Shree Shyamji Transport Company for the contract period and the apprehension of the appellant was ill-founded. In the light of the observations in CWP No.21694/2011, appellants contend that the Order dated 21.3.2012 rejecting the appellants? tender for MLC invoking Clause 4 (III) is unsustainable3. Challenging action of the respondents - FCI in not considering their MLC tender, the appellants filed two writ petitions bearing Nos. CWP 8415/2012 and 8416/2012 to quash the communication dated 21.3.2012 and also prayed for consideration of their price bid with regard to MLC tender dated 14.3.2012. The High Court dismissed the writ petitions by a common Order dated 26.7.2012, interalia, on the grounds:- (i) In the Writ Petition No.21694/2011, forfeiture of Earnest Money Deposit (EMD) of the appellants was not set aside by the Court and forfeiture of earnest money stood sustained justifying the invocation of Clause 4 (III); (ii) appellants had also not challenged the action of the respondents declaring it to be disqualified under Clause 4 (III) of the MTF. Aggrieved appellants are before us.

Court's reasoning:
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