Govind Kamat vs. The Managing Director And Anr

Held

The Court held that the cancellation of the petitioner's successful bid was justified due to his persistent failure to deposit the required amounts despite multiple communications and notices. However, the Court found that the blacklisting of the petitioner for a period of two years was arbitrary and illegal as it was done without affording him an opportunity of being heard, thus violating the principles of natural justice. Although the tender notification contained certain provisions regarding non-compliance by successful bidders, leading to them being treated as blacklisted, the Court emphasized that an opportunity must be given before imposing such a severe penalty. Therefore, the portion of the order dated February 14, 2019, blacklisting the petitioner for two years, was set aside. The remaining portion of the order was upheld. The writ petition was allowed in part.

Facts

The petitioner, Govind Kamat, was the successful bidder in a tender notification dated October 12, 2018, for the Vijayapur Central Bus Stand. A letter of intent was issued on December 1, 2018, requiring the petitioner to remit a Security Deposit and necessary fee within seven days. The petitioner failed to comply. Following several notices issued between December 5 and December 17, 2018, and a show cause notice on December 29, 2018, the petitioner deposited a partial amount. The respondents then demanded a further sum of Rs. 72,46,688/- within three days. The petitioner sought clarification on whether this amount was inclusive or exclusive of GST. Despite this, the petitioner failed to deposit the full amount by January 4, 2019. Consequently, the respondents cancelled the petitioner's successful bid and blacklisted him for two years through an order dated February 14, 2019.

Key Issues

1. Whether the order dated February 14, 2019, passed by the second respondent, cancelling the petitioner's successful bid and blacklisting him for two years, is liable to be quashed, considering the petitioner's doubt regarding the GST component of the bid amount and the alleged lack of opportunity for blacklisting? (Question of law and fact, turning on principles of natural justice and tender conditions). Petitioner's arguments: The petitioner contended that Annexure-C, the financial offer, was inclusive of statutory/tax costs, leading to doubt about the exact amount payable. He argued that Annexure-F clarified the GST component, but the tender notification did not explicitly mention blacklisting for two years. Therefore, Annexure-F (presumably referring to the order of blacklisting) is liable to be set aside. Respondents' arguments: The respondents argued that the amount specified in Annexure-F was not deposited even by January 4, 2019. They emphasized the petitioner's conduct in prolonging the matter and failing to comply with the tender conditions and subsequent communications, justifying the cancellation of the bid and the blacklisting.