M/S Balaji Steel Industries vs. State Of Rajasthan

The present petition has been filed with the following prayer : “1) The Impugned order dated 12.06.2025 may kindly be quashed & set aside.

Brief facts of the instant matter are that the petitioner is a proprietorship firm duly registered with the respective Departments. That the Department of Agriculture marketing through respondent No.5 had issued a notice inviting open competitive bidding dated 07.03.2025 from the firms having valid licenses, for construction and maintenance of around 16 buildings in Jaipur and adjoining areas and qua the same bid documents were to be submitted from 18.03.2025 till 07.04.2025 by 11.00 A.M.

That the petitioner participated in the bid for the construction of the work and submitted the technical and financial bid along with the requisite documents within the period specified under the Notice Inviting Bid.

That the petitioner-firm, as per terms and conditions, submitted various documents through one of its employees, who inadvertently tempered with the affidavit of Rs.1000/- in order to save money and indulged in deceitful conduct amounting to misrepresentation towards the petitioner-firm, resultant to which the members of the committee as a punitive measure declared the petitioner-firm as non-responsive. Thereafter, the petitioner participated in another tender issued on 28.04.2025 for works in Bharatpur, bids for which were accepted. However, prior to awarding the contract, a defective notice was issued regarding the irregularity in the erstwhile tender dated 07.03.2025. [2025:RJ-JP:39011] (3 of 9) [CW-9408/2025] Thereafter, vide impugned order dated 12.06.2025, the petitioner – firm is debarred for two years from participating in the tenders. SUBMISSIONS OF PETITIONER-FIRM:

In this background, learned counsel for the petitioner had submitted that the impugned order dated 12.06.2025 passed by the respondent No.3 - Chief Engineer, Rajasthan State Agriculture Marketing Board is illegal, arbitrary, unreasonable and against the principles of natural justice, as the same is against the terms and conditions of the NIB as well as the provisions of the Rajasthan Transparency Public Procurement Act, 2012 (hereinafter referred as “the Act of 2012”). It was further submitted that the bids submitted by the petitioner-firm in the subsequent tender were approved, in support of the said contention, attention was drawn upon the minutes of the meeting (Annexure-7 and 8).

Further, it was submitted that notice dated 28.05.2025 received under Section 80(2)(B) and 80(2)(D) of the Act of 2012 qua irregularity in the application for bid submitted in furtherance of NIB dated 07.03.2025, in pursuance of which the impugned order is passed, does not meet the legal requirements of a show- cause notice. Moreover, respondents wrongly invoked the provisions of Section 46(4) of the Act of 2012 as the said Section only entitles the procuring entity to debar the bidder from participating, therefore, the bidder can only be debarred if bid security or the entire performance security is forfeited, whereas, in the case at hand, the petitioners’ bid was declared as non responsive at the preliminary stage, moreso, no such order was

Subsequently, it was submitted that the respondents without considering the case of the petitioner and medical documents of the petitioner had passed the impugned order, whereby the petitioner is debarred from participating in the bids for two years under Section 46(4)of the Act of 2012. 9. Furthermore, it was submitted that impugned actions of the petitioner were committed in the erstwhile tender dated 07.03.2025, for which the petitioner bids were treated as non- responsive, whereas the petitioner is debarred vide order dated 12.06.2025 for the tender dated 28.04.2025, which was altogether a different tender, wherein no irregularity is committed. Moreover, during the currency of the petition, the respondents deliberately cancelled the two works in the NIB/tender dated 28.04.2025. 10. Learned counsel further submitted that the requirement of Rs.1000/- stamp for a declaration affidavit was not in consonance with the Rajasthan Stamp Act, 1998 which under its Schedule at entry No. 4 mandates Rs.50/- for the purpose of affidavit, however, the respondents placed reliance upon clause

Learned counsel had placed reliance upon the judgment passed by Hon’ble Supreme Court in M/s. Techno Prints vs. Chattisgarh Textbook Corporation and Anr., ; Civil Appeal No. 2362/2025. 12. Lastly, it was submitted that the petitioner was unable to mark appearance before the respondent on 12.06.2025 on account of medical condition, therefore, passing of the impugned order without considering the same has resulted in civil death of the petitioner. SUBMISSIONS OF RESPONDENTS :

Per contra, learned counsel for the respondents had submitted that the petition ought to be dismissed at the threshold. It was further submitted that in the condition stipulated under tender form of bid number 08/2024-2025, it is mentioned that bidders will have to furnish an affidavit on the stamp of Rs.1000/-, as required under Section 7 of the Act of 2012. Further, it was submitted that the stamp duty is not charged by the respondent Board rather the same is charged by the Revenue/ Finance Department and the same gets deposited with the stamp department.

Further, it was submitted that single stamp paper used by the petitioner had caused revenue loss to the respondents, resultant to which order dated 12.06.2025 was issued.

Furthermore, it was submitted that respondents provided various opportunities to the petitioner to tender explanation qua use of the same stamp, however, the petitioner had not marked appearance before the authority concerned.

Additionally, it was submitted that the petitioner had not availed the alternate remedy available under Section 38 of the Act of 2012. 17. Consequently, it was submitted that the petitioner- firm committed fraud by submitting single stamp paper qua all the bids.

Howsoever, learned Additional Advocate General appearing for the respondent- Department and the Officers of the Finance Department concerned were unable to refute the contention qua Rs.50/- stamp for affidavit. Moreover, the Officer In-charge of the Finance Department had also affirmed/confirmed the abovesaid and had drawn attention of the Court on the notification dated 15.05.1999 issued by Law (Legislative Drafting) Department and Schedule issued under Section 3. 19. Lastly, leaned counsel for the respondents had placed reliance upon the judgment passed by Principal Seat at Jodhpur in M/s Soltown Infra Private Limited & Anr. Vs. Central Transmission Utility of India Ltd.: SB Civil Writ Petition No.9702/2024, decided on 01.07.2025 and Development and Investment Corporation & Ors.: DB Civil Special Appeal (Writ) No.395/2022, decided on 18.12.2023. 20. Heard and considered.

Considering the submissions made by the learned counsel for the parties and upon assiduous perusal of the material available on record and judgments cited at Bar, this Court has made the following observations: -

1 That the petitioner is a recognized firm having valid registration under Udyog Adhar and GST department for construction and maintenance of buildings.

2 That due to an inadvertent error by a staff/ employee of the petitioner- firm a single stamp paper qua affidavit was used for submitting the bids for tender/NIB dated 07.03.2025 and due to the same, the petitioners’ bid was declared as non- responsive after technical evaluation on 02.05.2025. 21.3 That the petitioner- firm applied for another tender issued on 28.04.2025, wherein, the petitioners’ technical bids were accepted, however, due to erstwhile tender dated 07.03.2025, notice was issued to the petitioner, in pursuance to which the impugned order dated 12.06.2025 was issued, debarring the petitioner from participating in tenders for two years due to non-submission of Rs.1000/- stamp paper qua affidavit, thereby causing revenue loss.

4 That as per Section 3 of the Rajasthan Stamp Act, 1998, the instruments shall be chargeable with the duty as specified in the Schedule, thence it can be deduced that requirement for submitting a Rs.1000/- stamp paper qua affidavit is bad in law. Moreover, the officers of Finance Department and Additional Advocate General have affirmed the same. The relevant extract is reproduced below: -

Affidavit including an affirmation or declaration in the case of persons by law allowed to affirm or declare instead of swearing. [Fifty rupees]

5 That the error committed by the staff/ employee of the petitioner- firm is rectifiable under Section 59 of the Act of 2012. 22. Taking note of the aforementioned, this Court while placing reliance upon Grosons Pharmaceuticals (P)Ltd., vs. The State of Uttar Pradesh, ; (2001) 8 SCC 604, Gorkha others,; (2014) 9 SCC 105 and M/s Erusian Equipment and Chemicals Ltd. vs. State of West Bengal and Another ; (1975) 1 SCC 70, has opined that before passing any order qua blacklisting or debarment, adherence to principles of natural justice is imperative, and the person or entity must be afforded due opportunity of hearing, since such actions are akin to civil death for a commercial entity and has far-reaching consequences. In the matter at hand, petitioner- firm, being an established entity carrying on several works with substantial infrastructure comprising manpower, machinery, and other resources, cannot be subjected to such an extreme measure unless there exists a material and deliberate act of grave magnitude attributed to it and respondents should not have passed such an exaggerated order.

Further, principle of proportionality i.e., scale of punitive measure must align with the severity of breach, should have been applied by the respondents before blacklisting or debarring the petitioner-firm. Therefore, such severe punishment should only be imposed when there are substantial evidence and serious wrongdoing and non- submission of affidavit on Rs.1000/- stamp paper is not a grave and major default. Additionally, there is no revenue loss to the State and requirement of submission of Rs.1000/- stamp paper qua affidavit is per se illegal.

In view of the above, this Court deems it apposite to quash and set aside the impugned order dated 12.06.2025. 25. Accordingly, the present petition is hereby allowed. Pending applications, if any, shall stand disposed of. (SAMEER JAIN),J Preeti Asopa