Pricewaterhousecoopers Private Limited vs. Union Of INDIA Through The Secretary Department Of Agriculture And Farmers Welfare Ministry Of Agri

Facts

PricewaterhouseCoopers Private Limited (Petitioner) filed a writ petition challenging an Office Memorandum (OM) dated July 16, 2024, which disqualified it for five years from participating in RFPs issued by the Integrated Nutrient Management Division (INMD) of the Department of Agriculture & Farmers Welfare (Respondent No. 1). The petition also challenged a communication dated July 22, 2024, suspending the Petitioner's account on the Government e-Market Place (GeM) portal (Respondent No. 2) for 30 days. The dispute arose from an RFP dated January 4, 2024, for selecting a consultancy firm. The Petitioner submitted its technical proposal and, due to portal limitations, submitted its financial proposal in hard copy on February 19, 2024, stating an annual fee of Rs. 3,46,92,000/-. On March 20, 2024, the Petitioner clarified via email that this quoted amount was the annual total fee (including GST) and the total fee for three years would be thrice this amount. Subsequently, on April 18, 2024, the Petitioner was informed of its selection as a service provider with a contract generated on GeM for Rs. 3,46,92,000/- for the entire three-year period. The Petitioner highlighted this discrepancy on April 24, 2024, stating the contract reflected only the annual cost.

Held

The Court held that the impugned Office Memorandum dated July 16, 2024, and the communication/email dated July 22, 2024, were liable to be set aside on the ground of infraction of the principles of natural justice. The Court found that a genuine confusion was created due to the phraseology of the financial proposal format in Annexure II of the RFP, which did not clearly indicate whether the last column was for the total amount for three years or the annual amount with applicable taxes. It was noted that the Petitioner had promptly clarified its quote as an annual total fee via email on March 20, 2024, and there was no cogent and timely response to this clarification. The Court emphasized that debarment, which amounts to civil death, should not be readily invoked for ordinary breaches of contract where a bona fide dispute exists. The Court directed that any future action by the respondents against the petitioner concerning the subject tender or any other account must be preceded by a cogent and self-contained show cause notice, an opportunity of hearing, and a reasoned order.

Key Issues

1. Whether the impugned Office Memorandum dated 16.07.2024 and the communication dated 22.07.2024, which disqualified the petitioner for 5 years and suspended its GeM account, were issued in violation of the principles of natural justice, particularly the right to a fair hearing and a reasoned order, as argued by the Petitioner. The Petitioner contended that no proper show cause notice was issued, nor was an adequate opportunity for hearing provided before imposing such severe penalties. The Petitioner relied on the principles laid down in judgments concerning debarment and blacklisting, emphasizing that such actions require adherence to natural justice. The Revenue (Respondents) did not record any specific arguments on this issue in the judgment provided. 2. Whether the discrepancy in the financial proposal, where the Petitioner quoted an annual fee and the contract reflected a total fee for three years, was a result of genuine confusion arising from the RFP's financial proposal format and the GeM portal's limitations, as argued by the Petitioner. The Petitioner asserted that its subsequent communications clarifying the annual nature of the quote were not adequately addressed. The Revenue (Respondents) did not record any specific arguments on this issue in the judgment provided.