Mr. Sanjay Ghosh, Sr. Advocate along with Mr. Naman Jain, Mr. Rohan Mandal Mr v. RAMAGUNDAM FERTILIZERS AND CHEMICALS LTD & ANR

Judgment

1. The present petition has been filed by the petitioner being aggrieved by the encashment/forfeiture of the Bank Guarantee towards the Earnest Money Deposit (hereinafter referred as <EMD-BG=) amounting to Rs. 47,50,000/- by the respondent no.1/Ramagundam Fertilizers and Chemicals Ltd. The said EMD-BG was furnished on Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021

16.12.2015 (with a validity up to 27.12.2016) by the petitioner while participating in a tender dated 09.11.2015 floated by the respondent no.2/Engineers India Ltd (EIL) for the work of <cooling tower and CWTP packages for revival of Ramagundam Fertilizers and Chemicals project=. 2. The petitioner is a company engaged in the business of manufacturing and supplying of cooling equipments including cooling towers. Respondent no.1 is a Joint Venture (JV) company of EIL/respondent no.2 (an engineering consultancy and EPC company under the ownership of the Ministry of Petroleum and Natural Gas, Government of India), National Fertilizer Ltd (NFL) and Fertilizer Corporation of India Ltd (FCIL) formed for setting up gas-based Urea manufacturing plant at Ramagundam, Telangana. Respondent no.2/EIL was awarded the detailed engineering and project management for revival of Fertilizer Plant at Ramagundam, Telangana and in pursuance of the same, floated a tender dated 19.11.2015 for supply, erection and construction of FRP cooling tower. 3. Pursuant to the scrutiny/verification of the requisite documents submitted by the petitioner for the aforementioned tender, a Show Cause Notice (SCN) dated 14.10.2016 came to be issued against the petitioner proposing suspension and debarment of its business on account of alleged submission of forged document/certificate for satisfying the bidder qualification criteria. The said SCN reads as under: Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021

4. The aforementioned allegations were also communicated vide a letter dated 17.10.2016 to the respondent no.1 by the respondent no.2. The same reads as under: Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 xxx xxx xxx Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021

5. Subsequently, respondent no.1 issued a letter dated 20.12.2016 to the bank of the petitioner for forfeiture of the EMD-BG. On

22.12.2016 the EMD-BG was released in favour of respondent no.1 by the concerned bank. 6. In the meantime, vide an email dated 21.12.2016, the respondent no.2, also intimated the petitioner that the competent authority of respondent no.2 has decided to put the petitioner on <holiday list of the EIL Construction Contractor= for a period of 3 years w.e.f.

14.12.2016. 7. Against said decision dated 21.12.2016, the petitioner preferred a representation dated 11.01.2017 before the Appellate Authority of respondent no.2. Vide an order dated 26.05.2017, the aforementioned decision dated 21.12.2016 came to be revoked by the Appellate Authority with immediate effect. The said order dated 26.05.2017 reads as under: Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021

8. In the circumstances, considering that the ban imposed upon the petitioner has been revoked by the Appellate Authority of the Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 respondent no.2 vide an order dated 26.05.2017, the petitioner between 2017 and 2020 made various representations to the respondents seeking refund of EMD-BG retained by respondent no.1. However, it is submitted that the respondents failed to respond/act upon the said representations. 9. Consequently, the petitioner issued a legal notice dated

10.02.2021 to respondent no.1 seeking for refund of the EMD-BG retained by them. However, again, the respondent no.1 failed to respond. 10.

In the aforesaid background, aggrieved, the petitioner preferred the present petition seeking to direct the respondents to return/refund the forfeited EMD-BG to the petitioner. SUBMISSIONS ON BEHALF OF THE PETITIONER

11. Learned senior counsel on behalf of the petitioner submitted that even before a reply was submitted by the petitioner to the Show Cause Notice dated 14.10.2016, a communication dated 17.10.2016 came to be issued by the respondent no.2 to respondent no.1 alleging submission of forged document by the petitioner. Further, the respondent no.1 issued a letter dated 20.12.2016 to the bank of the petitioner for forfeiture of the EMD-BG without issuing any Show Cause Notice or an independent enquiry into the said matter. 12. It is further contended that the petitioner is entitled to a refund of the EMD-BG encashed by respondent no.1 inasmuch as the letter dated 20.12.2016 issued by respondent no.1 to the petitioner’s bank for forfeiture of the furnished security, was premised upon a Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 communication dated 17.10.2016 from respondent no.2, alleging submission of a forged document/certificate by the petitioner. However, the unconditional revocation of the banning order dated

21.12.2016 by the Appellate Authority of respondent no.2 vide order dated 26.05.2017, effectively nullified the allegations of forgery which constituted the very foundation of the aforesaid communication dated

17.10.2016, consequent ban by respondent no.2 and encashment of the EMD-BG by respondent no.1. 13. It is further submitted that the allegation pertaining to the forgery of documents emanated from an inadvertent error made by the petitioner. It is stated that during the bidding process, the petitioner furnished an experience certificate dated 14.12.2015 bearing ref: GGEL/HR/Mech./2015-16 (hereinafter referred as <Exhibit 1=) issued by one of its previous employers i.e., Godavari Green Energy Pvt. Ltd, (hereinafter referred as <GGEL=). Due to certain procedural requirement, the said certificate dated 14.12.2015 was revised and again submitted in the desired format. However, inadvertently, the petitioner submitted draft version dated 18.04.2016 bearing ref: GGEL/HR/ Mech/2015-16 (hereinafter referred as <Exhibit 2=) of the revised certificate instead of the certificate dated 18.04.2016 bearing ref: GGEL/HR/Mech/2016/02 (hereinafter referred as <Exhibit 3=) approved by GGEL. The said inadvertent error was subsequently clarified and rectified and is evident from an email dated 20.10.2016 received from GGEL. 14. It is further brought out that the tender dated 09.11.2015, for which the EMD-BG deposited by the petitioner was forfeited by the Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 respondent no.1 was cancelled/withdrawn/not acted upon by the respondents. Subsequently, a fresh tender for the same work was re- issued on 12.06.2017 by the respondent no.2, which ultimately came to be awarded vide a Letter of Award dated 08.08.2017 in favour of the petitioner and duly executed. It is contended that had the petitioner’ action been void of bonafide intentions, the aforesaid award would have not been awarded in its favour. 15. It is submitted that till date, there is no material/order/finding on record that would justify forfeiture of EMD-BG by the respondent no.1. Further, mere existence of an alternative remedy does not oust the jurisdiction of this Court under Article 226 of the Constitution of India inasmuch as the conduct of respondent no.1 is clearly in contravention of the principles of natural justice, arbitrary in nature and void of any cogent rationale. In this regard, reliance has been placed upon catena of judgments rendered by the Supreme Court1. 16. It is further submitted that it is a settled law that the period of limitation does not apply to writ jurisdiction and instead the concept of laches is applicable. An entity under Article 12 of the Constitution of India cannot justify unjust enrichment by resorting to a mere technical plea of limitation, especially considering that the petitioner was continuously pursuing the said matter with the officials of respondents 1 Union of India & Ors. vs. Tantia Constructions (P) Ltd., (2011) 5 SCC 697; Harbanslal Sahnia v. Indian Oil Corporation Ltd., (2003) 2 SCC 107; Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1; National Sample Survey Organization and Anr. v. Champa Properties Limited and Anr., (2009) 14 SCC 451; Hindustan Petroleum Corporation Limited and Ors. v. Super Highway Services and Anr., (2010) 3 SCC 321; ABL International Ltd. and Ors. vs. Export Credit Guarantee Corporation of India Ltd. and Ors., (2004) 3 SCC 553 and UP Power Transmission Corporation Ltd. and Ors. vs. CG Power and Industrial Solutions Limited and Ors., (2021) 6 SCC 15. Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 for resolution since 2017 and never abandoned the same. Thus, the cause of action finally arose when the respondent no.1 failed to respond to the legal notice dated 10.02.2021. Even otherwise, without prejudice to the aforesaid, assuming that the cause of action arose on

26.05.2017, the period of limitation which would have expired on

25.05.2020 ought to have been relaxed in line with the directions rendered by the Supreme Court in Suo Moto Writ Petition No. 3/2020. SUBMISSIONS ON BEHALF OF THE RESPONDENT

17. Learned counsel on behalf of the respondent no.1 submitted that in view of the violation of contractual obligation by the petitioner, under clause 36.8.1 of General Conditions of Contract (GCC) EMD- BG was forfeited. Further, the petitioner never approached the Appellate Authority of respondent no.2 against the forfeiture of EMD- BG by the respondent no.1 and instead directly invoked the jurisdiction of this Court. 18. It is further contended that the present petition is not maintainable inasmuch as (i) the dispute between the parties to the present petition are private in nature and there is no violation of statutory duty (ii) the petitioner has approached this Court without exhausting an alternative remedy (arbitration) available to the petitioner in terms of clause 35.2.2 of the GCC. Reliance in this regard is placed upon judgment rendered by the Supreme Court in Joshi Technologies International Inc vs Union of India and Ors, (2015) 7 SCC 728 and K.K Saxena vs International Commission on Irrigation and Drainage, (2015) 4 SCC 670 (iii) the EMD-BG was forfeited by Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 the respondent no.1 in 2016 and the present petition has been filed after a delay of 5 years without any cogent rationale thereof. 19. It is submitted that the during the scrutiny and verification of documents, it came to the knowledge of respondent no.2, that the experience certificate dated 18.04.2016 purportedly issued by GGEL was false and fabricated. The said allegation has been supported by an email dated 10.10.2016, wherein, GGEL categorically denied issuance of the aforesaid certificate. 20. Further, attention is drawn to a letter dated 21.01.2019 along with inter-office Memorandum dated 09.01.2019, issued by the respondent no.2, justifying the forfeiture of EMD-BG by the respondent no.1 categorically observing document/certificate purportedly issued by GGEL, submitted by the petitioner along with the bid was not genuine and tantamount to fraud on part of the petitioner. The letter dated 21.01.2019 and inter-office Memorandum dated 09.01.2019 reads as under:- Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 ANALYSIS AND FINDINGS

21. At the outset, this Court is not persuaded by the objections of the respondents as regards (non) maintainability of the present writ petition. The law is well settled that this Court has jurisdiction, even in contractual or tender matters to redress the arbitrariness and/or denial of principles of natural justice. 22. The legal position in this regard has been reiterated by the Supreme Court time and again in various judgments including that of Subodh Kumar Singh Rathour v. Chief Executive Officer and Others, 2024 SCC OnLine SC 1682, by observing as under:-

57. Thereafter, this Court in its decision in M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd. [M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023) 2 SCC 703] exhaustively delineated the scope of judicial review of the courts in contractual disputes concerning public authorities. The aforesaid decision is in the following parts:- Scope of judicial review in matters pertaining to contractual disputes

57.1. This Court in M.P. Power Management case [M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023) 2 SCC 703] held that the earlier position of law that all rights against any action of the State in a non-statutory contract would be governed by the contract alone and thus not amenable to the writ jurisdiction of the Courts is no longer a good law in view of the subsequent rulings. Although writ jurisdiction is a public law remedy, yet a relief would still lie under it if it is sought against an arbitrary action or inaction of the State, even if they arise from a non-statutory contract. The relevant observations read as under: (M.P. Power Management case [M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023) 2 SCC 703] , SCC p. 763, paras 81-82) <81. … when the offending party is the State. In other words, the contention is that the law in this field has witnessed an evolution and, what is more, a revolution of sorts and a transformatory change with a growing realisation of the true ambit of Article 14 of the Constitution of India. The State, he points out, cannot play the Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021 laid down Dr Jekyll and Hyde game anymore. Its nature is cast in stone. Its character is inflexible. This is irrespective of the activity it indulges in. It will continue to be haunted by the mandate of Article 14 to act fairly. There has been a stunning expansion of the frontiers of the Court's jurisdiction to strike at State action in matters arising out of contract, based, undoubtedly, on the facts of each case. It remains open to the Court to refuse to reject a case, involving State action, on the basis that the action is, per se, arbitrary. *** 82.1. It is, undoubtedly, true that the writ jurisdiction is a public law remedy. A matter, which lies entirely within a private realm of affairs of public body, may not lend itself for being dealt with under the writ jurisdiction of the Court. 82.2. The principle in Bareilly Development Authority [Bareilly Development Authority v. Ajai Pal Singh, (1989) 2 SCC 116] that in the case of a non-statutory contract the rights are governed only by the terms of the contract and the decisions, which are purported including Radhakrishna Agarwal [Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457] , may not continue to hold good, in the light of what has been laid down in ABL [ABL International Ltd. v. Export Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC 553 : (2004) 118 Comp Cas 213] and as followed in the recent judgment in Sudhir Kumar Singh [State of U.P. v. Sudhir Kumar Singh, (2021) 19 SCC 706] . 82.3. The mere fact that relief is sought under a contract which is not statutory, will not entitle the respondent State in a case by itself to ward-off scrutiny of its action or inaction under the contract, if the complaining party is able to establish that the action/inaction is, per se, arbitrary.= followed, to be impropriety, arbitrariness, Exercise of writ jurisdiction in disputes at the stage prior to the award of contract 57.2. An action under a writ will lie even at the stage prior to the award of a contract by the State wherever such award of contract is imbued with procedural favouritism or without any application of mind. In doing so, the courts may set aside the decision which is found to be vitiated for the reasons stated above but cannot substitute the same with its own decision. The relevant observations read as under: (M.P. Power Management case [M.P. Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023) 2 SCC 703] , SCC p. 764, para 82.4) <82.4. An action will lie, undoubtedly, when the State purports to award any largesse and, undoubtedly, this relates to the stage prior to the contract being entered into (see Ramana Dayaram Shetty [Ramana Signature Not Verified Digitally Signed By:ROHIT KUMAR PATEL Signing Date:03.02.2026 19:23:09 W.P.(C) 6570/2021