Fatehpur- Shekhawati, Dist.-Sikar (Raj). vs Department Of Telecommunications, For Union Of India

Judgment

1. Department Of Telecommunications, For Union Of India Through Secretary Sanchar Bhawan, 20 Ashoka Road New Delhi-110001

2. Department Of Telecommunications, Through Secretary Sanchar Lekha Bhawan, Jhalana Doongri, Jaipur (Raj)- 302004

3. Divisional Engineer (Tech) Cn Tx-North, For Bsnl, 4Th Floor, Amenity Block, Pgmtd Compound, M.i. Road, Jaipur-302001 Jaipur

4. Assistant General Manager-Iii (Hq-P) Cnn, For Bsnl Kidwai Bhawan Janpath New Delhi ----Respondents Connected With S.B. Civil Writ Petition No. 1248/2025 J.K. Construction Company, Through Its Authorized Signatory

And Partner Mr. Vinod Mahala, Having Its Office At Mahala Residency, Near Choudhary Well, Railway Station Road, Fatehpur- Shekhawati, Dist.-Sikar (Raj). Versus ----Petitioner

1. Department Of Telecommunications, For Union Of India Through Secretary Sanchar Bhawan, 20 Ashoka Road New Delhi.

2. Department Of Telecommunications, Through Secretary Sanchar Lekha Bhawan, Jhalana Doongri, Jaipur (Raj).

3. Divisional Engineer And Tech Cn Tx-North, For Bsnl, 4Th Floor, Amenity Block, Pgmtd Compound, M.i. Road, Jaipur,

4. Assistant General Manager -III(Hq-P), Cnn, For Bsnl Kidwai Bhawan Janpath New Delhi. [2025:RJ-JP:32262] (2 of 8) [CW-1158/2025] ----Respondents For Petitioner(s) : Mr. Rajesh Maharshi, Adv. For Respondent(s) : Mr. Shiv Kumar, Adv. Mr. Kapil Sharma with Mr. Vaibhav Jhakara for Mr. Tej Prakash Sharma HON'BLE MR. JUSTICE SAMEER JAIN Judgment 18/08/2025

1. Taking note of the fact that the present petitions revolve around interwoven issues of fact and law, the same were clubbed and are henceforth adjudicated by this common judgment.

2. These petitions are filed by the petitioner challenging the letter dated 09.04.2024, whereby the petitioner was banned for a period of two years due to non-submission of the acceptance of Advance Purchase Orders (APOs), security deposit, and bank guarantee.

3. Learned counsel for the petitioner has submitted that the Notice Inviting Tender (NIT) dated 20.10.2023 was issued for laying PLB pipe/duct and associated works by open trench method/trenchless technology, optical fiber cable pulling/blowing, splicing works, and OFC route rehabilitation work. It is submitted that the petitioner is a partnership firm and was engaged in similar contracts with the respondent- BSNL, from past 20 years approximately. It is further submitted that pursuant to the NIT, the petitioner was found to be the L-1 (successful) bidder, after technical and financial evaluation and as a registered MSME, the petitioner was exempted from depositing Earnest Money Deposit (EMD) as per the terms and conditions. However, without being [2025:RJ-JP:32262] (3 of 8) [CW-1158/2025] afforded with an opportunity for a hearing, the petitioner was blacklisted for two years, resulting in civil death of the firm with respect to its business operations.

4. It is further submitted that the blacklisting order violates the terms of the contract and bid document, as well as the principles laid down by the Supreme Court in a catena of judgments such as The Blue Dreamz Advertising Pvt. Ltd. and Ors. v. Kolkata Municipal Corporation and Ors. (AIR 2024 SC 4183), UMC Technologies Pvt. Ltd. v. Food Corporation of India and Ors. (2021) 2 SCC 551, and Techno Prints v. Chhattisgarh (2025) 3 SCR 208. Relying on the same, counsel for the petitioner contends that a blacklisting order, without providing an opportunity for a hearing, causes a commercial civil death and must be proportionate, reasonable, and in compliance with due process. Furthermore, it is argued that the forfeiture conditions were not warranted, and the respondents wrongfully imposed a blanket ban for a period of two years upon the petitioner, which is contrary to the settled position of law. Thus, the petitioner prays that the blacklisting order, being dehors the contractual terms and conditions, be set aside as it prohibits future participation and violates Articles 14 and 19 of the Constitution of India.

5. Per contra, learned counsel for the respondents submits that BSNL, a Government of India enterprise, is engaged in developing telecommunications infrastructure. The contract for optical fiber and associated works was time-sensitive and critical for building infrastructure, with time being of the essence of the contact. It is submitted that the terms and conditions of the bid were [2025:RJ-JP:32262] (4 of 8) [CW-1158/2025] unambiguous, as outlined in Clause 12(d) of Section XXIV of Tender for OFC Construction works. It is further submitted that qua the petitioner a letter dated 13.02.2024 (Annexure-3) was issued, directing it to submit performance security within 14 days from the issuance of the APO. It was explicitly stated that the terms and conditions were unconditional and binding.

6. Moreover, the letter further clarified that non-compliance of the said directions and mandates will lead to cancellation of the process at the petitioner’s risk and cost. Thereafter as without cogent reasons and as the petitioner failed to comply, vide letter dated 23.03.2024 (Annexure-4) the APO was cancelled, stating that further action would be taken as per the terms and conditions of the tender. It is argued that looking the time-sensitive nature of the project and its public importance, a letter dated 09.04.2024 was issued, invoking Clause 12(d) read with Section VII, para 1.3, and Section XXIV, banning business dealings with the petitioner- M/s J.K. Construction Company.

7. Counsel for the respondents further submitted that the petitioner was given due opportunity to comply with the terms and conditions, and the actions taken by the respondents were within the contractual framework. Therefore, a pray for the dismissal of the petitions with heavy costs is made, additionally arguing that the judgments cited by the petitioner are distinguishable.

8. Having considered the records, submissions of learned counsel for both parties, and the judgments cited at the Bar, the following facts are noteworthy:- [2025:RJ-JP:32262] (5 of 8) [CW-1158/2025]

8.1 That the NIT dated 20.10.2023 was issued with specific general and special terms and conditions, and it is undisputed that time was of the essence of the contact.

8.2 That as per Condition No. 3, Section 7, and Section XXIV, Clause 12(d) of the Tender for OFC Construction Works, the competent authority was empowered to ban business dealings in case of violation of terms and conditions.

8.3 That the petitioner, with 20 years of experience, participated in the tender with complete knowledge of these terms and never challenged them prior to the dispute.

8.4 That the petitioner was non-responsive to the letters issued for compliance (Annexures 3 and 4) and has not challenged the cancellation of the APO, at relevant time. The petitioner’s conduct indicates that, despite being the L-1 bidder, it did not intended and was willing to honor the successful bid. The petitioner admitted in its reply (Annexure-6, dated 24.04.2024) qua facing financial crunch due to non-payment by the concerned department.

8.5 That the banning order specifies that it applies to banning of business for three years which implies barring further dealing with the vendor for procurement for goods and services including participation in future tenders invited by BSNL for three years from date of issuance of banning order; and not to the other instrumentalities in the public domain, moreover in letter No.CNNCO-17/11/99/2023-NTCE JP/ dated 09.04.2024, it is categorically noted that the order regarding banning of business due to non-acceptance of APOs and non submission of SB/BG by [2025:RJ-JP:32262] (6 of 8) [CW-1158/2025] L-1 bidder shall be effective in CN Tx-M region of BSNL only. Therefore, the petitioner’s argument of a "civil death" is misconceived.

9. Furthermore, at page 149 of the petition (tender document), it is clarified that the banning does not affect the existing work, Annual Maintenance Contracts (AMCs), or bill settlements, rendering the petitioner’s arguments meritless. Nevertheless, in infrastructure projects of public importance, where time is the essence of contract, the petitioner’s failure to proceed as the L-1 bidder justifies the respondent’s actions. The judgments cited by the petitioner pertain to cases where work orders were issued, and performance was not carried out, unlike the present case, where the bid did not progress to a contract. Moreover, the tender document’s specific provisions for banning (Section XXIV) distinguish this case from blacklisting, rendering the cited judgments inapplicable.

10. Given the petitioner’s failure to challenge the cancellation order and its delayed challenge to the banning order after one year, coupled with its non-compliance with tender conditions, this Court while relying on the ratio encapsulated in the judgments of Tata Cellular v. Union of India and Ors.:(1994) 6 SCC 651, Raunaq International Ltd. v. I.V.R. Construction Ltd.: (1999) 1 SCC 492, Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd.:(2005) 6 SCC 138, Michigan Rubber (India) Ltd. v. State of Karnataka and Ors.: (2012) 8 SCC 216 and Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corp. Ltd.:(2016) 16 SCC 818 is not inclined to entertain [2025:RJ-JP:32262] (7 of 8) [CW-1158/2025] these petitions. The relevant extract from Tata Cellular (supra) is reproduced herein below: “In Union of India v. Hindustan Development Corporation: AIR 1994 SC 988 this Court held thus: ...the Government had the right to either accept or reject the lowest offer but that of course, if done on a policy, should be on some rational and reasonable grounds. In Erusian Equipment and Chemicals Ltd. v. State of W.B. this Court observed as under: When the Government is trading with the public, 'the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions'. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone but if it does so, it must do so fairly without discrimination and without unfair procedure. from the above are: The principles deducible (1) The modern trend points to judicial restraint in administrative action. (2) The Court does no sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The Court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting its own decision, without the necessary fallible. expertise which (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. may be itself Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fairplay in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free arbitrariness not affected by bias or actuated by malafides. (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure.” [2025:RJ-JP:32262] (8 of 8) [CW-1158/2025] (Emphasis supplied)

11. Accordingly, the petitions are dismissed with costs of Rs. 1 lakh (Rs. 1,00,000/-) to be paid to the respondent No.4 cumulatively by the petitioners. Pending applications, if any, stand disposed of.

12. A copy of this judgment be placed in the connected petition. CHANDAN /26,27 (SAMEER JAIN),J