Ccs Computers Private Limited vs New Delhi Municipal Council & Anr on 8 August, 2025

August 12, 2025

Delhi High Court

Ccs Computers Private Limited vs New Delhi Municipal Council & Anr on 8 August, 2025

1. By this writ petition, Petitioner lays siege to letter/order dated
07.06.2024 issued by Respondent No. 1/New Delhi Municipal Council
(‘NDMC’), whereby Petitioner has been blacklisted by NDMC and debarred
from participating in any bid in NDMC for a period of 02 years from the
date of issue of the letter. Petitioner seeks writ of mandamus to direct
NDMC not to publish the impugned letter on its website or to take down the
same, if already published as also not to take further coercive action during
pendency of Complaint Case No. 3100/2024, titled ‘CCS Computers Private
Limited v. State & Ors.’, pending before the Trial Court and return the bank
guarantee amount.

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2. Case set up by the Petitioner is that Petitioner is a company
incorporated under the Companies Act, 1956 engaged in the business of
providing IT services with vast experience in the industry. Petitioner has
successfully provided IT related services to various Government entities
including but not limited to Indian Navy, Army Headquarters Computer
Centre, Ministry of Home Affairs, DRDO and Ministry of Science &
Technology. Petitioner is a MSME organization duly registered under the
Micro, Small and Medium Enterprises Development Act, 2006.

3. It is averred that Education Department of NDMC vide Request for
Proposal (‘RFP’) floated a tender for procurement of 4,159 pre-loaded
electronic tablets on Government E-Marketplace (‘GeM’) on 28.05.2022. To
participate in the tender, Respondent No. 2/Datamini Technologies (India)
Ltd., which was the ‘Original Equipment Manufacturer’ (‘OEM’),
authorized the Petitioner to negotiate and conduct the entire process of
bidding on its behalf and for this purpose issued a bid specific
Manufacturer’s Authorization Form dated 21.06.2022. As per the
authorization given by Respondent No. 2 through its representative namely,
Sh. Chandan Kumar, Petitioner participated in the bidding process and
submitted the bid along with requisite documents on GeM portal and also
furnished a Bank Guarantee dated 22.06.2022, for a sum of Rs.18,71,550/-
in favour of NDMC.

4. It is stated that after the bid was submitted, NDMC vide e-mail dated
02.09.2022 informed the Petitioner that the Turnover Certificate of
Respondent No. 2, submitted as part of the bid documents, appeared to be
forged and Petitioner was asked to verify the correctness of the certificate.
Shocked with this revelation, Petitioner proceeded to inquire into the

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veracity of the allegation from its employees who were involved in the bid
submission process. On 05.09.2022, Petitioner called for a written
explanation from two of its employees namely, Sh. Sunil Kumar Srivastava
and Sh. Puspendra Singh with respect to the alleged forgery in the Turnover
Certificate. Additionally, considering the gravity of the situation, Petitioner
held a meeting of its Board of Directors on 05.09.2022, wherein a
Resolution was passed for conducting a detailed inquiry into the conduct of
the delinquent employees who had submitted the bid documents, on
instructions of and in connivance with Sh. Chandan Kumar, an employee of
Respondent No. 2.

5. It is averred that to ensure that the inquiry process was unbiased, an
advocate, who had no relation with the Petitioner and was an independent
person, was nominated as an Inquiry Officer vide letter dated 05.09.2022,
who conducted a detailed inquiry by issuing formal notices to the employees
involved in the bidding process. Four employees were examined in the
inquiry, after receiving their written responses on 08.09.2022. Sh. Sunil
Kumar Srivastava and Sh. Puspendra Singh confessed and admitted that the
Turnover Certificate was edited and the original figure of Rs.28,20,10,671/-
was changed to Rs.128,20,10,671/- so as to meet the required turnover of the
tender. Importantly, they also admitted that the change in the given turnover
was carried out under the influence of and upon instructions from Sh.
Chandan Kumar and the management of the Petitioner was not informed of
this change. Hence, the decision of NDMC to blacklist the Petitioner as an
organization, is untenable in law.

6. It is further averred that while the independent inquiry was on-going,
Petitioner received a show cause notice dated 09.09.2022 from NDMC

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calling for an explanation for tampering/forging the Turnover Certificate, in
response to which the Petitioner, vide letter dated 15.09.2022, sought
extension of time till 21.09.2022 to furnish a detailed explanation along with
the Fact-Finding Report. After the Inquiry Officer submitted its final report
dated 20.09.2022 holding Sh. Sunil Kumar Srivastava and Sh. Puspendra
Singh guilty of forging the Turnover Certificate, Petitioner submitted the
report along with reply dated 21.09.2022 to NDMC, expecting and hoping
that NDMC will drop the show cause notice as it was now clear that the
management/senior officers of the Petitioner had nothing to do with the
forgery of the Turnover Certificate, which was an act planned and
orchestrated by its employees at the instance of Respondent No. 2 for
personal gains and without knowledge of the management. Being an
organization of great repute and following the policy of zero tolerance for
corruption, Petitioner terminated the services of these employees, looking at
the gravity and seriousness of the situation, basis the findings and
recommendations of the Inquiry Officer.

7. It is averred that despite the fact that Petitioner informed NDMC that
it had terminated the delinquent employees who had indulged in wrong
practices for personal gains and motives, NDMC issued a non-speaking
order dated 07.12.2023, blacklisting the Petitioner for three years from
participating in any tender issued by NDMC. By representation dated
15.12.2023, Petitioner requested NDMC to re-consider the decision but
there was no response and having no other option, Petitioner filed W.P. (C)
No. 16767/2023 in this Court, which was disposed of vide order dated
04.03.2024 quashing the letter dated 07.12.2023 on the ground that:

(a) explanation furnished by the Petitioner was not considered; (b) no

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opportunity was given to the Petitioner to respond to the stand of NDMC
with respect to General Financial Rules, 2017 (‘GFR’); and (c) order dated
07.12.2023 was non-speaking and contained no reasons for blacklisting for
three years. Court granted liberty to NDMC to issue a fresh show cause
notice and consider the response of the Petitioner and thereafter pass a
reasoned and speaking order, if any action was proposed.

8. It is averred that during the pendency of the writ petition, Petitioner
filed a complaint on 23.12.2023 in Kalkaji Police Station, Delhi against its
employees as also Sh. Chandan Kumar for committing forgery of official
documents, requesting for registration of FIR. As no action was being taken
on the complaint, Petitioner filed another complaint on 06.05.2024 with
DCP, South-East District, Delhi, which was later transferred to Police
Station, Parliament Street, New Delhi but no action was taken, despite
passage of five months, leading to the Petitioner filing an application under
Section 156(3) read with Section 200 Cr.P.C. in Patiala House Courts, for
registration of FIR. The complaint was registered as Complaint Case No.
3100/2024. By order dated 27.05.2024, learned MM, directed the
Investigating Officer to submit Action Taken Report (‘ATR’) and after ATR
was filed, complaint was transferred to the Court of learned CJM on account
of lack of jurisdiction, where the matter is pending.

9. It is stated that in terms of the liberty granted by this Court, NDMC
issued a fresh show cause notice dated 26.04.2024 calling upon the
Petitioner to explain within ten days as to why necessary action be not taken.

During the course of personal hearing, representative of the Petitioner
verbally explained the actual facts and circumstances to Director
(Education), NDMC and also gave a written reply dated 23.05.2024,

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highlighting that at no point in time, management and/or other officers of the
Petitioner company were aware of tampering in the bid document i.e.
Turnover Certificate by the ex-employees in connivance with representative
of Respondent No.2. Petitioner also brought forth that it had an impeccable
track record of business dealings and had provided services for years to
several departments under the Central Government Ministries and Public
Sector Undertakings, with no complaints from any sector. However,
glossing over the explanation rendered, NDMC issued the impugned order
dated 07.06.2024, debarring the Petitioner from participating in any tender
floated by NDMC for two years. Petitioner represented against the said
decision on 13.06.2024 and sought review of the decision, flagging several
issues which made the decision illegal, disproportionate and harsh and
highlighting that blacklisting amounted to civil death of the Petitioner.
Problems of the Petitioner were compounded by the show cause notice
issued to the Petitioner on 30.07.2024 by GeM calling upon to explain why
its account on GeM be not suspended.

CONTENTIONS ON BEHALF OF THE PETITIONER:

10. Petitioner has been in the business of providing IT services and
products to several Government entities including but not limited to
Departments in the Defence sector, SPG, Airport Authority of India Ltd.,
BHEL, Power Grid Corporation of India, ONGC, Central Bank of India,
DRDO, NIA Delhi, NIC Delhi, NTRO, GAIL, BSES Rajdhani Power
Limited. The list of customers placed on record includes as many as 108
institutions. Petitioner has been in the business for over 32 years and has
more than 300 staff members on its rolls. Petitioner has a stellar and
impeccable reputation amongst all its prestigious and high profile customers

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and has given no cause of complaint to anyone. Petitioner has to its credit
several appreciation letters from Government departments/PSUs and with
this background, there was no reason why senior officials/directors would
indulge in an act of forgery so as to tarnish the image and reputation of the
Petitioner and harm its on-going business, for the sake of one tender.

11. The Supreme Court in Kulja Industries Limited v. Chief General
Manager, Western Telecom Project Bharat Sanchar Nigam Limited and
Others, (2014) 14 SCC 731, has elucidated a set of comprehensive factors,
that are required to be taken into consideration by the Competent Authority
before taking a decision of blacklisting/debarring, but these factors have not
been taken into account by NDMC before taking the impugned decision.

Relevant factors are as follows:-

“(a) The actual or potential harm or impact that results or may result from
the wrongdoing.

(b) The frequency of incidents and/or duration of the wrongdoing.

(c) Whether there is a pattern or prior history of wrongdoing.

(d) Whether the contractor has been excluded or disqualified by an agency
of the Federal Government or has not been allowed to participate in State
or local contracts or assistance agreements on the basis of conduct similar
to one or more of the causes for debarment specified in this part.

(e) Whether and to what extent did the contractor plan, initiate or carry
out the wrongdoing.

(f) Whether the contractor has accepted responsibility for the wrongdoing
and recognized the seriousness of the misconduct.

(g) Whether the contractor has paid or agreed to pay all criminal, civil
and administrative liabilities for the improper activity, including any
investigative or administrative costs incurred by the Government, and has
made or agreed to make full restitution.

(h) Whether the contractor has cooperated fully with the government
agencies during the investigation and any court or administrative action.

(i) Whether the wrongdoing was pervasive within the contractor’s
organization.

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(j) The kind of positions held by the individuals involved in the
wrongdoing.

(k) Whether the contractor has taken appropriate corrective action or
remedial measures, such as establishing ethics training and implementing
programs to prevent recurrence.

(l) Whether the contractor fully investigated the circumstances
surrounding the cause for debarment and, if so, made the result of the
investigation available to the debarring official.”

12. Observing that blacklisting has serious consequences and fall out and
thus blacklisting/debarment action must be reasonable, fair and
proportionate to the gravity of the offence, the Supreme Court in Kulja
Industries (supra), specially emphasized on looking into: (a) past conduct
and track record of the entity; (b) response of the entity in accepting the
alleged fault and taking necessary steps to rectify/investigate the wrong; and

(c) position of the employees involved. In other words, the Supreme Court
recognized that there could be cases where few employees may be involved
in the wrong doing without the knowledge of the management and thus the
entire company should not be penalized for the unauthorized acts of those
employees. NDMC has not tested the case of the Petitioner on the
touchstone of parameters/factors in Kulja Industries (supra) and completely
overlooked that: (a) forgery was committed by the two ex-employees of the
Petitioner purely for personal gains and without the knowledge of
Petitioner’s officials in the top management; (b) immediately on this
shocking revelation, Board members resolved to initiate investigation into
the matter, which was followed by a formal inquiry by a third party having
nothing to do with the Petitioner, to ensure independence, fairness and
transparency in the inquiry process; (c) criminal complaints were filed by
authorised representatives against the employees, followed by application

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under Section 156(3) Cr.P.C. for registration of FIR; (d) impeccable and
unblemished past record of over 32 years in business dealings with
Government departments/PSUs, including defence services; and (e) services
of the delinquent employees were terminated, without a delay once the
Inquiry Officer indicted them, in keeping with policy of zero tolerance for
corruption. Had the Competent Authority of NDMC carefully looked into
these aspects brought out in the representation, the decision would have
been otherwise.

13. In Hyundai Rotem Company v. Delhi Metro Rail Corporation, 2018
SCC OnLine Del 6690, Co-ordinate Bench of this Court while testing a
blacklisting order passed by DMRC and following the judgments of the
Supreme Court in Kulja Industries (supra); and Chairman, All India
Railway Recruitment Board and Another v. K. Shyam Kumar and Others,
(2010) 6 SCC 614, in the context of proportionality of a blacklisting order,
observed that an order of blacklisting an entity may be subject to judicial
review if it is concluded that it was not within the range of action and for so
determining, some benchmark must be followed. Reference was also made
to the judgment of this Court in Coastal Marine Engineering Construction
and Engineering Limited and Another v. Indian Oil Corporation Ltd. and
Others, 2019 SCC OnLine Del 6542, for the same proposition.

14. Petitioner company is involved in several tenders at any given point
of time and it is neither possible nor feasible for Directors of the Petitioner
to be involved in the procedural aspects of the process of submission of bids.
In fact their role is focussed towards enhancing customer base, business
initiatives and managing finances of the Company. It has been a long
standing practice in the company that the Directors assign customer

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accounts to employees right at the start of the Financial Year or at the time
of their joining and it is left to them to execute the assigned tasks and
responsibilities including bidding in the tenders and completing the required
formalities of submitting the requisite bid documents. In the instant case, Sh.
Puspendra Singh was authorized and responsible for overseeing the entire
tender process including but not limited to scrutinizing documents, attending
meetings, signing the requisite documents, submission of bids etc. When the
bid in the present case was submitted in June, 2022, Petitioner was
concomitantly working on 62 tenders and for processing each bid, an
employee was designated to oversee the entire tender process including
submission of the bid documents. Being a large organization involved in
several tenders, Petitioner has to rely on its employees and trust their
honesty and integrity and this mechanism of delegation has withstood the
test of time for over three decades. The present case is the first and the only
aberration, where employees breached the trust reposed in them by the
management and tampered with the Turnover Certificate, only to subserve
their personal interests.

15. Petitioner has no involvement even remotely in the act of forgery
committed by its employees in connivance with representative of
Respondent No. 2. The independent inquiry conducted by an advocate by
profession, has clearly revealed and fortified this fact. Sh. Puspendra Singh,
Business Manager was working with the Petitioner since August, 2021 and
was part of the Sales Team. He confessed that he had been quoting for
tenders in Railway projects in his previous jobs and came in touch with Sh.
Chandan Kumar in 2021 in one assignment where Sh. Chandan Kumar
sought his help in quoting for a Railway tender. At that stage, Sh. Chandan

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Kumar promised that a certain part of the gratification of that tender would
be given to Sh. Puspendra Singh as an incentive but money was not
received. When NDMC floated the tender, Sh. Chandan Kumar approached
him and proposed that he should bid for the tender through Respondent No.2
as the OEM. He stated that on 24.06.2022, Sh. Chandan Kumar was present
in the premises of the Petitioner company and at the time of submission of
bid, when it was realized that Respondent No. 2 was not meeting the
financial turnover criteria as per the tender conditions, at the instance of
Sh. Chandan Kumar, Sh. Sunil Kumar Srivastava was instructed to edit
the document and change the turnover from Rs.28,20,10,671/- to
Rs.128,20,10,671/-. Sh. Puspendra Singh accepted that the document was
edited and that he had neither sought approval from the Management to
change the turnover reflected in the certificate nor informed them as it was
late in the evening and later tendered an apology to the Management. The
confessional statement of Sh. Puspendra Singh was corroborated by
Sh. Sunil Kumar Srivastava who added that Sh. Chandan Kumar had assured
that he would manage everything at the customer end as well as with his
company. Once the two employees have admitted that they forged the
document and this was without the knowledge and/or consent of the
Management, no blame can be placed on the Petitioner. These statements
and the inquiry report have been completely overlooked by NDMC even
though the same were part of the representation of the Petitioner, referred to
in the impugned order. The impugned decision is thus arbitrary and
consequently violative of Article 14 of the Constitution of India.

16. Petitioner has been held vicariously liable for the wrongful acts of its
delinquent employees overlooking the crucial fact that these employees have

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clearly admitted and confessed to the commission of the act of forgery for
their personal gains. The role played by the two employees and the modus
operandi adopted by them in editing the Turnover Certificate has been
brought forth by the Petitioner in the additional affidavit dated 08.11.2024,
filed pursuant to order dated 25.10.2024 directing the Petitioner to explain
the manner in which the bid in question came to be submitted. It is a settled
law that there is no vicarious liability unless the Statute concerned provides
for it. It is equally settled that the principal will be responsible for the acts of
his agent only where the agent does an act which is within the scope of
authority granted to it or does the act under the actual control of the
principal i.e. for master’s liability to arise, act by the agent must be one
which was authorized by the master. [Ref.: Sitaram Motilal Kalal v.
Santanuprasad Jaishankar Bhatt, 1966 SCC OnLine SC 210]. Notably,
though NDMC has attempted to impeach the credibility of the internal
inquiry during the course of oral arguments before this Court but there is no
finding in this regard in the impugned decision.

17. The impugned order is also vitiated on ground of clear discrimination
between the Petitioner and Respondent No. 2, as no action has been taken
against the latter even though the allegation of NDMC was that there is
collusion between the two in generating forged and fabricated document to
meet the bid eligibility conditions. On 05.12.2023, NDMC had itself
written to GeM that Respondent No. 2 was involved in forgery. Internal
investigation by the Petitioner also revealed the active role played by Sh.
Chandan Kumar, an employee of Respondent No. 2 in the entire scheme of
forging the Turnover Certificate. Yet, admittedly no action has been taken
by NDMC against Respondent No. 2. Most conveniently, Respondent No. 2

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now takes a stand before this Court that the Turnover Certificate sent by it
indicated the correct and factual turnover and the act of forgery was
committed by Petitioner’s employees while uploading the Turnover
Certificate. Contrary to its earlier position, NDMC now supports and
defends Respondent No. 2 by stating that there was no privity of contract
between NDMC and Respondent No. 2. This position is incorrect as the
tender document itself contemplated involvement of Respondent No. 2 and
in fact the credentials of Respondent No. 2 were crucial factors for grant of
tender viz. ‘OEM financial documents required’; ‘OEM experience
requirements’; ‘OEM servicing requirements’; ‘other OEM requirements’
and ‘OEM’s blacklisting status is relevant’. While Petitioner is not
suggesting that Respondent No. 2 as an entity was responsible for the
forgery but only urges that Petitioner has been selectively penalized for no
fault while Respondent No. 2 being the author and custodian of the Turnover
Certificate is continuing with its business with no blot or penalty of
blacklisting.

18. In a recent judgment in Blue Dreamz Advertising Pvt. Ltd. and
Another v. Kolkata Municipal Corporation and Others, 2024 SCC OnLine
SC 1896, the Supreme Court upheld the order of the learned Single Judge
quashing the blacklisting order and set aside the order of the Division Bench
reversing the said decision, observing that blacklisting being a drastic
remedy, Division Bench ought to have enquired whether conduct of the
Appellant was part of the normal vicissitudes in business and common place
hazards in commerce or whether Appellant had crossed the rubicon
warranting a banishment order, albeit for a temporary period in larger public
interest. In Modern Stage Service (Projects) v. India Tourism Development

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Corporation Ltd., 2025 SCC OnLine Del 2311, this Court observed that
even though for a limited period of 3 years, nonetheless debarment order has
the potential to cause irreparable harm to Petitioner’s reputation in the
market and also attaches stigma in terms of its prior conduct, when
considered in future tender bids. Proportionality has to be seen between the
alleged act and the harm caused by it to the Respondent and the tender
process. This decision is also relevant to the instant case since the Court
found therein that no financial harm was caused to the Respondent as the
tender was ultimately allotted to the third party with the lowest bid. In the
present case, forgery was detected at the initial stage and therefore, the
contract was never awarded to the Petitioner and no harm or financial loss
was caused to NDMC, whereas the damage caused to Petitioner’s
impeccable reputation is irreversible.

19. In Satya Builders, Represented by Rajat Sharma v. Northeast
Frontier Railway Rep. by the Chief Engineer and Another, 2025 SCC
OnLine Gau 1824, even though the Guwahati High Court found as a matter
of fact that Petitioner had submitted false credentials documents albeit later
it had offered to submit the correct document, the Court while upholding the
termination of Letter of Acceptance and forfeiture of earnest money deposit,
Bank Guarantee and Performance Bank Guarantee, set aside the order of
blacklisting the Petitioner from participation in any and all tenders for five
years.

CONTENTIONS ON BEHALF OF NDMC:

20. The impugned decision of NDMC to blacklist the Petitioner is far
from being arbitrary or whimsical, as alleged by the Petitioner. Petitioner
admits that copy of the Turnover Certificate uploaded on the GeM portal on

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behalf of the Petitioner company was a forged document, intentionally
fabricated by its employees, with a view to attain financial eligibility of
Respondent No. 2’s bid and equally admitted is the fact that the document
was uploaded by employees of the Petitioner. Submission of forged
document in a bidding process is a reason enough to justify the blacklisting
decision, which was taken after giving show cause notice and personal
hearing.

21. Main plank of the argument of the Petitioner is that the forgery was
carried out by its employees along with representative of Respondent No. 2
and this was not in the knowledge of the management. It is urged that
different tenders are allocated to different employees who alone are
responsible for the entire bidding process and the management is not
involved in the process of submitting bid documents. This stand is
unbelievable as also untenable in law. It cannot be accepted or believed that
junior executives of the Petitioner would not have pointed out at the very
outset that the Turnover Certificate of Respondent No.2 was not meeting the
eligibility condition and/or that at the time of bid submission, numerical ‘1’
was added to the existing figure of turnover, more so, when Petitioner itself
claims that it is extremely cautious of its reputation and has a policy of zero
tolerance to corruption. Assuming that the management has chosen to keep
itself aloof from the tendering process as a practise or business decision, it is
at its own peril but in so far as NDMC is concerned, the decision is justified
as submitting forged bid documents directly impacts the sanctity of tender
process and it is against public interest to encourage such practices.

22. Petitioner has highlighted and asserted that it has an impeccable
reputation and has been tendering for Government departments/agencies for

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decades with no complaints. None of these facts are in the knowledge of
NDMC, with which Petitioner has no past dealings. Petitioner’s credentials
vis-a-vis third parties cannot be cited as a benchmark to establish
Petitioner’s credibility when the factum of forgery in the Turnover
Certificate is candidly and fairly admitted. In any event, if by Petitioner’s
own case it has hundreds of on-going contracts with other entities, two
years’ blacklisting by NDMC, will not dent its otherwise flourishing
business.

23. It goes without saying that before bidding, Petitioner with its vast
experience, would have seen and known the tender conditions and process
of bidding. Petitioner admittedly submitted a Turnover Certificate dated
24.03.2022, reflecting OEM’s turnover as Rs.128,20,10,671/-, whereas the
actual turnover was Rs.28,20,10,671/-. It was obviously known to the
Petitioner that with a turnover of Rs.28,20,10,671/-, Petitioner was not
eligible to participate in the tender process as the required turnover for OEM
was Rs. 3743 lakhs in last three years and thus for obvious reasons, the
Certificate was edited to add numerical ‘1’ prior to the actual figure on the
Certificate. During technical evaluation of the bids, a complaint was
received by NDMC from one Sh. Uttam Kumar, Advocate vide e-mail dated
05.07.2022, pointing out that the Turnover Certificate submitted by the
Petitioner was a forged document. Based on this, number of e-mails were
sent by NDMC to the Chartered Accountant Firm who had issued the
Certificate but there was no response to any of the e-mails.

24. Faced with this and before taking any decision, NDMC issued show
cause notice dated 08.09.2022 to Respondent No. 2 followed by a show
cause notice dated 09.09.2022 to the Petitioner. Reply of the Petitioner was

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considered and found unsatisfactory and in light of the serious act of
forgery, Petitioner was blacklisted for three years, in public interest.
However, after the order passed by this Court on 04.03.2024, matter was re-
examined by NDMC and fresh show cause notice was issued on 26.04.2024.
Impugned decision was taken after permitting the Petitioner to furnish its
explanation in writing and granting personal hearing. Consistently,
Petitioner admitted that the Turnover Certificate was forged and the only
defence was that the forgery was by its employees, without the knowledge
of the senior officers in the management. This was found to be an
unsatisfactory response as Petitioner cannot absolve itself of the acts of its
employees done with the authority of the Petitioner and accordingly, the
impugned order was issued blacklisting the Petitioner for two years from the
date of issue of the order.

25. Petitioner’s plea that the two employees forged the Turnover
Certificate for personal gains is also misconceived. It goes without saying
that if the bid was accepted, the beneficiary was the company. In any event,
this is not a valid defence. The tender in question was of a high value and
Petitioner’s senior officers ought to have been more cautious in ensuring that
the bids were properly submitted/uploaded with correct data and documents,
especially with respect to eligibility conditions for bidding and that too when
onus of final submission of the bids was on the Petitioner and not the OEM.
It is clear that forgery in the Turnover Certificate was a well thought of plan,
orchestrated to meet the threshold of required turnover and Petitioner cannot
be absolved, even though the execution of the plan was by its employees.

26. NDMC sought explanation from Respondent No. 2 also and in
response to its e-mails, Respondent No. 2 had claimed that the forged

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Turnover Certificate submitted with the bid was not sent by it and that
forgery was committed by Petitioner’s employees at the time of bid
submission. The e-mail shared by Respondent No.2, attaching the Turnover
Certificate was shown during personal hearing and substantiated the plea of
Respondent No. 2.

27. Petitioner is well aware of the rules and regulations including General
Terms and Conditions on GeM 3.0 (Version 1.21), GFR and the pre-
integrity pact executed by the parties. Rule 175(1)(i)(h) of GFR which deals
with ‘Code of Integrity’ provides that no official of a procuring entity or a
bidder shall act in contravention of the Codes which includes making false
declaration or providing false information for participation in a tender
process or to secure a contract. Rule 175(2) provides that if a procuring
entity, after giving a reasonable opportunity of being heard, comes to the
conclusion that bidder has contravened the Code of Integrity, it may take
appropriate measures. Rule 151(iii) of GFR deals with ‘Debarment from
Bidding’ and stipulates that a procuring entity may debar a bidder from
participating in any procurement process for a period not exceeding two
years, if it determines that bidder has breached the Code of Integrity with a
caveat under sub-Rule (iv) that debarment can only be after giving
reasonable opportunity to the bidder to represent against such debarment.
The action of the NDMC is within the four corners of the GFR and after
granting opportunity of personal hearing to the officials of the Petitioner.

28. The pre-integrity pact between the parties clearly stipulated that any
breach of the provisions by the bidder or anyone employed by it shall entitle
NDMC to take all or any of the actions including debarring the bidder
from participation in future bidding process for a period of five years,

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extendable further. Moreover, general terms and conditions on GeM, on
which the parties acted, stipulated that these conditions shall act as valid
agreement between seller/service provider and the buyer and paragraph 21
thereof permits administrative action such as suspension/debarment/removal
from GeM, if a seller furnishes inaccurate, false, misleading or forged
information/documents to the buyer including during the bidding process.

29. Heavy reliance of the Petitioner on the internal inquiry conducted
against its employees and/or their consequent termination from service, is of
no aid to the Petitioner. Firstly, plain reading of the inquiry report shows that
the said inquiry was a mere eyewash. The proceedings were completed in
one day on 15.09.2022 and that too when the inquiry commenced only at
04:00 PM. Statements were recorded in a hurry and haste and importantly,
the manner in which confessional statements have been made by the
employees, sheds light on the fact that they were not voluntary and were
either given under pressure and coercion by the senior officials of the
Petitioner or out of inducement. Neither NDMC nor Respondent No. 2 was
even remotely associated with the inquiry and therefore, the report is
nothing more than a self-serving document of the Petitioner and inherently
not credible. Pertinently, the Inquiry Officer did not even inquire into
whether there was any involvement of the senior officials in the
management in the entire bidding process and/or why an employee would
bid with forged documents when it was the company which stood to benefit
if the bid was ultimately accepted.

30. Filing of criminal complaints or an application under Section 156(3)
read with Section 200 Cr.P.C. is also an eyewash as these steps were
initiated only to cover up Petitioner’s own wrongs and unlawful acts. In any

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event, this cannot take away the right of the NDMC to blacklist the
Petitioner which stems from GFR, terms and conditions of the bid etc. The
action of NDMC is commensurate with and proportionate to the gravity of
the offence committed and the management of the Petitioner cannot take
itself away from the act of its employees, done in the course of duty. There
are no allegations of mala fides or bias against any official of NDMC in
taking the impugned decision. Petitioner has acted against public interest
and the sanctity of a bidding process in the public domain must be
preserved. Petitioner has been independently debarred by GeM portal vide
order dated 02.09.2024 to participate in any tender process for 60 days
which ended on 01.11.2024 and which was not challenged by the Petitioner.
CONTENTIONS ON BEHALF OF RESPONDENT NO. 2:

31. By this writ petition, Petitioner calls upon this Court to enter into
disputed questions of facts regarding involvement of the employee of
Respondent No. 2 in the act of forgery of the Turnover Certificate and/or
whether the management of the Petitioner had any role to play in the
offence. It is trite that disputed questions of fact cannot be adjudicated in a
writ jurisdiction and on this ground alone, this writ petition deserves to be
dismissed. [Ref.: Harpati and Others v. State of NCT of Delhi and Others,
2023 SCC OnLine Del 4607].

32. Petitioner has approached this Court with unclean hands and
concealed material facts and is thus not entitled to any relief in a writ
jurisdiction. Petitioner contacted Respondent No. 2 vide e-mail dated
30.05.2022 requesting for supply of electronic tablets to participate in the
NDMC tender floated on 28.05.2022 on GeM portal. Respondent No. 2
agreed to supply the tablets and vide e-mail dated 23.06.2022 provided the

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product link as also authorization letter dated 21.06.2022; Turnover
Certificate dated 24.03.2022; BIS Renewal Certificate; Udyam Registration
Certificate etc. The Turnover Certificate shared by Respondent No. 2 clearly
reflected turnover of Rs.28,20,10,671/- for Financial Year 2021. However,
at the time of submission of the bid, Petitioner uploaded a forged Turnover
Certificate representing falsely the turnover as Rs.128,20,10,671/- which
came to the knowledge of Respondent No. 2 only after NDMC sought its
explanation. Petitioner has not filed the correct Turnover Certificate sent to
it by e-mail by Respondent No. 2, with a view to misguide this Court.

33. Respondent No. 2 cannot be blamed for the forgery. In fact by an
e-mail dated 03.09.2022, it was brought to the notice of NDMC that the
forged Turnover Certificate was not the one sent by Respondent No. 2 and
that the same was edited without its knowledge. Show cause notice dated
08.09.2022 was received by Respondent No. 2 and its officials attended the
hearing at NDMC’s office on 15.09.2022 when Petitioner’s official was also
present. During this hearing, Respondent No. 2 had clarified that the
Turnover Certificate provided to the Petitioner by e-mail dated 23.06.2022
differed from the one submitted by the Petitioner during the bidding process
and the actual copy was shared. In fact, Respondent No. 2’s financial status
and certifications are regularly updated on GeM portal and manipulations
are out of question. Respondent No. 2 was eligible to participate in the
tender independent of the Petitioner and had no reason to forge its own
documents.

34. The so-called internal inquiry conducted by the Petitioner was only a
guise to escape the rigors of blacklisting. Respondent No. 2 gained
knowledge of the inquiry only when copy of the writ petition filed by the

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Petitioner was served. It is beyond comprehension that a large organization
such as the Petitioner with vast business sense and legal team would not
even intimate Respondent No. 2 of the proposed inquiry and associate its
officials in the same since the whole inquiry was about the Turnover
Certificate purportedly issued by Respondent No. 2. The result of having the
inquiry to the exclusion of Respondent No. 2 was naturally that Petitioner’s
management was conveniently absolved of the wrongdoing whereas
employee of Respondent No. 2 was held responsible. The self-serving
documents and statements of its employees taken under duress/coercion/
pressure and/or inducement cannot help the Petitioner escape from the
liability and penalties of committing serious offence of forgery.

35. Insofar as the complaint before SHO, Kalkaji Police Station filed on
23.12.2023 is concerned, the same was filed only after NDMC passed the
initial blacklisting order on 07.12.2023 and even thereafter, no effective
steps were taken by the Petitioner to prosecute the same. Moreover,
admittedly, Petitioner was aware of the forgery committed from September,
2022 but the complaint was filed only on 23.12.2023, which clearly reflects
the motive behind filing the complaint. The application under Section 156(3)
read with Section 200 Cr.P.C. was filed as a strategy only to make that a part
of the reply to show cause notice dated 13.05.2024 and create a smokescreen
that Petitioner’s top management was innocent. None of these complaints
have any relevance to the act of forgery in the Turnover Certificate
submitted during the bidding process and the repeated effort to malign
Respondent No. 2 is in bad faith. The entire case of the Petitioner is only
aimed at saving itself from blacklisting and shifting the entire blame
wrongly on Respondent No. 2. If the Petitioner boasts of its credentials and

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past track record, it cannot be overlooked that Respondent No. 2 has also
been supplying products to various Government Departments across India
for the last two decades and no complaint has been made. Respondent No. 2
has always been compliant with policies of the Government relating to
tenders and has maintained high standards of integrity and transparency.
Once it is an admitted case that the forgery was done in the Turnover
Certificate at the time of uploading the bid, it substantiates that the Turnover
Certificate sent by Respondent No. 2 was the correct Certificate and hence
Respondent No. 2 cannot be blamed for the wrong bidding. Insofar as
involvement of Sh. Chandan Kumar is concerned, the criminal complaint is
pending and this decision will be taken by the competent Court. In any
event, representative of Respondent No. 2 had no reason to connive in the
forgery since all financial documents of Respondent No. 2 are on the GeM
portal.

36. The allegations levelled by the Petitioner against Respondent No. 2
and its employee are baseless and clearly an afterthought to escape penal
consequences. Both NDMC and GeM, after conducting investigation into
the matter have not arrived at any adverse finding against Respondent No. 2
regarding manipulation or forgery of Turnover Certificate. Significantly,
NDMC in its counter affidavit has admitted that documents shared by
Respondent No. 2 with the Petitioner reflected correct turnover and clearly
the onus of submitting factually correct bid documents was on the Petitioner.
ANAYSIS AND FINDINGS:

37. By this petition, Petitioner lays a challenge to order dated 07.06.2024
issued by NDMC blacklisting the Petitioner and debarring it from
participating in any tender of NDMC for a period of two years. Genesis of

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the impugned order lies in a tender issued by NDMC for procurement of
4,159 pre-loaded electronic tablets on GeM on 28.05.2022. To participate in
the tender, Respondent No. 2, which was the OEM, authorized the Petitioner
to carry out the process of bidding. As per authorization by Respondent
No. 2 through its representative Sh. Chandan Kumar, Petitioner participated
in the bidding on behalf of the OEM and submitted the bids along with
requisite documents, which included a Turnover Certificate of Respondent
No. 2. The minimum turnover required as per the tender conditions was
Rs. 3,743 lacs. Petitioner’s authorized employees uploaded the Turnover
Certificate dated 24.03.2022 reflecting a turnover of Rs. 128,20,10,671/- of
Respondent No. 2, whereas, admittedly the turnover was Rs. 28,20,10,671/-.
On receiving a complaint that the Turnover Certificate was forged, NDMC
asked the Petitioner to verify the correctness and authenticity of the
Certificate. On receipt of e-mail dated 02.09.2022 from NDMC, as per
Petitioner’s case, explanation was called from the two employees
responsible for bidding and by Board Resolution dated 05.09.2022 it was
decided to conduct a detailed enquiry into the matter. Formal inquiry was
held by appointing an advocate as an Inquiry Officer to ensure a fair and
unbiased inquiry, in which the employees allegedly confessed that the
Turnover Certificate was forged by them to meet the turnover criteria. It is
pertinent to note that even going by the stand of the Petitioner, the Turnover
Certificate was indeed forged albeit by Sh. Puspendra Singh and Sh.
Sunil Kumar Srivastava along with Sh. Chandan Kumar and instead of the
actual turnover of Rs.28,20,10,671/- of the OEM, the certificate was
uploaded with a wrong turnover of Rs.128,20,10,671/-.

38. Impugned decision of NDMC is largely predicated on the fact that

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submission of a forged bid document at the time of bidding is a grave and
serious offence and this act touches upon the credibility of a bidder and
impacts the sanctity of the tender process. NDMC pleads that the employees
had no vested interest as the ultimate beneficiary of award of tender was the
Petitioner alone. NDMC also asserts that the forgery was clearly with an
intent to meet the eligibility threshold of annual turnover, which was not met
with the actual and correct turnover of the OEM. In the impugned order,
NDMC has refused to accept the stand of the Petitioner that it could absolve
itself from the offence committed by its employees in discharge of their
duties and takes a position that forgery of the Turnover Certificate was a
well thought of plan.

39. Broadly understood, Petitioner pegs its case on two points: (a) forgery
was committed by Petitioner’s employees for their own vested interests and
management had no knowledge of uploading of forged certificate and thus
cannot be held vicariously liable for acts, not authorized; and (b) decision to
blacklist the Petitioner, which amounts to civil death, has been taken
oblivious of the guidelines in Kulja Industries (supra). Added to this was
the point that credibility of the Petitioner is beyond question in light of its
business dealings with Government departments/agencies/PSUs etc. for over
three decades and the list of includes 108 institutions. Petitioner is stated to
have no past history of any misdemeanor. Much emphasis was also laid on
the action taken to hold an inquiry into the misconduct of the delinquent
employees and their consequent termination along with recourse to criminal
action.

40. The moot question that thus arises for consideration is whether
Petitioner can claim that it cannot be held vicariously liable for the forgery,

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admittedly committed by its employees. From a careful analysis of facts and
arguments it is clear as day that Sh. Puspendra Singh was duly authorized to
process the bid documents and upload them. In the additional affidavit filed
by the Petitioner on 08.11.2024, it is stated that as per general practice in
Petitioner’s organization, Directors assign customer accounts to their
employees and in the present case, Sh. Puspendra Singh was authorized and
responsible for overseeing the entire tender process in question, including
but not limited to scrutinizing documents, attending meetings, signing the
requisite documents and submitting the bids. It is also stated that the
designated employees of the Petitioner scrutinize all documents in relation
to the bid and handle the submission thereof. It is thus clear that Sh.
Puspendra Singh scrutinized and submitted the bid under authorization of
the Petitioner and hence with its knowledge and consent.

41. Law with respect to vicarious liability of an employer for acts and
omissions of the employees is no longer res integra. In Sitaram Motilal
(supra), the Supreme Court restated the law laid down by Lord Denning in
Ormord v. Crosville Motor Services Ltd., (1953) 2 ALL ER 753 that owner
is not only liable for negligence of the driver, if the driver is his servant
acting in the course of his employment but also where the driver is, with the
owner’s consent, driving the car for his own purpose. This principle was
reiterated by the Supreme Court in Pushpabai Purshottam Udeshi and
Others v. Ranjit Ginning & Pressing Co. (P) Ltd. and Another, (1977) 2
SCC 745. In Sohan Lal Passi v. P. Sesh Reddy and Others, (1996) 5 SCC
21, the Supreme Court held that the crucial test is whether the initial act of
the employee was expressly authorized and lawful. If it was, then the
employer shall nevertheless be responsible for the manner in which the

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employee acts. If the dispute revolves around the mode or manner of
execution of the authority of the master by the servant, master cannot escape
the liability so far as the third parties are concerned on the ground that he
had not actually authorized the particular manner in which the act was done.
It was also held that the accident in that case took place when the act
authorized was being performed in a mode which may not be proper but
nonetheless was directly connected with the course of employment and was
not an independent act for a purpose which had no nexus or connection with
the business of the employer so as to absolve him from the liability. In
Salmond’s Law of Torts (Twentieth Edn.), it is stated as follows:-

“On the other hand it has been held that a servant who is authorised to
drive a motor vehicle, and who permits an unauthorised person to drive it
in his place, may yet be acting within the scope of his employment. The act
of permitting another to drive may be a mode, albeit an improper one, of
doing the authorised work. The master may even be responsible if the
servant impliedly, and not expressly, permits an unauthorised person to
drive the vehicle, as where he leaves it unattended in such a manner that it
is reasonably foreseeable that the third party will attempt to drive it, at
least if the driver retains notional control of the vehicle.”

42. In Halsbury’s Laws of England, Fourth Edn., Vol. 16, para 739 is
held as follows:-

“Where the act which the employee is expressly authorised to do is lawful,
the employer is nevertheless responsible for the manner in which the
employee executes his authority. If, therefore, the employee does the act in
such a manner as to occasion injury to a third person, the employer
cannot escape liability on the ground that he did not actually authorise the
particular manner in which the act was done, or even on the ground that
the employee was acting on his own behalf and not on that of his
employer.”

43. I may also allude to a judgment of the Privy Council in United Africa
Company Limited v. Saka Owoade, (1957) 3 ALL ER 216, wherein it was
laid down that a master is liable for his servant’s fraud perpetrated in the

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course of master’s business, whether the fraud was for master’s benefit or
not, if it was committed by the servant in the course of his employment.

44. In Punjab National Bank v. Smt. Durga Devi & Others, 1977 SCC
OnLine Del 93, Division Bench of this Court held that acts of fraud or
collusion by bank officials with a view to benefit a person presenting a
forged or materially altered cheque results in payment being made by the
bank against such a cheque and such an act of the bank employees, being
within the course of their employment, is binding on the bank at the instance
of the person who is damnified by the fraud albeit the bank is free to take
action against its officials. In Smt. Niranjan Kaur v. M/s New Delhi Hotels
Ltd. and Others, 1987 SCC OnLine Del 313, this Court observed that a
master is not responsible for wrongful act done by his servant unless it is
done in the course of employment and it is deemed to be so done if it is
either: (1) a wrongful act authorized by the master; or (2) a wrongful and
unauthorized mode of doing some act authorized by the master. It was also
observed that a master is liable even for acts which he has not authorized,
provided they are so connected with acts which he has authorized that they
may rightly be regarded as modes albeit improper modes of doing them. If a
servant does negligently that which he was authorized to do carefully or if
he does fraudulently that which he was authorized to do honestly, his master
will answer for that negligence, fraud or mistake.

45. In Poongottil Prasad v. Melattur Grama Panchayat and Another,
2023 SCC OnLine Ker 5596, the Kerala High Court observed that ordinarily
a person is liable for his own wrongful acts and one does not incur any
liability for acts done by others, however, principle of vicarious liability
makes certain persons liable for acts of others. This principle applies where

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the law presumes that ‘he who does an act through another is deemed in law
to do it himself’. Commonly accepted examples of vicarious liability are in
cases of relationship between principal and agent, master and servant and
partners in each other’s tort. Fundamental requirements to apply vicarious
liability are that there should be a certain relationship between the two
parties and that the wrongful act should be done in such a way that it is
connected to the relationship. It would be useful at this stage to refer to a
judgment of this Court in CE Info Systems Pvt. Ltd. and Another v. Gas
Authority of India Ltd., 2019 SCC OnLine Del 7779, where a challenge
was laid by the Petitioner to an order debarring it from participating in
bidding process related to a tender floated by GAIL, for a period of three
years, based on an allegation that Petitioner had submitted a forged
certificate indicating that it had completed certain works for IOCL for a
certain value. There was no dispute that the certificate was forged but the
Petitioner contended that this did not warrant a punitive measure as the
certificate was furnished by its employee who was not authorized to do so
and moreover, it did not affect Petitioner’s eligibility for participating in the
tender in question. Challenge to the debarring order was laid by the
Petitioner on five fronts, the first of them being that the forged completion
certificate was not issued by its authorized officer and emphasis was laid on
a Power of Attorney furnished along with the bid indicating that one of the
General Managers of the Petitioner company was constituted as the attorney
to act on behalf of the Petitioner in respect of the said tender. Court negated
the contentions, observing that it was wholly unpersuasive that the document
had been furnished by an unauthorized person inasmuch as Petitioner had
furnished a letter of authority in favour of Shri Sandeep Rathore, which also

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indicated that he was authorized for any subsequent correspondence/
communication in relation to the bid documents submitted by the Petitioner.
Court also held that the fact that Petitioner submitted a forged document was
enough for GAIL to take a decision not to deal with the Petitioner and the
question whether Petitioner derived any benefit from the same is relevant
only to determine the quantum of punishment.

46. In the aforesaid case, Court also referred to the guidelines laid down
by the Supreme Court in Kulja Industries (supra), but declined to interfere
with the debarment order observing that Petitioner did seem to derive benefit
from submission of the forged document for the reason that although
Petitioner claimed to be eligible on the basis of work executed for Atlas
Comnet, it did not provide the document sought by GAIL for establishing
the same and instead supplied forged completion certificate, allegedly issued
by IOCL, showing that Petitioner had completed work of the value required
as eligibility condition. It was observed that it was obvious that intention of
the Petitioner was to acquire eligibility to participate in the bidding process
based on the contract with IOCL, conveniently ignoring the requirement of
providing documents of experience of working with Atlas Comnet, basis
which Petitioner had initially claimed to be eligible for participating in the
bidding process. Significantly, Court also held that notwithstanding the
provisions of the terms of the contract, GAIL would have the authority to
take a decision not to enter into business with the contractor, if it is found
that contractor had indulged in fraudulent practices as this is an inherent
right available with any authority. Reference was made in this context to the
judgement in Patel Engineering Limited v. Union of India and Another,
(2012) 11 SCC 257. On the aspect of principle of natural justice, Court

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noted that Petitioner was put to notice before taking the action of
blacklisting.

47. From the conspectus of the aforesaid judgments, it is luminously clear
that an employer or a master cannot distance himself from the acts or
omissions of the employee/servant where the acts or omissions are in the
course of employment and authorized by the employer/master, even if the
acts or omissions are through wrongful and unauthorized modes so long as
they have a direct nexus with the employment. In the instant case, it is an
admitted case of the Petitioner that Sh. Puspendra Singh was duly authorized
to take necessary steps towards the bidding process and therefore his act of
submitting the bid documents, including the forged Turnover Certificate was
an act in the course of employment. In fact, Petitioner has itself placed on
record job description of Sh. Puspendra Singh, which shows his role and
responsibilities and inter alia includes revenue generation by selling IT
infrastructure services and solution in Government sectors etc.; participating
in Government procurement projects through tenders; liasoning;
coordinating and negotiating prices with OEMs; preparing quotations as per
customer requirement; coordinating with all teams to process bid/tender
related activities etc. Therefore, once the bidding process was carried out by
an employee, authorized by the Petitioner to do that act, Petitioner cannot
distance itself and contend that it be absolved of the liability. It bears
repetition to state that a master is liable even for acts he has not authorized,
provided they are connected with the employment or the acts which were
authorized and the only exception that can be carved out is where the
employee does an act which is not even remotely connected with his scope
of employment and is his independent act, which is not the case here.

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48. A significant aspect of this case, which weighs heavily against the
Petitioner is that there is no dispute that the Turnover Certificate was forged.
It is equally undisputed that the Certificate was uploaded by employees of
the Petitioner, duly authorized to process and submit the tender documents.
It is crucial to note that Respondent No. 2/the OEM has not only taken a
categorical stand before NDMC and on an affidavit before this Court that its
officials had vide e-mail dated 23.06.2022 provided the product link for the
electronic tablets, the goods that were to be supplied under the tender in
question after it was decided that Respondent No. 2 being the OEM would
supply the electronic tablets and along with the product link, it had sent
several documents to the Petitioner including Authorization Letter dated
21.06.2022, a BIS Renewal Certificate, an Udyam Registration Certificate as
also the Turnover Certificate dated 24.03.2022, among other documents. It
is also stated in the affidavit that the Turnover Certificate as shared by
Respondent No. 2 reflected a turnover of Rs.28,20,10,671/- of Respondent
No. 2 for Financial Year 2020-21. E-mail with its attachment containing
the Turnover Certificate, which indeed reflects the turnover as
Rs.28,20,10,671/-, has been filed by Respondent No.2 and importantly, this
document has been concealed by the Petitioner. It is an uncontroverted
position that Respondent No. 2’s financial status and certifications were
regularly updated on the GeM Portal and/or that Respondent No. 2 was able
to establish in the personal hearing that the Turnover Certificate it had
shared with the Petitioner before uploading, reflected the actual and correct
turnover. This completely explains the position of NDMC in not taking any
action against Respondent No. 2, which is one of the contention and
grievance of the Petitioner albeit the role of its representative is under

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examination in the pending criminal case and hence no observation is made
here. Be that as it may, the responsibility to submit and upload the bid was
of the Petitioner and therefore, due caution ought to have been taken at the
senior level to ensure that the bid is submitted with true and correct
information and supporting documents and therefore, the fact that NDMC
has not taken any action against Respondent No. 2 is inconsequential.

49. The main stake of the argument of the Petitioner with respect to the
forgery of the Turnover Certificate is that the Management of the Petitioner
was completely unaware of the forgery by its employees. As noted above,
Petitioner cannot claim immunity for the acts of its employees done in the
course of their employment. Even otherwise, the onus of submitting
factually correct information and documents was on the Petitioner. The
tender in question was a high value bid and it is unbelievable that the
Management of the Petitioner had completely distanced itself from the
process of preparing the documents etc. for submission of the bid and
assuming that it did, it was at its own peril and NDMC cannot be faulted for
taking action once it was clear that a forged bid document had been
submitted. Also it cannot be glossed over that with a turnover of
Rs.28,20,10,671/-, Petitioner was ineligible to bid and therefore, the ultimate
beneficiary of the award of contract must accept responsibility for the
forgery to achieve the eligibility condition. The argument that NDMC has
nothing to lose since ultimately the tender was not accorded is irrelevant
since the sanctity of a tender process is required to be maintained and
therefore, a party which indulges in wrongdoings at the stage of bidding
cannot be heard to say that no penalty should be imposed. Assuming a
situation where no complaint was received highlighting the forgery in the

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Turnover Certificate, the contract may have been awarded to the Petitioner
basis a forged bid document which was against public interest.

50. Relying heavily on the judgement of the Supreme Court in Kulja
Industries (supra), it was urged that before taking a decision to
debar/blacklist an entity, the Competent Authority must take into account:

whether contractor has accepted responsibility for the wrongdoing and
recognized the seriousness of the misconduct; whether the contractor has co-
operated fully with the Government agencies during investigation and any
Court or administrative action; the positions held by the individuals involved
in the wrongdoings; whether contractor fully investigated the circumstances
surrounding the cause for debarment and if so, made the result of
investigation available to the debarring official; and whether contractor has
taken appropriate corrective action or remedial measures such as
establishing ethics training and implementing programs to prevent
recurrence, but in the instant case, NDMC has not considered Petitioner’s
track record as also the disciplinary and criminal action taken by the
Petitioner against the delinquent employees.

51. Coming to the aspect of in-house inquiry, Respondents are right that
the inquiry began at 04:00 PM on 15.09.2022 and ended the same day.
Inquiry Officer examined four persons i.e. Sh. Gopal Singh Bisht, Business
Manager, Sh. Rakesh Choudhary, General Manager (HR), Sh. Puspendra
Singh, Business Manager and Sh. Sunil Kumar Srivastava, Business
Engagement Executive. All the four persons were employees of the
Petitioner and admittedly neither Respondent No. 2 nor NDMC were
involved in the inquiry. Sh. Gopal Singh Bisht stated that the bid was
submitted by Sh. Sunil Kumar Srivastava and Sh. Puspendra Singh along

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with one Sh. Chandan Kumar who was Authorized Representative of
Respondent No. 2 and that at 08:15 PM, he received an OTP for submission
of the bid, which he shared after he received a call from Sh. Sunil Kumar
Srivastava and that he was not informed of any change in the bid documents.
Sh. Rakesh Choudhary stated that Sh. Puspendra Singh and Sh. Sunil Kumar
Srivastava had a clean verification report before joining and there was no
history of misconduct. His statement centered around the post-bid action of
issuing Show Cause Notices to Sh. Puspendra Singh and Sh. Sunil Kumar
Srivastava on 05.09.2022 and their replies, wherein the two admitted that
they had forged the Turnover Certificate by editing the figure of
Rs.28,20,10,671/- to read as Rs.128,20,10,671/-. Basis these confessional
statements, the Inquiry Officer rendered a finding that Sh. Sunil Kumar
Srivastava changed the Turnover Certificate on instructions of Sh.
Puspendra Singh and Sh. Chandan Kumar to meet the targets for
gratification and recommended the Management of the Petitioner to initiate
appropriate disciplinary proceedings.

52. Respondents are right in their submission that this is a self-serving
internal inquiry of the Petitioner, without involving NDMC or the OEM,
whose Turnover Certificate was in question and which entity was finally
blamed by the Inquiry Officer. In any event, whether the employees of the
Petitioner gave confessional statements under any threat or inducement will
come forth once the criminal case registered by Petitioner against its
employees concludes. In a writ petition, it is beyond the remit of this Court
to enter into the issues whether the statements of the employees of the
Petitioner were out of their free volition or under threat or coercion and/or
whether other officials of the Petitioner were involved. In any event,

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management of the Petitioner cannot absolve itself even if the confessional
statements were voluntarily made by applying the principle of vicarious
liability and thus, the holding of the in-house inquiry and/or its report
cannot rescue the Petitioner insofar as NDMC is concerned. As the
impugned decision indicates the same is predicated on the seriousness and
gravity of forging of bid document and principle of vicarious liability.

53. As far as criminal action is concerned, Respondents have brought
forth that the first complaint was filed with the Kalkaji Police Station after a
lapse of one year i.e. on 23.12.2023, despite the fact that Petitioner was fully
aware of the forgery from September, 2022. The second complaint was filed
after show cause notice was issued to the Petitioner on 26.04.2024 and this
was despite the fact that Petitioner knew that no FIR had been lodged on the
earlier complaint. The timing of the second complaint was one day before
filing reply to the said show cause notice. For the sake of completeness, it is
also relevant to note the order of the Judicial Magistrate, Patiala House
Court, passed on 03.12.2024 while disposing of the application filed by the
Petitioner under Section 156(3) Cr.P.C. seeking registration of the FIR
against the employees. The application was dismissed by applying the
principles and guidelines laid down by this Court in Alok Kumar v. Harsh
Mander and Another, 2023 SCC OnLine Del 4213, however, the Trial
Court granted an opportunity to the Petitioner to pursue its complaint under
Section 200 Cr.P.C. and took cognizance of the complaint to this extent and
matter was fixed for pre-summoning evidence of the Petitioner. It was
observed by the Court in the said order that much credibility cannot be
attached to an in-house inquiry report, which was aimed at a disciplinary
action against the employees as also that the employees had nothing to gain

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out of the transaction and the only beneficiaries would have been the two
companies involved in the agreement to bid. It was observed that the
employees had no reason to upload a fabricated Turnover Certificate for
procuring the tender without instructions of the seniors. While the Court is
conscious of the fact that these are observations of a Criminal Court but the
only purpose to highlight them is to emphasize on two crucial aspects viz.
employees had no individual benefit in forging the Turnover Certificate and
the ultimate beneficiary if the contract was awarded was the company, a
view which this Court also holds. The in-house inquiry or the criminal
action initiated by the Petitioner is well taken, however, this does not render
the decision of blacklisting illegal or arbitrary. Submission of admittedly
forged documents with a bid is a good enough reason for NDMC to take the
action it did in public interest and to maintain sanctity of the tender process.

54. NDMC has also rightly placed reliance on General Financial Rules,
2017 published by Department of Expenditure, Ministry of Finance,
Government of India which provides for debarment of bidders who breach
the Code of Integrity. Rules 151 and 175(1) of GFR are as follows:-

“Rule 151 Debarment from bidding.

(i) A bidder shall be debarred if he has been convicted of an offence–

(a) under the Prevention of Corruption Act, 1988; or

(b) the Indian Penal Code or any other law for the time being in force,
for causing any loss of life or property or causing a threat to public
health as part of execution of a public procurement contract.

(ii) A bidder debarred under sub-section (i) or any successor of the bidder
shall not be eligible to participate in a procurement process of any
procuring entity for a period not exceeding three years commencing from
the date of debarment. Department of Expenditure (DoE) will maintain
such list which will also be displayed on the Central Public Procurement
Portal.

(iii) A procuring entity may debar a bidder or any of its successors, from
participating in any procurement process undertaken by it, for a period

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not exceeding two years, if it determines that the bidder has breached the
code of integrity. The Ministry/Department will maintain such list which
will also be displayed on their website.

(iv) The bidder shall not be debarred unless such bidder has been given a
reasonable opportunity to represent against such debarment
xxx xxx xxx
Rule 175 (1) Code of Integrity
No official of a procuring entity or a bidder shall act in contravention of
the codes which includes

(i) prohibition of

(a) making offer, solicitation or acceptance of bribe, reward or gift or
any material benefit, either directly or indirectly, in exchange for an
unfair advantage in the procurement process or to otherwise influence
the procurement process.

(b) any omission, or misrepresentation that may mislead or attempt to
mislead so that financial or other benefit may be obtained or an
obligation avoided.

(c) any collusion, bid rigging or anticompetitive behavior that may
impair the transparency, fairness and the progress of the procurement
process.

(d) improper use of information provided by the procuring entity to
the bidder with an intent to gain unfair advantage in the procurement
process or for personal gain.

(e) any financial or business transactions between the bidder and any
official of the procuring entity related to tender or execution process
of contract; which can affect the decision of the procuring entity
directly or indirectly.

(f) any coercion or any threat to impair or harm, directly or indirectly,
any party or its property to influence the procurement process.

(g) obstruction of any investigation or auditing of a procurement
process.

(h) making false declaration or providing false information for
participation in a tender process or to secure a contract;

(ii) disclosure of conflict of interest.

(iii) Disclosure by the bidder of any previous transgressions made in
respect of the provisions of subclause (i) with any entity in any country
during the last three years or of being debarred by any other procuring
entity.”

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55. It can be seen from the Rules that a procuring entity has the right and
prerogative to debar a bidder from participating in a procurement process for
a period not exceeding two years, if it determines that bidder has breached
the Code of Integrity. Clause (h) of Rule 175(1)(i) provides that making a
false declaration or providing false information to secure a contract would
amount to breach of Code of Integrity. Even from this angle, NDMC was
well within its rights to take the impugned action in the circumstances it did.
The pre-integrity pact between the parties clearly stipulated that any breach
of the provisions by the bidder or anyone employed by it shall entitle
NDMC to take all or any of the actions including debarring the bidder from
participation in future bidding process for a period of five years, extendable
further. Moreover, general terms and conditions on GeM, on which the
parties acted, stipulated that these conditions shall act as valid agreement
between seller/service provider and permit administrative action such as
suspension/debarment/removal from GeM, if a seller furnishes inaccurate,
false, misleading or forged information/documents to the buyer including
during the bidding process, as flagged by NDMC.

56. Insofar as the judgment of the Supreme Court in Kulja Industries
(supra) is concerned, the Supreme Court no doubt lays emphasis on the
guidelines formulated by the Government in USA for protecting public
interest from contractors and recipients who are non-responsible, lack
business integrity and engage in dishonest or illegal conduct etc. as is
evident from reading of the judgment. Relevant paragraphs from the
judgment are as follows:-

“22. The guidelines also stipulate the factors that may influence the
debarring official’s decision which include the following:

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(a) The actual or potential harm or impact that results or may result
from the wrongdoing.

(b) The frequency of incidents and/or duration of the wrongdoing.

(c) Whether there is a pattern or prior history of wrongdoing.

(d) Whether the contractor has been excluded or disqualified by an
agency of the Federal Government or has not been allowed to
participate in State or local contracts or assistance agreements on the
basis of conduct similar to one or more of the causes for debarment
specified in this part.

(e) Whether and to what extent did the contractor plan, initiate or
carry out the wrongdoing.

(f) Whether the contractor has accepted responsibility for the
wrongdoing and recognized the seriousness of the misconduct.

(g) Whether the contractor has paid or agreed to pay all criminal,
civil and administrative liabilities for the improper activity, including
any investigative or administrative costs incurred by the Government,
and has made or agreed to make full restitution.

(h) Whether the contractor has cooperated fully with the government
agencies during the investigation and any court or administrative
action.

(i) Whether the wrongdoing was pervasive within the contractor’s
organization.

(j) The kind of positions held by the individuals involved in the
wrongdoing.

(k) Whether the contractor has taken appropriate corrective action or
remedial measures, such as establishing ethics training and
implementing programs to prevent recurrence.

(l) Whether the contractor fully investigated the circumstances
surrounding the cause for debarment and, if so, made the result of the
investigation available to the debarring official.”

23 As regards the period for which the order of debarment will remain
effective, the guidelines state that the same would depend upon the
seriousness of the case leading to such debarment.

24 Similarly in England, Wales and Northern Ireland, there are statutory
provisions that make operators ineligible on several grounds including
fraud, fraudulent trading or conspiracy to defraud, bribery, etc.
25 Suffice it to say that “debarment” is recognised and often used as an
effective method for disciplining deviant suppliers/contractors who may
have committed acts of omission and commission or frauds including

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misrepresentations, falsification of records and other breaches of the
regulations under which such contracts were allotted. What is notable is
that the “debarment” is never permanent and the period of debarment
would invariably depend upon the nature of the offence committed by the
erring contractor.”

57. In my view, it is not open for the Petitioner to contend that the
Competent Authority of NDMC has not taken into consideration the factors
enumerated in the guidelines in the aforementioned judgment. Petitioner had
made a detailed representation dated 23.05.2024 to NDMC in which all
issues as canvassed before this Court, were detailed. Petitioner pointed out
that the forgery of the Turnover Certificate was unknown to the Petitioner
and without its knowledge and consent. It was brought forth that show cause
notices were issued to the employees engaged in submission of the bid
documents and it was resolved by the Board to conduct an inquiry by
appointing an independent Inquiry Officer. Statements made by the two
employees were also brought to notice of NDMC along with the report of
the Inquiry Officer and the fact of subsequent termination of two delinquent
employees. Criminal action initiated against the employees was also brought
forth in the representation. The past history of working with Government
organizations, PSUs etc. was also highlighted along with the impeccable
track record and proven integrity of the Petitioner. Impugned order dated
07.06.2024 reflects that the representation was taken into consideration by
the Competent Authority before taking a decision in the matter along with
mitigating factors. However, having considered the issues raised by the
Petitioner, NDMC was of the view that blacklisting for two years was the
appropriate action. The order is a reasoned order holding that Petitioner
cannot claim innocence by placing the onus of forging bid documents on its
employees who indulged in forgery during the course of official discharge of

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their duties and the beneficiary was the Petitioner as a whole. It was rightly
observed that being a high value bid, Petitioner ought to have been more
cautious in submission of facts and documents apart from the fact that when
the documents were uploaded by the Petitioner’s employees, the onus was
on the Petitioner to submit factually correct information and documents after
due verification. What weighed with the Competent Authority was also the
fact that Petitioner admitted forgery in the document and never claimed that
it was a mistake or error. Thus it cannot be urged that the Competent
Authority had not applied its mind to the points raised or the mitigating
factors.

58. It is true that blacklisting is a serious action and amounts to civil death
of a business entity. It is equally settled that before taking a decision for
blacklisting or debarring any entity, the Competent Authority must arrive at
an objective satisfaction taking into account relevant consideration and
eschewing irrelevant ones. [Ref.: M/s Erusian Equipment & Chemicals
Ltd. v. State of West Bengal and Another, (1975) 1 SCC 70]. It has been
repeatedly affirmed by the Supreme Court that before taking action of
blacklisting/debarment, principles of natural justice must be followed by
issuing a show cause notice and giving an opportunity of hearing to the
entity against whom action is sought to be taken to ascertain if there is any
rationale behind the alleged misconduct. [Ref.: Joseph Vilangandan v. The
Executive Engineer, (PWD), Ernakulam and Others, (1978) 3 SCC 36,
Raghunath Thakur v. State of Bihar and Others, (1989) 1 SCC 229 and
Gorkha Security Services v. Government (NCT of Delhi) and Others,
(2014) 9 SCC 105]. Indisputably, in the present case, these parameters are
duly met inasmuch as show cause notice was issued and Petitioner was

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given opportunity of presenting its case.

59. In State of Odisha and Others v. Panda Infraproject Limited, (2022)
4 SCC 393, the Supreme Court held that debarment is an effective method
for disciplining deviant suppliers/contractors who may have committed acts
of omission and commission and negated the plea that even if the alleged
action was the first offence committed by the contractor, it was of no avail
where the allegations were serious. Relevant paragraphs are as follows:-

“24. As per the law laid down by this Court in a catena of decisions
“debarment” is recognised and often used as an effective method for
disciplining deviant suppliers/contractors who may have committed acts of
omission and commission. It is for the State or appropriate authority to
pass an order of blacklisting/debarment in the facts and circumstances of
the case. Therefore, the High Court has erred and has exceeded its
jurisdiction in exercise of powers under Article 226 of the Constitution of
India by quashing and setting aside the blacklisting order, that too,
without adverting to the serious allegations and the act of omission and
commission on the part of the contractor which led to a serious incident of
collapse of ten metre slab while concrete work of the deck was going on
and due to which one person died and eleven others were injured. It was
specifically found that the safety arrangements were lacking severely in
the construction work zone. It was also found that quality assurance was
not emphasised as stipulated in the codes and manuals and as per the
agreement. Therefore, the High Court ought to have considered the
seriousness of the incident in which due to omission and commission on
the part of the contractor in constructing the flyover one person died and
eleven others were injured.

25. The next question which is posed for consideration of this Court is,
whether, in the facts and circumstances of the case the contractor was
required to be debarred/blacklisted permanently?

26. In Kulja Industries [Kulja Industries Ltd. v. Western Telecom Project
BSNL, (2014) 14 SCC 731] , this Court has observed that “debarment” is
never permanent and the period of debarment would invariably depend
upon the nature of the offence committed by the erring contractor. In the
said decision this Court emphasised on prescribing guidelines by
determining the period for which the blacklisting should be effective. It is
observed and held by this Court that while determining the period for
which the blacklisting should be effective, for the sake of objectivity and
transparency it is required to formulate broad guidelines to be followed. It
is further observed that different periods of debarment depending upon the

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gravity of the offences, violations and breaches may be prescribed by such
guidelines.

xxx xxx xxx

28. Duration of blacklisting cannot be solely per offence. Seriousness of
the lapse and the incident and/or gravity of commission and omission on
the part of the contractor which led to the incident should be the relevant
considerations. In a given case, it may happen that the commission and
omission is very grave and because of the serious lapse and/or negligence,
a major incident would have taken place. In such a case, it may be the
contractor’s first offence, in such a case, the period/duration of the
blacklisting/banning can be more than three years. However, as the said
guidelines are not under challenge, we rest the matter there and leave it to
the State Government to suitably amend and/or modify the said office
memorandum. However, what we have observed above can be a guide
while determining the period of debarment/blacklisting.

29. In the instant case, it might be true that the offence was the first
offence committed by the contractor. However, considering the seriousness
of the matter that due to the omission and commission on the part of the
contractor a serious incident had occurred as there was a collapse of a ten
metre slab while constructing a flyover in which one person died and
eleven others injured, as such the contractor does not deserve any
leniency. However, to debar him permanently can be said to be too harsh
a punishment. But considering the subsequent OM dated 26-11-2021
reproduced hereinabove (to which as such we do not agree as observed
hereinabove), we are of the opinion that if the blacklisting is restricted to
five years, it may be in the fitness of things.”

60. In W.B. State Electricity Board v. Patel Engineering Co. Ltd. and
Others, (2001) 2 SCC 451, the Supreme Court emphasized on the degree of
care that should be taken in a bidding process and that it was essential to
maintain the sanctity and integrity of the tender process as also award of a
contract. One of the decisions of the Supreme Court where the blacklisting
was found to be justified also needs a mention. In Patel Engineering
Limited (supra), Petitioner had chosen to go back on its offer of paying a
premium of Rs.190.53 crores per annum after realising that the next bidder
quoted a much lower amount. The Supreme Court held that whether the
decision of the Petitioner was bona fide or mala fide required a further probe

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but the dereliction in which the Petitioner had indulged if not handled
firmly, was likely to result in recurrence of such activity not only on part of
the Petitioner but also others who deal with public bodies. The Supreme
Court also observed that there was no illegality or irrationality in the
conclusion of the Respondent that Petitioner was not commercially reliable
and trustworthy in the light of its conduct. In fact, in Kulja Industries
(supra), the party was blacklisted on account of a fraudulent withdrawal of
huge amount of money which was not due to it, in collusion and conspiracy
with officials of the Respondent Corporation and the Supreme Court in fact
upheld the decision to blacklist the Petitioner but only directed
reconsideration of the period of blacklisting.

61. The facts of this case come close to the decision of this Court in CE
Info Systems Pvt. Ltd. (supra), facts of which have been brought out in
detail in earlier part of the judgment. At the cost of repetition, in the said
case, the Court was examining an order passed by GAIL debarring the
Petitioner from participating in the bidding process for three years basis an
allegation that Petitioner had submitted a forged certificate indicating that it
had completed certain works for IOCL for a certain value indicated therein.
Petitioner did not dispute that the certificate was forged but contended that
the same was furnished by its employee, who was not authorized to do so
and therefore, there was no warrant for a punitive measure. Petitioner
contended inter alia that the forged certificate was not issued by the
authorized officer. GAIL, on the other hand, disputed that the forged
certificate was not issued by the authorized officer and sought to establish
his authorization. It was also contended that Petitioner did not qualify the
eligibility criteria but for the forged completion certificate.

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62. After looking into the rival contentions of the parties, the Court came
to a conclusion that it was wholly unpersuasive that the document which
was admittedly forged was not submitted by an authorized person and held
that the fact that Petitioner had submitted a forged document was sufficient
for GAIL to take a decision not to deal with the Petitioner and that it could
not be accepted that submission of the forged document was of no
consequence. The question whether Petitioner derived any benefit from the
forgery was relevant only to determine the quantum of punishment and in
this context, Court referred to and relied on the judgment in Kulja Industries
(supra).

63. Delving into the facts of the case, the Court observed that in the
forged completion certificate, Petitioner indicated having completed work at
a value of over Rs.39 lacs with an intent to claim eligibility to participate in
the bidding process. It was held that the Executive Authority has the
discretion to decline entering into any contract with the person if the
authority is of the opinion that it is undesirable to enter into a contractual
relationship subject to the limitation that the decision is not arbitrary and
unreasonable. GAIL had issued a show cause notice to the Petitioner and
gave full opportunity to meet the allegations. In the context of the argument
of the petitioner that in case GAIL found document to be forged, the only
recourse available with GAIL was to reject the bids and forfeit the earnest
money, the Court held that notwithstanding the provisions of the contract,
GAIL would always have authority to take a decision not to enter into
business with a contractor if it found that the contractor had indulged in
fraudulent practices. This was held to be an inherent right available with any
authority and there was no requirement to specify this in the contract. In the

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instant case also, principles of natural justice were complied with by NDMC
and in light of the fact that admittedly a forged Turnover Certificate was
submitted during the bidding process on behalf of the Petitioner, in my view,
NDMC was well within its right to take the impugned decision, which
cannot be termed as arbitrary or unreasonable.

64. Learned Senior Counsel for the Petitioner laboured hard to emphasise
on the credentials of the Petitioner by referring to its impeccable track
record and proven integrity, substantiated by its contracts with various
Government as also Public Sector Undertakings, including Ministry of
Petroleum and Natural Gas, Ministry of Defence, National Informatics
Centre, Ministry of Power, NTPC, Airport Authority of India, Power Grid
Corporation of India, IIT, Mumbai, BHEL etc., with a view to urge that
these mitigating factors, when seen cumulatively do not justify blacklisting.
NDMC has refuted this argument on the ground that it has no knowledge of
the contracts executed by the Petitioner with other entities and is only
concerned with the manner in which the bid was submitted by the Petitioner
with NDMC. No doubt, past history and impeccable track record are
mitigating factors to be taken into consideration while taking a decision on
blacklisting or the period thereof. Even taking these factors into account, I
am unable to agree with the Petitioner that in light of the serious act of
forgery of a crucial bid document, which is an admitted position, the
decision to debar/blacklist by NDMC was uncalled for. In Chairman, All
India Railway Recruitment Board (supra), the Supreme Court summarised
the law on proportionality as follows:-

“36. Wednesbury [Associated Provincial Picture Houses Ltd. v.
Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] applies
to a decision which is so reprehensible in its defiance of logic or of

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accepted moral or ethical standards that no sensible person who had
applied his mind to the issue to be decided could have arrived at it.
Proportionality as a legal test is capable of being more precise and
fastidious than a reasonableness test as well as requiring a more intrusive
review of a decision made by a public authority which requires the courts
to “assess the balance or equation” struck by the decision-maker.
Proportionality test in some jurisdictions is also described as the “least
injurious means” or “minimal impairment” test so as to safeguard the
fundamental rights of citizens and to ensure a fair balance between
individual rights and public interest. Suffice it to say that there has been
an overlapping of all these tests in its content and structure, it is difficult
to compartmentalise or lay down a straitjacket formula and to say
that Wednesbury [Associated Provincial Picture Houses Ltd. v.
Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] has met
with its death knell is too tall a statement. Let us, however, recognise the
fact that the current trend seems to favour proportionality test
but Wednesbury [Associated Provincial Picture Houses Ltd. v.
Wednesbury Corpn., (1948) 1 KB 223 : (1947) 2 All ER 680 (CA)] has not
met with its judicial burial and a State burial, with full honours is surely
not to happen in the near future.

37. Proportionality requires the court to judge whether action taken was
really needed as well as whether it was within the range of courses of
action which could reasonably be followed. Proportionality is more
concerned with the aims and intention of the decision-maker and whether
the decision-maker has achieved more or less the correct balance or
equilibrium. The court entrusted with the task of judicial review has to
examine whether decision taken by the authority is proportionate i.e. well
balanced and harmonious, to this extent the court may indulge in a merit
review and if the court finds that the decision is proportionate, it seldom
interferes with the decision taken and if it finds that the decision is
disproportionate i.e. if the court feels that it is not well balanced or
harmonious and does not stand to reason it may tend to interfere.

xxx xxx xxx

39. The courts have to develop an indefeasible and principled approach
to proportionality, till that is done there will always be an overlapping
between the traditional grounds of review and the principle of
proportionality and the cases would continue to be decided in the same
manner whichever principle is adopted. Proportionality as the word
indicates has reference to variables or comparison, it enables the court to
apply the principle with various degrees of intensity and offers a
potentially deeper inquiry into the reasons, projected by the decision-
maker.”

65. Applying the aforesaid principles, it cannot be said that the decision

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blacklisting the Petitioner for two years is so reprehensible in its defiance of
logic or of accepted moral or ethical standards that no sensible person after
application of mind would have arrived at. The decision was certainly within
the range of the course of action which anyone in the given facts and
circumstances would have taken. It cannot be glossed over that sanctity of
tenders has to be maintained and applying any objective criteria of counter
balancing the gravity of the offence with mitigating circumstances, I am
unable to conclude that even the period of debarment is unreasonable.

66. The judgments relied upon by the Petitioner, in my view, do not aid
the Petitioner. As noted above, in Kulja Industries (supra), the Supreme
Court referred to the guidelines issued by the Government in USA which
need to be taken into consideration by the Authority taking a decision to
blacklist/debar an entity as also to determine the period thereof. All factors
that Petitioner pleads in the present petition were placed before the
Competent Authority and taken into consideration. Looking at the gravity of
the act of forgery by the employees of the Petitioner and its vicarious
liability for the acts of its employees committed in discharge of duty, a
decision was taken to blacklist the Petitioner. The judgement has been
followed by NDMC in letter and spirit.

67. The decision of the Supreme Court in Blue Dreamz (supra) is of no
avail to the Petitioner. In the said case, the Supreme Court held that where
the case is of an ordinary breach of contract and explanation offered by the
person concerned raises a bona fide dispute, blacklisting/debarment as a
penalty ought not to be resorted to, as by debarment a person/entity is
commercially ostracized resulting in serious consequences and therefore
debarment should not be too readily invoked for ordinary cases of breach of

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contract. In the said case, the disputes between the parties related to
fulfilment of reciprocal obligations in the bid document. While Appellant
claimed that Respondent did not issue work orders, format of bank
guarantee, refused No Objection Certificate for obtaining electricity
connection etc. Respondent claimed that bank guarantee was not a mode of
payment and in the joint inspection it was found that work was not
completed on all allotted locations. In this backdrop, the Supreme Court
concluded that these reasons fell far short of rendering the conduct of the
Appellant abhorrent as to justify invocation of drastic remedy of
blacklisting. In fact, in this judgment itself, the Supreme Court noted that in
Kulja Industries (supra), the blacklisted party had allegedly fraudulently
withdrawn a huge amount of money in collusion and conspiracy with
officials of corporation and in Patel Engineering Limited (supra), the
concerned party had gone back on its offer after realizing that the next
bidder had quoted a lower amount and these two cases bring out the contrast
between the cases of that ilk and others like the case in Blue Dreamz
(supra).

68. Coastal Marine (supra) was again a case which related to breach of
terms of contract where the Respondent alleged that Petitioner had failed to
mobilize the marine spread as required under the contract. The Court
observed that although there were allegations that Petitioner had not
submitted the charter party as required and without going into the
controversy of whether Petitioner could submit a charter party or an MoU, it
could not be ignored that the vessels were present at the required port for
performance of the work in question and therefore, non-submission of the
document did not warrant action of blacklisting. It was observed that this

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was not a case where Petitioner’s conduct was so wanton and reprehensible
so as to effectively disqualify the Petitioner from conducting its business for
three years. On the issue of proportionality, referring to the judgment in
Kulja Industries (supra), the Court set aside the order of blacklisting on the
ground that the impugned action was taken purely due to non-performance
of contractual obligations. Court also observed that in the given facts it was
apparent that a bona fide dispute was raised by the Petitioner with respect to
its obligations and there was no material to indicate that IOCL had found
Petitioner’s conduct so reprehensible that it was undesirable to deal further
with the Petitioner.

69. In Hyundai Rotem Company (supra), Petitioner had challenged an
order of DMRC blacklisting the Petitioner for five years on the ground that
it had secured the contract on the basis of false declaration in its offer and
was guilty of fraudulent practice. Referring to Clause (h) of Rule 175(1)(i)
and Rule 151(iii) of GFR, where debarment action can be taken for a period
not exceeding two years and the conduct of the Petitioner, the Court did not
interfere with the decision of blacklisting per se, however, taking into
account the mitigating factors that Petitioner had conducted an inquiry and
taken disciplinary action against its employees responsible for the
submission of the bids as also the fact that there were several divisions of
the Petitioner being a large organization with some amount of autonomy in
conducting its business etc., the Court was of the view that period of
debarment was disproportionate. It is also noticed in the judgment that
during the course of arguments Court had suggested the period of debarment
be reduced to 3 years but considering that this was the remit of the
Respondent, the petition was disposed of with a direction to DMRC to

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reconsider the period of blacklisting in light of the observations made and
principles in Kulja Industries (supra).

70. Reliance on the judgment of the Guwahati High Court in Satya
Builders (supra) is also misplaced. Reading of the judgment shows that the
said case pertained to submission of false credential documents with the bid
for which the Respondent terminated the letter of award and forfeited the
earnest money, bank guarantee and performance bank guarantee to the tune
of Rs.3,08,93,889.65 along with imposing penalty of debarring/blacklisting
for five years. The Guwahati High Court did not interfere in forfeiture of the
amount but held that penalty of blacklisting was harsh and set aside the same
but without any reasoning. This judgment, with due respect, does not
persuade this Court as there is no reasoning as to why blacklisting order was
interfered with besides the fact that the Court did not think it fit to interfere
with forfeiture of a huge amount in light of the serious and grave conduct of
the Petitioner in furnishing false credential documents with the bid.

71. For the aforesaid reasons, the impugned order warrants no
interference by this Court in exercise of its writ jurisdiction and the present
petition is dismissed along with pending application.

72. It is, however, made clear that nothing stated in this judgment will
have any bearing in the pending criminal case referred to above and the
same shall be decided on its own merit.

JYOTI SINGH, J
AUGUST 08 , 2025/shivam/S. Sharma

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Signing Date:10.08.2025
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Author: Jyoti Singh

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