Delhi High Court
Srsc Infra Pvt. Ltd vs Union Of India on 14 August, 2025
Author: Sachin Datta
Bench: Sachin Datta
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment pronounced on: 14.08.2025
+ W.P.(C) 6734/2023 and CM APPLs.26340/2023, 41118/2024
SRSC INFRA PVT. LTD. .....Petitioner
Through: Ms. Ruchi Kohli (Sr. Adv.) along
with Mr. Yash Mishra, Ms. Shrishti
Mishra, Mr. Satya Dev Prakash, Mr.
Harsh Vardhan and Mr. Siddhanth,
Advocates.
versus
UNION OF INDIA .....Respondent
Through: Dr. B. Ramaswamy (CGSC) for UOI.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
1. The present petition has been filed by the petitioner being aggrieved
with a communication dated 10.04.2023, whereby the Letter of Award
(LOA) dated 14.02.2023, issued to the petitioner by the respondent has been
revoked / withdrawn.
2. The aforesaid LOA was issued in the backdrop of a Request for
Proposal (RFP) issued by the Ministry of Road Transport and Highways
(MoRTH) on 06.12.2021, for the project titled “Widening and Strengthening
from KM. 0.000 to KM. 38.853 of NH-330D (Sitapur to Kurain Section) to
two lanes with paved shoulder configuration under EPC mode”.
3. The technical bids were opened on 24.03.2022, and upon evaluation
of the technically qualified bidder, the financial bids were opened on
03.06.2022. Pursuant thereto, the petitioner was declared as the L-1 bidder.
Signature Not Verified
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
4. Subsequently on 04.10.2022, the respondent issued a Show Cause
Notice (SCN) to the petitioner, alleging violation of the Integrity Pact. The
petitioner submitted its reply on 10.10.2022, refuting the allegations.
Subsequently, the representatives of the petitioner attended a personal
hearing before the MoRTH on 07.12.2022 and made its submissions.
5. It transpires from the counter-affidavit filed on behalf of the
respondent that the matter thereafter remained pending for consideration as
to whether debarment action should be taken or not. Vide Note #181
(No.201537), the file was sent to the Additional Secretary (Highways) on
21.11.2022 for directions on the issue of LOA. The file was returned by the
Highway Section vide Note #200 on 27.01.2024 with comments: “The
debarment case/matter of M/s SRSC is under consideration in File No. NH-
24036/43/2022-H-Part(1) (e-215001). As soon as the decision is taken, the
same may be conveyed to Roads wing in this file.” Pursuant thereto, no
communication regarding debarment was received in the office of CE-RO
Lucknow. Therefore, LOA was issued by the answering respondent vide
letter no.CE-RO/LKO/NH(O)/14/NH-330D/2021-22 dated 14.02.2023.
6. It has been brought out by the respondent that thereafter, an e-mail
was received from the Highway Section on 17.03.2023 conveying the
Ministry’s OM No.NH-24036/43/2022-H dated 17.03.2023, whereby it was
conveyed that the petitioner has been debarred vide Ministry’s order dated
07.02.2023 for a period of three months from the date of issue of the said
order.
7. In view of the debarment letter, the respondent issued a letter (bearing
No.CE-RO/LKO/NH(O)/14/NH-330D/2021-22) dated 10.04.2023, in terms
of which the LOA in favour of the petitioner was withdrawn. The said
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
communication, inter-alia, reads as under:
“2. Whereas Ministry vide O.M. No. NH-24036/43/2022-H dated
17.03.2023 has conveyed that M/s SRSC Iinfra Pvt. Ltd. has been
debarred vide Ministry’s order dated 07.02.2023 for a period of 03
months from the date of issue of the order.
3. Whereas Department of Expenditure (DoE) vide O.M. No.
F20/56/2022-PPD dated 31.08.2022 has stated that bids from only
those firms shall be considered for placement of contract which are
neither debarred on the date of opening of tender nor debarred on
the date of contract, and that no contract should be placed on such
debarred firms.
4. Whereas, in view of the above Ministry’s O.M. No. NH-
24036/43/2022-H dated 17.03-2023 and DOE’s O.M No.
F.20/56/2022-PPD dated 31.08.2022 the LOA issued vide letter
no.CE-RO/LKO/NH(O)/14/NH-33OD-2021-22 dated 14.02.2023 is
withdrawn and the award stands cancelled.”
8. In the above background, the present petition has been filed seeking
that the aforesaid communication dated 10.04.2023, as also the debarment
action against the petitioner, be quashed.
9. The petitioner has also sought that the respondent be restrained from
taking any consequential steps pursuant to the impugned communication
dated 10.04.2023, including calling for fresh bids.
10. Learned senior counsel for the petitioner assails the debarment action
against the petitioner on the following grounds:-
(i) The debarment letter dated 07.02.2023 was never
communicated to the petitioner and came to light only when it
found mention in the counter affidavit filed by the respondent;
(ii) The said debarment letter is unreasoned and does not even take
note of, much less deal with, the submissions made by the
petitioner in response to the SCN served on the petitioner.
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
11. A perusal of the record of the case reveals that there is indeed merit in
the aforesaid contention of learned senior counsel for the petitioner.
12. In the counter-affidavit, filed on behalf of the respondent itself, it has
been brought out that the debarment letter dated 07.02.2023 was never
served on the petitioner.
13. The debarment action against the petitioner was taken pursuant to a
SCN dated 04.10.2022, issued by the respondent / MoRTH, which reads as
under:
” Dated: 04 October, 2022
To,
The Authorised Representative
M/s SRSC Infra Pvt.. Ltd.
HQ: AA-12, Chandanvan, Mathura, UP
Branch Office: H-36, Sector, Naida, UP
Subject: Show Cause Notice: Violation of the condition of Article 2 of
Integrity Pact of the contract agreement signed between MoRTH and
M/s SRSC Infra Pvt. Ltd.-reg.
Sir,
This is to bring to your kind attention that M/s SRSC Infra Pvt. Ltd. had
submitted its bid and signed the Integrity Pact (IP) on 21.03.2022 in
connection with NH works- widening and strengthening from km 0.000
to km 38.853 of NH-330D (Sitapur to Kurain section) to two lane with
paved shoulder configuration under EPC mode in the State of Uttar
Pradesh. The extract of Article-3 of IP states that “If the
bidder(s)/Contractor(s)/Concessionaire(s)/ Consultant(s) has
committed a transgression through a violation of Article-2 such as to
put his reliability or credibility into question, the Principal shall be
entitled to exclude including blacklist and put on holiday the
Bidder(s)/Contractor(s)/Concessionaire(s)/Consultant(s) for any future
tenders/contract award process.”
2. It is pertinent to mention that Article 2 of the IP provides for the
commitment of the Bidder/Contractor/Concessionaire and the relevant
part is reproduced herein:
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
“The Bidder(s)/Contractor(s)/Concessionaire(s)/ Consultant(s)
will not directly or through any other person or firm, offer,
promise or give to any of the Principal’s employees involved in
the tender process of the execution of the contract of to any third
person any material or other benefit which he/she is not legally
entitled to, in order to obtain in exchange any advantage of any
kind whatsoever during the tender or during the execution of the
contract.”
3. Recently, it has come to the notice of this Ministry that CBI has filed
RC No.2162022A0012 at CBI/AC-II, New Delhi on the ground that
employee of the M/s SRSC Infra Pvt. Ltd. has provided illegal
gratification to one Resident Engineer (RE) of M/s Voyants Solutions
Private Ltd. working in NHAI projects under his jurisdiction for
showing them favor in issuance of completion certificates, processing
of bills, smooth progression of the awarded works in relation to
projects awarded by NHAI to such private companies. The NH project
viz. two lane with paved shoulders of Sitarganj-Bareilly of NH-74 is
awarded by NHAI to the firm, M/s SRSC Infra Private Limited. The
said case has been registered against the RE of M/s Voyants Solutions
Private Ltd. as well as employee of M/s SRSC Infra Pvt. Ltd. under the
provision of Prevention of Corruption Act and India Penal Code.
4. Moreover, it is also important to highlight that Rule 151 (iii) of
General Financial Rules (GFR) 2017 provides that a procuring entity
may debar a bidder or any of its successor, from participating in any
procurement process undertaken by it, for a period not exceeding two
years, if it determines that the bidder has breached the code of
integrity.
5. In view of the above,you are being served with this Show Cause
Notice to explain that why this Ministry should not take action against
M/s SRSC Infra Pvt. Ltd. as per Article 3(2) of IP and GFR 2017.
6. Your reply in the matter should be received within 7 days of issuance
of this letter. In case, no response is received by the said time period, it
will be presumed that you do not have to say anything in the matter and
the Ministry will take decision on the basis of merits of available facts
in this regard.
7. This is without prejudice to any other rights and remedies that
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
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Ministry may have in the law and contract.
(Sushant Sudan)
Deputy Secretary to the Government of India
Email: [email protected]”
14. A detailed response to the said SCN was sent by the petitioner vide
communication dated 10.10.2022. It was inter-alia stated in the reply as
under:
“4. The contents of Para 4 of your SCN is denied and Rule 151 (iii) is
being reproduced below:
“Rule 151 Debarment from bidding.
{i) A bidder shall be de barred if he has been convicted of an offence-
(iii) under the Prevention of Corruption Act, 1988
or
(iv) 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 Commerce
(DGS&D) will maintain such list which will also be displayed on the
website of DGS&D as well as Central Public Procurement Portal.
(v) A procuring entity may debar a bidder or any of its successors, from
participating in any procurement process undertaken by it, for a period
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.
(vi) The bidder shall not be debarred unless such bidder has been given
a reasonable opportunity to represent against such debarment.”
The content of this para is denied in toto-toto. Admittedly no conviction
has occurred in respect of said FIR.
Rule 151 only applies post-conviction. Accordingly, your reference to
above rule is misplaced.
In view of the above, we strongly condemn the unfair view as regards
mere allegations in FIR No. RC2162022A0012 at CBI/ACI, New Delhi
which are still inder investigation and are yet to be established in the
Competent Court. Cognizance of the orders of various courts may
please be taken wherein the Hon’ble Courts have taken a view that it is
a settled position that the authorities cannot refuse or cancel the
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
contract or agreements or take punitive action merely on the ground of
registration of an FIR. We are enclosing following orders/judgements
with highlighting of the relevant portion for your kind perusal:
a) M/s Sovika Aviation Services Pvt. Ltd . Vs.
Union of lndia;
(Administration) Regional Passport Officer,
Kolkata & Ors.;
d) Minakshiben Laxmanbhai Paraliya Vs. State of Gujarat;
e) Rajkumar Vs. State of Himachal Pradesh; and
f) Yogesh Kumar Vs. Union of India“
15. As such, it was brought out that in terms of relevant provisions of
General Financial Rules, 2017 (GFR) it was untenable to take any
debarment action against the petitioner.
16. In the debarment order that eventually came to be issued on
07.02.2023 (filed as Annexure R-1/2A of the counter-affidavit filed on
behalf of the respondent / MoRTH), none of the submissions made by the
petitioner in response to the SCN has been taken note of. Only a cryptic
finding has been rendered to the effect that after careful examination of all
records and taking into account Rule 151 of GFR, 2017, it is noticed that the
petitioner has violated Article-2 of the Integrity Pact, entered into with
NHAI.
17. The vital issue raised by the petitioner viz. that the petitioner could
not be presumed to be guilty, and Rule 151 of GFR is attracted only post-
conviction, has not even been taken note of, much less dealt with in the
impugned order.
18. It is well settled that the debarment / backlisting order is required to
contain the relevant reasons for the same and also deal with any defence as
may be raised by the delinquent entity / person.
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
19. In Kulja Industries Limited v. Chief General Manager, Western
Telecom Project Bharat Sanchar Nigam Limited And Others, (2014) 14
SCC 731, the Supreme Court had observed as under –
20. It is also well settled that even though the right of the writ
petitioner is in the nature of a contractual right, the manner,
the method and the motive behind the decision of the authority
whether or not to enter into a contract is subject to judicial
review on the touchstone of fairness, relevance, natural
justice, non-discrimination, equality and proportionality. All
these considerations that go to determine whether the action is
sustainable in law have been sanctified by judicial
pronouncements of this Court and are of seminal importance
in a system that is committed to the rule of law. We do not
consider it necessary to burden this judgment by a copious
reference to the decisions on the subject. A reference to the
following passage from the decision of this Court in Mahabir
Auto Stores v. Indian Oil Corpn. [(1990) 3 SCC 752] should,
in our view, suffice: (SCC pp. 760-61, para 12)“12. It is well settled that every action of the State or an
instrumentality of the State in exercise of its executive
power, must be informed by reason. In appropriate cases,
actions uninformed by reason may be questioned as
arbitrary in proceedings under Article 226 or Article 32
of the Constitution. Reliance in this connection may be
placed on the observations of this Court in Radhakrishna
Agarwal v. State of Bihar [(1977) 3 SCC 457 : (1977) 3
SCR 249] . … In case any right conferred on the citizens
which is sought to be interfered, such action is subject to
Article 14 of the Constitution, and must be reasonable
and can be taken only upon lawful and relevant grounds
of public interest. Where there is arbitrariness in State
action of this type of entering or not entering into
contracts, Article 14 springs up and judicial review
strikes such an action down. Every action of the State
executive authority must be subject to rule of law and
must be informed by reason. So, whatever be the activitySignature Not Verified
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
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of the public authority, in such monopoly or semi-
monopoly dealings, it should meet the test of Article 14 of
the Constitution. If a governmental action even in the
matters of entering or not entering into contracts, fails to
satisfy the test of reasonableness, the same would be
unreasonable. … It appears to us that rule of reason and
rule against arbitrariness and discrimination, rules of
fair play and natural justice are part of the rule of law
applicable in situation or action by State instrumentality
in dealing with citizens in a situation like the present one.
Even though the rights of the citizens are in the nature of
contractual rights, the manner, the method and motive of
a decision of entering or not entering into a contract, are
subject to judicial review on the touchstone of relevance
and reasonableness, fair play, natural justice, equality
and non-discrimination in the type of the transactions and
nature of the dealing as in the present case.”
20. In Diwan Chand Goyal v. National Capital Region Transport
Corporation and Another, 2020 SCC OnLine Del 2916, this Court has
observed as under –
“45. Upon a reading of the aforesaid judgments cited on
behalf of both the parties, the general principles, which
emerge, with respect to blacklisting are;
(a) Principles of natural justice have to be complied with
before the order of blacklisting is passed;
(b) Natural justice or audi alteram partem does not always
require a hearing to be granted. Serving of show cause notice
and affording an opportunity to reply to the same, is
considered as being adequate opportunity and is sufficient
adherence to the principles of natural justice;
(c) Blacklisting constitutes civil death and has extremely grave
consequences. Thus, the same is amenable the judicial review
if the same is by governmental authorities;
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
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(d) Any order of blacklisting ought to contain proper reasons.
The reasons need not be detailed or elaborate. It is sufficient
to be brief, pithy and concise;
(e) Reasons should be supplied to the affected party;
(f) Decision taken ought not to be arbitrary or discriminatory.
(g) Blacklisting orders being amenable to judicial review can
be judged on the standard of proportionality. Thus, the period
of blacklisting as also terms and conditions thereof have to be
proportionate to the irregularities or conduct of the bidder.”
21. A perusal of the debarment order also reveals that the same was
issued by the concerned Deputy Secretary, Government of India and a copy
thereof was not marked to the petitioner. Instead, copy of the debarment
order was supplied as under:-
“Copy to:
1. Chairperson, NHAI with the request that a copy of this order may
be served upon M/s SRSC Infra Pvt. Ltd. and the report to this effect
may be submitted to the Ministry.
2. DG (RD)& SS
3. MD, NHIDCL.”
22. Along with the counter-affidavit, filed on behalf of the respondent /
MoRTH, a letter dated 20.06.2023 has also been enclosed (Annexure-
R1/1A) thereto which reads as under:
” Date: 20.06.2023
NHAI/Debarment/SRSC/05/2023/E-207281-82850
To,
Ms. Sangita Topoo, US (Highways)
Ministry of Road Transport & Highways,
New Delhi.
Sub: W.P.(C) 6734/2023 along with Miscl, Applications filed in the
High Court of Delhi.
Regarding servicing of debarment order dated 07.02.2023.
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
19:34:28
Madam,
May please refer your email dated 23.05.2023 on the subject mentioned
above and to intimate that the debarment order dated 07.02.2023 could
not be served upon M/s SRSC Infra Pvt. Ltd. due to over sight.
You are therefore, requested to see for further action and information.
Yours faithfully,
(Virender Sambyal)
GM (T) UP (W)
Email:- Virender [email protected]”
23. As such, it is evident that the debarment order dated 07.02.2023 was
never served on the petitioner.
24. It is trite that there cannot be any debarment / blacklisting without the
necessary order being communicated to the concerned person / entity. From
the document filed by the respondent itself it is evident that the relevant
debarment order was not even communicated to the petitioner till after the
expiry of the period of debarment. As such, the same does not withstand the
scrutiny of law.
25. In the circumstances, the debarment order dated 07.02.2023 is
quashed.
26. Since the communication dated 10.04.2023 is also predicated on the
debarment order dated 07.02.2023, the same is also quashed.
27. It is noticed that the LOA was issued in favour of the petitioner as far
back as on 14.02.2023. The Contract Agreement never came to be executed
thereafter in view of the aforementioned intervening developments.
28. Given that the communication dated 10.04.2023 has been quashed, it
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
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shall be open for the respondent to proceed with execution of the Contract
Agreement with the petitioner. However, in case the same has become
unviable on account of significant lapse of time, (since the commencement
of the tender process), it shall be open for the respondent to take an
appropriate decision for scrapping of the tender process and issuing a fresh
tender.
29. In this regard, it would be apposite to refer to a recent judgment of the
Supreme Court in The Principal Chief Conservator of Forest & Ors. v.
Suresh Mathew & Ors., 2025 INSC 569 wherein it has been held that it is
always open to a tendering authority to scrap the tender of the bidding
process and to call for a fresh tender.
“22. The Division Bench of the High Court, which upheld the
judgment of the Ld. Single Judge, was of the opinion that
merely because there was a likelihood of the rates being
lowered if successive tenders are invited, the same cannot be a
justifiable ground at all for cancellation of the contract since it
would lead to a situation of an unending tender inviting
procedure. However, we are of the opinion that the said
observations by the High Court are contrary to the settled
principles of law laid down by the Supreme Court that the
Government is the protector of financial resources of the state
and thus, it has every right to cancel and call for fresh tender
if it is in the nature of protecting the financial interests of the
State.”
(emphasis supplied)
30. Needless to say, in the event of the respondent deciding to scrap the
tender process and re-tendering the same, it shall be open to the petitioner to
participate in the said process. Further, the right of the petitioner to claim
damages / monetary relief on account of any loss that may have been
occasioned on account of cancellation of the LOA dated 14.02.2023 vide
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
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impugned communication dated 10.04.2023, shall remain expressly
reserved.
31. The petition is disposed of in the above terms. Pending applications
also stand disposed of.
SACHIN DATTA, J
AUGUST 14, 2025/cl, sv
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By:ABHISHEK THAKUR
Signing Date:16.08.2025
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