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Shree Shyamji Transport Company v. Food Corporation of India

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 9379 of 2014)Decided 9 Oct 2014
Civil Appeal No. 9379 of 2014
Justice T.S. Thakur · Justice R. Banumathi

Background

FCI rejected two firms' labour-contract bids because earnest money had been forfeited in an earlier transport tender after delayed security and bank guarantees. In earlier proceedings, the High Court had found no intentional lapse and had recorded that FCI had not debarred the contractors. FCI's request to modify that ruling had also failed.

Decision Breakdown

The Supreme Court allowed the appeals and set aside the High Court order sustaining the later tender rejection. The earlier findings about banking delays, absence of intentional default and non-debarment had become final and bound FCI. In those circumstances, FCI could not use the forfeiture-based disqualification clause to impose the exclusion that the earlier ruling had addressed. The Court also noted that the contractors had already suffered about three years of debarment; it did not direct that they receive the contracts.

Lesson Learnt

A public authority must respect final judicial findings when deciding a bidder's eligibility. This result depended on the earlier binding orders and does not remove forfeiture-based disqualification conditions from every tender.

Official source (sci.gov.in)View Judgment (PDF)

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