W.P.(C) 6570/2021 Page 1 of 31

$~J

* IN THE HIGH COURT OF DELHI AT NEW DELHI

Judgment pronounced on : 02.02.2026

+ W.P.(C) 6570/2021

PAHARPUR COOLING TOWERS LTD .....Petitioner

Through: Mr. Sanjay Ghosh, Sr. Advocate

along with Mr. Naman Jain,

Mr. Rohan Mandal and

Mr. Mohit Garg, Advocates.

versus

RAMAGUNDAM FERTILIZERS AND CHEMICALS LTD &

ANR. .....Respondents

Through: Mr. Dipak Kumar Jena, Mr.

R.K. Poshwal, Mr. Sandip

Munain, Mr. Ashutosh Singh

Deo and Mr. Raj Shekar Jena,

Advocates. and Ms. Priya

Chaudhary, MT Law.

Mr. Abhimanyu Garg, Advocate

and Mr. Himanshu Singh

Yadav, Dy. Manager, Legal

(EIL).

CORAM:

HON'BLE MR. JUSTICE SACHIN DATTA

JUDGMENT

1. The present petition has been filed by the petitioner being

aggrieved by the encashment/forfeiture of the Bank Guarantee towards

the Earnest Money Deposit (hereinafter referred as “EMD-BG”)

amounting to Rs. 47,50,000/- by the respondent no.1/Ramagundam

Fertilizers and Chemicals Ltd. The said EMD-BG was furnished on

W.P.(C) 6570/2021 Page 2 of 31

16.12.2015 (with a validity up to 27.12.2016) by the petitioner while

participating in a tender dated 09.11.2015 floated by the respondent

no.2/Engineers India Ltd (EIL) for the work of “cooling tower and

CWTP packages for revival of Ramagundam Fertilizers and

Chemicals project”.

2. The petitioner is a company engaged in the business of

manufacturing and supplying of cooling equipments including cooling

towers. Respondent no.1 is a Joint Venture (JV) company of

EIL/respondent no.2 (an engineering consultancy and EPC company

under the ownership of the Ministry of Petroleum and Natural Gas,

Government of India), National Fertilizer Ltd (NFL) and Fertilizer

Corporation of India Ltd (FCIL) formed for setting up gas-based Urea

manufacturing plant at Ramagundam, Telangana. Respondent

no.2/EIL was awarded the detailed engineering and project

management for revival of Fertilizer Plant at Ramagundam, Telangana

and in pursuance of the same, floated a tender dated 19.11.2015 for

supply, erection and construction of FRP cooling tower.

3. Pursuant to the scrutiny/verification of the requisite documents

submitted by the petitioner for the aforementioned tender, a Show

Cause Notice (SCN) dated 14.10.2016 came to be issued against the

petitioner proposing suspension and debarment of its business on

account of alleged submission of forged document/certificate for

satisfying the bidder qualification criteria. The said SCN reads as

under:

W.P.(C) 6570/2021 Page 3 of 31

4. The aforementioned allegations were also communicated vide a

letter dated 17.10.2016 to the respondent no.1 by the respondent no.2.

The same reads as under:

W.P.(C) 6570/2021 Page 4 of 31

xxx xxx xxx

W.P.(C) 6570/2021 Page 5 of 31

5. Subsequently, respondent no.1 issued a letter dated 20.12.2016

to the bank of the petitioner for forfeiture of the EMD-BG. On

22.12.2016 the EMD-BG was released in favour of respondent no.1 by

the concerned bank.

6. In the meantime, vide an email dated 21.12.2016, the respondent

no.2, also intimated the petitioner that the competent authority of

respondent no.2 has decided to put the petitioner on “holiday list of the

EIL Construction Contractor” for a period of 3 years w.e.f.

14.12.2016.

7. Against said decision dated 21.12.2016, the petitioner preferred

a representation dated 11.01.2017 before the Appellate Authority of

respondent no.2. Vide an order dated 26.05.2017, the aforementioned

decision dated 21.12.2016 came to be revoked by the Appellate

Authority with immediate effect. The said order dated 26.05.2017

reads as under:

W.P.(C) 6570/2021 Page 6 of 31

8. In the circumstances, considering that the ban imposed upon the

petitioner has been revoked by the Appellate Authority of the

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respondent no.2 vide an order dated 26.05.2017, the petitioner between

2017 and 2020 made various representations to the respondents

seeking refund of EMD-BG retained by respondent no.1. However, it

is submitted that the respondents failed to respond/act upon the said

representations.

9. Consequently, the petitioner issued a legal notice dated

10.02.2021 to respondent no.1 seeking for refund of the EMD-BG

retained by them. However, again, the respondent no.1 failed to

respond.

10. In the aforesaid background, aggrieved, the petitioner preferred

the present petition seeking to direct the respondents to return/refund

the forfeited EMD-BG to the petitioner.

SUBMISSIONS ON BEHALF OF THE PETITIONER

11. Learned senior counsel on behalf of the petitioner submitted that

even before a reply was submitted by the petitioner to the Show Cause

Notice dated 14.10.2016, a communication dated 17.10.2016 came to

be issued by the respondent no.2 to respondent no.1 alleging

submission of forged document by the petitioner. Further, the

respondent no.1 issued a letter dated 20.12.2016 to the bank of the

petitioner for forfeiture of the EMD-BG without issuing any Show

Cause Notice or an independent enquiry into the said matter.

12. It is further contended that the petitioner is entitled to a refund

of the EMD-BG encashed by respondent no.1 inasmuch as the letter

dated 20.12.2016 issued by respondent no.1 to the petitioner’s bank

for forfeiture of the furnished security, was premised upon a

W.P.(C) 6570/2021 Page 8 of 31

communication dated 17.10.2016 from respondent no.2, alleging

submission of a forged document/certificate by the petitioner.

However, the unconditional revocation of the banning order dated

21.12.2016 by the Appellate Authority of respondent no.2 vide order

dated 26.05.2017, effectively nullified the allegations of forgery which

constituted the very foundation of the aforesaid communication dated

17.10.2016, consequent ban by respondent no.2 and encashment of the

EMD-BG by respondent no.1.

13. It is further submitted that the allegation pertaining to the

forgery of documents emanated from an inadvertent error made by the

petitioner. It is stated that during the bidding process, the petitioner

furnished an experience certificate dated 14.12.2015 bearing ref:

GGEL/HR/Mech./2015-16 (hereinafter referred as “Exhibit 1”) issued

by one of its previous employers i.e., Godavari Green Energy Pvt. Ltd,

(hereinafter referred as “GGEL”). Due to certain procedural

requirement, the said certificate dated 14.12.2015 was revised and

again submitted in the desired format. However, inadvertently, the

petitioner submitted draft version dated 18.04.2016 bearing ref:

GGEL/HR/ Mech/2015-16 (hereinafter referred as “Exhibit 2”) of the

revised certificate instead of the certificate dated 18.04.2016 bearing

ref: GGEL/HR/Mech/2016/02 (hereinafter referred as “Exhibit 3”)

approved by GGEL. The said inadvertent error was subsequently

clarified and rectified and is evident from an email dated 20.10.2016

received from GGEL.

14. It is further brought out that the tender dated 09.11.2015, for

which the EMD-BG deposited by the petitioner was forfeited by the

W.P.(C) 6570/2021 Page 9 of 31

respondent no.1 was cancelled/withdrawn/not acted upon by the

respondents. Subsequently, a fresh tender for the same work was re-

issued on 12.06.2017 by the respondent no.2, which ultimately came

to be awarded vide a Letter of Award dated 08.08.2017 in favour of

the petitioner and duly executed. It is contended that had the

petitioner’ action been void of bonafide intentions, the aforesaid award

would have not been awarded in its favour.

15. It is submitted that till date, there is no material/order/finding on

record that would justify forfeiture of EMD-BG by the respondent

no.1. Further, mere existence of an alternative remedy does not oust

the jurisdiction of this Court under Article 226 of the Constitution of

India inasmuch as the conduct of respondent no.1 is clearly in

contravention of the principles of natural justice, arbitrary in nature

and void of any cogent rationale. In this regard, reliance has been

placed upon catena of judgments rendered by the Supreme Court

1

.

16. It is further submitted that it is a settled law that the period of

limitation does not apply to writ jurisdiction and instead the concept of

laches is applicable. An entity under Article 12 of the Constitution of

India cannot justify unjust enrichment by resorting to a mere technical

plea of limitation, especially considering that the petitioner was

continuously pursuing the said matter with the officials of respondents

1

Union of India & Ors. vs. Tantia Constructions (P) Ltd., (2011) 5 SCC 697; Harbanslal Sahnia

v. Indian Oil Corporation Ltd., (2003) 2 SCC 107; Whirlpool Corporation v. Registrar of Trade

Marks, (1998) 8 SCC 1; National Sample Survey Organization and Anr. v. Champa Properties

Limited and Anr., (2009) 14 SCC 451; Hindustan Petroleum Corporation Limited and Ors. v.

Super Highway Services and Anr., (2010) 3 SCC 321; ABL International Ltd. and Ors. vs.

Export Credit Guarantee Corporation of India Ltd. and Ors., (2004) 3 SCC 553 and UP Power

Transmission Corporation Ltd. and Ors. vs. CG Power and Industrial Solutions Limited and

Ors., (2021) 6 SCC 15.

W.P.(C) 6570/2021 Page 10 of 31

for resolution since 2017 and never abandoned the same. Thus, the

cause of action finally arose when the respondent no.1 failed to

respond to the legal notice dated 10.02.2021. Even otherwise, without

prejudice to the aforesaid, assuming that the cause of action arose on

26.05.2017, the period of limitation which would have expired on

25.05.2020 ought to have been relaxed in line with the directions

rendered by the Supreme Court in Suo Moto Writ Petition No. 3/2020.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

17. Learned counsel on behalf of the respondent no.1 submitted that

in view of the violation of contractual obligation by the petitioner,

under clause 36.8.1 of General Conditions of Contract (GCC) EMD-

BG was forfeited. Further, the petitioner never approached the

Appellate Authority of respondent no.2 against the forfeiture of EMD-

BG by the respondent no.1 and instead directly invoked the

jurisdiction of this Court.

18. It is further contended that the present petition is not

maintainable inasmuch as (i) the dispute between the parties to the

present petition are private in nature and there is no violation of

statutory duty (ii) the petitioner has approached this Court without

exhausting an alternative remedy (arbitration) available to the

petitioner in terms of clause 35.2.2 of the GCC. Reliance in this regard

is placed upon judgment rendered by the Supreme Court in Joshi

Technologies International Inc vs Union of India and Ors, (2015) 7

SCC 728 and K.K Saxena vs International Commission on Irrigation

and Drainage, (2015) 4 SCC 670 (iii) the EMD-BG was forfeited by

W.P.(C) 6570/2021 Page 11 of 31

the respondent no.1 in 2016 and the present petition has been filed

after a delay of 5 years without any cogent rationale thereof.

19. It is submitted that the during the scrutiny and verification of

documents, it came to the knowledge of respondent no.2, that the

experience certificate dated 18.04.2016 purportedly issued by GGEL

was false and fabricated. The said allegation has been supported by an

email dated 10.10.2016, wherein, GGEL categorically denied issuance

of the aforesaid certificate.

20. Further, attention is drawn to a letter dated 21.01.2019 along

with inter-office Memorandum dated 09.01.2019, issued by the

respondent no.2, justifying the forfeiture of EMD-BG by the

respondent no.1 and categorically observing that the

document/certificate purportedly issued by GGEL, submitted by the

petitioner along with the bid was not genuine and tantamount to fraud

on part of the petitioner. The letter dated 21.01.2019 and inter-office

Memorandum dated 09.01.2019 reads as under:-

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W.P.(C) 6570/2021 Page 13 of 31

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ANALYSIS AND FINDINGS

21. At the outset, this Court is not persuaded by the objections of

the respondents as regards (non) maintainability of the present writ

petition. The law is well settled that this Court has jurisdiction, even in

contractual or tender matters to redress the arbitrariness and/or denial

of principles of natural justice.

22. The legal position in this regard has been reiterated by the

Supreme Court time and again in various judgments including that of

Subodh Kumar Singh Rathour v. Chief Executive Officer and

Others, 2024 SCC OnLine SC 1682, by observing as under:-

57. Thereafter, this Court in its decision in M.P. Power Management

Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd. [M.P. Power

Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd.,

(2023) 2 SCC 703] exhaustively delineated the scope of judicial

review of the courts in contractual disputes concerning public

authorities. The aforesaid decision is in the following parts:-

Scope of judicial review in matters pertaining to contractual disputes

57.1. This Court in M.P. Power Management case [M.P. Power

Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd.,

(2023) 2 SCC 703] held that the earlier position of law that all rights

against any action of the State in a non-statutory contract would be

governed by the contract alone and thus not amenable to the writ

jurisdiction of the Courts is no longer a good law in view of the

subsequent rulings. Although writ jurisdiction is a public law remedy,

yet a relief would still lie under it if it is sought against an arbitrary

action or inaction of the State, even if they arise from a non-statutory

contract. The relevant observations read as under: (M.P. Power

Management case [M.P. Power Management Co. Ltd. v. Sky Power

Southeast Solar India (P) Ltd., (2023) 2 SCC 703] , SCC p. 763, paras

81-82)

“81. … when the offending party is the State. In other words, the

contention is that the law in this field has witnessed an evolution

and, what is more, a revolution of sorts and a transformatory

change with a growing realisation of the true ambit of Article 14 of

the Constitution of India. The State, he points out, cannot play the

W.P.(C) 6570/2021 Page 15 of 31

Dr Jekyll and Hyde game anymore. Its nature is cast in stone. Its

character is inflexible. This is irrespective of the activity it indulges

in. It will continue to be haunted by the mandate of Article 14 to act

fairly. There has been a stunning expansion of the frontiers of the

Court's jurisdiction to strike at State action in matters arising out

of contract, based, undoubtedly, on the facts of each case. It

remains open to the Court to refuse to reject a case, involving State

action, on the basis that the action is, per se, arbitrary.

***

82.1. It is, undoubtedly, true that the writ jurisdiction is a public

law remedy. A matter, which lies entirely within a private realm of

affairs of public body, may not lend itself for being dealt with under

the writ jurisdiction of the Court.

82.2. The principle laid down in Bareilly Development

Authority [Bareilly Development Authority v. Ajai Pal Singh,

(1989) 2 SCC 116] that in the case of a non-statutory contract the

rights are governed only by the terms of the contract and the

decisions, which are purported to be followed, including

Radhakrishna Agarwal [Radhakrishna Agarwal v. State of Bihar,

(1977) 3 SCC 457] , may not continue to hold good, in the light of

what has been laid down in ABL [ABL International Ltd. v. Export

Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC 553 : (2004)

118 Comp Cas 213] and as followed in the recent judgment in

Sudhir Kumar Singh [State of U.P. v. Sudhir Kumar Singh, (2021)

19 SCC 706] .

82.3. The mere fact that relief is sought under a contract which is

not statutory, will not entitle the respondent State in a case by itself

to ward-off scrutiny of its action or inaction under the contract, if

the complaining party is able to establish that the action/inaction

is, per se, arbitrary.”

Exercise of writ jurisdiction in disputes at the stage prior to the award

of contract

57.2. An action under a writ will lie even at the stage prior to the award

of a contract by the State wherever such award of contract is imbued with

procedural impropriety, arbitrariness, favouritism or without any

application of mind. In doing so, the courts may set aside the decision

which is found to be vitiated for the reasons stated above but cannot

substitute the same with its own decision. The relevant observations read

as under: (M.P. Power Management case [M.P. Power Management Co.

Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023) 2 SCC 703] ,

SCC p. 764, para 82.4)

“82.4. An action will lie, undoubtedly, when the State purports to award

any largesse and, undoubtedly, this relates to the stage prior to the

contract being entered into (see Ramana Dayaram Shetty [Ramana

W.P.(C) 6570/2021 Page 16 of 31

Dayaram Shetty v. International Airport Authority of India, (1979) 3 SCC

489 : AIR 1979 SC 1628] ). This scrutiny, no doubt, would be undertaken

within the nature of the judicial review, which has been declared in the

decision in Tata Cellular v. Union of India [Tata Cellular v. Union of

India, (1994) 6 SCC 651] .”

xxx xxx xxx

Other relevant considerations for exercise of writ jurisdiction

57.5. Lastly, this Court in M.P. Power Management case [M.P. Power

Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023)

2 SCC 703] held that the courts may entertain a contractual dispute

under its writ jurisdiction where: (I) there is any violation of natural

justice, or (II) where doing so would serve the public interest, or (III)

where though the facts are convoluted or disputed, but the courts have

already undertaken an in-depth scrutiny of the same provided that it was

pursuant to a sound exercise of its writ jurisdiction. The relevant

observations read as under: (M.P. Power Management case [M.P. Power

Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd., (2023)

2 SCC 703] , SCC p. 766, para 82)

“82. … 82.13. A lodestar, which may illumine the path of the Court,

would be the dimension of public interest subserved by the Court

interfering in the matter, rather than relegating the matter to the

alternate Forum.

82.14. Another relevant criteria is, if the Court has entertained the

matter, then, while it is not tabooed that the Court should not relegate

the party at a later stage, ordinarily, it would be a germane

consideration, which may persuade the Court to complete what it had

started, provided it is otherwise a sound exercise of jurisdiction to

decide the matter on merits in the writ petition itself.

82.15. Violation of natural justice has been recognised as a ground

signifying the presence of a public law element and can found a cause

of action premised on breach of Article 14. (See Sudhir Kumar

Singh [State of U.P. v. Sudhir Kumar Singh, (2021) 19 SCC 706] ).”

58. What can be discerned from the above is that there has been a

considerable shift in the scope of judicial review of the court when it

comes to contractual disputes where one of the parties is the State or its

instrumentalities. In view of the law laid down by this Court in ABL [ABL

International Ltd. v. Export Credit Guarantee Corpn. of India Ltd.,

(2004) 3 SCC 553 : (2004) 118 Comp Cas 213] , Joshi

Technologies [Joshi Technologies International Inc. v. Union of India,

(2015) 7 SCC 728 : (2015) 374 ITR 322] and in M.P. Power [M.P.

Power Management Co. Ltd. v. Sky Power Southeast Solar India (P) Ltd.,

(2023) 2 SCC 703] , it is difficult to accept the contention of the

respondent that the writ petition filed by the appellant before the High

W.P.(C) 6570/2021 Page 17 of 31

Court was not maintainable and the relief prayed for was rightly declined

by the High Court in exercise of its writ jurisdiction. Where State action

is challenged on the ground of being arbitrary, unfair or unreasonable,

the State would be under an obligation to comply with the basic

requirements of Article 14 of the Constitution and not act in an arbitrary,

unfair and unreasonable manner. This is the constitutional limit of their

authority. There is a jural postulate of good faith in business relations

and undertakings which is given effect to by preventing arbitrary exercise

of powers by the public functionaries in contractual matters with private

individuals. With the rise of the social service State more and more

public-private partnerships continue to emerge, which makes it all the

more imperative for the courts to protect the sanctity of such relations.

23. Likewise, in Unitech Limited and Others vs Telangana State

Industrial Infrastructure Corporation (TSIIC) and Ors., (2021) 16

SCC 35, it was held by the Supreme Court as under:-

“39. A two-Judge Bench of this Court in ABL International Ltd. v. Export

Credit Guarantee Corpn. of India Ltd. [ABL International Ltd. v. Export

Credit Guarantee Corpn. of India Ltd., (2004) 3 SCC 553] [ABL

International] analysed a long line of precedent of this Court [K.N.

Guruswamy v. State of Mysore, (1954) 2 SCC 125 : AIR 1954 SC

592; Gujarat State Financial Corpn. v. Lotus Hotels (P) Ltd., (1983) 3

SCC 379; Gunwant Kaur v. Municipal Committee, Bhatinda, (1969) 3

SCC 769] to conclude that writs under Article 226 are maintainable for

asserting contractual rights against the State, or its instrumentalities, as

defined under Article 12 of the Indian Constitution.

39.1. Speaking through N. Santosh Hegde, J. the Court held : (ABL

International case [ABL International Ltd. v. Export Credit Guarantee

Corpn. of India Ltd., (2004) 3 SCC 553] , SCC p. 572, para 27)

“27. … the following legal principles emerge as to the maintainability

of a writ petition:

(a) In an appropriate case, a writ petition as against a State or an

instrumentality of a State arising out of a contractual obligation is

maintainable.

(b) Merely because some disputed questions of fact arise for

consideration, same cannot be a ground to refuse to entertain a writ

petition in all cases as a matter of rule.

(c) A writ petition involving a consequential relief of monetary claim is

also maintainable.”

This exposition has been followed by this Court, and has been adopted by

the three-Judge Bench decisions of this Court in State of U.P. v. Sudhir

Kumar Singh [State of U.P. v. Sudhir Kumar Singh, (2021) 19 SCC 706 :

W.P.(C) 6570/2021 Page 18 of 31

2020 SCC OnLine SC 847] and Popatrao Vyankatrao Patil v. State of

Maharashtra [Popatrao Vyankatrao Patil v. State of Maharashtra,

(2020) 19 SCC 241] .

39.2. The decision in ABL International, cautions that the plenary power

under Article 226 must be used with circumspection when other remedies

have been provided by the contract. But as a statement of principle, the

jurisdiction under Article 226 is not excluded in contractual matters.

39.3. Article 23.1 of the development agreement in the present case

mandates the parties to resolve their disputes through an arbitration.

However, the presence of an arbitration clause within a contract between

a State instrumentality and a private party has not acted as an absolute

bar to availing remedies under Article 226 [Harbanslal Sahnia v. Indian

Oil Corpn. Ltd., (2003) 2 SCC 107; Ram Barai Singh & Co. v. State of

Bihar, (2015) 13 SCC 592 : (2016) 1 SCC (Civ) 770] .

39.4. If the State instrumentality violates its constitutional mandate under

Article 14 to act fairly and reasonably, relief under the plenary powers of

Article 226 of the Constitution would lie. This principle was recognised

in ABL International [ABL International Ltd. v. Export Credit Guarantee

Corpn. of India Ltd., (2004) 3 SCC 553] : (ABL International case [ABL

International Ltd. v. Export Credit Guarantee Corpn. of India Ltd.,

(2004) 3 SCC 553] , SCC p. 572, para 28)

“28. However, while entertaining an objection as to the

maintainability of a writ petition under Article 226 of the Constitution

of India, the court should bear in mind the fact that the power to issue

prerogative writs under Article 226 of the Constitution is plenary in

nature and is not limited by any other provisions of the Constitution.

The High Court having regard to the facts of the case, has a discretion

to entertain or not to entertain a writ petition. The Court has imposed

upon itself certain restrictions in the exercise of this power.

(See Whirlpool Corpn. v. Registrar of Trade Marks [Whirlpool

Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1] .) And this

plenary right of the High Court to issue a prerogative writ will not

normally be exercised by the Court to the exclusion of other available

remedies unless such action of the State or its instrumentality is

arbitrary and unreasonable so as to violate the constitutional mandate

of Article 14 or for other valid and legitimate reasons, for which the

Court thinks it necessary to exercise the said jurisdiction.”

39.5. Therefore, while exercising its jurisdiction under Article 226, the

Court is entitled to enquire into whether the action of the State or its

instrumentalities is arbitrary or unfair and in consequence, in violation

of Article 14. The jurisdiction under Article 226 is a valuable

constitutional safeguard against an arbitrary exercise of State power or

a misuse of authority.

39.6. In determining as to whether the jurisdiction should be exercised in

a contractual dispute, the Court must, undoubtedly eschew, disputed

W.P.(C) 6570/2021 Page 19 of 31

questions of fact which would depend upon an evidentiary determination

requiring a trial. But equally, it is well settled that the jurisdiction under

Article 226 cannot be ousted only on the basis that the dispute pertains to

the contractual arena. This is for the simple reason that the State and its

instrumentalities are not exempt from the duty to act fairly merely

because in their business dealings they have entered into the realm of

contract. Similarly, the presence of an arbitration clause does (sic not)

oust the jurisdiction under Article 226 in all cases though, it still needs to

be decided from case to case as to whether recourse to a public law

remedy can justifiably be invoked.

39.7. The jurisdiction under Article 226 was rightly invoked by the Single

Judge and the Division Bench of the Andhra Pradesh High Court in this

case, when the foundational representation of the contract has

failed. Tsiic, a State instrumentality, has not just reneged on its

contractual obligation, but hoarded the refund of the principal and

interest on the consideration that was paid by Unitech over a decade

ago. It does not dispute the entitlement of Unitech to the refund of its

principal.

24. Similarly, in GAIL v. Indian Petrochemicals Corpn. Ltd.,

(2023) 3 SCC 629, the Supreme Court held as under:-

“21. Although the dispute arises from a commercial contract, we

find that the writ petition challenging the clauses was

maintainable. It is not disputed that GAIL is a public sector

undertaking and thus qualifies under the definition of “State” as

per Article 12 of the Constitution. At the time of entering into

contract, GAIL was enjoying a monopolistic position with respect

to the supply of natural gas in the country. IPCL, having incurred

a significant expense in setting up the appropriate infrastructure,

had no choice but to enter into agreement with GAIL. Thus, there

was a clear public element involved in the dealings between the

parties. Further, writ jurisdiction can be exercised when the State,

even in its contractual dealings, fails to exercise a degree of

fairness or practises any discrimination. We are fortified in our

view by this Court's decision in ABL International [ABL

International Ltd. v. Export Credit Guarantee Corpn. of India

Ltd., (2004) 3 SCC 553] and Joshi Technologies [Joshi

Technologies International Inc. v. Union of India, (2015) 7 SCC

728]”

25. This Court is also not inclined to accept the contention of the

respondents that the present petition is “barred by limitation”.

W.P.(C) 6570/2021 Page 20 of 31

26. In Sudama Devi (Smt.) vs. Commissioner and others., (1983) 2

SCC 1, the Supreme Court observed that period of limitation is not

stipulated for filing a writ petition and maintainability of a petition on

account of delay requires to be adjudged case-to-case basis after

considering as to whether the concerned party is guilty of laches. The

relevant portion of the said judgment reads as under: -

“We are of the view that so far as writ petition under Article 226

of the Constitution is concerned, there can be no hard and fast

rule of 90 days by way of period of limitation but the general rule

of laches alone can be applied and this must necessarily depend

on the facts and circumstances of each case. The High Court has

said in its order that “the writ petition was beyond time by 136

days. Neither the explanation of 136 days nor the explanation for

filing it today, was given.” This view does not appear to be correct

because the High Court has proceeded on the assumption that

there is a period of limitation of 90 days and unless sufficient

cause is shown as contemplated under Section 5 of the Limitation

Act a writ petition filed after the expiration of 90 days is liable to

be rejected. This assumption is wholly unjustified. There is no

period of limitation prescribed by any law for filing a writ petition

under Article 226 of the Constitution. It is in fact doubtful whether

any such period of limitation can be prescribed by law. In any

event one thing is clear and beyond doubt that no such period of

limitation can be laid down either under rules made by the High

Court or by practice. In every case it would have to be decided on

the facts and circumstances whether the petitioner is guilty of

laches and that would have to be done without taking into account

any specific period as a period of limitation. There may be cases

where even short delay may be fatal while there may be cases

where even a long delay may not be evidence of laches on the part

of the petitioner. We would, therefore, set aside the order of the

High Court and remand the writ petition to the High Court so that

the High Court may dispose it of on merits in accordance with

law. We accordingly allow the appeal, set aside the judgment and

order of the High Court and direct that the writ petition may be

disposed of by the High Court on merits in accordance with law.

There will be no order as to costs.”

27. Further, a three Judge Bench of the Supreme Court in VetIndia

W.P.(C) 6570/2021 Page 21 of 31

Pharmaceuticals Ltd vs. State of Uttar Pradesh and Anr., (2021) 1

SCC 804 categorically opined that “writ petition was not barred by

unexplained delay as the appellant had been pursuing the matter with

the authorities and it is they who sat over it”. The relevant portion of

the said judgment reads as under: -

“15. That brings us to the question of delay. There is no doubt that

the High Court in its discretionary jurisdiction may decline to

exercise the discretionary writ jurisdiction on the ground of delay

in approaching the court. But it is only a rule of discretion by

exercise of self-restraint evolved by the court in exercise of the

discretionary equitable jurisdiction and not a mandatory

requirement that every delayed petition must be dismissed on the

ground of delay. The Limitation Act stricto sensu does not apply to

the writ jurisdiction. The discretion vested in the court under

Article 226 of the Constitution therefore has to be a judicious

exercise of the discretion after considering all pros and cons of

the matter, including the nature of the dispute, the explanation for

the delay, whether any third-party rights have intervened, etc. The

jurisdiction under Article 226 being equitable in nature, questions

of proportionality in considering whether the impugned order

merits interference or not in exercise of the discretionary

jurisdiction will also arise. This Court in Basanti Prasadv. Bihar

School Examination Board [Basanti Prasad v. Bihar School

Examination Board, (2009) 6 SCC 791 : (2009) 2 SCC (L&S)

252] , after referring to Moon Mills Ltd. v. M.R. Meher [Moon

Mills Ltd. v. M.R. Meher, AIR 1967 SC 1450] , Maharashtra

SRTC v. Balwant Regular Motor Service [Maharashtra SRTC v.

Balwant Regular Motor Service, (1969) 1 SCR 808 : AIR 1969 SC

329] and State of M.P. v. Nandlal Jaiswal [State of M.P. v.

Nandlal Jaiswal, (1986) 4 SCC 566] , held that if the delay is

properly explained and no third-party rights are being affected,

the writ court under Article 226 of the Constitution may condone

the delay, holding as follows : (Basanti Prasad case [Basanti

Prasad v. Bihar School Examination Board, (2009) 6 SCC 791 :

(2009) 2 SCC (L&S) 252] , SCC p. 796, para 18)

“18. In the normal course, we would not have taken exception

to the order passed by the High Court. They are justified in

saying that a delinquent employee should not be permitted to

revive the stale claim and the High Court in exercise of its

discretion would not ordinarily assist the tardy and indolent

W.P.(C) 6570/2021 Page 22 of 31

person. This is the traditional view and is well supported by a

plethora of decisions of this Court. This Court also has taken

the view that there is no inviolable rule, that, whenever there is

delay the Court must refuse to entertain a petition. This Court

has stated that the writ court in exercise of its extraordinary

jurisdiction under Article 226 of the Constitution may condone

the delay in filing the petition, if the delay is satisfactorily

explained.”

16. The contention of the respondents that they have acted in

accordance with the provisions of the Drugs Act pursuant to the

report of the analyst for misbranded product under Section 9 is

devoid of substance and merits no consideration. It is not the case

of the respondents that the procedure prescribed under Sections

23, 25 and 26 of the Drugs Act has been followed. The feeble

attempt to show compliance with provisions of the Drugs Act by

alleged purchase of the samples under Form 14-A at Annexure R-

5 to the counter-affidavit dated 21-7-2008 from an unknown

source and date must be rejected outright as an attempt to create

evidence where none exists.

17. The aforesaid discussion, therefore, leads us to the conclusion

that the writ petition was not barred by unexplained delay as the

appellant had been pursuing the matter with the authorities and it

is they who sat over it, triggering rejection of the appellant's

tender by the Rajasthan Government on 5-7-2019 leading to the

institution of the writ petition on 24-7-2019. The High Court

therefore erred in dismissing the writ petition on grounds of delay.

The illegality and the disproportionate nature of the order dated

8-9-2009, with no third-party rights affected, never engaged the

attention of the High Court in judicious exercise of the

discretionary equitable jurisdiction. Consequently, the impugned

order [Vetindia Pharmaceuticals Ltd. v. State of U.P., 2019 SCC

OnLine All 6734] of the High Court as well as the order dated 8-

9-2009 of the respondents are set aside, and the appeal is

allowed.”

28. It is noticed that in the present petition as well the petitioner has

been pursuing the matter with the respondents ever since it preferred a

representation dated 11.01.2017 before the Appellate Authority of

respondent no.2 against the decision of putting the petitioner on

W.P.(C) 6570/2021 Page 23 of 31

“Holiday List” (vide communication dated 21.12.2016). Even pursuant

to the passing of order dated 26.05.2017 by the Appellate Authority,

between 2017 and 2020, the petitioner made various representations

before the respondents for redressal of the said matter. Importantly,

vide a letter dated 11.06.2019, the respondent no.2 intimated the

petitioner that the said issue has been referred to respondent no.1 and

petitioner shall contact the latter thereof. The said communication

dated 11.06.2019 reads as under: -

W.P.(C) 6570/2021 Page 24 of 31

29. Subsequently, since no action/response was received despite

multiple representations, the petitioner ultimately issued a legal notice

dated 10.02.2021 to the respondent no.1. However, to no avail.

30. Evidently, therefore, the petitioner had been proactively

pursuing the matter with the respondents, however, the respondents

were remiss in taking a suitable decision. In the peculiar factual

backdrop, it cannot be said that the petition is not maintainable on

account of delay or laches.

31. On merits, the primary grievance canvassed by the learned

senior counsel on behalf of the petitioner is that in light of the decision

dated 26.05.2017 passed by the Appellate Authority of respondent

no.2, the allegations of forgery and fraudulent practice forming the

very basis for forfeiture of the EMD-BG under the clause 36.8.1 of

GCC by respondent no.1 ceased to exist. In such circumstances,

respondent no.1 ought to have not continued to retain the said EMD-

BG, particularly in the absence of any independent enquiry or cogent

finding casting aspersions on the bonafides of the petitioner.

32. Evidently, the controversy between the parties arose as regard

the veracity of certificate dated 18.04.2016 bearing ref:

GGEL/HR/Mech./2015-16 (stated to be issued by GGEL) submitted

by the petitioner during the bidding process. The respondent no.1,

upon receipt of letter dated 17.10.2016 from the respondent no.2 in

this regard, on account of the alleged violation, invoked clause 36.8.1

of the GCC and forfeited the EMD-BG furnished by the petitioner.

Clause 36.8.1 of the GCC reads as under:-

W.P.(C) 6570/2021 Page 25 of 31

33. Despite the Appellate Authority of respondent no.2 discharging

the petitioner from the alleged violation (as communicated vide letter

dated 17.10.2016) vide order dated 26.05.2017, the rationale for

continuing to retain the forfeited EMD-BG in terms of clause 36.8.1 of

the GCC by respondent no.1, as canvassed on behalf of the respondent

no.1, is that (i) the forfeiture of EMD-BG by respondent no.1 is

independent of any action/inaction on part of respondent no.2 (which

acted as the project consultant for respondent no.1) (ii) during the

bidding process the petitioner with a malafide intention deliberately

furnished a forged and fabricated certificate dated 18.04.2016 bearing

ref: GGEL/HR/Mech/2015-16 to secure the bid. In this regard, reliance

has been placed upon an email dated 10.10.2016, whereby, the GGEL

in response to a query raised by the respondents as to the veracity of

the aforementioned certificate furnished by the petitioner, refuted

issuance of the same.

34. However, this Court is unable to uphold the aforesaid rationale

advanced by the learned counsel on behalf of the respondent no.1 for

retention of the forfeited EMD-BG inasmuch as:

i. the petitioner by virtue of order dated 26.05.2017 passed by the

W.P.(C) 6570/2021 Page 26 of 31

Appellate Authority of respondent no.2 has been exonerated of

the allegation of forgery/fraud that at the very first instance led

to issuance of letter dated 17.10.2016 by respondent no.2 to

respondent no.1 and consequent invocation of clause 36.8.1 of

the GCC by the respondent no.1 for forfeiture of the EMD-BG

furnished by the petitioner.

ii. In view of the aforesaid, no action/ enquiry was undertaken/

made by the respondent no.1 to go into the allegation of forgery/

fraud levied against the petitioner.

iii. The petitioner specifically apprised the respondents that the very

rationale of the order dated 26.05.2017 passed by the Appellate

Authority was that the allegations of forgery/fraud against the

petitioner were unfounded. As a consequence, thereof, pursuant

to the decision of the Appellate Authority, rationale for

forfeiture of EMD-BG also stood dissipated/ extinguished.

iv. The reliance by respondent no.1 upon an email dated

10.10.2016 issued by the GGEL to justify the allegation of

fraud/forgery is misplaced inasmuch as it disregards subsequent

emails dated 20.10.2016 and 23.11.2016 sent by GGEL itself,

clarifying the matter. All the certificates that found their way to

the respondent no.2, were dealt with and explained in the

aforementioned emails by the GGEL. It is pointed out that the

certificate enclosed as Exhibit no.2 in email dated 20.10.2016

(dated 18.04.2016 bearing ref: GGEL/HR/Mech/2015-16),

issuance of which was earlier refuted by the GGEL, was a draft

certificate. The actual certificate that came to be issued by the

W.P.(C) 6570/2021 Page 27 of 31

GGEL i.e., certificate dated 18.04.2016 bearing ref:

GGEL/HR/Mech/2016/02, was enclosed as Exhibit no.3 to the

email dated 20.10.2016 and the contents of the same are not at

variance with the said draft certificate.

It clearly transpires that it was only on account of an

erroneously sent “draft certificate”, that a confusion arose as to

whether the same was fabricated. The correct position, having

been explained by the author of the concerned certificates, the

matter clearly stood explained in terms of the said emails dated

20.10.2016 and 23.11.2016.

Evidently, it was for this reason that the order dated 21.12.2016

whereby the petitioner had been sought to be “holiday listed”

was revoked by the Appellate Authority. After the controversy

stood resolved in this manner, there was no occasion for

respondent no.1 to retain the amount released by way of

encashment of EMD-BG of Rs.47,50,000/-

v. The aforesaid clarification/s were also brought to the attention

of the Chairman and Managing Director of respondent no.2 by

the petitioner vide a letter dated 09.12.2016. The same was not

refuted/ replied.

vi. Undisputedly, a tender dated 12.06.2017 re-floated by

respondent no.2 for the same work (as tender dated 09.11.2015)

was awarded in favour of the petitioner by the respondent no.2

vide an award dated 08.08.2017. Not only was the said work

completed by the petitioner but for the same Pre-

Commissioning Certificate came to be issued by the respondent

W.P.(C) 6570/2021 Page 28 of 31

no.1 as under: -

W.P.(C) 6570/2021 Page 29 of 31

W.P.(C) 6570/2021 Page 30 of 31

vii. Moreover, attention has also been brought to a letter dated

10.02.2022 issued by the General Manager of respondent no.2

to respondent no.1 (handed over during the course of

proceedings), whereby, respondent no.2 opined that “in view of

the fact that PCTL (petitioner herein) is already exonerated fully

of charges of forgery of documents, retaining EMD is not

recommended” and advised respondent no.1 to return the

forfeited EMD-BG to the petitioner by way of amicable

settlement. The said letter reads as under:-

W.P.(C) 6570/2021 Page 31 of 31

35. In the circumstances, since the very premise for forfeiture of the

EMD-BG stood dissipated, therefore, there is no justification for

respondent no.1 in retaining the said amount. The action taken by the

respondent no.1 in retaining the said amount is inconsistent with the

decision of the Appellate Authority whereby the petitioner was

exonerated of the very same allegation which was the very basis for

forfeiture of EMD-BG.

36. In the circumstances, the respondent no. 1 is directed to refund

the EMD-BG amount of Rs. 47,50,000/- to the petitioner within a

period of 4 weeks from today.

37. The petition is disposed of in the above terms.

SACHIN DATTA, J

FEBRUARY 2, 2026/sl