(Prayer: Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction, more particularly one in the nature of a writ of mandamus declaring the action of the 2nd respondent in issuing the Impugned Banning order vide Reference N0.25/MS/SBC dated 07.05.2025 banning the petitioner for a period of 3 years with effect from 07.05.2025 and de-registering from the list of ancillaries/Vendors/Contractors of RINL from the date of issuance of banning order is illegal, arbitrary, violative of principles of natural justice, apart from violation of the rights of the petitioners under Art. 14, 19 and 21 of the Constitution of India and consequently set aside the banning order dated 07.05.2025 and pass

IA NO: 1 OF 2025

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the Impugned Banning order issued by the 2nd respondent vide Reference No.25/MS/SBC dated 07.05.2025 by permitting the petitioner to participate in future tenders pending disposal of the Writ Petition and pass)

1. Heard Sri Y.Sudhakar Rao, learned counsel for the Writ Petitioner and Sri Kiran Kumar Vadlamudi, learned counsel for the respondent Nos.1 to 4.

2. This Writ Petition was filed seeking the following relief:

                  “…to issue a Writ or Order or direction more particularly one in the nature of Writ of Mandamus declaring the action of 2nd respondent in issuing the impugned Order vide Reference No.25/MS/SBC dated 07.05.2025 banning the petitioner for a period of 3 years with effect from 07.05.2025 and deregistering from the list of Ancillaries/Vendors/ Contractors of RINL from the date of issuance of Banning Order, as illegal, arbitrary, violative of principles of natural justice, apart from violation of the rights of Writ Petitioner under Articles 14, 19 and 21 of the Constitution of India and consequently, set-aside the Banning Order dated 07.05.2025 and pass such other order or orders …”

3. Contents of the affidavit filed by the Managing Partner of Writ Petitioner Company, in brief, are that the Writ Petitioner is a Partnership Firm registered with the Registrar of Firms, Visakhapatnam on 23.09.2015. The main object of the Writ Petitioner firm is to undertake and execute mechanical, structural, civil, electrical equipment erection and commissioning, technological assistance etc., and other contract business. The Writ Petitioner firm is also registered with the Ministry of Micro, Small and Medium Enterprises, Government of India as a Micro Enterprise. The Writ Petitioner firm is also a Registered Contractor of RINL-VSP, vide Registration No.VSP/WC/REGN-P/2023-134, dated 07.10.2023.

                  (b) On 07.05.2024, 1st respondent called for Tenders for Cleaning Works including Cooling System and PCI of BF-1 and BF-2 vide Notice Inviting Tender No.260000885 with an estimated value of Rs.4,25,62,634.40 paise and the contract period is 24 months. The Writ Petitioner firm participated in the bid and quoted price of Rs.59,58,727.60 paise via RFx No.2600008855. While entering the bid figures, it erroneously entered the digits and quoted the bid price as Rs.59,58,727.60 paise, which is 86% below the estimated amount. Realizing the error, the Writ Petitioner firm immediately made a communication dated 15.06.2024 to 3rd respondent, notifying the above typographical error and stating that it would be impossible for the Writ Petitioner firm to execute the works on the quoted price and apologized for the mistake.

                  (c) On 25.06.2024, 3rd respondent straightaway issued Suspension Order in respect of business dealings of the Writ Petitioner firm, stating that it was suspended for a period of Six (06) months for backing out from the subject work with effect from 25.06.2024. Respondent No.3, instead of lifting the suspension order after lapse of Three (03) months, vide Order dated 23.01.2025 extended the said suspension for a further period of Three (03) months with effect from 25.12.2024. Respondent No.2, without prior notice or hearing, vide Reference No.25/MS/SBC, dated 07.05.2025 issued order, banning the business dealings with Writ Petitioner firm for a period of Three (03) years with effect from 07.05.2025 and deregistered the firm from the list of Contractors of RINL. After receipt of orders, the Writ Petitioner addressed letters on 13.06.2025 and 15.07.2025 to 2nd respondent requesting the authority to consider the issue amicably, but there was no response whatsoever from 2nd respondent authority. The Writ Petitioner made a representation/ Appeal on 16.08.2025 to 3rd and 4th respondents for withdrawal of banning orders and the same is pending till date. Hence, the Writ Petition.

4. Respondent Nos.1 to 4 filed counter-affidavit denying the contents of the affidavit accompanying Writ Petition, contending inter alia that the Writ Petitioner firm submitted their quotation electronically on 30.05.2024 at 10:51:19, and the communication stating the error, was made on 15.06.2024.  Immediately upon submission of quotation, on 30.05.2025, the system generated quotation response document that contain explicit, multi-layered warnings regarding the abnormal discrepancy. The Writ Petitioner firm RFx response explicitly pointed out 86% deviation and confirmed the tender and despite these definitive electronic warnings, the Writ Petitioner firm took no action to withdraw or rectify the bid prior to the tender opening. The Writ Petitioner firm notified the RINL error on 15.06.2024 after generating the comparative statement dated 14.06.2024. The Tender was floated to execute job in Blast Furnace 1 and 2, which are most critical units of RINL, operates 24x7 and any delay in tendering process would hamper the production and cost huge financial loss to RINL and in such scenario, the Writ Petitioner firm’s conduct resembles a buyer’s remorse scenario, as it chose to ignore clear system warnings well in advance. Respondent No.3 vide e-Mail dated 17.06.2024 in reply to the Letter dated 15.06.2024 of the Writ Petitioner firm, informed the agency that appropriate action would be taken as per Clause 27 of the Special Conditions of Contract (for brevity ‘SCC’).

                  (b) The Writ Petitioner firm on the same day i.e. 17.06.2024 replied that it cannot accept the quoted rate and to proceed as per its its process, hence, the Writ Petitioner firm was aware of the Clause 27 and the consequences that follow and 3rd respondent was constrained to take action as per procedure. The Writ Petitioner firm vide Letters dated 15.07.2025 and 16.08.2025 requested to review the banning order, but as per the impugned Order dated 07.05.2025, it was made clear that appeal if any, may be filed within 30 days before the Appellate Authority and the Writ Petitioner firm preferred the appeal after two months well after the deadline exhausting the remedy provided to them, which shows its casual and litigant nature.

                  (c) Further, the agency in its bid security declaration had given an undertaking that in case of failure or refusal to execute contract, it shall be debarred automatically for a period of Three (03) years and it was agreed by the Writ Petitioner firm. The Writ Petitioner’s withdrawal/backing out of the Tender (RFx No.2600008855) after achieving Lowest Bidder (L-1) status, severely prejudiced the operations of RINL, and it necessitated for re-tendering and caused heavy financial loss to RINL. The requirement of a personal hearing is not absolute or mandatory in every instance and the Committee is empowered to dispense with such hearing, where the merits of the case do not justify. Hence, it is prayed to dismiss the Writ Petition.

5. Learned counsel for the Writ Petitioner would contend that no written notice or reasonable opportunity of hearing was provided to the Writ Petitioner before passing the impugned Order vide Reference No.25/MC/SBC dated 07.05.2025 by 2nd respondent and it is in clear violation of principles of natural justice. Learned counsel would further contend that quoting less price in the subject Tender occurred erroneously due to oversight, but instead of considering the same as a human error, impugned Order was issued straightaway for a period of Three (03) years.

6. Learned counsel for the respondent Nos.1 to 4 would contend that after generating the comparative statement on 14.06.2024, the Writ Petitioner firm notified the RINL error on 15.06.2024. The act of Writ Petitioner, ignoring clear system warnings well in advance, hampered the production and huge financial loss to RINL. Learned counsel would further contend that the Writ Petitioner is provided the remedy to prefer appeal within 30 days before the Appellate Authority, but the same was preferred after two months after exhausting the deadline, which shows its casual and litigant nature.

7. Perused the entire material available on record.

8. The Writ Petitioner firm is a Micro Enterprise, registered with the Ministry of Micro, Small and Medium Enterprises, Government of India vide Udyam Registration No.UDYAM-AP-10-0012927, dated 28.08.2015, and its object is to undertake and execute manufacturing works pertaining to mechanical, structural, civil, electrical equipment erection. The Writ Petitioner firm, vide Registration No.VSP/WC/REGN- P/2023/134, dated 07.10.2023 entered into a Partnership Contract with respondent No.1 viz. RASHTRIYA ISPAT NIGAM LIMITED, Visakhapatnam Steel Plant and the said registration is valid up to 31.08.2026. However, in the Registration Certificate, entered between the Writ Petitioner and 1st respondent, it was mentioned that the registration does not guarantee tender enquiry and award of contract works.

9. A perusal of the material on record goes to show that respondent No.1 issued a Notice Inviting Tender (NIT) vide No.260000885, dated 07.05.2024 calling for tenders in respect of the work for ‘Cleaning works including Cooling System and PCI of BF-1 and BF-2’ and last date and time for submission of tenders was 30.05.2024 at 15.00 hours. A perusal of the NIT further goes to show that the value for the aforesaid work estimation is Rs.4,25,62,634.40 paise. As per the NIT issued by 1st respondent, the Pre-Qualification Criteria (PQC) for consideration of tender is that the tenderer should have experience in executing at least one single similar work of the aforesaid nature of value not less than Rs.1,06,40,658.60 paise during last 7 (Seven) years ending last day of previous month of the NIT date and further, the tenderer should have an average annual financial turnover of Rs.63,84,395.16 paise during last 3 (Three) Financial Years (i.e. from 2022 to 2024).

10. A perusal of Udyam Registration No.UDYAM-AP-10- 0012927, dated 28.08.2015 registered with the Ministry of Micro, Small and Medium Enterprises, Government of India goes to show that the Writ Petitioner firm was incorporated on 28.08.2015 and during the Financial Year, its total turnover is Rs.2,11,17,427/-. There is a condition put-forth by 1st respondent that for renewal of registration, the agency must have successfully executed one similar job in VSP in each category registered during the last three years or must have participated in at least one tender enquiry in each category during last three years served by VSP. Indisputably, the Registration Certificate vide No.VSP/WC/REGN- P/2023/134, dated 07.10.2023 entered between the Writ Petitioner and 1st respondent, the Writ Petitioner firm was registered as a Contractor of RINL-VSP for fresh class of jobs/works i.e. ‘5.27 C, 5.11 E and 5.07 C’ besides renewing the Class of Jobs/Works for ‘5.17C’. Therefore, it can be assumed that the Writ Petitioner being an agency, fulfilled the conditions of 1st respondent and as such, the Registration Certificate was renewed with certain class of jobs besides assigning fresh class of jobs to the Writ Petitioner firm.

11. Indisputably, pursuant to the Notice Inviting Tender dated 07.05.2024, the Writ Petitioner submitted its quote by mentioning the Unit Price at Rs.59,58,727.60 paise. The Estimated Value of the Tender is Rs.4,25,62,634.40 paise. Therefore, the Writ Petitioner quoted its Unit price 86% below the estimated cost.

12. Learned counsel for the Writ Petitioner would contend that while making entry of the bid figures, a mistake occurred, due to which, a sum of Rs.59,58,727.60 paise was quoted, and it is 86% below the estimated cost and it is highly impossible for the Writ Petitioner to execute the works on the quoted price and it would sustain loss and the mistake was duly informed to 1st respondent, but the respondent No.1 without seeking any explanation from the Writ Petitioner, straightaway suspended the business dealings with Writ Petitioner for a period of Six (06) months and later, issued the impugned Order dated 07.05.2025.

13. Learned counsel for the respondents would contend that due to the act of Writ Petitioner, RINL sustained huge financial loss. Further, in view of the inability to execute the work after being the lowest bidder, and backing out from the tender, failure or refusal to execute the contract, the tenderer shall be barred automatically for a period of Three (03) years. Similarly, the Writ Petitioner being the tenderer, expressed its inability to execute the works and as such, the impugned Banned Order was issued, banning the business dealings with Writ Petitioner.

14. A perusal of the correspondence made by the Writ Petitioner with 1st respondent goes to show that the intention of Writ Petitioner was to propose a price that aligns with industry standards, which it estimated to be approximately higher than the amount it quoted currently due to the scope and requirements of the project, but, it is due to a typographical error, the Writ Petitioner wrongly quoted their amount at 86% below the estimated cost and therefore, it expressed their inability that it could not execute the work at the quoted price. Pursuant to the said letter, vide Ref.No.VSP/WC/BF/2600008855/24/WCC/ 388, dated 25.06.2024 since the Writ Petitioner was backing out from the subject Tender, 1st respondent suspended the business dealings with Writ Petitioner firm for a period of Six (06) months with effect from 25.06.2024 and the same was extended for a further period of Three (03) months.

15. Vide impugned Order Reference No.25/MS/SCB/ dated 07.05.2025, 1st respondent banned the business dealings with Writ Petitioner firm for a period of Three (03) years with effect from 07.05.2025 and deregistered the firm from the list of ancillaries/vendors/contractors of RINL. The impugned Order, dated 07.05.2025 would go to show that under Clause 27 of Tender Enquiry-Default by Tenderers – the successful tenderer may be debarred at the discretion of the company, from issue of further tender documents, work orders etc., for a specific period to be decided by the employer in case of: „undue delay in starting and execution of work awarded, poor performance, backing out from the tender, non-accepting Work Order/LOA during the validity of tender or non-observance of company‟s materials/property, non-payment of due wages to labour or such similar defaults‟. The Writ Petitioner vide Letters dated 13.06.2025, 15.07.2025 and 16.08.2025 to 1st respondent expressed their grievance that no one could complete the subject works for the price quoted by the Writ Petitioner and it is due to human error, the amount was wrongly quoted and being deprived of the impugned order, requested to withdraw the said order.

16. A perusal of the record goes to show that the Writ Petitioner having quoted the amount, expressed its inability to execute the works as per the Tender, for the reason that it quoted the amount at 86% below the estimated cost, which is on account of a typographical error, and it is highly impossible for them to execute the said work as per the quoted unit price. It is further stated by the Writ Petitioner that if it executes the work, it would sustain huge financial loss. The Writ Petitioner firm is a micro enterprise. The estimated value of the Tender is Rs.4,25,62,634.40 paise. As per the Writ Petitioner, it wrongly quoted the price at Rs.59,58,727.60 paise. When the estimation value is Rs.4,25,62,634.40 paise and quoted price is 86% below the estimation value, even though a tenderer like the Writ Petitioner, who is a micro enterprise, successfully gets the bid, it could not execute the work for such a lesser price.

17. Learned counsel for the Writ Petitioner contends that there is no provision under which 1st respondent could have passed the impugned order, banning the business dealings with the Writ Petitioner, and the Writ Petitioner cannot be prohibited from participating in any tenders called by 1st respondent unless such a prohibition is supported by law and for specific reasons held against the Writ Petitioner. He placed strong reliance on the proposition of law laid down by this Court in Virothi Ramulu v. Visakhapatnam Port Trust(Writ Petition No.22780 of 2021, dated 13.07.2022 on the file of the High Court of Andhra Pradesh at Amaravati.), wherein this Court at paragraph Nos.8 and 9 held as under:

                  “8. …it must be held that there is no provision for banning a contractor, for any period of time, by the 1st respondent, under the special conditions of contract. The impugned proceedings of the 2nd respondent are stating that the petitioner has been banned from doing business with the 1st respondent. Such a ban is not provided for in any of the terms of the contract or the special conditions of contract being applied by the 1st respondent.

                  9. In such circumstances, it must be held that the impugned proceedings are clearly not supported by any provision of law or by any agreement between the parties.”

18. Under Clause No.27 of Special Conditions of Contract, which deals with Default by Tenderers, if there is unduedelay in starting and execution of work awarded, poor performance, backing out from the tender etc., at the discretion of the Company, the successful tenderer may be debarred from issue of further tender documents, work orders etc., for a specific period to be decided by the employer. No doubt, on account of inability expressed by the Writ Petitioner to execute the subject works on the ground of quoting of aforesaid price, 1st respondent was necessitated for retendering. At the same time, the respondents ought to have examined the fact as to whether the Writ Petitioner was able to execute the subject work at the price quoted, which is 86% below the estimation price. Further, pursuant to the Letter dated 15.06.2024 addressed by the Writ Petitioner bringing it to the notice of 1st respondent that because of the typographical error, it wrongly quoted substantially lesser price, 1st respondent did not issue any notice to the Writ Petitioner. The said fact is also concurred by the learned counsel for the respondents that they did not issue any notice to the Writ Petitioner before passing the impugned order. The action of 2nd respondent in passing the impugned Ban Order, which is not preceded by any prior notice, is in violation of the principles of natural justice, specifically audi alteram partem, as the Writ Petitioner being the affected party, lost a reasonable opportunity to put-forth its defence before suffering the consequences. In view of the aforesaid facts and circumstances, the impugned Order, dated 07.05.2025 deserves to be set-aside.

19. Accordingly, the Writ Petition is allowed, setting-aside the impugned Order vide Reference No.25/MS/SBC dated 07.05.2025. There shall be no order as to costs of the Writ Petition.

As a sequel thereto, the miscellaneous applications, if any, pending in this Writ Petition shall stand closed.