Authority: High Court of Judicature at Madras

Order Date: 16 September 2026

Case Overview

  • Parties: Renaatus Projects Private Limited (petitioner) filed a writ petition under Article 226 against the Government of India, Ministry of Housing and Urban Affairs, and the Central Public Works Department (respondent). The petitioner was represented by Mr. P.J. Rishikesh; the respondent was represented by Additional Solicitor General Mr. AR L. Sundaresan, assisted by Mr. K. Ramanamoorthy.
  • Tender Details: A tender dated 16 March 2024 was floated by CPWD for the construction of 476 regular‑bedded and 81 non‑complementary‑bedded JIPMER Karaikal Hospital (G+5), HT panel‑cum‑Control Room and connecting corridor. Estimated cost: Rs. 246,42,40,519. Earnest Money Deposit (EMD) required: Rs. 2,55,44,422 (approximately 1 % of contract value). Technical bids opened on 1 May 2024 (10 bids received, 2 ineligible). Financial bids opened on 27 June 2024; Renaatus Projects was the L1 bidder with a price of Rs. 199,62,31,244.44, i.e., 18.99 % below the estimate.
  • Form F Affidavit: Bidders were required to submit Form F affirming that they had not been blacklisted by any State or Central department in the preceding seven years. The petitioner submitted the affidavit on 1 May 2024 stating no blacklisting.
  • Alleged Non‑Disclosure: The petitioner had been temporarily removed from the registered contractor list by the State Highways Department, Government of Tamil Nadu, via G.O. No. 156 dated 27 Nov 2023 for a period of one year (a sanction arising from a forged experience certificate related to a 2018 grade‑separator contract). The removal was pending before the Madras High Court in W.P. No. 10518 of 2024.
  • Disclosure Attempts: On 19 July 2024 the petitioner sent a detailed letter to CPWD disclosing the Tamil Nadu order and the pending writ petition, and reiterated the same on 16 Aug 2024, claiming no mala‑fide intent.
  • Complaint and Legal Opinions: A complaint dated 19 June 2023 alleged the petitioner was blacklisted. CPWD obtained a report from the Tamil Nadu Highways Department confirming a one‑year ban (27 Nov 2023 – 26 Nov 2024). Legal opinions (10 July 2024, 22 Aug 2024) concluded that such a ban constitutes blacklisting and should be treated as a material suppression.
  • Internal Communications: CPWD sought guidance on 31 July 2024 and 5 Aug 2024; received a legal opinion on 22 Aug 2024 stating the ban must be treated as blacklisting. On 14 Aug 2024 the Chief Engineer opined that the Form F requirement was unique to this tender and had been added without proper approval.
  • Tender Committee Deliberation: On 6 Sep 2024 the tender committee recorded that Form F was added to Annexure‑24 of the NIT without requisite approval from ADG/SDG, violating CPWD Works Manual 2022. The committee concluded that the petitioner’s false affidavit warranted rejection and that the tender could not be approved.
  • Cancellation and Fresh Tender: The tender was cancelled by order dated 18 Sep 2024 and a fresh tender was floated. The Court’s decision in W.P. No. 10518 of 2024 (21 Oct 2024) clarified that the one‑year blacklisting would end on 26 Nov 2024 and would not bar the petitioner from other tenders in Tamil Nadu.
  • Show‑Cause and Impugned Order: CPWD issued a show‑cause notice on 6 Jan 2025 directing the petitioner to explain why the EMD could not be forfeited for non‑disclosure. The petitioner replied on 18 Jan 2025, arguing voluntary disclosure and the absence of an explicit forfeiture clause. The impugned order dated 22 Jan 2025 directed forfeiture of Rs. 2,36,42,405 EMD.
  • Counsel Submissions: The petitioner’s counsel argued (i) no forfeiture clause existed; (ii) voluntary disclosure cured the omission; (iii) forfeiture is a penalty and, per Supreme Court precedents (Gopal Krishnan, Kailash Nath), actual loss must be shown. The respondent’s counsel contended that Form F itself contains an automatic forfeiture provision for false information, irrespective of contract award.
  • Judicial Questions Considered: (i) Whether the petitioner was obligated to disclose the one‑year removal in Form F and whether non‑disclosure could be deemed a genuine mistake; (ii) Whether voluntary disclosure before the show‑cause notice would negate the suppression; (iii) Whether the EMD could be forfeited on account of the false affidavit.
  • Court’s Reasoning: The Court held that (a) the one‑year removal amounted to blacklisting; (b) the petitioner’s non‑disclosure was wilful and cannot be treated as a genuine mistake; (c) voluntary disclosure after the fact does not cure the breach; (d) Form F expressly provides for forfeiture of the EMD upon false declaration, and the clause applies even before contract award; (e) extensive Supreme Court jurisprudence on earnest money, penalty clauses, and Section 74 of the Indian Contract Act was examined, confirming that forfeiture is permissible where the contract terms are clear and explicit.

Final Outcome

  • The writ petition (W.P. No. 2888 of 2025) is dismissed. No costs are awarded. The connected miscellaneous petition (W.P. No. 3194 of 2025) is closed. Consequently, the order directing forfeiture of the Rs. 2,36,42,405 EMD remains in force.

Topics: Earnest Money Deposit, Tender Blacklisting