Delhi High Court
Giriraj Enterprises vs Municipal Corporation Of Delhi on 6 May, 2026
Author: Amit Bansal
Bench: Amit Bansal
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Reserved on: 25th March, 2026
Judgment pronounced on: 6th May, 2026
+ W.P.(C) 12493/2025 with CM APPL. 50962/2025
GIRIRAJ ENTERPRISES .....Petitioner
Through: Mr. Abhay Kumar, Mr. Pankaj
Jaiswal, Mr. Shagun Ruhil and
Mr. Karan Chopra, Advocates
Versus
MUNICIPAL CORPORATION OF DELHI .....Respondent
Through: Mr. Tushar Sannu and Ms. Pulak
Gupta Joshi, Advocates for MCD with
Mr. Kushal Kadiyan, MCD Officer.
CORAM:
HON'BLE MR. JUSTICE AMIT BANSAL
JUDGMENT
AMIT BANSAL, J.
1. The present writ petition has been filed seeking setting aside of the
order dated 13th August, 2025 issued by respondent no.3/Assistant
Commissioner, MCD, by which the allotment of the parking site at Red Fort
Metro Station Parking, City SP Zone awarded to the petitioner has been
cancelled. Further, the security deposit and the FDR submitted by the
petitioner has been forfeited and the petitioner has been blacklisted.
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2. Brief facts relevant for deciding the present writ petition are set out
below.
3. On 30th August, 2024, respondents invited E-bids from eligible bidders
for allotment of authorized surface parking sites at various locations. One of
the parking sites offered was at ‘Red Fort Metro Station Gate No.1, 2, 3 and
4’ (‘subject parking site’). The Reserved Monthly License Fee was fixed at
Rs.59,000/-, whereas the EMD was fixed for a sum of Rs.1,06,200/-.
4. On 26th September, 2024, the petitioner submitted its comprehensive
bid for a monthly license fee of Rs.7,61,000/- for the allotment of the subject
parking site. The bid of the petitioner was admitted by the respondents on 18th
November, 2024.
5. On 22nd November, 2024, a communication was sent by the
respondents to the petitioner, wherein it was stated that the aforesaid bid by
the petitioner was accepted and the subject parking site was offered to the
petitioner for a period of three years.
6. On 29th November, 2024, the petitioner deposited the requisite security
deposit for an amount of Rs.22,83,000/- with the respondents in accordance
with the terms and conditions of the e-tender. Subsequently, the petitioner also
deposited a sum of Rs.29,37,815/- towards the advance monthly license fee
for a period of four months.
7. Pursuant thereto, the petitioner was handed over the possession of the
subject parking site on 16th December, 2024.
8. The Traffic Police issued a communication dated 21st February, 2025 to
MCD seeking cancellation of the license of parking area at the Red Fort Metro
Gate No.4 as the same was causing traffic congestion in the area. On 7th May,
2025, the MCD sent a communication to the Traffic Police stating that MCD
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had allotted the parking site only for Gate No.1 and Gate No.2 of the subject
parking site. Therefore, the parking site being operated at Gate No.3 and 4 is
unauthorized.
9. A Show Cause Notice dated 13th May, 2025 was issued by MCD to the
petitioner stating that the petitioner was covering parking space beyond the
allotted parking area and accordingly, the petitioner was called to pay a
penalty of Rs.1,14,115/-.
10. A subsequent Show Cause Notice was issued on 30th May, 2025,
wherein the petitioner was called to pay outstanding amounts towards
monthly license fees of Rs.25,33,296/-. The aforesaid notice also proposed
cancellation of the contract, forfeiture of security deposit and blacklisting of
the petitioner.
11. The aforesaid Show Cause Notices were challenged by the petitioner
by way of Writ Petition, being W.P.(C) 9024/2025, before this Court. The said
writ petition was disposed of vide order dated 4th July, 2025, directing the
petitioner to file a reply to the aforesaid Show Cause Notice and directing
respondents/MCD to decide the Show Cause Notice after considering the
reply filed by the petitioner granting opportunity of personal hearing to the
petitioner. The relevant observations of the said order are set out below:-
“12. Upon the petitioner filing the reply to the said Show Cause Notices,
the respondent no. 1-MCD shall consider the reply of the petitioner and
also grant an opportunity of personal hearing.
13. In case, the respondent no. 1-MCD arrives at a conclusion that the
petitioner is unable to operate the full area of the parking space allotted
to it, the respondent no. 1-MCD shall consider giving proportionate
remission to the petitioner, in terms of its policy.
14. Needless to state, during the pendency of the proceedings before the
MCD pertaining to the Show Cause Notices issued by the MCD, no
coercive action shall be taken against the petitioner.
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15. At this stage, this Court notes the submissions of learned counsel
appearing for the respondent that the petitioner was handed over the
parking site in January, 2025, however, till date the petitioner has not
paid any amount.
16. Responding to the same, learned counsel appearing for the
petitioner submits that a sum of Rs. 4,00,000/- (Rupees Four Lakh) has
been deposited recently.
17. In view of the submissions made before this Court, it is directed that
a sum of Rs. 10,00,000/- (Rupees Ten Lakh) shall be deposited by the
petitioner on account, with the respondent no. 1-MCD within a period
of one week from today.”
12. Pursuant thereto, the petitioner filed a reply dated 14th July, 2025 to the
Show Cause Notice dated 30th May, 2025.
13. The impugned order was passed by MCD on 13th August, 2025. For the
sake of convenience, the same is set out below:-
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14. The petitioner has challenged the aforesaid impugned order in the
present writ petition. This Court vide order dated 19th August, 2025, stayed
the operation of the impugned order, subject to the petitioner depositing an
additional amount of Rs.10,00,000/- with the MCD within two weeks
therefrom. The petitioner complied with the said direction by depositing the
requisite amount, and accordingly, the operation of the impugned order has
remained stayed.
15. The main ground of challenge raised by the petitioner is that the
contract was awarded in favour of the petitioner for all four gates of the Red
Fort Metro Station, i.e. Gate Nos. 1 to 4. However, respondents permitted the
petitioner to operate only at two gates, i.e. Gate Nos.1 and 2.
16. Counsel for the petitioner submits that it is for the first time in the
counter affidavit that the respondents have raised the plea that respondents
had awarded the parking site only in the stretch covering Gate Nos.1 and 2.
This plea was never taken in any of the earlier communications. A perusal of
the e-tender documents which gives a list of parking sites, offer letter dated
24th November, 2024 and the possession letter dated 16th December, 2024,
clearly show that the petitioner was to be given all four gates of the parking
site. Therefore, the contention of the respondents that the petitioner only
required to be given parking site at Gate Nos.1 and 2 is completely contrary
to the record. It is further contended on behalf of the petitioner that the
petitioner cannot be charged monthly license fees for the parking site covering
four gates, i.e. Gate Nos. 1, 2, 3 and 4 when the petitioner was permitted to
operate only at the two gates.
17. It is further submitted on behalf of the petitioner that the impugned
order proceeds to blacklist the petitioner in a completely unlawful manner. In
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this regard, reference is placed on the judgments of the Supreme Court in
Eurasian Equipment v. State of West Bengal1 and B.S.N. Joshi & Sons v.
Nair Coal Services2.
18. In the reply affidavit filed on behalf of the respondents/MCD, it is
stated that the petitioner was allotted only Gate Nos.1 and 2 of the subject
parking site. This is evident from the site map of the subject parking site which
was counter signed by the petitioner. The plea of not handing over the sites at
Gate Nos. 3 and 4 is clearly an afterthought which was raised much after the
acceptance of possession. The petitioner’s conduct shows repeated and
independent breaches, such as overcharging and unauthorized occupation.
Accordingly, the respondents were fully justified in cancelling the contract of
the petitioner.
19. Mr Tushar Sannu, standing counsel appearing on behalf of MCD,
submits that even though the parking site was referred to in the tender
document as ‘Metro Red Fort Gate no. 1, 2, 3 and 4’, the parking was allotted
only between Gate Nos.1 and 2. The parking between Gate Nos. 3 and 4 was
not a part of the subject parking site. The approved site map of the subject
parking site was annexed to the allotment letter issued by the respondents in
favour of the petitioner, which confirms that only Gate Nos.1 and 2 are part
of the licensed area for operation of the subject parking site. The said site map
was counter signed by the petitioner.
20. The petitioner accepted the aforesaid allotment without any protest.
The petitioner did not object at the time of taking over the possession of the
subject parking site on 16th December, 2024. Therefore, the petitioner is
1
(1975) 1 SCC 70.
2
(2006) 11 SCC 548.
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deemed to have waived his right by way of continued participation. Reliance
is placed on the judgment of the Supreme Court in State of Punjab v.
Davinder Pal Singh Bhullar3.
21. The respondents also question the maintainability of the present writ
petition as the rights of the parties are governed by contractual terms.
Therefore, the proper remedy would be to file a civil suit. Reliance in this
regard is placed on the judgments of the Supreme Court in Bareilly
Development Authority v. Ajai Pal Singh4 (‘Bareilly Development
Authority‘) and Tata Cellular v. Union of India5.
22. Insofar as blacklisting is concerned, it is submitted that taking into
account the conduct of the petitioner, the respondents were fully justified in
blacklisting the petitioner. Reliance in this regard is placed on the judgment
of the Supreme Court in Kulja Industries Ltd. v. Western Telecom Project
BSNL6 (‘Kulja Industries Limited’) and Patel Engineering v. Union of
India7.
23. I have heard the counsel for the parties and examined the record.
24. From the perusal of the site map of the subject parking site filed along
with the e-tender documents (part of Annexure P-2 at page 166 of the
petition), it is manifest that MCD awarded the subject parking site to the
petitioner only for the stretch from Gate No.1 to Gate No.2. The site map
clearly notes that the allotment of the parking site is for Gate Nos.1 and 2 of
the Red Fort Metro Station. As per the said document, the subject parking site
3
(2011) 14 SCC 770.
4
(1989) 2 SCC 116.
5
(1994) 6 SCC 651.
6
(2014) 15 SCC 731.
7
(2012) 11 SCC 257.
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covers 175 meters with a parking space of 7 four-wheeler vehicles and 45
two-wheeler vehicles.
25. The MCD has also placed on record a copy of the said site map duly
counter signed by the petitioner (additional documents filed by the MCD on
25th March, 2026). It transpires from the aforesaid document that even though
the nomenclature used for parking site was “Red Fort Metro Station Gate
Nos.1, 2, 3 and 4”, the actual parking area that was offered in the e-tender was
only in respect of parking site between Gate Nos.1 and 2. The parking
between Gate Nos.3 and 4 which falls on the other side of the road was not
part of the e-tender.
26. Pertinently, the possession of the parking site was handed over to the
petitioner on 16th December, 2024 (at Annexure P-6) and the petitioner never
disputed till May, 2025 that the area between Gate Nos.3 and 4 have not been
handed over to him. The plea of the petitioner that the MCD did not hand over
the parking between the Gate Nos.3 and 4 clearly appears to be an
afterthought.
27. Respondents/MCD in its communication dated 7th May, 2025 to the
traffic police (Annexure P-11) had clearly stated that the parking site was
allotted to the petitioner from Gate No.1 to Gate No.2 only and the parking
from Gate Nos.3 and 4 was not allotted to the petitioner.
28. It has been submitted by the MCD that a pre-bid meeting was duly
convened wherein all prospective bidders were present and their queries were
addressed. Pertinently, if the petitioner had any reservations or concerns with
respect to the subject parking site, the same ought to have been raised and
clarified during the said meeting.
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29. Pertinently, against a Reserve Monthly License Fee of Rs.59,000/-, the
petitioner bid for an amount of Rs. 7,61,000/- as a monthly license fee. Having
made a bid for this amount, the petitioner cannot claim that the area at the
subject parking site was less and unilaterally start paying lesser amount on a
proportionate basis.
30. In the opinion of this Court, the cancellation was carried out by MCD
in accordance with provision of Notice Inviting Tender (‘NIT’) which
constituted the contract between the parties. Clause 10(B) and Clause 11 of
Section-II (Instructions to Bidders) and Clause 24 of the ‘Additional Terms &
Conditional for Award of Contract of Parking Sites’ at Annexure 5 clearly
provided that failure to deposit dues in a timely manner can result in
termination of the contract and upon termination, MCD is entitled to forfeit
the security deposit.
31. From the calculation sheet filed by the MCD on 22nd February, 2026, it
is evident that the petitioner has failed to pay the monthly license fee of
Rs.7,61,000/- on multiple occasions since February, 2025 and there are
outstanding dues amounting to a total of Rs. 49,37,061/-.
32. Insofar as the aspect of blacklisting is concerned, Clause 26 of the
‘Additional Terms & Conditional for Award of Contract of Parking Sites’ at
Annexure 5 in the NIT, provides that a contractor can be blacklisted if there
are regular defaults in payment of license fee by the contractor and in such
cases, permits forfeiture of the security amount/Performance
guarantee/advance MLF and other deposits, however, the said clause does not
provide any time frame for blacklisting. For ease of reference, Clause 26 is
set out below:
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“Clause 26 Blacklisting-
The contractor, if at any time, found engaged in any kind of
malpractices including default in payment of license fee regularly shall
be liable to be blacklisted & in such an event his security
amount/Performance guarantee/advance MLF and other deposits will
be forfeited.”
33. The Supreme Court in Kulja Industries Limited (supra) has held that
blacklisting against a contractor cannot be permanent. The period of
debarment/blacklisting would depend on the nature of the offence committed
by the contractor. The following guidelines were laid down by the Supreme
Court for blacklisting:-
“22. The guidelines also stipulate the factors that may influence the
debarring official’s decision which include the following:
(a) The actual or potential harm or impact that results or may result
from the wrongdoing.
(b) The frequency of incidents and/or duration of the wrongdoing.
(c) Whether there is a pattern or prior history of wrongdoing.
(d) Whether the contractor has been excluded or disqualified by an
agency of the Federal Government or has not been allowed to
participate in State or local contracts or assistance agreements on the
basis of conduct similar to one or more of the causes for debarment
specified in this part.
(e) Whether and to what extent did the contractor plan, initiate or carry
out the wrongdoing.
(f) Whether the contractor has accepted responsibility for the
wrongdoing and recognized the seriousness of the misconduct.
(g) Whether the contractor has paid or agreed to pay all criminal, civil
and administrative liabilities for the improper activity, including any
investigative or administrative costs incurred by the Government, and
has made or agreed to make full restitution.
(h) Whether the contractor has cooperated fully with the government
agencies during the investigation and any court or administrative
action.
(i) Whether the wrongdoing was pervasive within the contractor’s
organization.
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(j) The kind of positions held by the individuals involved in the
wrongdoing.
(k) Whether the contractor has taken appropriate corrective action or
remedial measures, such as establishing ethics training and
implementing programs to prevent recurrence.
(l) Whether the contractor fully investigated the circumstances
surrounding the cause for debarment and, if so, made the result of the
investigation available to the debarring official.
23. As regards the period for which the order of debarment will remain
effective, the guidelines state that the same would depend upon the
seriousness of the case leading to such debarment.
24. Similarly in England, Wales and Northern Ireland, there are
statutory provisions that make operators ineligible on several grounds
including fraud, fraudulent trading or conspiracy to defraud, bribery,
etc.
25. Suffice it to say that “debarment” is recognised and often used as
an effective method for disciplining deviant suppliers/contractors who
may have committed acts of omission and commission or frauds
including misrepresentations, falsification of records and other
breaches of the regulations under which such contracts were allotted.
What is notable is that the “debarment” is never permanent and the
period of debarment would invariably depend upon the nature of the
offence committed by the erring contractor.”
[emphasis supplied]
34. The judgment of the Supreme Court in Kulja Industries Limited
(supra) was followed in Blue Dreamz Advertising Private Limited and
Another v. Kolkata Municipal Corporation and Others8. Applying the
aforesaid principles laid down in Kulja Industries Limited (supra), the order
of blacklisting was set aside by the Supreme Court. The relevant observations
are set out below:-
“25. In other words, where the case is of an ordinary breach of contract
and the explanation offered by the person concerned raises a bona fide
dispute, blacklisting/debarment as a penalty ought not to be resorted to.
Debarring a person albeit for a certain number of years tantamounts to8
(2024) 15 SCC 264.
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civil death inasmuch as the said person is commercially ostracised
resulting in serious consequences for the person and those who are
employed by him.
26. Too readily invoking the debarment for ordinary cases of breach of
contract where there is a bona fide dispute, is not permissible. Each
case, no doubt, would turn on the facts and circumstances thereto.”
35. In Techno Prints v. Chhattisgarh Textbook Corporation9, the Supreme
Court once again deprecated the practice of blacklisting a contractor as it is a
drastic step and brings to an end the entire business.
36. In the present case, there has been no assessment as to the period for
which the petitioner was to be blacklisted taking into account the conduct of
the petitioner. The order blacklisting the petitioner, has been passed in a
completely mechanical manner and therefore is liable to be set side.
37. In view of the above discussion, the present writ petition is disposed of
in the following terms:
i. Termination/cancellation of allotment of the subject parking site is
upheld.
ii. The forfeiture of security deposit and FDR by the MCD is upheld.
iii. Liberty is given to the respondents/MCD to take steps for recovery
of unpaid dues/Monthly License Fees from the petitioner.
iv. The impugned order is set aside to the extent that it indefinitely
blacklists the petitioner.
v. The respondents/MCD are at liberty to initiate fresh proceedings for
blacklisting by issuing an appropriate show cause notice to the
petitioner and affording due opportunity of hearing. Any decision
with respect to blacklisting shall be taken in accordance with the9
2025 SCC OnLine SC 343.
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principles laid down by the Supreme Court in Kulja Industries
Limited (supra).
38. All pending applications stand disposed of.
AMIT BANSAL
(JUDGE)
May 6, 2026
Vivek/-/ds
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