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2008 DIGILAW 407 (PAT)

Surendra Singh v. State Of Bihar

2008-02-26

NAVANITI PRASAD SINGH

body2008
Judgment 1. The petitioner had agreement No. F2/ 14/2002-2003 entered into between petitioner and the State of Bihar through Ex ecutive Engineer, National Highway Division, Road Constructibns Department, Bhagalpur. In the said agreement which was dated 21.9.2002, petitioner was to complete work by 20th March, 2003. In between he was allotted additional work on 22.2.2003. Apparently on work not having been completed in time, the agreement was cancelled on 26.7.2003 but subsequently revived by order dated 25.6.2005 and extended time for completion was granted upto 31.12.2005. In between the extended period, petitioner gave several representations (Annexure-6 series) pointing out to the authorities that there was encroachment at work site which authorities had inspected as well and the encroachment not being removed, petitioner could not carry out the work. Authorities allegedly failed to remove encroachment and handover clear site. Petitioner then brings to attention Annexure-5 being letter of the authorities dated 13.3.2006 wherein it is clearly admitted that design of one ol the bridges had been changed for which designs and estimates were yet to be prepared and furnished. On these facts, petitioner submits that it is wrong to state that petitioner had failed to complete the work in time and, thus, the agreement is liable to be cancelled. Consequently, he could not have been blacklisted nor his security forfeited for the same. The order of cancellation of forfeiture of security money is Annexure-9 and the order of blacklisting is Annexure-5 to the IA which is a petition for amendment and allowed as such. Therefore, in nutshell, the petitioner challenges the order of cancellation and the consequential blacklisting. Shri N.K. Singh, learned counsel appearing for the petitioner principally submits that in view of the facts as noted above by this Court, it could not be said that the petitioner was at fault in not finishing the work in time. He further submits that a reference to Annexure-9, the impugned order cancelling the agreement, would show that the impugned order has not been even referred to on this basic undisputed facts while dealing with the matter in regard to the blacklisting order. He further submits that a reference to Annexure-9, the impugned order cancelling the agreement, would show that the impugned order has not been even referred to on this basic undisputed facts while dealing with the matter in regard to the blacklisting order. He submits that if the order cancelling contract goes, the order blacklisting the petitioner could not stand by itself Further, he submits that before a person can be blacklisted, which order has drastic consequence, authorities must establish not only a failure to perform the contract as agreed but authorities must establish a deliberate and conscious failure to do so. In other words, if the failure was not wholly attributable to the fault of the petitioner or not a deliberate failure, such consequences ought not to flow. 2. State, on the other hand, has filed counter affidavit and submitted that the petitioner was required to complete the contract by 20.3.2003. He had not completed the same and, as such, by Annexure-9. dated 14.8.2006, the contract was rescinded. The learned counsel for the State submits that under the contract in terms of condition 3C, State had the jurisdiction to cancel the contract for non-performance and it did so. That could not be justiciable before this Court. Similar plea has been taken with regard to order of blacklisting. Heard the parties and with their consent, the writ application is being disposed of at the stage of admission itself. 3. A reference to Annexure-9 would show that all the said order of cancelling the contract states is that the work had to be completed by 20.3.2003 and had not been done which was violation of the agreement and, as such, in view of condition 3 of the agreement, the agreement was being rescinded. This order is dated 14.8.2006. Significant to mention that in this order, no reason is given or disclosed as to why when the contract was to be completed in March 2003 and was not allegedly completed by then, action was being taken on 14.8.2006. In other words, order does not disclose or deal with the first cancellation which was ordered on 26.7.2003 and the revival of the agreement on 25.6.2005 extending the period upto 31.12.2005. This important matter has not been referred to at all. In other words, order does not disclose or deal with the first cancellation which was ordered on 26.7.2003 and the revival of the agreement on 25.6.2005 extending the period upto 31.12.2005. This important matter has not been referred to at all. Similarly, no reference has been made to the petitioners letters appended as Annexure-6 series which were prior to the extended date of completion of the contract. Further, Annexure-5 dated 13.3.2006 of the Department itself noticing the change in design and the necessity to prepare estimates has also not been referred to. In my view, these were essential facts to be not only referred to but discussed. If essential facts are left out or ignored then the order cannot be termed as an informed decision. An authority before it can cancel a contract, it must instruct itself of all relevant facts. It is only as a consequence of all relevant facts being noticed then a decision can be justified otherwise it would be an uninformed decision which per se would be arbitrary. 4. In the present case, the contract was earlier rescinded but after two years, further time was granted to complete the same very contract. These were material facts which have been totally ignored. These facts are not even challenged by the State. They were the relevant facts and in fact it is those facts which explained why this gap between 20.3.2003 when the work was originally to be completed and 14.8.2006 when finally by Annexure-9, the contract was cancelled. It is not for this Court to speculate as to why this was done for this ought to have been apparent from the order itself. In such a situation, the order (Annexure-9) rescinding the contract cannot be sustained. It is either based on half information or relevant information has been ignored all of which were available to the authorities themselves. The order is an uninformed order and is per se arbitrary. It is, thus, set aside with all consequences. 5. Now coming to the order of blacklisting. This order, though visits the petitioner with grave consequences, it condemns the petitioner and prohibits the petitioner from entering into any contract with the Government also cannot be sustained for firstly it is dependant on order of cancellation of contract which has been set aside and secondly it is a totally non-speaking order. Now coming to the order of blacklisting. This order, though visits the petitioner with grave consequences, it condemns the petitioner and prohibits the petitioner from entering into any contract with the Government also cannot be sustained for firstly it is dependant on order of cancellation of contract which has been set aside and secondly it is a totally non-speaking order. All It says is that the explanation offered was not found satisfactory. What were the allegations, how the petitioner in his show cause has sought to meet them and what was the conclusion based on those allegations have not been discussed at all much less noticed. This order blacklisting a contractor has been held to be an order quasi-judicial in nature. If it is an order quasi-judicial in nature, it has to be a speaking order. A speaking order is an order which contains reason as has been held by Courts repeatedly. Reasons are the link between the facts found and the decision taken. The order blacklisting is open to judicial review but if no reason in respect of the decision is found in the order, the Court exercising power of judicial review is handicapped in exercising its jurisdiction. It is for this reason that non-speaking orders have been held to be violating the basic requirements of principles of natural justice and void as such. In those circumstances, the order of blacklisting being order dated 23.10.2007 passed by the En-gineer-in-Chief appended as Annexure-5 to the interlocutory application which has been treated as a part of the main writ application cannot be sustained. 6. In the result, both the order cancelling the contract and the order blacklisting the petitioner are both unsustainable and set aside. 7. However, it would be open to the respondent authorities to issue fresh notices to the petitioner, and after considering the matter afresh, pass appropriate orders on both counts in accordance with law. 8. The writ application is, thus, allowed with the observations and directions as aforesaid.