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2008 DIGILAW 761 (CAL)

Madan Mohan Mondal v. STATE OF WEST BENGAL

2008-07-31

DIPANKAR DATTA

body2008
Judgment :- (1.) A tender notice dated 14. 9. 07 was issued by the Programme Director, Indo german Basic Health Project and ex-officio Special Secretary of the Health and family Welfare Department, Government of West Bengal for execution of various jobs of upgradation of Block Primary Health Centres in various districts of the state. Pathardihi Block Primary Centre in Purulia district (hereafter the said bphc) was one of such centres for which bids were invited. The petitioner responded to the tender notice. His offer was considered by the respondents and ultimately letter of acceptance dated 24.1.2008 was issued in his favour. On 25. 1. 08 a complaint was addressed to the Programme Director by the zilla Parishad Contractors Association, Suri, Birbhum alleging that contractors had been selected for works mentioned in the tender notice though they had failed to qualify in terms of the tender terms and conditions. While responding to the tender notice, the petitioner had submitted a certificate issued by the manager, Sainthia Branch of Birbhum District Centre Cooperative Bank Limited (hereafter the said Bank), dated 11. 10. 07. By the said certificate it was assured that the said Bank would be providing cash-credit facility to the extent of Rs. 50 lakh to the petitioner to meet the working capital requirements if he is selected for executing the contract for the work of upgradation of the said BPHC. (2.) WHILE looking into the complaint as aforesaid, enquiries were initiated and in pursuance thereof the incumbent in the post of Manager, Sainthia Branch of the said Bank by his communication dated 23. 2. 08 conveyed that the certificate dated 11. 10. 07 produced by the petitioner, purportedly issued by the branch, is fake. In addition, it was further conveyed that the Branch Manager has no authority to issue such certificate to any person and it was only the Chief executive Officer of the Bank who could issue the same. Soon after receipt of such communication from the Branch Manager, two orders dated 24. 3. 08 were issued, one by the Programme Director and the other by the Chief Engineer of Basic Health Project. Soon after receipt of such communication from the Branch Manager, two orders dated 24. 3. 08 were issued, one by the Programme Director and the other by the Chief Engineer of Basic Health Project. The Programme Director by his memo No. HF/bhp/kfw/170/07/142 conveyed to the petitioner that on verification it had been detected that he had adopted corrupt and fraudulent practice by furnishing false/forged documents in support of his credentials in connection with the bids submitted by him in response to invitation of bids dated 14. 9. 07 for the work of upgradation of the said BPHC. Accordingly the letter of acceptance issued vide Memo dated 24. 1. 08 was revoked and he was asked to show cause within 7 days as to why he should not be debarred from participating in bids for at least five years and the bid security for execution of work of upgradation of the said BPHC shall not be forfeited for vitiating the bidding process and misleading the Government in the evaluation of bids. By the Chief engineers order contained in Memo No. 148/ce/bhp/08, the letter of acceptance issued in favour of the petitioner was cancelled. Upon receipt of the letter revoking the letter of acceptance and the show cause notice, the petitioner responded by his representation dated 31. 3. 08. The petitioner called upon the Chief Engineer, Basic Health Project and the programme Director to inform him particulars regarding false/forged documents allegedly submitted by him. He was then informed by the Chief Engineer by his letter dated 2. 4. 08 that the Manager, Sainthia Branch of the said Bank had confirmed that the bank certificate assuring credit facilities as submitted by him was fake. The petitioner again replied by his letter dated 15. 4. 08. He expressed helplessness at the said Bank conveying that the certificate issued by it is fake. However, he prayed for further time so that necessary certificate by a nationalised bank may be issued for extending him credit facility. (3.) AT this juncture, by letter dated 18. 6. The petitioner again replied by his letter dated 15. 4. 08. He expressed helplessness at the said Bank conveying that the certificate issued by it is fake. However, he prayed for further time so that necessary certificate by a nationalised bank may be issued for extending him credit facility. (3.) AT this juncture, by letter dated 18. 6. 08 the Programme Director conveyed the decision taken by him to the effect that the petitioner would be debarred from participating in bids relating to works under Health and Family Welfare department, Government of West Bengal for a period of 5 years from date of issue thereof for vitiating the bidding process and misleading the Government in the evaluation of bids by submitting false/forged documents in support of his credentials. Though the petitioner by his letter dated 15. 4. 08 had expressed his absence of faith in the said Bank, he again wrote to the Chief Executive Officer thereof on 19. 4. 08 and requested him to issue a fresh certificate of assurance for credit facility in his favour. The Chief Executive Officer of the said Bank on the basis of the prayer of the petitioner now assured by his letter dated 23. 4. 08 addressed to the Programme Director that the said Bank was agreeable to extend credit facility to the petitioner. By the said letter, it was reiterated that the branch Manager of the said Bank had no authority to issue bank certificate of assurance for credit facility to anybody and it is he who had the sole authority in this respect. Armed with this letter of the Chief Executive Officer of the said bank, the petitioner again approached the Programme Director with a request to consider his case on humanitarian ground and to issue work order upon withdrawal of the order revoking the letter of acceptance citing that he was never at fault for submission of the certificate dated 11. 10. 07. The petitioners request was not acceded to by the respondents. Questioning the orders of the respondents revoking the letter of acceptance and debarring him from participating in any bid of the Health and Family Welfare department of the Government for five years, the petitioner approached this court by filing a writ petition bearing W. P. No. 9096 (W) of 2008 (hereafter the first writ petition). (4.) THE writ petition was admitted on 13. 5. 08. (4.) THE writ petition was admitted on 13. 5. 08. Affidavits were directed to be exchanged. Having regard to the prima facie satisfaction of the Court, interim order was passed staying operation of the order dated 16. 4. 08 blacklisting the petitioner. So far as the earnest money/security money deposited by the petitioner is concerned, the respondents were directed to invest the same in short-term fixed deposit, to be renewed from time to time until further orders are passed by the Court; return of such money together with interest to the petitioner, however, would depend on the final outcome of the writ petition. No order was passed on the petitioners prayer for stay of further proceeding in relation to execution of the work of upgradation of the said BPHC. Soon thereafter, fresh bid was invited in respect of work of upgradation of the said BPHC on 23. 5. 08, the other writ petition [w. P. No. 10355 (W) of 2008] (hereafter the second writ petition) was then filed by the petitioner challenging the fresh tender notice. While admitting the second writ petition on 16. 6. 08, this court directed exchange of affidavits and granted liberty to the respondents to receive tenders in pursuance of the impugned tender notice but were restrained from taking any final decision without obtaining leave of Court. The writ petitions were heard together by this Court and shall be governed by this common order. (5.) MR. Kar, learned Counsel appearing for the petitioner contended that the certificate dated 11. 10. 07 furnished by the petitioner could not have been termed "a fake document". According to him the certificate dated 11. 10. 07 has been actually acknowledged to have been signed by the Manager, Sainthia Branch of the said Bank by the Chief Executive Officer in his letter dated 23. 4. 08. Having admitted that the said document was executed and signed by the Branch manager, the conclusion is inescapable that it was a document which genuinely emanated from the office of the said Bank and was not manufactured or fabricated by the petitioner. It is absolutely a different issue altogether that the branch Manager did not have the authority to issue such letter. He relied on the meaning of the word "fake" as given in Blacks Law Dictionary and submitted that by no stretch of imagination could it be held to be a fake document. It is absolutely a different issue altogether that the branch Manager did not have the authority to issue such letter. He relied on the meaning of the word "fake" as given in Blacks Law Dictionary and submitted that by no stretch of imagination could it be held to be a fake document. In this connection, he relied on a Division Bench judgment of this Court reported in (2007) 2 CLT 316 (H. C): Sri Umananda Roy vs. Aandn Administration and ors. to trace the Courts understanding of the word "fake". According to him, the acts of revocation of the letter of acceptance and blacklisting the petitioner were on the basis of a wrong premise. He next contended that the petitioner was blacklisted without complying with principles of natural justice and without informing the petitioner the reasons therefor. He relied on the decisions of the Apex Court reported in AIR 1975 SC 266 (Erusian Equipments and Chemicals Ltd. Vs State of West Bengal); (1989) 1 SCC 229 (Raghunath Thakur "vs- State of Bihar and ors. ; and 1994 Supp. (II) SCC 699 (Southern Painters "vs- Fertilizers and Chemicals, Travancore and ors.)to contend that any order of blacklisting without hearing the person concerned is illegal and thus is liable to be set aside. By relying on the decision of the Apex court reported in 1995 (5) SCC 482 : Life Insurance Corporation of India and anr. vs. Consumer Education and Research Centre and ors. and (1990) 3 SCC 752 : mahabir Auto Store vs. Indian Oil Corporation, he contended that the petitioner having complied with the terms and conditions of the tender notice and his offer having been accepted by the State, the contract stood concluded between the parties by notification of award dated 24. 1. 08 subject to furnishing of performance security. The petitioner having duly submitted performance security to the tune of Rs. 13,39,744/-on 5. 2. 08 as well as additional performance security amount of Rs. 1,70,000/-on the same date, a concluded contract came into existence and the State could not have resile there from except for fair, just and equitable reasons in conformity with principles of natural justice, in public interest and in consonance with the constitutional conscience and socio economic justice. 13,39,744/-on 5. 2. 08 as well as additional performance security amount of Rs. 1,70,000/-on the same date, a concluded contract came into existence and the State could not have resile there from except for fair, just and equitable reasons in conformity with principles of natural justice, in public interest and in consonance with the constitutional conscience and socio economic justice. It was his further contention that the State having acted arbitrarily, its action is liable to be tested on the touchstone of Article 14 of the constitution of India and the decision making process being vitiated by illegality, irrationality and procedural impropriety, the petitioner is entitled to complete relief as prayed for in the first writ petition. (6.) WHILE questioning the action of the respondents in issuing fresh tender notice (issue in the second writ petition), he contended that no leave was obtained from the Court on 13. 5. 08 when the first writ petition was entertained and attempt to issue fresh tender notice is definitely designed to deprive the petitioner of his accrued right to exclude him. Ms. Majumder, learned Counsel appearing for the respondents in the first writ petition opposed the petition by submitting that whatever be the nature of the complaint received by the Programme Director, he had the authority to initiate enquiries, particularly when an allegation had been received that tenderers who had not qualified in terms of requirements of the tender notice had been selected. It is her further contention that the Manager, Sainthia Branch of the said Bank having notified the Programme Director by his letter dated 23. 2. 08 that the earlier certificate produced by the petitioner dated 11. 10. 07 was fake, no further obligation was cast on the Programme Director to ascertain the genuineness of the documents initially submitted by the petitioner. According to her, the project is of immense importance since it has been conceived for wellbeing of the rural people and prompt action being the call of the day, the programme Director proceeded in the right direction to revoke the letter of acceptance and had called upon the petitioner to give his reply as to why he shall not be blacklisted. Despite opportunity, the petitioner did not come forward with any satisfactory explanation for which ultimately he had been blacklisted. Despite opportunity, the petitioner did not come forward with any satisfactory explanation for which ultimately he had been blacklisted. Principles of natural justice according to her were duly complied with in the process and the petitioner could have no reason to complain. Accordingly, she prayed for dismissal of the writ petition. (7.) MR. Mukhopadhyay, learned Junior Standing Counsel representing the respondents in the second writ petition submitted that the writ petition is not maintainable. He invited the attention of the Court to the fact that the petitioner had prayed for interim order at the stage of admission of the first writ petition to restrain the respondents from proceeding further with re-tender of the work relating to upgradation of the said BPHC. The Court had refused to grant such interim relief and since the work is of emergent nature, the respondents had no other alternative but to proceed for re-tender which cannot be termed illegal or arbitrary on facts and in the circumstances. He, accordingly, prayed for dismissal of the second writ petition. Having heard learned Counsel for the parties the following issues arise for consideration: 1) Whether the certificate dated 11. 10. 07 issued by the Branch manager, Sainthia Branch of the said Bank is a fake document? 2) Whether the respondents were justified in revoking the letter of acceptance and to blacklist the petitioner? 3) Whether the fresh tender notice dated 23. 5. 08 has been validly issued by the respondents? 4) To what relief, if any, the petitioner is entitled on facts and in the circumstances? Issue No. 1: the incumbent in the office of the Manager, Sainthia Branch of the said bank on 11. 10. 07 issued a certificate assuring extension of credit facility in favour of the petitioner in the event of his selection for executing the work of upgradation of the said BPHC. However, the incumbent in the same office on 23. 2. 08 informed the respondents that the said certificate was fake. While branding the same as fake, it was not the stand of the said Manager that it had not been issued by his predecessor-in-office at all; his signature was forged, or the letter head used was not of the said Bank. Unless these facts were disputed by the incumbent in the office of Branch Manager on 23.2.08, he had no authority to brand the said certificate fake. Unless these facts were disputed by the incumbent in the office of Branch Manager on 23.2.08, he had no authority to brand the said certificate fake. The contents of the second paragraph of his letter dated 23. 3. 087 hardly emphasize the fact that the said certificate was fake. It only reflects that the Manager, Sainthia Branch of the said Bank had no authority to issue such certificate since the authority rested on the Chief executive Officer of the said Bank. At best the certificate produced by the petitioner could be termed to be one issued without lawful authority which is not the same as a fake document. The certificate must have been issued on an approach being made by the petitioner who was in the look out for financial assistance. It is not for a person like the petitioner to know as to whether the branch Manager has or has not the lawful authority to issue such certificate. Having regard to the definition of the word "fake" in Blacks Law Dictionary and the other dictionaries referred to in the decision dated 20. 2. 06 in Umananda roy (supra), the Division Bench of this Court held that the diploma certificate issued in favour of the private respondent in that case by the College of engineering Technology, Madras was not fake. Applying the same tests, this court holds that the Manager of Sainthia Branch of the said Bank who issued the letter dated 23. 2. 08 not having disputed the letterhead of the said Bank on which the certificate was issued on 11. 10. 07 and the signature of his predecessor-in-office, the said document could not have been branded a fake document. (8.) ISSUE No. 2: law is well-settled that blacklisting of a contractor must be resorted to upon compliance with principles of natural justice. In the present case it is true that the petitioner was not given opportunity of hearing but the proposed action of blacklisting was communicated to him together with an opportunity to present his version there against. The petitioner did not give any effective reply to the show cause notice but prayed for time to produce certificate from a nationalised Bank since he could not repose trust and faith in the said Bank which had issued the earlier certificate dated 11. 10. 07. He also did not seek any opportunity of personal hearing. The petitioner did not give any effective reply to the show cause notice but prayed for time to produce certificate from a nationalised Bank since he could not repose trust and faith in the said Bank which had issued the earlier certificate dated 11. 10. 07. He also did not seek any opportunity of personal hearing. In such circumstances, it is difficult for this Court to return a finding that the respondents did not adhere to principles of natural justice. The principle of audi alteram partem ordains that no one should be condemned unheard i. e. an opportunity of representation must be given. Such opportunity may be in the form of a personal hearing or seeking explanation against the proposed action. The respondents having granted the petitioner opportunity to make representation against the proposed action, its action of blacklisting the petitioner cannot be interdicted only for non-grant of opportunity of personal hearing. However, rest of the decision making process leading to the ultimate decision to blacklist the petitioner requires examination. The petitioner was accused of production of a fake document. That the document is not a fake document has been held (supra). The submission of Ms. Majumder that the respondents had nothing further to do upon receipt of letter dated 23. 2. 08 certifying the certificate dated 11. 10. 07 to be a fake document has not impressed this Court. The respondents are not supposed to act without due application of mind. They ought to have appreciate what the letter dated 23. 2. 08 purported to record. The reason why it was branded as fake was specified in the second paragraph of the same. Authenticity of the certificate was doubted not on the ground that it was a manufactured document but it had been issued by an officer not having necessary authorisation. It was an internal affair of the said Bank. A person of ordinary prudence acting reasonably could not have reached the decision the Programme Director ultimately reached. On the sole ground that the petitioner had produced the certificate dated 11. 10. 07 which was considered to be a fake document by him, the petitioner could not have been blacklisted for reason discussed above. The order of blacklisting is, accordingly, unsustainable in law and stands set aside. Now the issue of revocation of letter of acceptance is taken up for consideration. 10. 07 which was considered to be a fake document by him, the petitioner could not have been blacklisted for reason discussed above. The order of blacklisting is, accordingly, unsustainable in law and stands set aside. Now the issue of revocation of letter of acceptance is taken up for consideration. It is not in dispute that before revoking the letter of acceptance the respondents did not give any opportunity to the petitioner to show cause against proposed revocation. Obviously, they had proceeded on the basis of the letter dated 23. 2. 08 of the Manager, Sainthia Branch of the said Bank which apart from branding the earlier certificate dated 11. 10. 07 as a fake document conveyed that a Branch Manager has no authority to issue certificate assuring extension of credit facility and it is only the Chief Executive Officer of the said Bank who is the repository of such power. Though attention of the Court to the terms of the tender notice requiring submission of a certificate from a Bank assuring extension of credit facility to be submitted along with the tender papers has not been invited, this Court would assume that such was the requirement or else the petitioner would not have submitted the certificate dated 11. 10. 07. Nothing has been placed by the petitioner before this Court to show that the contents of the second paragraph of the letter dated 23. 2. 08 are incorrect. On the contrary, by his conduct he has accepted the fact that the Chief Executive Officer of the said bank only has the authority to issue such certificate. Not having submitted a valid certificate of assurance of extension of credit facility along with the tender papers, the petitioner could not have been treated to be a qualified tenderer and therefore was not eligible to have his bid considered. (9.) MR. Kar, however, has contended that an opportunity of hearing ought to have been extended to the petitioner prior to taking drastic action involving civil consequences. This Court does not agree. Rules of natural justice are to be followed for doing substantial justice and not for completing a mere ritual of hearing without possibility of any change in the decision of the case on merits [see: Escorts Farms Ltd. Vs Commissioner, Kumaon Division, Nainital reported in (2004) 4 SCC 281 ]. This Court does not agree. Rules of natural justice are to be followed for doing substantial justice and not for completing a mere ritual of hearing without possibility of any change in the decision of the case on merits [see: Escorts Farms Ltd. Vs Commissioner, Kumaon Division, Nainital reported in (2004) 4 SCC 281 ]. It is therefore held that by revoking the letter of acceptance without granting opportunity of hearing to the petitioner, the respondents did not commit any illegality for the petitioner could not have obtained a different decision on merits even if hearing was granted to him. Issue No. 3: this Court is in entire agreement with the learned Junior Standing counsel appearing for the respondents in the second writ petition that they committed no wrong in issuing a fresh tender notice. The petitioners prayer for interim relief having been refused by this Court, there was no impediment for issuing fresh tender notice and the respondents were under no obligation to seek leave of Court for inviting fresh tenders. This Court, therefore, holds the action of inviting fresh tenders to be valid. Issue No. 4: since the order blacklisting the petitioner has been set aside, the petitioner shall be entitled to return of earnest/security money deposited by him together with accrued interest. (10.) THE petitioner did not participate in the tender process that was initiated by the fresh tender notice on 23. 5. 08. There was no embargo for the petitioner to offer his bid. Not having offered his bid and the last date therefor having expired, he has no right to claim that he must be allowed to participate in the fresh process of tender. The respondents must have received offers from intending contractors by now. They shall be at liberty to proceed in accordance with law. However, since the respondents are the guardians of the finances of the State, they are granted liberty to consider the earlier offer of the petitioner for entrusting him with execution of the work in question (now that the Chief executive Officer of the said Bank has assured extension of credit facility to him) if the same is drastically lower than the lowest rate offered in course of the fresh tender, and if the petitioner is willing to execute the work at the rate offered earlier. The first writ petition stands disposed of accordingly while the second writ petition stands dismissed. There shall be no order as to costs. Photostat copy of this judgment, duly countersigned by the Assistant registrar (Court), shall be retained with the record of W. P. No. 10355 (W) of 2008. Urgent photostat certified copy of this order, if applied for, be furnished to the applicant within 4 days from date of putting in requisites therefor.