Shyama Power (India) Ltd. , Through Its Acting Chief Manager Nemely Sri A. K. Chamoli v. Bihar State Electricity Board, Patna through its Secretary Vidyut Bhawan, Patna
2012-08-17
V.N.SINHA
body2012
DigiLaw.ai
ORDER Heard learned counsel for the petitioner, the State and the Bihar State Electricity Board (hereinafter referred to as the Board). 2. Petitioner-company is a works contractor. It was entrusted with the Village Electrification Works Contract under Rajiv Ganjdhi Rural Electrification Programme by the Board on Turn-Key basis in the district of Begusarai. Allegations were levelled against the petitioner- company that its sub-contractor, agents or employees were extracting money from the beneficiaries of the said Programme comprising of Below Poverty Line families in Bara Panchayat of Khodawandpur Block of Begusarai district. After receipt of the allegation, an enquiry was ordered by the District Magistrate, Begusarai. The Enquiry Team comprised of Senior Deputy Collector, Begusarai, Electrical Executive Engineer, Electric Division, Begusarai and Block Development Officer, Khodawandpur. The Enquiry Team examined as many as 135 villagers residing in Bara Panchayat, who deposed before the Enquiry Team that the electrical equipment for providing electric connection under the Programme was supplied to the villagers by the workers and men of the contractor after receipt of illegal gratification. It appears from the enquiry report that the 135 allegationists examined named a particular person to whom the allegationist paid the illegal gratification who provided electrical equipment for granting electric connection to the allegationist. In support of the allegation, the allegationist examined also put his/ her thumb impression or signature against his/ her name together with the amount paid to the supplier of equipment. In the light of the statement of 135 villagers, the Enquiry Team under report dated 8.7.2011, Annexure-C/2 series to the counter affidavit filed on behalf of the Board informed the District Magistrate, Begusarai that M/s Madan Sahani, Bablu Mistry, Santosh Jha, Tinku Rai, Ram Babu Mistrry, Shyama Jha and Sunil Rai @ Mahatmaji were the employees or men of the contractor. One of the aforesaid 7 identified men of the contractor was named in the report against the name of the allegationist to whom the allegationist paid the illegal gratification and received the electrical equipment whereafter electrical connection was given to the concerned allegationist. The District Magistrate, Begusarai forwarded the aforesaid report to the Chairman of the Board under letter No. 1788 dated 16.7.2011, Annexure-II to the counter affidavit requesting the Chairman to initiate appropriate action against the contractor.
The District Magistrate, Begusarai forwarded the aforesaid report to the Chairman of the Board under letter No. 1788 dated 16.7.2011, Annexure-II to the counter affidavit requesting the Chairman to initiate appropriate action against the contractor. The Board having received the report, issued notice to the petitioner- company bearing letter No. 1807 dated 1.8.2011, Annexure-4 to the writ petition annexing the copy of the report asking the petitioner- company to show cause as to why Work Order and the agreement executed in its favour be not cancelled as also appropriate action as is deemed fit by the Board be not taken against the petitioner- company. Petitioner- company having received the notice dated 1.8.2011, Annexure-4, submitted reply dated 8.8.2011, Annexure-5 disputing the contents of the notice, as according to the petitioner- company, the persons identified in the report, who took illegal gratification from the villagers were not its men or agents and petitioner- company could not have been held responsible for the illegal acts of the seven persons named in the notice dated 1.8.2011, Annexure-4. 3. The Chairman of the Board considered the reply dated 8.8.2011, Annexure-5 and passed the impugned order bearing Memo No. 1438 dated 21.5.2012, Annexure-14 to the writ petition directing that the petitioner- company is debarred from participating in any future tender of the Board for two years with effect from 5.3.2012 till 4.3.2014. On going contracts of the petitioner- company has, however, not been cancelled, but the same shall be reviewed as per the terms and conditions of the contract. The copy of the impugned order dated 21.5.2012, Annexure-14 has also been forwarded to all Utilities and other Departments of the Government of Bihar for necessary action at their end. 4. It is submitted by the counsel for the petitioner- company that perusal of the impugned order indicates that action against the company has been taken in the light of Clause 35.3 of the notice inviting tender which does not empower the Board to debar the contractor as the said clause only provides that the contractor shall be responsible for the acts, defaults and neglects of any sub-contractor, his agents or employees, but for such default or neglect by the sub-contractor, agent or employee, the contractor cannot be debarred for being considered for future contracts.
According to the counsel for the petitioner, if any wrong was noticed during the execution of the present contract, action should have been taken to cancel the present contract, but petitioner- company could not have been debarred with reference to Clause 35.3 of the notice inviting tender from being considered for grant of future contract. Learned counsel for the petitioner thereafter submitted that the notice dated 1.8.2011, Annexure-4 only provides for cancellation of the Work Order and the agreement, as such, with reference to the said notice, there could not have been any order to debar the petitioner from being considered for grant of future contract. In this connection, learned counsel for the petitioner-company relied on the judgments of the Hon’ble Supreme Court in the case of S.L. Kapoor Vrs. Jagmohan and others, reported in AIR 1981 Supreme Court 136, paragraph 16, in the case of Joseph Vilangandan Vrs. The Executive Engineer (P.W.D.), Ernakulam and others, reported in AIR 1978 Supreme Court 930, paragraph 17 and in the case of Raghunath Thakur Vrs. State of Bihar and others, reported in 1989 PLJR 17 (S.C.), paragraph 4. With reference to the aforesaid three judgments of the Supreme Court, it was contended that specific notice to debar the contractor from being considered for grant of future contract is required to be given. In the instant case, notice did not propose to debar the contractor, as such, the impugned order is wholly without jurisdiction. With reference to the judgment of the Supreme Court in the case of Ravi Yashwant Bhoir Vrs. District Collector, Raigad and others, reported in (2012) 4 Supreme Court Cases 407, paragraph 38, it is submitted that the order to debar the petitioner- company from being considered for grant of future contract was passed without giving reasons in support thereof. In this connection, it is pointed out that order to debar the petitioner- company from being considered for grant of future contract entails civil consequences and before passing any order causing civil consequences not only specific notice indicating proposed punishment but also reasons in support of the punishment is required to be given in the order of punishment.
In this connection, it is pointed out that order to debar the petitioner- company from being considered for grant of future contract entails civil consequences and before passing any order causing civil consequences not only specific notice indicating proposed punishment but also reasons in support of the punishment is required to be given in the order of punishment. In the instant case, neither the notice indicating proposed punishment to debar the petitioner contractor for a period of two years was given nor reasons supporting the order to debar petitioner have been indicated in the order, as perusal of the impugned order would indicate that without giving reasons in support of the order, the order concludes that the cause shown by the petitioner- company has not been found convincing. Finally, learned counsel for the petitioner-company submitted that perusal of paragraph 5 of the impugned order dated 21.5.2012, Annexure-14 would indicate that the authorities of the Board have relied on the letter of the District Magistrate, Begusarai bearing No. 111 dated 4.2.2012, copy whereof was never served on the petitioner, as such, the serious allegations which have been levelled in the said letter having been relied on by the authorities of the Board to debar the petitioner- company, the Board proceeded on extraneous materials, copy whereof was not given to the petitioner-company to explain. In this connection, reliance is placed on the Division Bench judgment of this Court in the case of Dr. Rabindra Nath Singh Vrs. The State of Bihar and others, reported in 1983 BBCJ 33 , paragraph 5 (c). 5. Counsel for the Board has opposed the aforesaid submission with reference to the averments made in the counter affidavit and reliance has been placed over the statements made in paragraphs 5, 8, 11, 15, 18, 19 and 24 of the counter affidavit. 6. From the counter affidavit, it does not appear that the copy of the letter of the District Magistrate, Begusarai bearing No. 111 dated 4.2.2012 referred to in paragraph 5 of the impugned order was furnished to the petitioner- company in support of the allegations levelled against it.
6. From the counter affidavit, it does not appear that the copy of the letter of the District Magistrate, Begusarai bearing No. 111 dated 4.2.2012 referred to in paragraph 5 of the impugned order was furnished to the petitioner- company in support of the allegations levelled against it. Failure to serve the letter dated 4.2.2012 on the petitioner- company, however, shall not affect the result of this case for the simple reason that the allegations levelled against the petitioner- company under letter dated 4.2.2012 are only in support of the main allegation levelled against the petitioner- company that petitioner company has no control over its sub-contractor, men, who exploited the allegationist comprising of Below Poverty Line families of Bara Panchayat in Khodawandpur block of Begusarai district while providing the family concerned with electric connection under Rajiv Gandhi Rural Electrification Programme. In the show cause reply, petitioner-company has only disputed the fact that it has no connection with the seven men, who extracted illegal gratification from the beneficiaries of the Rajiv Gandhi Rural Electrification Programme in Bara Panchayat of Khodawandpur block of Begusarai district as was found in the report of the Enquiry Team dated 8.7.2011. The show cause reply, however, does not refute the allegation found during the enquiry that the 7 men identified in the report were extracting illegal gratification from the beneficiary of the Electrification Scheme as they were entrusted with supply of material and equipment for grant of electric connection to the villagers including 135 allegationists. From the report, it appears that the electric connection was given to the allegationists only after they paid illegal gratification to one of the seven men named in the report by the side of the name of the allegationist. The other submissions raised by the counsel for the petitioner- company that no specific notice to debar the petitioner- company for two years was given to the company will also not persuade this Court to interfere in its favour as notice dated 1.8.2011, Annexure-4 provides for cancellation of contract or any other action which is deemed fit by the Board.
The other submissions raised by the counsel for the petitioner- company that no specific notice to debar the petitioner- company for two years was given to the company will also not persuade this Court to interfere in its favour as notice dated 1.8.2011, Annexure-4 provides for cancellation of contract or any other action which is deemed fit by the Board. The notice asking the petitioner to show cause against any action deemed fit by the Board, in my opinion, will include option to debar the contractor from being considered for future contract, as such, petitioner- company after being given notice dated 1.8.2011, Annexure-4 along with the enquiry report, the video recording of the enquiry proceeding conducted by the Enquiry Team was allowed adequate opportunity to defend itself before it was debarred for two years. The action taken against the petitioner- company does not call for any interference by this Court. 7. Reliance placed by the counsel for the petitioner over the judgment of the Supreme Court in the case of Ravi Yashwant Bhoir(supra) is wholly misplaced in view of the fact that in the said case President of Uran Municipal Council was disqualified for the remaining tenure of councillorship and further disqualified for a period of 6 years from contesting the election of Municipal Council on the ground that President did not call for a meeting of the council for a period of three months and tender for lower estimated cost was not accepted. President was disqualified without considering the explanation submitted by him that neither the officer concerned of the council informed the President about the holding of the meeting nor the members asked the President to hold such meeting. The explanation submitted by the President for not accepting the lowest tender was that the council itself had taken the decision to accept the tender and in such circumstances, he (President) could not have been held responsible for accepting tender as the decision was taken by the council and not by the President alone. Ignoring the aforesaid explanation submitted by the President, President was disqualified.
Ignoring the aforesaid explanation submitted by the President, President was disqualified. In the instant case, however, explanation submitted by the Company has not been accepted in view of the findings in the enquiry report, whereunder it has been specifically found that a particular allegationist paid illegal gratification to the Sub-contractor, men engaged by the Company, whose name is also mentioned in the enquiry report by the side of the name of the allegationist. It is the finding in the enquiry report, which is the basis for rejection of the cause shown by the Company. In such view of the matter, reliance placed over the judgment of the Supreme Court in the case of Ravi Yashwant Bhoir (supra) is wholly misplaced as in the said case the explanation furnished by the President that he was neither informed by the officer of the council nor requested by the members of the council to convene the meeting of the council together with the other explanation that the tender was accepted by the council under its resolution which was only forwarded by the President for which he could not have been held responsible was never considered. 8. Reliance placed by the counsel for the petitioner over the judgment of the Supreme Court in the case of S.L. Kapoor(supra) is also misconceived as in the said case without giving opportunity of being heard to the New Delhi Municipal Committee Lieutenant Governor superseded the Committee on the ground that it was incompetent to discharge municipal functions under the Punjab Municipal Act. In the instant case, Company was given show cause notice to explain the findings recorded in the enquiry report and after considering the cause shown the impugned order has been passed holding that the cause shown by the Company is not convincing in view of the findings of the enquiry team as Company could not dislodge the findings of the enquiry team that particular allegationist paid illegal gratification to the individual named in the report by the side of the name of the allegationist and after payment by the allegationist he was provided with electric connection. 9.
9. Reliance placed by the counsel for the petitioner over the judgment of the Supreme Court in the case of Joseph Vilangandan and Raghunath Thakur(supra) is also misconceived as in the said case notice given to the contractor by the Executive Engineer and the Collector asking the contractor to show cause as to why the work entrusted to the contractor be not rearranged at his risk and loss through other agencies/settlement of liquor shop be not cancelled but having considered the cause shown by the contractor not only the work was rearranged/liquor shop cancelled but the contractor was further debarred/blacklisted from being considered for grant of subsequent contract /allotment of liquor shop. In the instant case, notice was given to the Company asking it to show cause as to why agreement and the work order executed/issued in its favour be not cancelled in the light of the report of the enquiry team with further stipulation that any other action, which is deemed necessary in the matter be also not taken. The notice asking the Company to show cause is not limited to cancellation of the present work contract but also requires the Company to show cause as to why any other action which is deemed necessary in the matter including the action to debar the company from being considered for grant of subsequent contract be not passed. Aforesaid clause of the notice requires the Company to further show cause about any other action which is deemed necessary in the matter be taken against it. The any other action stipulated in the notice may include the order/ action to debar the Company. In the case in hand, Company was given option to show cause not only about cancellation of the present work but was also asked to show cause as to why any other action/ order, which is deemed necessary in the matter be also not passed against it. Such notice to show cause about any other action/ order in the opinion of this Court may also include the order/ action to debar the company for grant of future contract.
Such notice to show cause about any other action/ order in the opinion of this Court may also include the order/ action to debar the company for grant of future contract. In such circumstances, the aforesaid two Supreme Court judgment in the case of Joseph Vilangandan and Raghunath Thakur (supra) have no application to the facts of the present case, as in the aforesaid two judgments of the Supreme Court there is only notice to cancel the present contract without there being opportunity to show cause about any other action in the matter. 10. Reliance placed by the counsel for the petitioner over paragraph 5(c) of the Division Bench Judgment in the case of Dr. Ravindra Nath Singh(supra) is also misconceived in view of the fact that the said case was decided with reference to the submissions noted in paragraphs 5 (a) and 5(b) and not 5 (c ) as also for the reason that in the instant case the enquiry report on the basis of which the punishment order has been passed was duly served on the petitioner and petitioner never refuted the allegation that electric connection to 135 allegationist was given after they paid illegal gratification to the person named in the enquiry report against the name of the allegationist. 11. The writ petition is, accordingly, dismissed.