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2014 DIGILAW 271 (JK)

Aqua Traders v. Union of India

2014-07-04

ALI MOHAMMAD MAGREY

body2014
1. Petitioner, by the medium of instant petition, seeks a writ of certiorari to the extent that Order No. 3549/OW/189/Engrs dt. 10.02.2014, be quashed and a direction to issue quotations and send quotations of all the tendering processes to the petitioner firm and allow him to participate in the tendering process and grant those contracts to the petitioner in which the petitioner is found lowest tenderer, is also sought for in the name of respondents. 2. The controversy finds its origin in a communication bearing no. 3549/OW/189/Engrs dated 10th February, 2014, by virtue of which the petitioner firm has been deregistered for supply of operational Works Stores for financial year 2014-15. BRIEF FACTS 3. Petitioner is stated to be a registered Small Scale Industrial Unit dealing with supply of Pre-fabricated shelters and is in the said trade for quite a sometime. It is further stated that petitioner firm has been dealing with the respondent, department, for last more than 15 years and for all these years the performance in executing the contract work has been found excellent by the respondent, department. Petitioner has also given references in this regard towards major works executed by it during such span. 4. Petitioner firm, was allotted three supply orders, in terms of Order dated 10th November, 2012, for supply of i) Pre-fabricated Re-locatable 10-12 Men living shelter, ii) three shelters, iii) four shelters, made of steel structure and PUF panels in the size of 7m x 5m, for an amount of Rs. 5.30 lacs per shelter. The first two supply orders were meant for 68 Engineering Regiment and the third one was meant for 102 Engineering Regiment and the said material had to be submitted to the concerned by Mid January, 2013. 5. It is further stated that after meeting all the requirements of the contract, and after the clearance given by the Board of Officers by certifying the quality of the material to be upto mark, the payment for the said works was released and it was paid Rs. 10.60 lacs, 15.66 lacs and Rs. 20.84, lacs respectively. 6. That in terms of communication letter dated 4th May, 2013, issued by 102 Engineering Regiment, petitioner was informed that some parts of the shelter are not conforming the specification because it does not fit properly. Petitioner looked into the matter and the installation was done. 7. 10.60 lacs, 15.66 lacs and Rs. 20.84, lacs respectively. 6. That in terms of communication letter dated 4th May, 2013, issued by 102 Engineering Regiment, petitioner was informed that some parts of the shelter are not conforming the specification because it does not fit properly. Petitioner looked into the matter and the installation was done. 7. That thereafter, a show cause notice was issued by HQ-15 Corps Engineering Branch, whereby petitioner was asked to explain as to why the petitioner Unit is not banned from participating in tendering process for a period of 24 months. The show cause notice was responded to and position was clarified. However, respondent, department subsequently deregistered the petitioner unit unreasonably and petitioner is not being sent any quotations. 8. That the impugned order, is violative of Article 14 and 19 of the Constitution of India, therefore, is liable to be quashed more importantly for the reason that no enquiry in the matter was initiated and that it is without reasons. 9. Respondents have resisted the petition on the ground that the issuance of impugned order is in no way infringing the right of the petitioner firm as it failed to conform to the standards by supplying the defective material. It is submitted that initially a pilot sample is erected and its approval paves the way for the supplier to deliver the rest of the material and it does not in any way imply that the rest of the material would be of standard of the one that is erected. 10. The contention of petitioner that supplies were approved by the Board of Officers is replied in a way that the Board of Officers check the stores for the raw material used by the manufacturer's markings and thereafter the quantity of components of the stores ordered. Such acceptance of stores by the Board of Officers does not imply that the stores are of correct quality till the time it is erected on ground. 11. It is denied that there was any fitting problem with the material and it was sorted out with the help of petitioner firm. Instead it is stated that despite repeated requests made to petitioner firm that defects in the supplies be removed, petitioner did not turn up and it was after long persuasion the petitioner firm make good the defects. It is denied that there was any fitting problem with the material and it was sorted out with the help of petitioner firm. Instead it is stated that despite repeated requests made to petitioner firm that defects in the supplies be removed, petitioner did not turn up and it was after long persuasion the petitioner firm make good the defects. Therefore, the contention of immediately addressing the problem of the respondent, department by the petitioner firm is denied. 12. It is further stated that the impugned order is justified and is issued as per the Rules applicable. 13. Heard learned counsel for the parties and considered the submissions. 14. The contentions raised in the writ petition have sufficiently been replied by the respondents and the requisite record produced by the respondents throws light on all the aspects of the matter. 15. The attack to the impugned order is made mainly of it being without reasons; having been issued without any enquiry; is in violation of Article 14 and 19 of the Constitution of India; without taking into account the reply filed by petitioner firm and without any proof of allegations having been proved. 16. As stated earlier, the reply filed by the respondents and the record produced makes it abundantly clear that the impugned order has been a link of a wide chain that includes the communications requesting for removal of defects, issuance of show cause notice, and consideration of reply filed in response to such notice. However, additionally, the Defence Procurement Manual, 2009, governing the subject matter of the writ petition, in terms of Provision 3.4, lays down the method and speaks of the conditions leading to removal of a firm from the list of Approved Firms. The said provision, for facility of reference, is reproduced herein under, thus: 3.4. Removal from the List of the Approved Firms 3.4.1 Removal from the List: Whenever a firm is found lacking in performance in terms of response, delivery compliance, capacity, quality standards, ethics or any other valid reason, the firm may be removed from the list by the registering authority after giving notice of proposed removal to the firm. Besides, there may be registered firms which may have ceased to exist or may have been acquired by or merged with another firm, may have switched over to other sectors of business operation or indulged in unethical business practices and influence peddling. Besides, there may be registered firms which may have ceased to exist or may have been acquired by or merged with another firm, may have switched over to other sectors of business operation or indulged in unethical business practices and influence peddling. Such firms should be removed from the list of approved vendors after giving them notice of the proposed removal. 17. The above referred provision specifically lays down that lacking in performance in terms of response, leads to removal, therefore, the allegation of respondents having acted contrary to norms does not come forth. In fact what comes out is that the action has been taken against a defaulting supplier strictly in terms of the rules governing the subject. 18. Additionally there is no statutory rule which requires that an approved contractor cannot be removed without issuance of an order specifying reasons. The only requirement of law in such a situation is to provide a chance of hearing to other side also which has been done by issuing a show cause notice to the petitioner firm and the fact of having been served with show cause notice is not disputed too. In fact petitioner firm itself states to have replied to such notice which has been rejected as not convincing. 19. Assuming a situation where the Rules governing the subject do not support the removal of the approved from the rolls for having supplied the defective material, it cannot be expected and should not be taken that the indenting department cannot change their policy decision. They evidently can; but therefor there should be a public interest as contra distinguished from a mere profit motive. Any change in the policy decision for cogent and valid reasons is acceptable in law; but such a change must take place only when it is necessary. If the indenting department intends to take any measure for ensuring the supply requisitioned is in effect the same, they may be free to do so, in that, an approved firm on the rolls cannot be allowed to hijack the process of bidding for self interests. 20. The argument of learned counsel for petitioner that respondent, department did not take safety measures that lead to damage to the supplied material does not carry weight as the respondents have sufficiently explained the measures those were taken to prevent the supplied material from damages. 21. 20. The argument of learned counsel for petitioner that respondent, department did not take safety measures that lead to damage to the supplied material does not carry weight as the respondents have sufficiently explained the measures those were taken to prevent the supplied material from damages. 21. Having regard to above narration the writ petition is held to be without any merit, therefore, dismissed along with all CMPs. Interim direction, if any, shall stand vacated. 22. Record of the case be returned to Mr. Makroo, learned ASGI.