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Jharkhand High Court · body

2014 DIGILAW 797 (JHR)

SUPREMEDEV v. Bharat Cooking Coal Ltd.

2014-07-28

R.R.PRASAD

body2014
ORDER All the aforesaid three cases were heard together and are being disposed of by this common order as the issue involved in these three cases is the same. Facts giving rise to these three cases are being given herein under: W.P.C. No. 526 of 2014. 1. The Bharat Coking Coal Limited vide its Reference No. BCCL/CED/TC/NIT37/ 201314/967 dated 20/21.09.2013, issued a tender notice inviting applications from eligible bidders for construction of multistoried (G+ 8) BType, C Type and D Type quarters at Jagjivan Nagar CCWO Colony for the estimated amount of Rs. 345,62,82,879.10/. Through corrigendum the estimated cost was enhanced to Rs. 349, 20, 06,739.20/. As per the case of the petitioner, since the estimated cost was huge, a Joint Venture firm was formed in the name and style as SUPREMEDEV PL (JV) by executing a Joint Venture Agreement on 30/10/2013, consisting of two firms namely M/s SUPREME INFRASTRUCTURE INDIA LTD and M/s DEV MULTICOM PVT LTD. The petitioner as well as two other joint venture firms namely KCPLUNITY (JV) and INDU INFRASTRUCTURE LTD submitted their bid papers pursuant to NIT. On 15.11.2013, technical bid was opened, whereby M/s INDU INFRASTRUCTURE LTD was found to be nonresponsive. Subsequently, the price bid of only KCPLUNITY (JV) was opened, whereas the price bid of the petitioner was not opened on account of the fact that an order had been passed by the Tender Committee on 27.11.2013 in connection with the matter relating to the tender in which Gopalka Dev JV, had participated and on account of some act of forgery being committed the said firm and its partners were debarred from participating in future bid and also from the bid pending for consideration. The detail of it would be narrated lateron. W.P.C. No. 532 of 2014 2. Similarly, the Bharat Coking Coal Limited vide its Reference No. BCCL/GM (CMC)/FHEMMOS/2013/1129, dated 14.08.2013, issued a Tender Notice No. 136n inviting applications from the eligible bidders for the works of hiring of HEMM for removal of over burden and extraction and transportation of coal from Bhowra(s) Colliery. Since, according to the case of the petitioner, the price value was quite high, a Joint Venture firm was formed in the name and style as ATDEV PL (JV) (Petitioner) by executing a deed of Joint Venture Agreement on 20.09.2013. It consists of two firms namely M/s AVINASH TRANSPORT and M/s DEV MULTICOM PVT LTD. Since, according to the case of the petitioner, the price value was quite high, a Joint Venture firm was formed in the name and style as ATDEV PL (JV) (Petitioner) by executing a deed of Joint Venture Agreement on 20.09.2013. It consists of two firms namely M/s AVINASH TRANSPORT and M/s DEV MULTICOM PVT LTD. The petitioner as well as three other firms namely SUPLBLA(JV), MALA KUMAR (JV) and R.K. TRANSPORT, submitted bid papers. Initially when the technical bid was opened on 25.09.2013, SUPLBLA (JV), MALA KUMAR (JV), were found to be non-responsive, whereas the petitioner and R.K.TRANSPORT, were found to be responsive. However, subsequently, when some relaxations were made the aforesaid two firms were also found to have been qualified. On 24.12.2013, the price bid was opened of the others but not of the petitioner and then on 31.12.2013, SUPLBLA (JV) was found to be L1. Upon it, the petitioner filed a representation. Subsequently, the petitioner could know that the price bid of it was not opened for the same reason that the said firm M/s GOPALKADEV (JV) and its partners were debarred from participating in future bid and also from the bid pending for consideration. W.P.C. No. 533 of 2014 3. Likewise, the Bharat Coking Coal Limited vide its Reference No. BCCL/GM (CMC)/ FHEMMOS/2013/1093, dated 31.07.2013, issued a Tender Notice inviting applications from the eligible bidders for the works of hiring of HEMM for removal of over burden, extraction and transportation of coal from Dhansar Colliery. Since, as per the case of the petitioner, the estimated value of the work was quite high, a Joint Venture was formed in the name and style of ATDEV PL (JV) (Petitioner) on 31.08.2013, by executing a deed of Joint Venture Agreement consisting of two firms namely M/s AVINASH TRANSPORT and M/s DEV MULTICOM PVT LTD. Apart from the petitioner, four other bidders namely M/s SAAKARMASS (JV), M/S MALA KUMAR ENGINEERS PVT. LTD., M/S KEM & BKK JV DIEM FIRM and M/S DHANSAR ENGINEERING CO. PVT. LTD submitted bid papers. On 07.09.2013, technical bid was opened. On 28.11.2013, it was intimated to all that the price bid would be opened on 02.12.2013. On that day perhaps it was not opened, rather it was opened on 23.12.2013 of other but not of the petitioner and, thereby, M/s Dhansar Engineering Company Pvt. Ltd was found to be L1. LTD submitted bid papers. On 07.09.2013, technical bid was opened. On 28.11.2013, it was intimated to all that the price bid would be opened on 02.12.2013. On that day perhaps it was not opened, rather it was opened on 23.12.2013 of other but not of the petitioner and, thereby, M/s Dhansar Engineering Company Pvt. Ltd was found to be L1. Immediately thereafter a representation was filed by the petitioner, but no response was made. However, it could be known to the petitioner that the price bid of the petitioner was not opened for the same reason, which has been stated in the aforesaid two cases, the detail of which is being given herein under: M/s DEV MULTICOM PVT LTD had entered into a Joint Venture Agreement with M/s Shashi Kant Gopalka and a Joint Venture Firm in the name and style of M/s GOPALKADEV (JV) had been formed for the purpose of securing contracts against the notice inviting tender no. BCCL/CED/TC/NIT8/201314/66 dated 23.04.2013. After forming Joint Venture the said form participated in the tender process during which M/s GOPALKADEV (JV) had submitted a certificate showing its credentials, which, upon verification, were found to be forged. Finding such an act of forgery, a show cause was issued upon M/s GOPALKADEV. In response to that show cause, a reply was submitted on 24.08.2013, which was found to be unsatisfactory and, hence, an order was passed on 27.11.2013 for black listing the said joint venture M/s GOPALKADEV and also its individual partner namely M/s Shashi Kant Gopalka and M/s Dev Multicom Pvt. Ltd and at the same time the Joint Venture company and also the individual partners were disqualified from participating in all other pending tenders of BCCL. On account of that, the price bids of the aforesaid three petitioners were not considered in spite of they being found to be the responsive in technical bid. In that event, aforesaid three writ applications have been filed. 4. Initially, when these matters were heard by a Bench of this Court an order was passed on 05/03/2014 in WPC Nos. 526 of 2014 and 533 of 2014, for maintaining statusquo. That order was challenged in L.P.A. Nos. 160 of 2014 and 159 of 2014, which were dismissed. However, it was expressed that the writ applications be heard at an early date. That is how the matters have come up. 5. Mr. 526 of 2014 and 533 of 2014, for maintaining statusquo. That order was challenged in L.P.A. Nos. 160 of 2014 and 159 of 2014, which were dismissed. However, it was expressed that the writ applications be heard at an early date. That is how the matters have come up. 5. Mr. Ajit Kumar Sinha, learned senior counsel appearing for the petitioners submits that the order passed on 27.11.2013, debarring M/s GOPALKADEV (JV) was in connection with a Joint Venture firm, which had especially been formed for that particular NIT and, therefore, that order dated 27.11.2013 should have been confined only to M/s GOPALKADEV (JV) and not to this petitioner M/s ATDEV PL (JV) consisting of M/s AVINASH TRANSPORT and M/s DEV MULTICOM PVT LTD for the reason that the Joint Venture firm was formed on 30.10.2013 much before 27.11.2013 and, thereby, the authority did commit illegality in giving affect of the order dated 27.11.2013 with retrospectivity. Further it was submitted that the order dated 27.11.2013 is a punitive order and, thereby, any such order affecting civil right of a person, if is passed without giving any opportunity to the person, would be illegal per se. Further, it was submitted that in case of the petitioner the said order dated 27.11.2013 had been made operative with retrospectivity but in similar situation in case of M/s Susi Logistic Pvt. Ltd. JV and others, the order has been given prospective affect and, thereby, the action of the respondents is violative of the provisions as enshrined under Article 14 of the Constitution of India. Further, it was submitted that any such order debarring the petitioner from participating in the price bid without giving any opportunity to the petitioner to be heard in the matter is itself bad being violative of the principle of natural justice and on this ground alone the impugned order dated 27.11.2013, debarring the petitioner M/s ATDEV PL (JV) from participating in the pending process of tender and in future, is bad and is fit to be set aside. 6. More or less submissions advanced on behalf of the petitioners in other two cases (WPC Nos. 532 & 533 of 2014) are the same. 6. More or less submissions advanced on behalf of the petitioners in other two cases (WPC Nos. 532 & 533 of 2014) are the same. They put emphasis that in any event, the order passed on 27.11.2013, against M/s GOPALKADEV JV, cannot be made applicable with retrospectivity even if one of the partners is M/s DEV MULTICOM PVT LTD has been found guilty for some misdeed and, thereby, the reason for which the petitioners have been debarred from participating in the price bid is absolutely illegal and unjustified and, hence, is fit to be set aside particularly when in similar situation the same authority has passed the order debarring a firm found to be at fault from participating in future tender. 7. As against this, Mr. Mehta, learned counsel appearing for the respondents BCCL submits that in any tender of the BCCL the tenderer are required to submit an affidavit declaring all documents, credentials submitted alongwith the tender papers to be true, genuine and valid. Such an affidavit was furnished alongwith the tender papers by M/s GOPALKADEV which were found to be forged and, thereby, an order was passed preventing the said firm and its individual partner to participate in future tender and also in the tender which is pending consideration. Since, DEVMULTICOM PVT LTD is one of the partners in all the three Joint Ventures firm, the authority also did consider it fit and proper not to allow the petitioner to participate in the price bid and, thereby, the authority has not committed any illegality in not considering the price bid of the petitioners. 8. Before proceeding in the matter, one needs to understand the status of the Joint Venture firm. I need not to take trouble to find out the same as Their Lordships in a case of “New Horizons Lkimited and Another versus Union of India and Others [ (1995) 1 SCC 478 ]” has been pleased to take into account of it. It has been observed by Their Lordships that the expression 'Joint Venture' is more frequently used in the United States. It connotes a legal entity in the nature of a partnership engaged in the joint undertaking of a particular transaction (emphasis put by me) for mutual profit or an association of persons or companies jointly undertaking some commercial enterprise wherein all contribute assets and share risks. 9. It connotes a legal entity in the nature of a partnership engaged in the joint undertaking of a particular transaction (emphasis put by me) for mutual profit or an association of persons or companies jointly undertaking some commercial enterprise wherein all contribute assets and share risks. 9. One of the most significant aspects of the matter relating to Joint Venture is that it is formed for a particular transaction. From perusal of the agreement entered into in between M/s Shashi Kant Gopalka and m/s Dev Multicom Pvt Ltd, it appears that it was formed particularly with reference to a NIT dated 23.04.2013, whereby it has been agreed upon by the parties that the agreement shall come into effect from the date it is signed and remain valid till all the matters in connection with the work for which the agreement is signed, are over and settled. 10. It has already been indicated that M/s DEVMULTICOM PVT LTD had formed a Joint Venture with M/s Shashi Kant Gopalka in the name and style of M/s GOPALKADEV (JV) for securing contract against the notice inviting tender dated 23.04.2013. It participated in the tender process during which M/s GOPALKADEV (JV) has submitted certificates for showing its credential. Upon verification of the certificates it were found to be forged. Finding such an act of forgery a show cause was issued to M/s GOPALKADEV (JV) indicating therein that the certificates furnished by M/s Shashi Kant Gopalka were found to be forged and, hence, an order was passed on 27.11.2013 for black listing the said Joint Venture M/s GOPALKADEV and also its individual partner namely M/s Shashi Kant Gopalka and M/s Dev Multicom Pvt. Ltd and at the same time the Joint Venture company and also the individual partners were disqualified from participating in all other pending tenders of BCCL. Though M/s Dev Multicom Pvt. Ltd had formed a Joint Venture with other firms namely M/s Supreme Infrastructure India Ltd, M/s Avinash Transport much before 27.11.2013 and it participated in all the three tender processes NIT of which had also been issued earlier to 27.11.2013, still their price bids were not opened in spite of the fact that aforesaid Joint Venture firms were found to be responsive for the reason that one of the partners M/s Dev Multicom Pvt. Ltd had been disqualified from participating of pending tenders of BCCL, which action of the respondents is not only arbitrary but against the principle of natural justice. 11. It has been held by the Hon'ble Supreme Court in a case of “New Horizons Limited and Another” (supra) that “in the matter of entering into a contract, the State does not stand on the same footing as a private person who is free to enter into a contract with any person he likes. The State, in exercise of its various functions, is governed by the mandate of Article 14 of the Constitution which excludes arbitrariness in State in the action and requires the State to act fairly and reasonably. The action of the State in the matter of award of a contract has to satisfy this criterion. Moreover a contract would either involve expenditure from the State exchequer or augmentation of public revenue and consequently the discretion in the matter of selection of the person for award of the contract has to be exercised keeping in view the public interest involved in such selection. Therefore, while dealing with the public, whether by way of giving jobs or entering into contracts or issuing quotas or licences or granting other forms of largesse, the Government cannot act arbitrarily at its sweet will and like a private individual, deal with any person it pleases, but its action must be in conformity with the standards or norms which are not arbitrary, irrational or irrelevant.” 12. Here in the instant case, the action of the respondents never seems to be fair as without giving any opportunity of hearing the order has been passed with respect to all the aforesaid three Joint Venture firms debarring them from participating in all other pending tenders of BCCL, which will have a civil consequence. Here in the instant case, the action of the respondents never seems to be fair as without giving any opportunity of hearing the order has been passed with respect to all the aforesaid three Joint Venture firms debarring them from participating in all other pending tenders of BCCL, which will have a civil consequence. If any order having civil consequence is passed without giving opportunity to the person concerned, that order per se becomes illegal. 13. In this respect, I may refer to a decision rendered in a case of “Raghunath Thakur versus State of Bihar and Others [(1989) 1 SCC 229]” wherein it has been held that “blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In the aforesaid case, it has further been held by the Hon'ble Supreme Court that “Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is any implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realized that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order.” 14. Admittedly, no notice was issued to any of the petitioners before order was passed disqualifying them from participating in all other pending tenders of BCCL. Thus, the order dated 27.11.2013, not only is illegal but it smacks arbitrariness. 15. Admittedly, no notice was issued to any of the petitioners before order was passed disqualifying them from participating in all other pending tenders of BCCL. Thus, the order dated 27.11.2013, not only is illegal but it smacks arbitrariness. 15. Arbitrariness in the action of the respondents also gets surfaced from the fact that the order, which was passed on 27.11.2013, has been given effect of retrospectivity as it has already been indicated that all the petitioners had formed Joint Ventures with the said M/s Dev Multicom Pvt. Limited earlier and they have participated in the process of the tender NIT of which had also been issued earlier and, thereby, by the impugned order the right which had accrued to the petitioners, has been annulled, though the authority does not have such power to annul any right accrued by affecting the order with retrospectivity. I am supported with the view laid down in a case of “Uday Pratap Singh and Others versus State of Bihar and Others [(1994) supp 3 SCC 451]” wherein it has been held as follows: “6. By a catena of decisions of this Court, it is now well settled that by an executive order the statutory rules cannot be whittled down nor can any retrospective effect be given to such executive order so as to destroy any right which became crystallised. In this connection, it is profitable to refer a decision of this Court in “T.R.Kapur v. State of Haryana” wherein it is held that rules framed under Article 309 of the Constitution cannot affect or impair vested rights, unless it is specifically so provided in the statutory rules concerned. It is obvious that an executive direction stands even on a much weaker footing.” 16. Under the circumstances, the impugned order dated 27.11.2013 is also bad on account of the aforesaid reason. 17. Yet another reason is there for holding the said order to be bad on account of lack of fairness on the part of the authority. It is the case of the petitioners that in similar situation when something wrong was found on the part of M/s Susi Logistic Pvt. Ltd. JV, M/s R.K. Infrastructure, M/s Ujjawal Transport Agency and others, they were debarred from participating in future tender. The order relating to debarment was made with prospective effect, whereas in case of the petitioners the order of debarment has given retrospective effect. The order relating to debarment was made with prospective effect, whereas in case of the petitioners the order of debarment has given retrospective effect. According to the learned counsel appearing for the respondents, the action on their part was never so serious as it was in the case of M/s GOPALKADEV (JV). It is true that the order of debarment had been passed as it was found that some false certificates had been furnished on behalf of M/s GOPALKADEV (JV), but from the show cause issued by the authority to said M/s GOPALKADEV, it does appear that the false certificates had been furnished by M/s Shashi Kant Gopalka and not by M/s DEVMULTICOM PVT LTD. However, since the liability was joint and severable in respect of that tender in which M/s GOPALKADEV (JV) participated, the liability may be put upon both. But that liability would be confined only to that agreement. 18. In that event also, the order passed on 27.11.2013 for debarring the petitioners from participating in pending tenders of BCCL is bad. 19. Under the circumstances as stated above, the impugned order dated 27.11.2013, being bad, arbitrary, is hereby quashed in respect of all the aforesaid three cases. Thus, all these three writ applications stand allowed.