SINGLA ENGINEERS AND CONTRACTORS PVT. LTD. v. STATE OF UTTARAKHAND
2015-03-03
ALOK SINGH
body2015
DigiLaw.ai
JUDGMENT : Hon’ble Alok Singh, J. (Oral) 1. Present petition is filed assailing the order dated 28.1.2014 and 22.1.2014, whereby the petitioner/contractor was debarred/suspended with immediate effect from being eligible for participating in any bidding process in Uttarakhand Public Works Department for a period of ten years, either as a sole bidder or in joint venture or association with any other entity. 2. Brief undisputed facts of the present case, inter alia, are that Public Works Department, Government of Uttarakhand, invited tenders through bid documents in the month of October, 2012 for Uttarakhand State Road Investment Programme Project –III- Improvement/Strengthening of Roads under Package No. C-5 and Uttarakhand State Road Investment Programme Project –III- Improvement/Strengthening of Roads under Package No. C-6 in District Bageshwar, Uttarakhand; petitioner submitted bid for package Nos. C-5 and C-6 on 27.11.2012, no contract was awarded to the petitioner for package Nos. C-5 or C-6 within the validity period of bids submitted by the petitioner, therefore, vide Annexure No. P-5 dated 13.9.2013, petitioner was requested to extend the validity of the bids period for next seventy days upto 1.12.2013; vide letter dated 26.9.2013, Annexure No. P-6, petitioner extended the validity of the bid period for package Nos. C-5 and C-6 till 1.12.2013; vide letter dated 21.10.2013, Annexure No. P-7, petitioner’s bids were accepted for package Nos. C-5 and C-6 and petitioner was required to furnish the performance security within twenty-eight days in accordance with the conditions of the contract; petitioner informed the Chief Engineer/Project Director, USRIP, Dehradun that performance security of Rs. 2,51,68,947/- and Rs.
C-5 and C-6 till 1.12.2013; vide letter dated 21.10.2013, Annexure No. P-7, petitioner’s bids were accepted for package Nos. C-5 and C-6 and petitioner was required to furnish the performance security within twenty-eight days in accordance with the conditions of the contract; petitioner informed the Chief Engineer/Project Director, USRIP, Dehradun that performance security of Rs. 2,51,68,947/- and Rs. 2,62,19,175/- for C-5 and C-6 shall be submitted in the form of bank guarantees, which are under process with the bank and the respondents were requested to extend the period of furnishing the performance securities till 10.12.2013; again, petitioner, vide letter dated 4.1.2014, Annexure No. P-10, made request to extend the period to submit the performance security by next 120-150 days; petitioner did not furnish performance securities within the stipulated time as well as within the extended time by the Department; consequently, a notice dated 2.12.2013, Annexure No. CA-5 to the counter affidavit, was issued to the petitioner that if petitioner fails to furnish performance securities latest by 4.12.2013, Department shall be forced to initiate action against the petitioner as per the provisions of the bid documents for two packages under consideration, and thereafter impugned order was passed blacklisting/suspending the petitioner from participating in any bid process for future contracts for next ten years, either as a sole bidder or as an associate of any other bidder. Feeling aggrieved, petitioner has approached this Court by way of present writ petition. 3. In view of the aforesaid admitted facts, let me now examine - As to whether impugned order suspending/debarring the petitioner in participating for the future contract for next ten years is justified and legal? 4. Hon’ble Apex Court in the case of Gorkha Security Services v. Government (NCT of Delhi) and others reported in (2014) 9 SCC 105, in paragraph nos. 27 to 31, has observed as under: 27. We are, therefore, of the opinion that it was incumbent on the part of the Department to state in the show cause notice that the competent authority intended to impose such a penalty of blacklisting, so as to provide adequate and meaningful opportunity to the Appellant to show cause against the same. However, we may also add that even if it is not mentioned specifically but from the reading of the show cause notice, it can be clearly inferred that such an action was proposed, that would fulfill this requirement.
However, we may also add that even if it is not mentioned specifically but from the reading of the show cause notice, it can be clearly inferred that such an action was proposed, that would fulfill this requirement. In the present case, however, reading of the show cause notice does not suggest that noticee could find out that such an action could also be taken. We say so for the reasons that are recorded hereinafter. 28. In the instant case, no doubt show cause notice dated 6.2.2013 was served upon the Appellant. Relevant portion thereof has already been extracted above. This show cause notice is conspicuously silent about the blacklisting action. On the contrary, after stating in detail the nature of alleged defaults and breaches of the agreement committed by the Appellant the notice specifically mentions that because of the said defaults the Appellant was “as such liable to be levied the cost accordingly”. It further says “why the action as mentioned above may not be taken against the firm, besides other action as deemed fit by the competent authority”. It follows from the above that main action which the Respondents wanted to take was to levy the cost. No doubt, notice further mentions that competent authority could take other actions as deemed fit. However, that may not fulfil the requirement of putting the defaulter to the notice that action of blacklisting was also in the mind of the competent authority. Mere existence of Clause 27 in the agreement entered into between the parties, would not suffice the aforesaid mandatory requirement by vaguely mentioning other “actions as deemed fit”. As already pointed out above in so far as penalty of black listing and forfeiture of earnest money/security deposit is concerned it can be imposed only, “if so warranted”. Therefore, without any specific stipulation in this behalf, Respondent could not have imposed the penalty of black listing. 29. No doubt, rules of natural justice are not embodied rules nor can they be lifted to the position of fundamental rights. However, their aim is to secure justice and to prevent miscarriage of justice. It is now well established proposition of law that unless a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice, in exercise of power pre-judicially affecting another must be in conformity with the rules of natural justice. 30.
However, their aim is to secure justice and to prevent miscarriage of justice. It is now well established proposition of law that unless a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice, in exercise of power pre-judicially affecting another must be in conformity with the rules of natural justice. 30. We are conscious of the following words of wisdom expressed by this Court through the pen of Justice Krishna Iyer in the case of Chairman, Board of Mining Examination and Anr. v. Ramjee reported in 1977 (2) SCC 256 : “1. If the jurisprudence of remedies were understood and applied from the perspective of social efficaciousness, the problem raised in this appeal would not have ended the erroneous way it did in the High Court. Judges must never forget that every law has a social purpose and engineering process without appreciating which justice to the law cannot be done. Here, the socio-legal situation we are faced with is a colliery, an explosive, an accident, luckily not lethal, caused by violation of a Regulation and consequential cancellation of the certificate of the delinquent shot-firer, eventually quashed by the High Court, for processual solecisms, by a writ of certiorari. * * * * * 13. Natural justice is no unruly horse, no lurking land mine, nor a judicial cure all. If fairness is shown by the decision maker to the man proceeded against, the form, features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation, no breach of natural justice can be complained of. Unnatural expansion of natural justice, without reference to the administrative realities and other factors of a given case, can be exasperating. We can neither be finical nor fanatical but should be flexible yet firm in this jurisdiction. No man shall be hit below the belt—that is the conscience of the matter. 14 .... We cannot look at law in the abstract or natural justice as a mere artefact. Nor can we fit into a rigid mould the concept of reasonable opportunity. 31.
No man shall be hit below the belt—that is the conscience of the matter. 14 .... We cannot look at law in the abstract or natural justice as a mere artefact. Nor can we fit into a rigid mould the concept of reasonable opportunity. 31. When it comes to the action of blacklisting which is termed as ‘Civil Death’ it would be difficult to accept the proposition that without even putting the noticee to such a contemplated action and giving him a chance to show cause as to why such an action be not taken, final order can be passed blacklisting such a person only on the premise that this is one of the actions so stated in the provisions of NIT.” 5. Alleged show cause notice dated 2.12.2013, Annexure No. CA-5 to the counter affidavit, reads as under: “…….. Subject: - Notification of Award Contract No. C-5 Improvement/Strengthening of roads in Bageshwar District of Uttarakhand. Reference:- Our Leter No. 4358/65 (5) PMU Transport-Uttarakhand/12 Dated :21/10/2013. Our Letter No. 4357/65(6) PMU Transport-Uttarakhand/12 Dated : 21/10/2013 Dear Sir, This is with regarding our referred letter notifying award of contracts C5 and C6 under the USRIP Project 3 to your firm and our request to you to furnish the Performance Security in accordance with the conditions of contract within 28 days of the receipt of this letter. We have not received any communication on this matter from your side till date. Please refer the telephonic discussion with the undersigned on 2 December 2013 regarding the matter of submission of performance securities for the 2 aforesaid contracts. Kindly comply with the requirements of the issued letter of acceptance3s and submit the required Performance Securities latest by 4th December 2013 failing which we shall be forced to initiate action as per the provisions of the Bidding Documents for the 2 packages under consideration. ………………” 6. Alleged notice dated 2.12.2013 nowhere states that if the petitioner fails to furnish performance securities within the stipulated time, he shall be debarred/suspended from participating in future bid process for next ten years. On the other hand, it only suggests that if performance security is not furnished by 4.12.2013, Department shall be forced to initiate action as per the provisions of the bid document for the two packages under consideration.
On the other hand, it only suggests that if performance security is not furnished by 4.12.2013, Department shall be forced to initiate action as per the provisions of the bid document for the two packages under consideration. There is no doubt that petitioner himself has submitted bid document dated 27.11.2012, Annexure No. CA-1 to the counter affidavit, that if performance security is not furnished within stipulated period, petitioner shall be debarred from being eligible for bidding any contract for ten years. 7. In view of the dictum of Hon’ble Apex Court in the case of Gorkha Security Services (supra), show cause notice must be unambiguous and must state that as to why petitioner should not be debarred from participating in any bidding for future contract for ten years for the reasons shown in the show cause notice. Notice does not contain so. In my humble opinion, word “shall” used in bid document, Annexure No. CA-1 to the counter affidavit, must be read as “may”. Blacklisting or suspension for ten years should not be automatic. Guilty should be given opportunity to show cause as to why he should not be debarred or blacklisted. Therefore, keeping in mind the dictum of Hon’ble Apex Court in the case of Gorkha Security Services (supra), present petition deserves to be allowed. 8. Consequently, writ petition is allowed. Impugned orders are hereby quashed. However, the Department shall be at liberty to pass fresh orders after issuing appropriate show cause notice and after according sufficient opportunity of hearing to the petitioner. 9. No order as to costs. 10. CLMA No. 296 of 2015 also stands disposed of accordingly.