RAM SAJEEVAN SINGH (CONTRACTOR P. W. D. ) v. STATE OF U. P.
2015-03-11
D.Y.CHANDRACHUD, RAJAN ROY
body2015
DigiLaw.ai
JUDGMENT By the Court.—By these proceedings, the petitioner seeks to question the legality of an order dated 31 December 2014 passed by the Chief Engineer (Central Zone) in the Public Works Department at Lucknow, cancelling the registration of the petitioner and blacklisting him. The second relief which has been sought is for the sanctioning and payment of the bills submitted by the petitioner together with interest. 2. A tender was floated by the Superintending Engineer of the Lucknow Circle in 2012-13 for carrying out the work of renewal of State highway No. 40 on the Lucknow-Mohan road from kilometers 20 to 30. The bid submitted by the petitioner was accepted and a contract was executed on 26 February 2013. The work under the contract was to be completed by 25 April 2013. A notice to show-cause was issued to the petitioner on 29 October 2014 by the Chief Engineer (Central Zone) stating that an inspection has been carried out on 13 March 2014. During the course of the inspection, it has been revealed that (i) though the bitumen content of 5%, at least, was required to be observed, it has been found that the content utilized by the petitioner was between 3.59% to 4.19%; (ii) the grading of the grit used in the mix was not proper; (iii) the surface of the erstwhile road had not been properly cleaned and scrapped, as a result of which, the entire work of renewal which has been carried out by the petitioner was found to have been damaged. The petitioner submitted a reply to the notice to show-cause. Eventually, an order was passed on 31 December 2014 by the Chief Engineer (Central Zone). The Chief Engineer has entered the findings of fact that (i) as against the minimum bitumen content of 5%, the work carried out by the petitioner showed the bitumen content between 3.59% to 4.19%; (ii) the grading of the grit used in the mix was not proper; (iii) the surface of the erstwhile road had not been properly cleaned and scrapped, as a result of which, the entire work of renewal which has been carried out by the petitioner was found to have been damaged. 3.
3. The submission of the petitioner is that on 21 October 2014, the petitioner had issued an Advocate’s notice, seeking the payment of the outstanding dues, failing which, it was stated, the arbitration agreement in the contract would be invoked. The first submission is that the notice to show-cause was issued thereafter on 29 October 2014 in order to defeat the claim. The second submission which has been urged is that the bitumen was required to be supplied by the Public Works Department and it was supplied by the Department, hence no fault can be found with the work which was carried out by the petitioner. Thirdly, it was submitted that the work was to be supervised by the Superintending Engineer and hence, it was not open to the Chief Engineer to issue a notice to show-cause and blacklist the petitioner. Finally, it was submitted that the inspection was carried out in the absence of the petitioner. 4. Before we deal with the submissions which have been urged on merits, two preliminary objections are in order. The first is that, under the contract between the petitioner and the Public Works Department, there is an arbitration agreement under which the disputes, admittedly, are to be resolved by recourse to arbitration. All disputes on fact are, therefore, capable of being resolved in arbitration, including those in relation to the performance of work under the contract. The second point to be noted is that, it is a well-settled principle of law that any order for blacklisting, which has adverse civil consequences, has to be passed in compliance of the principles of natural justice. In the present case, that procedural requirement has been duly observed by issuing a notice to show-cause and by affording an opportunity of allowing the petitioner to present his case in defence. The scope for interference by the High Court under Article 226 of the Constitution would be limited to a situation where there is a procedural impropriety or where the finding, which has been arrived at by the authority, is irrational or perverse so as to warrant interference of the Court. The Court would not be justified in re-appreciating the evidentiary material and in substituting its own finding of fact for that which has been arrived at by the authority.
The Court would not be justified in re-appreciating the evidentiary material and in substituting its own finding of fact for that which has been arrived at by the authority. If this principle is borne in mind, it should be apparent that this Court would not be justified in interfering. The submissions which have been raised by the petitioner would require the Court to re-appreciate questions of fact and to re-assess material pertaining to performance under a contract. 5. The petitioner does not dispute, during the course of his submission, that the minimum bitumen content was required to be of 5%. But what was alleged and found to be used was actually much less, between 3.59% to 4.19%. The fact that the bitumen was to be supplied by the Department would not justify the petitioner in raising a defence to the effect that there was a justification for the work which was done otherwise in accordance with the terms of the contract. Similarly, there is no merit in the submission that it was after the legal notice of the petitioner dated 21 October 2014, that a notice to show-cause was issued to defeat the claim. The notice to show-cause dated 29 October 2014 was preceded by an inspection of 13 March 2014, which was much prior to the issuance of the legal notice. Similarly, we find no reason to accept the submission that the Chief Engineer was not competent to issue a notice to show-cause. As the Head of Department, the Chief Engineer was acting within his authority in taking steps once it was brought to his notice that the work, which has been performed under a contract, has not been satisfactorily completed. 6. We, however, clarify that the present findings are confined to the issue of blacklisting which has been raised in these proceedings and, shall not come in the way of the petitioner taking recourse to the provisions of the arbitration agreement. In the event, the petitioner invokes the arbitration clause, the arbitral tribunal shall decide all questions of law and fact independently on the basis of the material which may be adduced during the course of the arbitration proceeding. As regards the claim for the payment of outstanding dues, recourse to the writ jurisdiction under Article 226 of the Constitution is clearly not warranted since several disputed questions of fact and law have to be resolved.
As regards the claim for the payment of outstanding dues, recourse to the writ jurisdiction under Article 226 of the Constitution is clearly not warranted since several disputed questions of fact and law have to be resolved. The petitioner would be at liberty to take recourse to arbitration. 7. We, therefore, decline to entertain the petition. The petition is dismissed. There shall be no order as to costs. ——————