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2017 DIGILAW 56 (GAU)

Sri. Ganesh Fire Equipments (P) Ltd. v. State of Assam

2017-01-10

ACHINTYA MALLA BUJOR BARUA

body2017
JUDGMENT : Achintya Malla Bujor Barua, J. Heard Sri I. Choudhury, learned counsel for the petitioner and also heard Sri C Choudhury, learned Advocate General, Assam assisted by Ms. A Gayan. 2. In this writ petition, the petitioner, inter alia, challenges the order dated 25.05.2015 of the Additional Director General of Police cum Director, Fire and Emergency Services, Assam, Guwahati by which the writ petitioner was disqualified and debarred from taking part in any future bidding process in the Fire and Emergency Services, Assam for the next 3(three) years with effect from the financial year 2015-2016. It has been contended by the petitioner that the said impugned order of 25.05.2015 amounts to an order of blacklisting the petitioner. 3. It is the case of the petitioner that before issuing the impugned order of 25.05.2015, the petitioner was not given any opportunity of hearing or to present his case before being blacklisted. 4. The learned counsel for the petitioner relies upon the decision of the Supreme Court in M/s. Erusian Equipment & Chemicals Ltd. v. the State of West Bengal and Another, reported in (1975) 1 SCC page 70. In the said decision of the Supreme Court, it has been held that the order of blacklisting involves civil consequences and it causes a slur and creates a barrier between the person blacklisted and the Government in the matter of transaction. It has been held that the Government while trading with public, being the democratic form of Government, demands equality and absence of arbitrariness and discrimination in such transactions. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone but if it does, it must do so fairly without discrimination and without any unfair procedure. 5. It has been held by the Supreme Court that blacklisting tarnishes one's reputation. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods by discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods by discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Just as exclusion of the lowest tender will be arbitrary similarly exclusion of a person who offers the highest price from participating at a public auction would also have, the same aspect of arbitrariness. 6. It has been held by the Supreme Court that where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as to be meaning a duty to observe certain aspects of rules of natural justice. A body may 'be under a duty' to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein. 7. It was also held that blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting, indicates that the relevant authority is to have an objective satisfaction and the fundamentals of fair play requires that the person concerned should be given an opportunity to represent his case before he is put on the blacklist. 8. From the aforesaid pronouncement of the Supreme Court in the Erusian Equipment & Chemicals case (supra), what is discernible is that in order to blacklist a person, the authority is required to have an objective satisfaction that the facts and circumstances of the case warrants such blacklisting. 8. From the aforesaid pronouncement of the Supreme Court in the Erusian Equipment & Chemicals case (supra), what is discernible is that in order to blacklist a person, the authority is required to have an objective satisfaction that the facts and circumstances of the case warrants such blacklisting. Secondly, as an extended arm of the concept of requirement to act fairly, the State is also required to provide the person with a liberty to represent his case before the person is put on blacklist. 9. In the premises of the law laid down by the Supreme Court, when the impugned order dated 25.05.2015 is read, what is found is that the writ petitioner in respect of his earlier contract, wherein bids were obtained on 24.02.2014 for supply of water tender pump (Type B), had quoted the lowest bid of Rs.11,09,323/- which it was found to be Rs.2,95,977/- less than the second lowest bidder. It is also the conclusion of the respondent authorities that the rate of Rs.11,09,323/- was found to be even lower than the rate quoted in the previous settlement i.e., 2012-2013 by the same petitioner, which was Rs.12,92,500/-. 10. Similarly, in respect of mini water tender pump, the rate quoted by the petitioner in the bid opened on 23.12.2014 was Rs.9,13,377/- which was found to be Rs.3,19,594 less than the second lowest bidder. It was also found that the rate of Rs.9,13,377, quoted by the writ petitioner, was even lower than the rate which the petitioner was settled for the same item for the year 2012-2013, which was Rs.12,63,125/-. 11. It is a categorical finding of the respondent authorities that in respect of the supply of water tender pump (type B) and mini water tender pump, pursuant to the earlier tender 23.12.2014, the supplies that were made by the writ petitioner had a sharp deterioration in their functioning as per the report of the MTI, which made upon physical verification, there were inferior quality fitments in the aforesaid equipments. Accordingly, the authorities have arrived at a conclusion that the rate of Rs.11,81,250/- for the water tender pump (type B) and Rs.9,45,000/- for the mini water tender pump, would have been insufficient for maintenance of appropriate quality even for the earlier year of 2010-2011. 12. Accordingly, the authorities have arrived at a conclusion that the rate of Rs.11,81,250/- for the water tender pump (type B) and Rs.9,45,000/- for the mini water tender pump, would have been insufficient for maintenance of appropriate quality even for the earlier year of 2010-2011. 12. Accordingly, upon the premises of the aforesaid findings and conclusion of the authority, the impugned order of blacklisting was passed against the petitioner, by which the petitioner has been disqualified and debarred from taking part in any future bid process in the Fire and Emergency Services, Assam for the next 3(three) years. 13. It has been submitted by the petitioner that in respect of the earlier supply in the year 2014, the petitioner has been issued with a certificate by the then Additional Director General of Police cum Director, Fire and Emergency Services, Assam Guwahati dated 26.08.2013. The said certificate states that the petitioner has supplied 80 numbers of fabricated fire tendering equipments during the year 2012-2013 to the department and they have received the said fire tendering equipment as per the order of specification and in good working condition and the performance of the fire tendering equipment were found to be satisfactory. In order to evaluate the quality of the equipments involved in the petitioner's bid which was opened on 23.12.2014, the aforesaid certificate dated 26.08.2013 of the then Additional Director General of Police cum Director, Fire and Emergency Services, Assam Guwahati cannot be a basis for the petitioner to submit that the equipment supplied by him were of the desired quality. The said certificate dated 26.08.2013 merely provides that during the year 2011-2013, 80 numbers of fire equipments were received in good condition. The said certificate does not by itself give the indication that the fire equipments continued to perform in a good working condition for the entire period for which it was used. 14. At this stage, the learned counsel for the petitioner, Sri Choudhury, by referring to the MTI report dated 29.12.2014 had stated that the MTI report also pertains to the aforesaid 80 numbers of fire equipments that are being the subject matter of the certificate dated 26.08.2013. 14. At this stage, the learned counsel for the petitioner, Sri Choudhury, by referring to the MTI report dated 29.12.2014 had stated that the MTI report also pertains to the aforesaid 80 numbers of fire equipments that are being the subject matter of the certificate dated 26.08.2013. On a further perusal of the said report, it has been noticed that the report states that several types of defects are being found in the fire tendering equipments immediately after the expiry of the warranty period and the equipments had deteriorated to the extent of causing operational failure in the fire tendering services. The said MTI report further fortifies that the Annexure-3 certificate dated 26.08.2013, cannot be the basis to arrive at the conclusion that the fire fighting equipments supplied by the petitioner were of acceptable standard. 15. In view of the above, on due consideration given to the reasons set forth in the impugned order dated 25.05.2015, this Court is of the view that the relevant authority, before taking the impugned decision to blacklist the petitioner, had arrived at an objective satisfaction, as required under the law laid down by the Supreme Court in the Erusian Equipment & Chemicals case (supra), that, such order of blacklisting is required to be passed against the petitioner. 16. But on a further consideration of the impugned order dated 25.05.2015, it is apparent that before passing the impugned order of blacklisting the petitioner to the effect of disqualifying and debarring the petitioner from taking part in any future bidding for the next 3 years, the required procedure of giving the opportunity of hearing to the petitioner, as required under the law laid down by the Supreme Court in the Erusian Equipment & Chemicals case (supra) had not been duly followed in the present case. 17. The position of law is that the violation of the Principles of Natural Justice can no longer be construed to be a straight jacket formula and the parties alleging violation of the Principles of Natural Justice, is also required to satisfy that upon being given an appropriate opportunity of hearing, the party would be able to satisfy on merit that the order having adverse civil consequence cannot be sustained. 18. 18. On a pointed query to the learned counsel for the petitioner, as to what the effective stand the petitioner may take upon the opportunity of hearing being given, the learned counsel submits that had the petitioner been duly informed about the inferior quality of products, the petitioner would have refrained from supplying such inferior products. The learned counsel for the petitioner has also submitted that the impugned order of blacklisting has been passed upon, mala fide consideration. Upon a query, it has been explained that the concerned Officer of the Fire services department, who has passed the impugned order did not pass it on good faith and secondly before passing the said order, the concerned Official had an eye on giving the supply contract to some other tenderer. 19. The said assertion of, mala fide, cannot been gone into by this Court, inasmuch as, the concerned person against whom the mala fide has been alleged, has not been made a party by name in this proceeding and secondly, apart from the assertion, no adequate material had been placed before this Court to even look into the assertion of mala fide, let alone make a pronouncement upon it. 20. Be that as it may, it is the considered opinion of this Court that, as held earlier, the petitioner, having been not given the appropriate opportunity of hearing before the impugned order of blacklisting was issued, may have been provisionally affected, and further the procedure of providing an opportunity of hearing, as laid down by the Supreme Court, had not been followed. 21. Ends of justice would be met, if it is directed that the respondent authorities give the petitioner an affective opportunity of hearing to present his case against the order of blacklisting. But however, as has already been held, as the respondent authorities had provided some reasons indicating that they have arrived at an objective satisfaction that the order of blacklisting can be justifiably passed against the petitioner, this Court is of the view that while directing the respondent authorities to give the petitioner an appropriate opportunity of hearing, the effect of the order of blacklisting of not allowing the petitioner to participate in the future tendering process be maintained till the authorities pass an appropriate order upon the opportunity of hearing that may be given to the petitioner. 22. 22. Accordingly, it is directed that the writ petitioner would file an appropriate application before the respondent No.2, being the Additional Director General of Police cum Director, Fire and Emergency Services, Assam, Guwahati. In the said representation, the petitioner would be at liberty to take any ground that may be available to him and indicate any material, which in the view of the petitioner would indicate that the fire equipments supplied by the petitioner earlier were of acceptable quality. The aforesaid representation may be submitted by the petitioner within a period of 2(two) weeks from the date of receipt of a certified copy of this order. Upon such representation being filed, the respondent No.2, the Additional Director General of Police cum Director, Fire and Emergency Services, Assam, Guwahati would dispose of the same within a period of 6(six) weeks thereafter. While disposing of the representation of the petitioner, in the event, the petitioner desires, would give him an opportunity of personal hearing. 23. In Erusian Equipment & Chemicals case (supra) also, the Apex Court in paragraph 21 has provided that in view of the violation of the Principles of Natural Justice in that case, an opportunity was given to the petitioner therein to present their case by directing that the authorities would hear the petitioner accordingly. 24. Upon so considering, the respondent No.2 would pass a speaking order stating the reasons thereof. Till such speaking order is passed, it is provided that the petitioner, in view of the strong objective satisfaction of the authorities that the firefighting equipments that were supplied by him were of inferior quality, would not be allowed to participate in any tender process during this period. The said provision is made keeping in mind that the quality of the firefighting equipment is of overwhelming public interest and any inferior quality that may be supplied may have a devastating effect on the public. 25. In terms of the above, this writ petition is disposed of. No costs. 26. In view of the above, the connected interlocutory application also stands disposed of.