J. Sons Company Ltd. now JCL Infra Ltd. v. State of Uttarakhand
2019-02-26
LOK PAL SINGH
body2019
DigiLaw.ai
JUDGMENT : Lok Pal Singh, J. Present writ petition has been filed by the petitioner company seeking writ in the nature of certiorari quashing the impugned order dated 19.06.2014, passed by respondent no. 2 and other order dated 13.04.2018 and 04.05.2018, passed by respondent no. 3 (copy annexed as Annexure nos. 13, 15 and 16 to the writ petition). 2. Brief facts of the case are that the petitioner company J. Sons Company Ltd. was initially registered under the Companies Act, 1956. The name of said company was later on changed to JCL Infra Limited vide order dated 16.06.2011, passed by Registrar Companies, Uttar Pradesh and Uttarakhand. The petitioner company is in the business of selling of civil, metallurgical, mechanical, electrical, chemical engineering in all the branches since October 1980 and had goodwill in the market and they are doing the business with various departments to the satisfaction of its clients. 3. Vide order no. 5515/318(1)YATA-12/2008 dated 25.10.2008, the Superintending Engineer 12th Circle, P.W.D., Pauri Garhwal issued a purchase order to the petitioner company to supply the design, manufacturing and supplying of bride bearings for steel girder bridge 190m span over river Alaknanda to join H.N.B.G.U Chauras campus with Srinagar (six items). In pursuance of purchase order dated 25.10.2008, the Executive Engineer Construction Division, PWD, Srinagar Garhwal wrote a letter on 17.07.2009 to the Director, Quality Assurance. In said letter he informed the Director, Quality Assurance that they have placed order before the petitioner company for design, manufacturing and supply of all 06 items and requested the Director to make arrangement for testing of load capacity of bearings and other necessary tests. He further requested for a formal inspection and testing certificate for his record. Director, Quality Assurance issued a quality assurance certificate on 24.02.2011, which was sent to the Executive Engineer, Construction Division PWD, Srinagar Garhwal. Thereafter, petitioner company on 31.03.2011 supplied and send all the six items in pursuance of the purchase order dated 25.10.2008 to the Construction Division PWD vide challan no. 324 dated 31.03.2011 along with performa invoice. Final payment was made by the department to the petitioner firm on 07.02.2012. 4. It is alleged in the writ petition that condition no. 4 in the purchase order dated 25.10.2008 stipulates that bearings shall be fixed under petitioner company’s supervision and inspection charges shall be paid extra.
324 dated 31.03.2011 along with performa invoice. Final payment was made by the department to the petitioner firm on 07.02.2012. 4. It is alleged in the writ petition that condition no. 4 in the purchase order dated 25.10.2008 stipulates that bearings shall be fixed under petitioner company’s supervision and inspection charges shall be paid extra. It is stated in the writ petition that because the department got fixed the bearings from his own contractor, which informing the petitioner company, therefore, the bearings were neither fixed in the supervision of the petitioner company nor was there any occasion to pay extra charges for inspection to the petitioner company. 5. It is also stated in the writ petition that after a lapse of about 22 months one Suresh Kumar Tomar, Officiating Executive Engineer, Construction Division, PWD, Srinagar (Garhwal) issued a letter no. 4225/7C dated 24.12.2013 to the petitioner company stating therein that the products supplied by it, which were used in construction of a bridge could not withstand the load and as a result of which the bridge collapsed during its construction. A committee setup to investigate the matter found some discrepancy in the bearings supply by the petitioner company due to which the bridge collapsed. In reply, petitioner company submitted that the contents of letter dated 24.12.2013 are wrong and that the bearing supplied were tested and certified and the same were fitted by the contractor of PWD and not by the petitioner. 6. Vide letter no. 404/7C dated 05.02.2014 written to the petitioner, department informed that the matter is not with reference to the bearing supplied, but with reference to the design of restrainer supplied. Reminder was issued to the petitioner company on 26.02.2014. Petitioner company in reply to reminder letter dated 26.02.2014, again provided the drawing of uplift arrangement as asked by the department also called seismic restrainer for abutment A1 and A2 and informed that all bearings were tested at the petitioner’s factory for desired test load as per Indian Code and specifications and there are no specification or provisions to test the seismic restrainer i.e. uplift arrangement in India or abroad in technical course. 7. On 12.04.2014, Lokesh Kumar Sharma, Chief Engineer, Level II, PWD (Almora), member of the enquiry committee PWD, Dehradun, sent a letter to petitioner company requesting it to give the reply of the queries raised in the letter.
7. On 12.04.2014, Lokesh Kumar Sharma, Chief Engineer, Level II, PWD (Almora), member of the enquiry committee PWD, Dehradun, sent a letter to petitioner company requesting it to give the reply of the queries raised in the letter. Petitioner company vide letter dated 16.04.2014 gave a detailed reply of all the queries. On 15.05.2013, the petitioner company came to know that the Principal Secretary (PWD), Government of Uttarakhand Government, constituted an Enquiry Committee of three members constiting of Engineer-In-Chief, PWD Dehradun; Head of the Department of Irrigation Department, Uttarakhand and Chief Engineer Lokesh Kumar PWD Uttarakhand. The said Committee submitted the Enquiry report on 01.05.2014 to the Principal Secretary against the petitioner company, some contractors and some officers of the PWD department. 8. It is alleged in the writ petition that the roll of the petitioner company was limited only to supply the goods as per the satisfaction of the competent authority of PWD and after receiving the full payment towards supply of goods the petitioner company has nothing to do with the matter. It is also alleged that the petitioner company is being harassed by the officer of the PWD Department, Uttarakhand under one pretext or the other and with some ulterior motive simply to save the erring officers. The petitioner firm has neither committed any breach of any condition of purchase order dated 25.10.2008, nor committed any criminal offence, nor cheated the department, nor played any fraud with the department in supply the goods, nor is there any evidence with the department against the petitioner to this effect. It is further alleged that without given and serving a show cause notice to the petitioner company, the respondent no. 2 blacklisted the petitioner company vide order dated 19.06.2014 forever and restrained it to supply bearing and other materials in the State and further to participate in the tender process in the State of Uttarakhand forever. 9. Second and third respondents have filed their counter affidavit, wherein it is contended that the as per the Rule 15 of the Classification and Enlistments of Contractors in the Public Works Department Rules, applicable in the State of Uttarakhand, the department has power to pass the order of removal of a contractor’s name from Register of enlisted contractor or to blacklist the contractor if there is an illegality found in the work of the contractor.
It is also stated that the petitioner company supplied the bearing of the construction of Chauras Bridge. A high level three members Committee was constituted by the State Government for the inquiry regarding the Chauras Bridge. The Committee provided proper opportunity of hearing to the petitioner company vide letter dated 12.04.2014 and on 14.04.2014 had given an opportunity to it in the meeting held on 14.04.2018 in the office of Engineer-In-Chief, PWD. It is further contended that as per Rule 15 of the aforesaid Rules, there is no time period prescribed to take action against the person who is guilty for the unsatisfactory execution and other default. 10. In reply to contents of para 12 of the writ petition it is stated that petitioner firm has demanded the charges of inspection and supervision from the department, therefore, it was the duty to the petitioner firm that the technically efficient engineers should have been present at the time of fixing of bearings in the Chauras Bridge as only a technically sound person is able to give direction to fix the bearings in the aforesaid bridge. It was the duty of the petitioner firm to ensure presence of the technically sound engineer in fixing the bearing in the bridge, but the same has not been done. In reply to contents of para 14 of the writ petition, it is stated that the Chauras bridge collapsed on 25.03.2012. It was specifically mentioned in the letter dated 24.12.2013 that the work order dated 25.10.2008 was issued to supply the bearings as per the terms / conditions of the letter no. CED/IITR/VP/190/2/4 Aug / Sept. / 07, but the petitioner firm has not supplied the same as per the terms of conditions of the contract. The petitioner firm has not submitted any drawing to the department. The drawing in regard to uplift arrangement was never supplied by the petitioner firm to the department and the same were submitted before the inquiry committee. It is also stated that the petitioner firm though had supplied the bearings, but made a J. Hook Type arrangement in the aforesaid bridge, instead of uplift arrangement. In reply to para no.
The drawing in regard to uplift arrangement was never supplied by the petitioner firm to the department and the same were submitted before the inquiry committee. It is also stated that the petitioner firm though had supplied the bearings, but made a J. Hook Type arrangement in the aforesaid bridge, instead of uplift arrangement. In reply to para no. 27 of the writ petition, it has been stated that the Chauras bridge collapsed as a result of negligence on the part of the petitioner firm due to which seven persons lost their life and a loss of Rs.894.91 lacs was caused to the State Government. 11. In the rejoinder affidavit, the petitioner firm has reiterated the averments made in the writ petition. It is stated that Rule 15 of the Classification and Enlistment of Contractors in the PWD Rules, applicable in the State of Uttarakhand, are not applicable in the present case because the petitioner firm is not an enlisted contractor in PWD Uttarakhand. There is no provision of permanent blacklisting in Rule 15 of the aforesaid Rules. Relying upon the Enquiry Report (Annexure CA-5 to the counter affidavit), it is contended that the said enquiry report itself mentioned that it was the blunder committed by officials of PWD as they did not install “Hold Down Arrangement” at the time of deck slab casting, which was supplied by petitioner firm and paid by PWD. The bridge collapsed on 25.03.2012 at the time of deck slab casting. 12. Enquiry report has been annexed as Annexure C.A. 5 to the counter affidavit filed on behalf of respondent nos. 2 and 3. A perusal of the report would depict that the designer of the bridge Associate Professor Vipul Prakash, Civil Engineer, Indian Institute of Technology, Roorkee has stated that in case the bearings could be used for construction of the bridge then there cannot be ends uplifts of the bridge. In a nutshell, in view of the report, the goods supplied by the petitioner company are not faulty, rather it was the defect in the design of the bridge which leads to the collapse of bridge. 13.
In a nutshell, in view of the report, the goods supplied by the petitioner company are not faulty, rather it was the defect in the design of the bridge which leads to the collapse of bridge. 13. It is sorry state of affairs on the part of the State Government to punish the petitioner company alone and nothing has been done against the erring officers of various departments involved in the construction of said bridge, more particularly, at the time of the supply of goods by the petitioner company to check the quality of the goods supplied. No proper opportunity of haring was given to the petitioner company while taking the decision of blacklisting the petitioner company forever. Blacklisting of the petitioner company has serious repercussion in the business of petitioner company, which ultimately affect the livelihood of the employees of the petitioner company. A reasonable opportunity of hearing before passing an order is the requirement of principle of natural justice, but the same has not been done in the present case. 14. A perusal of the notice issued to the petitioner company would show that it was not proposed that in case the reply is not found satisfactory, the petitioner company will be blacklisted forever to participate in the tender process in the State of Uttarakhand forever and such strict decision is violative of Articles 14, 19(1)(g) of the Constitution of India. 15. Their Lordships of Hon’ble Apex Court in paragraph 26 of the judgment passed in M/s Kulja Industries Limited vs Chief General Manager, W.T. Proj., BSNL and others, AIR 2014 SC 9 have held as under : 26. ….blacklisting is in the nature of penalty the quantum whereof is a matter that rests primarily with the authority competent to impose the same. In the realm of service jurisprudence this court has no doubt cut short the agony of a delinquent employee in exceptional circumstances to prevent delay and further litigation by modifying the quantum of punishment but such considerations do not apply to a company engaged in a lucrative business like supply of optical fibre/HDPE pipes to BSNL. Secondly, because while determining the period for which the blacklisting should be effective the respondent-Corporation may for the sake of objectivity and transparency formulate broad guidelines to be followed in such cases.
Secondly, because while determining the period for which the blacklisting should be effective the respondent-Corporation may for the sake of objectivity and transparency formulate broad guidelines to be followed in such cases. Different periods of debarment depending upon the gravity of the offences, violations and breaches may be prescribed by such guidelines. While, it may not be possible to exhaustively enumerate all types of offences and acts of misdemeanour, or violations of contractual obligations by a contractor, the respondent-Corporation may do so as far as possible to reduce if not totally eliminate arbitrariness in the exercise of the power vested in it and inspire confidence in the fairness of the order which the competent authority may pass against a defaulting contractor. 16. In B.C. Biyani Projects Pvt. Ltd. vs State of M.P. and others, 2017 (3) AWC 2840 (SC) Hon’ble Apex Court has held that blacklisting of contractor for indefinite period on the ground of unreasonable delay in completion of six contracts awarded to it was permanent one. Thus, it was held that such blacklisting is not permissible in law and since more than three years had gone by during which period appellant had suffered blacklisting, the Court also took into consideration the fact that three out of six contracts had been completed by appellant, therefore, the period of blacklisting already undergone was sufficient to meet the ends of justice. As such, the order of blacklisting of appellant permanently was set aside. 17. In view of the dictum of the Hon’ble Apex Court, this Court is of the view that the impugned order has been passed in fragrant violation of the law laid down by Hon’ble Apex Court. 18. Impugned orders are hereby quashed. The writ petition is allowed. No order as to costs.