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Karnataka High Court · body

2019 DIGILAW 341 (KAR)

Govind Kamat v. Managing Director North East Karnataka Road Transport Corporation

2019-02-04

B.VEERAPPA

body2019
JUDGMENT : B. VEERAPPA, J. 1. In the above writ petition, the petitioner has sought for a writ of certiorari to quash the impugned order dated 04.01.2019 vide No. [1]3796: 2018-19 passed by the second respondent as per Annexure-M and for a writ of mandamus to direct the first respondent authority to execute an agreement as per the Tender Notification dated 12.10.2018 as at Annexure-A in respect of Vijayapur Central Bus Stand by accepting the bid amount offered. 2. It is the case of the petitioner that pursuant to the Tender Notification dated 12.10.2018, the petitioner submitted his bid for the refreshment/canteen at Vijayapur Central Bus Stand through online and he made his bid for Rs. 9,56,862/- including GST as shown in the E-procurement portal by paying EMD amount of Rs. 15,37,305/-. It is further case of the petitioner that E-procurement portal information shows the financial offer is inclusive of statutory tax. The petitioner being highest bidder, the first respondent has accepted his bid by letter dated 1.11/12.2018 and intimated for payment of security deposit of eight months' rent, one month advance and 18% GST. The total amount demanded by the authority after adjusting the EMD amount was Rs. 72,46,688/- contrary to the information available in the web site. The first respondent issued a notice dated 05.11/12.2018, 10.12.2018, 14.12.2018, 17.12.2018 and 19.12.2018 for total payment of Rs. 72,46,688/- including eight months' security deposit, one month's advance and 18% GST after adjusting the EMD amount of Rs. 15,37,305/-. 3. It is further case of the petitioner that the petitioner has requested and sought for clarification with regard to the financial bid offer submitted online for refreshment at Central Bus Stand for Rs. 9,56,862/-. Further, he submitted his bid including GST as indicated in the E-procurement portal at the time of submitting E-tender and requested for correction of the same demand notice amount. It is further case of the petitioner that the petitioner by E-mail letter dated 01.01.2019 intimated his willingness to deposit the balance amount of Rs. 59,06,757/- i.e., the total payment of Rs. 74,44,062/- including eight months' advance Rs. 64,87,200/- at basic rent of Rs. 8,10,900/- per month, one month advance rent of Rs. 8,10,900/- and 18% GST of one month Rs. 1,45,962/- which includes EMD amount of Rs. 15,37,305/-. 59,06,757/- i.e., the total payment of Rs. 74,44,062/- including eight months' advance Rs. 64,87,200/- at basic rent of Rs. 8,10,900/- per month, one month advance rent of Rs. 8,10,900/- and 18% GST of one month Rs. 1,45,962/- which includes EMD amount of Rs. 15,37,305/-. The second respondent by endorsement dated 02.01.2019 stated that bid amount is excluding 18% GST and intimated to pay balance amount of Rs. 72,46,688/- failing which indicated for forfeiting the EMD amount and putting him in the black list. The petitioner by his letter dated 03.01.2019 furnished the Bank account details for making security deposit etc., by RTGS. When the things stood thus, the respondents proceeded to pass the impugned order dated 04.01.2019 without giving an opportunity of being heard. Therefore, the petitioner is before this Court for the relief sought for. 4. I have heard the learned counsel appearing for the parties to the lis. 5. Sri Mahadev Patil, learned counsel for Sri S.S.Halalli for the petitioner vehemently contended that the impugned order passed by the respondents rejecting the tender and forfeiting the EMD amount and blacklisting the petitioner is arbitrary, erroneous and contrary to the material on record. He would further contend that before passing the impugned order blacklisting the petitioner, the petitioner was not heard. Therefore, the impugned order passed by the respondents cannot be sustained and the same is in utter violation of Articles 14 and 21 of the Constitution of India and therefore, he sought for allowing the writ petition. 6. Per contra, Sri Mahantesh Patil, learned counsel appearing for the respondents filed objections and contended that before forfeiting the EMD amount and blacklisting the petitioner, notice was given to the petitioner. Therefore, he sought to justify the impugned order. 7. Having heard the learned counsel appearing for the parties and on careful perusal of the impugned order dated 04.01.2019, it would clearly depict that though there is reference in issuing notice to the petitioner, the petitioner was not heard before passing the impugned order and before entering the name of the petitioner in the blacklist. 8. 7. Having heard the learned counsel appearing for the parties and on careful perusal of the impugned order dated 04.01.2019, it would clearly depict that though there is reference in issuing notice to the petitioner, the petitioner was not heard before passing the impugned order and before entering the name of the petitioner in the blacklist. 8. The Hon'ble Supreme Court while considering the provisions of Articles 14, 19, 21 and 226 of the Constitution of India with regard to the natural justice in the case of M/s Erusian Equipment and Chemicals Ltd., vs. State of West Bengal and another reported in, (1975) AIR SC 266, it has held that before placing the name of the person in blacklist, the person is entitled to be heard. Paragraphs-12, 13 and 14 of the said judgment reads as under: "12. Under Article 298 of the Constitution the Executive Power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of black-listing has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. 13. But for the order of black-listing, the petitioner would have been entitled to participate in the purchase of cinchona. When the State acts to the prejudice of a person it has to be supported by legality. 13. But for the order of black-listing, the petitioner would have been entitled to participate in the purchase of cinchona. Similarly the respondent in the appeal would also have been entitled but for the order of blacklisting to tender competitive rates. 14. The State can enter into contract with any person it chooses. No person has a fundamental right to insist that the Government must enter into a contract with him. A citizen has a right to earn livelihood and to pursue any trade. A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling." 9. In view of the aforesaid reasons, since the respondents have not heard the petitioner before passing the impugned order blacklisting the name of the petitioner, the impugned order cannot be sustained. Hence, this Court is of the considered opinion that the matter requires to be reconsidered by the respondents afresh after affording opportunity to the petitioner. 10. For the reasons stated above, the writ petition is allowed. The impugned order passed by the second respondent dated 04.01.2019 at Annexure-M in No.[2] 3796:2018-19 is hereby quashed. The matter is remanded to the second respondent for fresh consideration after giving an opportunity of being heard to the petitioner and pass appropriate orders in accordance with law. The petitioner is directed to appear before the second respondent on 14.02.2019 without waiting for any notice from the respondents. The respondents shall given an opportunity to the petitioner and pass orders strictly in accordance with law. Ordered accordingly.