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2020 DIGILAW 771 (GAU)

Vasistha Const. Pvt. Ltd. v. Union of India

2020-11-20

KALYAN RAI SURANA

body2020
ORDER : Kalyan Rai Surana, J. 1. Heard Mr. R. Dubey, learned counsel for the petitioner. Also heard Mrs. G. Sharma, learned standing counsel for, the respondents. 2. By filing this writ petition under Article 226 of the Constitution of India, the petitioner has challenged the proposed action of the respondents to forfeit the earnest money deposit in form of three call deposits. 3. The undisputed facts are that the petitioner in a joint venture entity. The Chief Engineer (Construction), NF Railways had issued two packet tender notices bearing No. CON/2014/May/03 dated 12.05.2014 for three works, viz., Tender Nos. CE/CON/B- S/EMB/2014/03, CE/CON/B-S/EMB/2014/04, and CE/CON/B-S/EMB/2014/05. Along with the bids, the petitioner deposited three call deposit receipts towards earnest money deposit (hereinafter referred to as 'EMD' for brevity). Although the petitioner was declared to be the lowest bidder, but on the ground that the Memorandum of JV agreement was not submitted and that the joint venture agreement was defective, the contract was not awarded to the petitioner. As the call deposit receipts were not returned despite request made, the petitioner apprehended that the respondents might encash the same. 4. It is seen that in their affidavit- in- opposition, the respondents had taken a stand that the price bids were opened on 20.11.2014 and subsequently, the respondents came to learn that the lead member of the petitioner joint venture had been blacklisted till 19.06.2018. The respondents by letter dated 26.12.2014, requested the Engineer-in-Chief, Madhya Pradesh Public Works Department, who confirmed the same. By another letter dated 26.12.2014, the lead member of the joint venture was also called upon to clarify their stand and reference was made to the declaration made by the petitioner as per the tender clause as the petitioner did not disclose such facts in its tender. In affidavit- in- reply, the petitioner has taken a stand that the Madhya Pradesh Government had uploaded the order dated 20.05.2013 of blacklisting M/s. Vasishtha Construction in their web-site. The said firm is the lead constituent of the petitioner joint venture, who is stated to have got information of such blacklisting sometime in August, 2015 and filed a writ petition before the Madhya Pradesh High Court on 01.09.2015 and the said Hon'ble Court by order dated 20.06.2016 in W.P. No. 5920/15, allowed the writ petition and interfered with the order of blacklisting and set aside and quashed the said action. The review petition filed by the State was rejected consequent upon dismissal of the petition filed under section 5 of the Limitation Act for condonation of delay. It is projected that the other joint venture partner of the petitioner was also not aware of such blacklisting. 5. With such factual backdrop, the learned counsel for the petitioner has submitted that in clauses no. (i) and (j) of the declaration appended to the tender document whereby the bidder is required to give a declaration did not authorize the respondents to forfeit the EMD, for which it was incumbent on part of the respondents to put the petitioner to notice and, as such, the proposed forfeiture of EMD is vitiated by non compliance of natural justice. 6. It is also submitted that the petitioner and its constituents were not aware of the blacklisting of the lead partner of joint venture. Therefore, as soon as the said lead partner came to know about such black-listing, writ petition was promptly filed before Madhya Pradesh High Court, which resulted in setting aside and quashing of the order of black-listing. Therefore, it is submitted that once the High Court had set aside and quashed the blacklisting, there would not be any ramification resulting out of such black-listing. 7. In support of his submissions, the learned counsel for the petitioner has relied on the following cases, viz., (i) Gorkha Security Service Vs. Govt. of N.C.T. of Delhi, : (2014) 9 SCC 105 : ( AIR 2014 SC 3371 ), (ii) Imran Hussain Laskar v. State of Assam, : (2017) 0 Supreme (Gau) 1104 : (2018) 2 GLR 286, (iii) order dated 20.06.2016, passed by Madhya Pradesh High Court in W.P. No. 5920/15 -Vasishtha Construction Pvt. Ltd. v. State of M.P. and Ors., (iv) order dated 05.05.2017, passed by Madhya Pradesh High Court in R.P. No. 136/2017 - State of M.P. and Ors. v. Vasishtha Construction Pvt. Ltd. 8. The learned standing counsel for the respondents has referred to the clauses No. (i) and (j) of the declaration as appended to the tender and it is submitted that as the material fact relating to blacklisting of lead partner of the petitioner had been suppressed in the tender, the forfeiture of EMD is justified. 9. Perused the writ petition, affidavit in opposition and affidavit in reply. 10. 9. Perused the writ petition, affidavit in opposition and affidavit in reply. 10. It is seen that it is not in dispute that the petitioner had not disclosed in its tender that the lead joint venture partner of the petitioner had been black-listed by Public Works Department, Govt. of Madhya Pradesh. The blacklisting of the petitioner was notified in the official web-site of the said department and accordingly, the respondents had sought for clarification from the said department vide letter dated 26.12.2014. In paragraph 9 of the affidavit- in- opposition it has been stated that the respondent No. 4 had written letter dated 26.12.2014 to the lead partner, but it was not responded to. The said statements made in para-9 of the affidavit- in- opposition has been replied to in para-8 of the affidavit- in- reply, however, except vaguely disputing and denying the statements, there is no specific denial that no such letter dated 26.12.2014 was ever served on the lead joint venture partner of the petitioner. In the writ petition, no statement has been made as to which of the two constituents is the lead partner. Nonetheless, it is observed from the bid documents that in the "Guidelines and conditions of joint venture" appended thereto contains reference to Clauses 65 to Indian Railway's General Conditions of Contract (GCC) with reference to Railway Board's letter no. 2002/CE-1/CT/37 dated 07.09.2011. Paragraph 15.4 of Guidelines and Conditions of Joint Venture, containing certain special conditions prescribe that "All the members of JV shall certify that they are not black listed or debarred by Railways or any other Ministry/Department of the Govt. of India/State Govt. from participating in tenders/contract on the date of opening of bids either in their individual capacity as members of the JV or the JV firm in which they were/are members/partners." Moreover, as per the bid documents, it is mandated under clause 11 of the Draft Joint Venture/Consortium Agreement that the agreement should contain a clause that the constituents of joint venture have not been black-listed. Therefore, on a conjoint reading of the bid documents, it appears that a lot of stress has been given therein that the constituents of joint venture must not have been black-listed. 11. Therefore, on a conjoint reading of the bid documents, it appears that a lot of stress has been given therein that the constituents of joint venture must not have been black-listed. 11. The plea urged by the learned counsel for the petitioner that the petitioner was not aware that its lead joint venture partner, namely, Vasishtha Construction Pvt. Ltd. was not aware of the black-listing though appears to be attractive, but as per paragraph 15.4 of guidelines and conditions of joint venture, as quoted herein before, each member of the joint venture was required to give its declaration, as such, the fact remains that when information about its black-listing was available in official website of Public Works Department, Govt. of Madhya Pradesh, the purported declaration submitted by the petitioner as per bid documents, specifically, clause (i) and (j) of declaration, that the constituents of the petitioner were not black-listed must be held to be reckless and without verifying facts and, as such, the declaration is deemed to be false. 12. Now it is required to be examined that how far the order dated 20.06.2016, passed by Madhya Pradesh High Court in W.P. No. 5920/15 - Vasishtha Construction Pvt. Ltd. v. State of M.P. and Ors., and order dated 05.05.2017, passed by Madhya Pradesh High Court in R.P. No. 136/2017 - State of M.P. and Ors. v. Vasishtha Construction Pvt. Ltd. would help the petitioner. It is seen that the Gwalior Bench of the Madhya Pradesh High Court had set aside and quashed the blacklisting order dated 20.05.2013 and that the review petition filed by State of Madhya Pradesh has also been dismissed by order dated 05.05.2017. It is well settled that quashing of an order results in the restoration of the position as it stood on the date of passing of the order which has been quashed. In other words, the order of blacklisting dated 20.05.2013 has been wiped out from existence. If one needs any authority on the point, reference may be made to the case of Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association, Madras : (1992) 3 SCC 1 : ( AIR 1992 SC 1439 ). 13. Ordinarily, a person giving a false declaration cannot be permitted to escape the consequences of having made a false declaration, knowing it to be false. 13. Ordinarily, a person giving a false declaration cannot be permitted to escape the consequences of having made a false declaration, knowing it to be false. However, in this present case in hand, notwithstanding that the petitioner is guilty of making incorrect declaration while submitting their tender, but in view of the order dated 20.06.2016, passed by Madhya Pradesh High Court in W.P. No. 5920/15 - Vasishtha Construction Pvt. Ltd. Vs. State of M.P. and Ors., the order of the blacklisting must be deemed to be non-est, taking effect on and from the date of black-listing, which has the effect as if the petitioner's constituent was not black-listed. 14. In view of the finding arrived at, there appears to be no necessity to discuss the other cases cited by the learned counsel for the petitioner. 15. Accordingly, in view of the discussions above, the petitioner has been able to successfully project that they are entitled to release and/or refund of their earnest money deposit (EMD) in form of three call deposit receipts submitted to NF Railway by the petitioners while submitting their bid. It is ordered accordingly. The respondents are directed to release and/or refund the earnest money deposit (EMD) in form of three call deposit receipts submitted by the petitioners to NF Railway authorities within a period of 2 (two) months from the date of receipt of certified copy of the order.