M. K. Enterprises, Hazaribagh, represented through its proprietor Md. Kalam v. State of Jharkhand
2021-12-22
RAJESH SHANKAR
body2021
DigiLaw.ai
JUDGMENT : The present cases is taken up through video conferencing. 2. The present writ petition has been filed for quashing the order of District Mineral Foundation Trust (DMFT), Hazaribag as contained in memo no. 30/DMFT dated 08.06.2020 issued under the signatures of the respondent nos. 2 and 3 being Chairman and Secretary respectively of the said DMFT whereby the following decisions have been taken:- (i) to lodge an F.I.R under section 420 of the IPC alleging misappropriation of the government funds by the petitioner, (ii) supply order earlier issued to the petitioner has been cancelled with immediate effect and the balance amount of the petitioner has been forfeited on the ground of violation of the terms and conditions of the tender, (iii) the petitioner has been blacklisted for a period of three years in the light of allegation with respect to embezzlement of government funds. 3. Factual background of the case as stated in the writ petition is that a very short term tender notice was issued by the Deputy Development Commissioner, Hazaribagh (the respondent no. 3) vide Notice Inviting Tender No. 01/DMFT/2019 dated 26.02.2019 for supply of food supplements to various Anganbari centres (330 Anganbari centres) in Dadi, Keredari and Barkagaon blocks of Hazaribagh District. The petitioner applied and was awarded the said work vide memo no. 20/DMFT dated 08.03.2019 issued by the respondent no. 3. The petitioner supplied the materials i.e ‘Chikki/Gud Patti’, ‘Chyavanprash’ and ‘Tetra Pack Amul Taaza Milk’ from April 2019 to July 2019 to the Anganbari centres of aforesaid three blocks and payment for the months from April 2019 to June 2019 was also made to the petitioner, however the bill for the month of July, 2019 was not paid. Thereafter, the petitioner could not supply the materials to the Anganbari centres of the said Blocks due to strike of Anganbari Sevikas. The supply was again made by the petitioner from the month of October, 2019 till December, 2019. Since the petitioner could not get the sufficient quantity of ‘Patanjali Chyavanprash’ in the month of December, 2019, it supplied some quantity of ‘Chyavanprash’ of different brand namely, ‘New Shama Chyavanprash Special’ to the said Anganbari centres. Thereafter, the petitioner submitted bills for the month of July, October, November and December, 2019 to the respondent no.3 and the total cost of the materials supplied for the said months was worth Rs. 76 Lakhs (approx.).
Thereafter, the petitioner submitted bills for the month of July, October, November and December, 2019 to the respondent no.3 and the total cost of the materials supplied for the said months was worth Rs. 76 Lakhs (approx.). However, the petitioner was not paid a single penny due to which it was not in a position to supply the materials from the month of January, 2020. The respondent no.3, vide memo no. 584/585 dated 20.05.2020 issued a show cause notice to the petitioner alleging that the supply of ‘Chyavanprash’ was not made to the Anganbari centres of three blocks of district- Hazaribagh as per the brand mentioned in the tender, rather a new brand of ‘Chyavanprash’ namely ‘New Shama Chyavanprash Special’ was supplied in the month of December, 2019 without taking permission from the competent authority. The petitioner replied the said show cause notice on 22.05.2020 stating that due to the pressure of Sevikas and the supervisors of the concerned Anganbari centres as well as due to scarcity of ‘Chyavanprash’ of ‘Patanjali’ brand in the market on account of model code of conduct having been imposed during Legislative Assembly election in the State of Jharkhand, the petitioner had no other option but to supply ‘Chyavanprash’ of different brand namely ‘New Shama Chyavanprash Special’ which is a 30 years old brand and of a reputed company. However, the petitioner was again issued show cause notice by the respondent no.3 vide memo no. 27/DMFT dated 27.05.2020 wherein it was alleged that the petitioner stopped supplying the materials from the month of January, 2020 without any information to the concerned authority. The petitioner replied the said show cause notice on 29.05.2020 stating that since payment of huge amount of Rs. 76 Lakhs (approx.) was pending, it was difficult for it to make any further supply from January, 2020. Thereafter, the respondent no. 2 passed the impugned order dated 08.06.2020 directing to lodge an F.I.R. against the petitioner under Section 420 of IPC for misappropriating government funds, to cancel the supply order with immediate effect and to forfeit its balance amount of bill. It was also ordered to blacklist the petitioner for a period of three years. Hence, the present writ petition. 4. Learned counsel for the petitioner submits that ‘Patanjali Chyavanprash’ was out of stock and the petitioner tried to get the same from other districts but it could not obtain the same.
It was also ordered to blacklist the petitioner for a period of three years. Hence, the present writ petition. 4. Learned counsel for the petitioner submits that ‘Patanjali Chyavanprash’ was out of stock and the petitioner tried to get the same from other districts but it could not obtain the same. In fact, it tried to procure the balance stock of ‘Chyavanprash’ of other brands but was not in a position to get sufficient quantity needed for supply to all the Anganbari centres and as such, it supplied the balance quantity of ‘Chyavanprash’ of other brand namely ‘New Shama Chyavanprash special’ to some of the Anganbari centres as the ingredients in ‘New Shama Chyavanprash Special’ are same to that of the ‘Chyavanprash’ of ‘Patanjali’, ‘Himalaya’, ‘Dabur’ etc. brands. Moreover, ‘New Shama Chyavanprash Special’ is also approved by Directorate of Ayush, Department of Health, Medical, Education and Family Welfare, Government of Jharkhand. The said brand is 30 years old which bears barcode and drug licence number as well. It is also submitted that there was pressure from the Anganbari Sevikas and the supervisors to supply the said material as early as possible for the benefit of children. It was also informed to the respondent no.3 that the petitioner was not getting the total quantity of ‘Chyavanprash’ of the said brands and on verbal permission of the respondent no. 3, ‘New Shama Chyavanprash Special’ were supplied to three Anganbari centres for the month of December, 2019. The said information was also given to the respondent nos. 2 and 3. The respondents accepted the ‘Chyavanprash’ of the said brand and were used also. The impugned action of debarment of the petitioner is in violation of the principles of natural justice as it was not provided due opportunity of hearing before taking the said decision. 5. Per contra, learned counsel for the respondents submits that as per the report submitted by the District Social Welfare Officer, Hazaribagh (the respondent no.4) vide letter no. 646 dated 30.05.2020, serious discrepancies were detected in supply of food supplements to the Aganbari centres under the said three blocks of Hazaribagh district as the petitioner supplied the ‘Chyavanprash’ of other brand i.e., ‘New Shama Chyavanprash Special’ in place of approved brands of ‘Chyavanprash’ which were specifically mentioned in the tender documents. Moreover, the petitioner raised bills for much higher quantity of materials than what was actually supplied by it.
Moreover, the petitioner raised bills for much higher quantity of materials than what was actually supplied by it. The petitioner did not adhere to the terms and conditions of the tender and the work order and also raised inflated bills which was admitted by it by submitting a cheque of Rs. 20,172/- to the District Mineral Foundation Trust, Hazaribagh towards excess of payment. Since underlying object of the scheme of supplying food supplements to children residing in mining prone area was to boost their nutrition and to compensate food deficiencies, the petitioner compromised the nutrient value of the product by supplying inferior quality of ‘Chyavanprash’ i.e., ‘New Shama Chyavanprash Special’ as well as it did not supply the food supplements of the brands specially mentioned in the tender document. The impugned order is reasoned and speaking one and as such there is no legal infirmity in the same. It is a settled principle of law that disputed claim arising out of contract cannot be adjudicated under the extraordinary writ jurisdiction. The petitioner was served with two show cause notices and as such the impugned order has been passed in conformity with the principles of natural justice. The petitioner had lot of options for supplying ‘Chyavanprash’ of other premium brands mentioned in the tender document and hence the explanation offered by the petitioner in its show cause reply was not found tenable and satisfactory. The petitioner had to supply ‘Chikki’/’Gud Patti’ of ‘Haldiram’ brand, but it supplied ‘Pramod’ brand in utter violation of the terms of the said tender. 6. Heard learned counsel for the parties and perused the materials available on record. The petitioner has challenged the decision of the respondent nos. 2 and 3 taken vide memo no. 30/DMFT dated 08.06.2020 to lodge FIR against it under Section 420 of IPC, to cancel the work order for supply of food supplements and to forfeit the balance amount of bill by blacklisting it for a period of three years.
The petitioner has challenged the decision of the respondent nos. 2 and 3 taken vide memo no. 30/DMFT dated 08.06.2020 to lodge FIR against it under Section 420 of IPC, to cancel the work order for supply of food supplements and to forfeit the balance amount of bill by blacklisting it for a period of three years. Admittedly, the petitioner did not supply ‘Chyavanprash’ of the brands mentioned in the tender document, however, it has contended that since ‘Chyavanprash’ of the brands stipulated in the tender document were not available in the market and it was under pressure of Anganbari Sevikas and Supervisors to supply the same, the ‘Chyavanprash’ of ‘New Shama Chyavanprash Special’ brand was supplied to some of the Anganbari centres after oral permission of the respondent no.3 which was accepted by the respondents without any protest. The said claim of the petitioner has, however, been refuted by the respondents specifically stating that the petitioner by not supplying the materials of the premium brands as specified in the tender document violated the terms and conditions of the tender. 7. It is well settled principle of law that the terms of NIT cannot be ignored treating those as redundant or superfluous, rather the same must be given a meaning and necessary significance. Whether a particular term of NIT is essential or not, is in the domain of the authority issuing the same, provided such decision is uniformly applied. The author of the tender document is the best person to understand and appreciate its requirement and to interpret its documents. A contract is a commercial transaction and the party inviting the tender has the right to put any condition to be fulfilled by a bidder and has also the right to strictly adhered to the same. 8. Though the petitioner has claimed that oral permission was granted by the respondent no.3 to supply ‘Chyavanprash’ of ‘New Shama Chyavanprash Special’ brand, the said averment of the petitioner has been denied by the respondents. Thus in absence of any such documentary evidence in this regard, this Court does not find any reason to accept the contention of the petitioner. 9. One of the allegations against the petitioner is that it received excess payment by submitting false bills and after issuance of show cause notice, it deposited the differential amount of Rs. 20,172/- and thus accepted the allegations levelled against it.
9. One of the allegations against the petitioner is that it received excess payment by submitting false bills and after issuance of show cause notice, it deposited the differential amount of Rs. 20,172/- and thus accepted the allegations levelled against it. The petitioner has not controverted the said fact, rather has tried to explain that there could be miscalculation in the TDS or any other reason for committing the said mistake. 10. So far as issue with regard to violation of the principles of natural justice is concerned, it appears that a show cause notice dated 20.05.2020 issued by the respondent no. 3 was served to the petitioner specifically stating the proposed punishment against it including the blacklisting. The said show cause notice was also replied by the petitioner and only thereafter a detailed order was passed by the respondent nos. 2 and 3 on 08.06.2020. Thus, I do not find any substance in the argument of the learned counsel for the petitioner regarding non-observance of the principles of natural justice by the respondents. 11. It is well settled that the State or its instrumentality is free to decide not to deal with certain persons or class of persons on account of undesirability of entering into the contractual relationship with such persons by passing the order of blacklisting. There need not be any statutory grant of such power. The only legal limitation upon exercise of such power is that the State has to act fairly and rationally and for some legitimate purpose. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract and as such before passing said order, the principles of natural justice is required to be followed by serving a show-cause notice thereby giving him opportunity to meet the allegations which were in the mind of the authority contemplating blacklisting of such a person. 12. Under the aforesaid facts and circumstance and keeping in view that before issuance of impugned order dated 08.6.2020, the petitioner was served show cause notice dated 20.05.2020 clearly mentioning that it violated the terms and conditions of tender by supplying ‘Chyavanprash’ of ‘New Shama Chyavanprash Special’ brand instead of supplying ‘Chyavanprash’ of premium brands mentioned in the tender document, I do not see any procedural impropriety in issuance of order dated 08.06.2020 whereby the petitioner has been blacklisted.
Thus, I am of the view that the impugned order of blacklisting has been passed in due compliance of the principles of natural justice and, therefore, there is no ground to interfere with the merit of the same under the writ jurisdiction. It, however, appears that the petitioner has been blacklisted for a period of three years whereas in the show cause notice, the proposed punishment of blacklisting was for one year and the respondents have failed to explain as to why they exceeded the period of blacklisting than what was proposed. 13. Since the petitioner has suffered consequence of the order of blacklisting for more than one year, I am of the view that the period of blacklisting already suffered by it will be sufficient in the facts and circumstances of the present case. Accordingly, it is observed that the petitioner is henceforth to be treated as out of blacklist in pursuance of impugned order contained in memo no. 30/DMFT dated 08.06.2020. So far the rest part of the order is concerned, I do not find any reason to interfere with the same under extraordinary writ jurisdiction. 14. The writ petition is accordingly disposed of with aforesaid observation.