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Gujarat High Court · body

2022 DIGILAW 1523 (GUJ)

Ramdev Pcv Products Private Limited v. Chief Engineer, Material Cell (C), Gujarat Water Supply And Sewerage Board

2022-11-07

ARAVIND KUMAR, ASHUTOSH J.SHASTRI

body2022
ORDER : (Aravind Kumar, J.) 1. Present petition under Article 226 of the Constitution of India is filed for the purpose of challenging the legality, validity and propriety of an order dated 18.6.2022. 2. Brief facts leading to filing of present petition are that petitioner is a approved vendor of Gujarat Water Supply and Sewerage Board (GWSSB) having its registration from 27.4.2021, provided by respondent and validity thereof is upto 25.4.2024. Petitioner has undertaken various projects and pursuant to certain purchase orders received from EPC contractor, pipes of various diameters were supplied for district Botad and Bakaskantha. Respondent by letter dated 6.1.2022 issued notice to petitioner by referring to the Chief Engineer, WASMO letter dated 22.9.2021 bearing letter No.440 and letter No.3 dated 4.1.2022- GIRDA. A joint inspection report was also prepared on 17.9.2021 as also CIPET inspection report dated 17.12.2021 and by referring to this, it has been informed to petitioner that certain samples failed to meet the prescribed parameters as per the sample reports and thereby respondent called upon the petitioner to clarify within 5 days, failing which punitive action was proposed to be taken for debarment/ cancellation of vendor approval. It is the case of the petitioner that along with that notice, documents which were referred to have not been provided and only through email dated 7.1.2022, a joint inspection report of GIRDA dated 17.9.2021 and inspection report of CIPET dated 17.12.2021 were provided. 3. Petitioner vide letter dated 12.1.2022 informed the respondent about technicality and requested to send said sample for retesting. Simultaneously, petitioner received a letter from respondent authority on 20.1.2022 and issued the same as final notice calling upon the petitioner to submit its reply as to why punitive action should not be taken against the petitioner. Against this final notice, petitioner offered its reply dated 25.1.2022 and undertook the exercise of replacing the defective pipes within the stipulated period and requested the respondent not to initiate any punitive action which may damage the image of petitioner on the ground it is a reputed company. Against this final notice, petitioner offered its reply dated 25.1.2022 and undertook the exercise of replacing the defective pipes within the stipulated period and requested the respondent not to initiate any punitive action which may damage the image of petitioner on the ground it is a reputed company. It is the case of petitioner that since oral request of retesting was not accepted, petitioner by way of letter dated 9.2.2022 provided the test result of pipes having same batch number and found positive result indicating no infirmity in the pipes supplied and as such, once again petitioner requested the respondent authority to give one chance of witness test and in case, test result fails, petitioner undertook to replace all the pipes supplied. The respondent authority neither replied to the said notice nor considered the request of petitioner for witness test and as such, petitioner returned the amount received from EPC contractor and took back the pipes from both sites, i.e. Botad and Banaskantha. Petitioner has indicated in the petition that a circular was issued by the respondent authority dated 18.2.2022 whereby a joint inspection report was required to be obtained in case of dispute with respect to supply of pipes and its quality. However, no such opportunity was given to the petitioner though specifically requested not only in writing but also verbally. It has been stated that after pipes were supplied on or after 6.1.2022, in various districts of State of Gujarat through EPC contractor for WASMO, there appears to be no complaint whatsoever about quality of pipes supplied by petitioner from any of the districts. It is only Botad and Banaskantha districts, which raised the issue of defective quality but still with a view to resolve the issue, petitioner took back the pipes though result for the same batch was positive. In spite of such clarification and replies dated 12.1.2022 as well as 25.1.2022 and despite pipes having been taken back, still the authority by an order dated 18.6.2022 in an arbitrary manner removed the name of petitioner from the approved vendors list of GWSSB and debarred petitioner from participating in any tender to be invited by GWSSB/GWIL/WASMO for a period of one year from the date of issuance of said order and it is this order passed by the respondent authority which has been questioned in the present petition before us. 4. 4. Based upon initial version of petitioner, this Courts issued notice on 30.6.2022 calling upon the authority to meet with the stand of petitioner and later on, after submission of affidavit-in-reply and rejoinder namely pleadings having been completed, learned advocates appearing for the parties requested this Court to hear and dispose of the petition. Hence, petition is taken up for final hearing. 5. Learned advocate Mr. Paras K. Sukhwani appearing on behalf of petitioner has vehemently submitted that action on the part of respondent authority is not only unjust and arbitrary but suffers from vice of non-application of mind and as such, same be quashed in the interest of justice. It has been pointed out that time and again, petitioner requested to allow the witness testing as permissible under the policy, but unfortunately, no such request was allowed and in an arbitrary manner, without allowing the petitioner to have such an opportunity, action is initiated which has got the effect of far reaching consequence upon the business and image of the firm. Mr. Sukhwani has further contended that almost in all parts of the State of Gujarat, petitioner supplied the pipes through EPC contractor for WASMO and from no corner of the State, such kind of grievance about quality is raised except districts of Botad and Banaskantha. Though later test report undertaken by the petitioner is found positive and in favour of petitioner, still with a view to see that image may not be tarnished, said offending pipes have been taken back of same batch and though this fact is well within the knowledge of authority and still action is initiated debarring the petitioner for a period of one year, which is unjust and arbitrary and hence, requested the Court to set set aside the impugned order. 6. Learned advocate Mr. Sukhwani has then further contended that order passed by the authority is not only in conflict with the relevant record but is also stretching beyond the scope of notice. A perusal of the notice clearly indicate as to in which circumstances, petitioner is called upon to explain, but perusal of impugned order reflects for other circumstances relied upon therein for which petitioner had not been put to any notice impugned order has been passed and as such this is nothing but a flagrant violation of principles of natural justice. Mr. Mr. Sukhwani has also contended that apart from this technicality now the sample pipes have been replaced and cogent explanation has been given and in addition thereto, even positive test report in favour of the petitioner is also forming part of the record of authority and said test report is through authorized agency of respondent and as such, decision making process reflects perversity, hence same requires to be corrected by quashing and setting aside the impugned order. 7. Learned advocate Mr. Sukhwani has also made a request that period of one year debarring the petitioner from further tendering is too harsh and thoroughly disproportionate in view of the peculiar background of facts and as such, at least, same be appropriately rectified to a reasonable extent, by reducing the period of one year, as indicated in the impugned order. With a view to strengthen his submission, Mr. Sukhwani has relied upon the decision of Coordinate Bench of this Court dated 9.9.2021 rendered in Special Civil Application No.10412 of 2018 and by referring to relevant paragraphs of doctrine of proportionality, a request is made by alternate prayer, period which has been mentioned under the impugned order may be appropriately reduced. No other submissions are made. 8. As against this, learned advocate Mr. Rituraj Meena appearing on behalf of respondent authority has vehemently contended that petitioner has supplied inferior quality of pipes, on account of which public work which has been undertaken is adversely affected and as such, stand taken by the authority is just and proper. It has been pointed out that it is not for the first time this has happened, but has repeatedly happened and as such, to see that in future, it may not re-occur, a just decision is taken after considering the overall circumstances and hence there is neither any arbitrariness nor any discrimination nor any kind of malafide in any form attributable to respondent. On the contrary, while taking the decision, every material has been taken note of and it is only thereafter impugned order came to be passed. According to Mr. Meena, sample pipes have failed to meet its level of testing and knowing fully well, still such kind of pipes have been supplied and hence respondent authority has taken a just decision. On the contrary, while taking the decision, every material has been taken note of and it is only thereafter impugned order came to be passed. According to Mr. Meena, sample pipes have failed to meet its level of testing and knowing fully well, still such kind of pipes have been supplied and hence respondent authority has taken a just decision. On the contrary, inspection report of authorized agency is quite eloquent enough to suggest the guilt of petitioner and same is is established by said report. Hence, there is hardly any reason to allow the petitioner to get away from such attempt being made. Hence, Mr. Meena has supported the order which has been impugned in the petition. No other submissions have been made. 9. Having heard learned advocates appearing for the parties and having gone through the material on record, few circumstances are eye-catching from the record which cannot be ignored : (1) At the outset, it appears from perusal of the impugned order that petitioner has been given adequate opportunity to represent its case and it is only after its explanation, a decision is taken and as such, it cannot be said that there is any violation of principles of natural justice. (2) Further, what has been noticed from the test report of an authorized laboratory of respondent is that pipes have burst in the process of analysis, as can be seen from the joint inspection report dated 17.9.2021 (Annexure-’C’). Said report would also indicate that pipes which were supplied have not proved to be of testing standard which was required to be supplied by petitioner under the contract and which is an obligation on the part of petitioner and this report which relates to Botad, as indicated above, is signed by the officers of GIRDA and said experts have also clearly opined against the petitioner and therefore, there is no reason for this Court to sit over the decision of experts and then to analyze the order which has been impugned in the petition. This report of an authorized laboratory has been considered and taken note of by the respondent authority while passing the impugned order and as such, we find no reason to interfere with the decision which has been taken based on experts’ report and all other material, including the explanation which has been offered by petitioner. This report of an authorized laboratory has been considered and taken note of by the respondent authority while passing the impugned order and as such, we find no reason to interfere with the decision which has been taken based on experts’ report and all other material, including the explanation which has been offered by petitioner. (3) We further feel that an attempt has been made to indicate that whatever has been supplied is of proper quality and same has been certified. That would be in the realm of disputed questions of facts, which we are not inclined to examine in extraordinary jurisdiction under Article 226 of the Constitution of India. (4) It is a trite law that when there is a disputed question of fact on the controversy involved and Court has the benefit of expert’s opinion, then in such a eventuality, extraordinary jurisdiction would not be exercised. Here, such disputed version is tried to be projected before the Court and hence there is no earthly reason for this Court to ignore the joint inspection report which has been placed on record, signed by all experts who are authorized. (5) The only aspect which deserves to be considered and examined is: As to whether there is any fault in decision making process or not. Considering the overall circumstances existing on record, we are of the opinion that order passed by the authority does not suffer from any illegality. (6) Additionally, even from the explanation given by the petitioner dated 25.1.2022 placed on record, we have noticed that petitioner has specifically admitted the mistake and ‘tendered a sincere apology’ and has undertaken that entire quantity would be replaced and after admitting its mistake, request was made not to initiate any penal action. This would only go to show that not only the conclusion arrived at by the respondent authority is justified but petitioner has also practically accepted the conclusion of joint inspection report. Hence, we are of the opinion that order passed by the authority does not call for any interference in its totality. This would only go to show that not only the conclusion arrived at by the respondent authority is justified but petitioner has also practically accepted the conclusion of joint inspection report. Hence, we are of the opinion that order passed by the authority does not call for any interference in its totality. (7) However, in respect of alternative submission made before us by learned counsel appearing for petitioner is that period of one year is too harsh and disproportionate to the guilt admitted by petitioner and since respondent counsel after submitting his stand has left to the discretion of the Court, we deem it proper to consider said prayer particularly when objectionable quantity has been replaced by petitioner, as stated before us, which fact is also not disputed by the other side and further, there appears to be a second test report in favour of petitioner and as such, considering these two issues, and also the fact that entire quantity of objectionable pipes have been replaced, we are of the view that period of one year of debarment appears to be little harsh. This is so, in view of the fact that being a prudent person, petitioner has accepted the negative circumstances against it and has tendered apology and has also replaced the objectionable quantity of pipes. Thus, bonafides to some extent has been exhibited by the petitioner. Hence, we are of the view, in this situation peculiar in nature, principle of proportionality and reasonableness has to be applied, considering the view taken by Coordinate Bench of this Court on the said issue of doctrine of proportionality where-under it has been held: “35. The question whether a punitive measure is disproportionate must also be viewed in the context of the standards set by the Corporation themselves. It is well settled that the High Court while exercising power of judicial review would be reluctant to substitute its own opinion on the quantum of penalty or punishment imposed. However, if the High Court finds the punishment as imposed shockingly disproportionate the interference with the same would be warranted. The Supreme Court in M/s. Kulja Industries Limited (Supra) considered a situation where a contractor had fradulently withdrawn a large sums of money in collusion with the officials of the B.S.N.L. On the same being discovered the Contractor had been blacklisted. Such are not the nature of the allegations in the present case. 36. The Supreme Court in M/s. Kulja Industries Limited (Supra) considered a situation where a contractor had fradulently withdrawn a large sums of money in collusion with the officials of the B.S.N.L. On the same being discovered the Contractor had been blacklisted. Such are not the nature of the allegations in the present case. 36. Having regard to the quick development of administrative law and the need to control the misuse of discretion granted to the exercising authority, the courts have evolved various doctrines and principles that enable them to interfere in an administrative discretion when it is found or noticed to be irrational, unreasonable or entails abuse of power. One such principle is the “Doctrine of proportionality”. The doctrine of proportionality entails that an administrative decision, which is taken through the exercise of discretionary powers, must be in the extent to the consequences that follow from implementing such decisions. 37. The “Doctrine of proportionality” is a European origin. It is imbibed in the “European Droit Administratif” and is one of the most important legal principles in the “European Administrative Law”. In Britain, the “Principle of Proportionality” has, for so long, been treated as a part of the Wednesbury's principle 2 of unreasonableness which postulated the basic standard of reasonableness that ought to be followed by a public body in its decisions. It stated that if a choice is so unreasonable to the point that no sensible expert could ever take those actions or employ the methods adopted, then such activities are subject to be liable and quashed through judicial review. 38. Although the “Doctrine of Proportionality” has been dealt with as a part of the Wednesbury's principle, the Courts have adopted a different position when it comes to the judicial intervention in terms of judicial review. It has been held that the principle entails the reasonableness test with a heightened scrutiny. In other words, to apply this doctrine, not only the decisions have to be within the limits of reasonableness, but only, there has to be a balance between the advantage and disadvantage in the outcome that has been achieved through the administrative action. Therefore, the extent of judicial review is more intense and greater on account of “proportionality” test than the 'reasonableness' test. Therefore, the extent of judicial review is more intense and greater on account of “proportionality” test than the 'reasonableness' test. Furthermore, the court while applying the rule of proportionality will think about the public and individual interest in the matter which is not done while applying the Wednesbury's principle of unreasonableness.” Aforesaid doctrine has been explained succinctly in the decision delivered by Hon’ble the Apex Court in the case of Gohil Vishvaraj Hanubhai and Ors. v. State of Gujarat and Ors. reported in (2017)13 SCC 621 , wherein after discussion and analyzing previous decisions, Hon’ble Apex Court has observed the significance of doctrine of proportionality. Paragraphs 24 to 27 are the relevant observations, but we are of the view not to overburden the present order and as such, we are of the considered opinion that in peculiar background of present facts on hand and applying the aforesaid principle, the request of curtailing the period of debarment deserves consideration and requires to be marginally reduced. 10. Hence, we deem it proper to pass following order which would meet the ends of justice:- ORDER : (1) Special Civil Application is partly allowed. Impugned order dated 18.6.2022, reflecting at Annexure-J is hereby modified to the extent of debarring the petitioner for a period of one year from the date of issue of impugned order, is restricted or reduced to NINE MONTHS (9- months) only and accordingly it stands modified and rest of the order is maintained without disturbing the findings recorded thereunder.