Stuti Pipes Pvt. Ltd. v. Chief Engineer, Material Cell (C), Gujarat Water Supply And Sewerage Board
2022-11-07
ARAVIND KUMAR, ASHUTOSH J.SHASTRI
body2022
DigiLaw.ai
ORDER : (Aravind Kumar, J.) 1. By way of this petition under Article 226 of the Constitution of India, petitioner has challenged the legality and validity of order passed by respondent authority dated 18.6.2022. 2. Brief facts leading to filing of present petition are that petitioner is a ISO 9001-2008 (subsequently upgraded to 9001:2015), a certified company and is being represented by its authorized representative in the present proceedings and it has been contended that petitioner company has successfully completed several projects in the State of Gujarat without any complaints and it is a reputed company and an approved Vendor of Gujarat Water Supply and Sewerage Board (hereinafter referred to as ‘GWSSB’) having registration from 23.9.2015, validity whereof is upto 31.12.2018, which was subsequently extended upto 31.12.2020 and further it was extended upto 25.4.2024 vide letter dated 27.4.2021. Petitioner was issued with various purchase orders from EPC Contractors for supply of various diameter of pipes. Petitioner was intimated by respondent the some of the samples failed as per report of CIPET. New samples from field were sent by GR Field Officer for lab re-testing and result of same disclosed positive or no failure vide report dated 20.5.2022. 3. According to petitioner, in view of the circular dated 18.2.2022, a joint inspection report is required to be obtained whenever there appears to be a dispute with regard to supply of pipes. Resultantly, such joint inspection report was prepared on 20.5.2022, signed by Research Assistant, GIRDA, Jr. Scientific Officer, GIRDA, Senior Scientific Officer, GIRDA, Assistant Manager, WASMO and Mr. Rasikhbhai Patel of the petitioner. It is the case of petitioner that on or after 30.3.2022, pipes have been supplied in various districts of State of Gujarat by petitioner through EPC Contractor for WASMO and no complaint was received of any nature with regard to its quality from any of the districts. For the purpose of indicating such, petitioner has attached certain copies at Annexure-H, consisting of order issued by respondent to EPC Contractor, e-invoices and way bills. It has been contended that except for Dahod district, and issue raised with respect to Dahod district was also within permissible limit of having variation of 1% only which could be due to lab to lab checking, still the petitioner replaced the pipes without any issue. Pursuant to notice having been issued, petitioner submitted its detailed reply on 30.3.2022.
It has been contended that except for Dahod district, and issue raised with respect to Dahod district was also within permissible limit of having variation of 1% only which could be due to lab to lab checking, still the petitioner replaced the pipes without any issue. Pursuant to notice having been issued, petitioner submitted its detailed reply on 30.3.2022. But despite same having been explained at length, vide order dated 18.6.2022, name of petitioner came to be removed from the list of approved vendors of GWSSB and petitioner has been debarred from participating in any tender process to be invited either by GWSSB or by GWIL or WASMO for a period of one year from date of issue of impugned order dated 18.6.2022. Petitioner has questioned this decision by raising multiple contentions in the present petition and based upon such facts, being pointed out, at initial stage, Court issued notice to respondent on 30.6.2022, who has appeared and a reply affidavit has been filed. Since pleadings are complete, upon request of both the learned advocates appearing for the respective sides, matter is taken up for final hearing. 4. Learned advocate Mr. Paras K. Sukhwani appearing on behalf of petitioner has vehemently contended that as per the requirement, a joint inspection report was also got prepared and same has been found positive and there is no indication with regard to quality compromise in respect of pipes and still ignoring such material as well as explanation offered by the petitioner, respondent authority has passed the order impugned in the petition. It has been pointed out that a joint inspection report reflecting at Annexure-G clearly indicates that all test results are positive; no indication of any negative result, can be seen from the said inspection report dated 20.5.2022 and said inspection report having been prepared by the authorized agency of respondent authority, there is hardly any reason for the authority to pass order in conflict with such report. By referring to report of GIR & DA, it has been pointed out that this has been duly signed by several experts in the field and Research Assistant, Jr.
By referring to report of GIR & DA, it has been pointed out that this has been duly signed by several experts in the field and Research Assistant, Jr. Scientific Officer, GIRDA, Senior Scientific Officer as well as the witnesses have put their signatures including representative of the petitioner and there is hardly any justifiable material available for the respondent authority to pass an order of blacklisting the petitioner and that too for a period of one year. 5. Learned advocate Mr. Sukhwani has further submitted that yet another circumstance which cannot be ignored is that report which has been prepared by an agency is found to be of authorized laboratory, as mentioned in clause 13 of the Vender Selection Procedure document, reflecting from Annexure-R1 and yet another report has also been got prepared, which is also not in dispute and nowhere pipes supplied by petitioner have been found to be of inferior quality as also in the reports. By referring to circular dated 5.10.2020, reflecting on Annexure-K of rejoinder affidavit dated 25.7.2022, procedure which has been indicated for testing has also been observed as can be seen from the report itself and as such, there is no earthly reason for the authority to pass an order debarring the petitioner for a period of one year. 6. Learned advocate Mr. Sukhwani has further submitted that apart from this, when controversy has been raised by the respondent authority, as a prudent businessman and having a long standing relation with the respondent authority, pipes have been replaced by petitioner which is also not in dispute and as such, in the absence of any fault on the part of petitioner, it is not just and proper to suspend the petitioner for a period of one year by impugned order. According to Mr. Sukhwani, explanation which has been forwarded has not at all been considered by respondent. Even two authorized laboratory reports have not been considered and factum of replacement has also not been considered by the respondent authority. It appears that impugned order is not only unjust and arbitrary but suffers from vice of pre-decisive exercise of discretion taken against the petitioner. Hence, that being so, order deserves to be quashed.
Even two authorized laboratory reports have not been considered and factum of replacement has also not been considered by the respondent authority. It appears that impugned order is not only unjust and arbitrary but suffers from vice of pre-decisive exercise of discretion taken against the petitioner. Hence, that being so, order deserves to be quashed. In fact, reports and voluminous documents indicate no negative circumstance prevailing against the petitioner and invoices which have been attached are also indicating that pipes have been replaced whenever authority has indicated about defects and as such there is hardly any reason to pass such stringent order not only debarring the petitioner in future from participating in any tender process for a period of one year but same would attach a stigma to the image of the petitioner and further, even after explanation having been forwarded, no further notice has been given before taking decision. Had that been given, even doubts which were in the mind of the authority would have been erased by petitioner and hence, on account of such lack of opportunity also, order in question deserves to be corrected. 7. In the alternate, counsel for petitioner has submitted that on the basis of material which has been attached to the petition compilation, this is a fit case in which order of remand may be passed for fresh consideration by an authority, so that wisdom may prevail. Hence, counsel for petitioner has submitted in the alternative that after setting aside the impugned order, appropriate direction be issued to respondent authority to reconsider the issue afresh and in that eventuality, Hon’ble Court may not express any opinion on merit. With this submission, learned advocate Mr. Sukhwani has requested the Court to consider and extend the relief which has been prayed for in the petition. 8. As against this, learned advocate Mr. Rituraj Meena appearing on behalf of the respondent authority has submitted that from the beginning, it was indicated to the petitioner that pipes which have been supplied were not proper. On the contrary, for that very purpose, specific notice has been served upon the petitioner on 25.3.2022, calling upon the petitioner to explain and clarify as to why punitive action should not be initiated and such notice has been issued on account of the fact that some samples were found to have failed as per the per the sample report of CIPET.
Hence, before issuance of notice and action in contemplation, petitioner was put to notice and granted adequate opportunity to meet with the circumstances and as such, it cannot be said in any manner that authority while passing an order has violated the principles of natural justice. Reply submitted by petitioner has been considered and all such material which were available has also been taken into consideration before passing impugned order and as such, it is not open for the petitioner to urge any contention of violation of the principles of natural justice or arbitrariness. When the authority has taken a conscious decision based on material, it is not open for the petitioner to assail the same by invoking extraordinary equitable jurisdiction of this Court. Hence, learned advocate Mr. Meena has submitted that petition deserves to be dismissed. However, on instructions, Mr. Meena, learned advocate for respondent, has submitted with regard to alternate prayer made by the petitioner about reconsideration, that authority would reconsider the claim of petitioner and has requested not to express any opinion on merits with regard to any of the issues raised by the petitioner and has left to the discretion of the Court. 9. Having heard learned advocates appearing for the parties and having gone through the material on record, few circumstances cannot be discarded by us from taking note of: (1) Petitioner has been put to notice on 25.3.2022 to explain as to why punitive action may not be taken against it and in that context, explanation has also been given by petitioner. (2) From record, at Annexure-G, it appears that a joint inspection report dated 20.5.2022 has been undertaken and result of that report is indicated in the last column of tabular columns and we find this report has been duly signed by Research Assistant, Jr. Scientific Officer, Senior Scientific officer, GIRDA and said report is also signed by witnesses and as such, result which has been indicated in the last column, as stated above, does not suggest any negative test report with regard to the items which were sent for testing and as such, experts’ opinion is not found to be against the petitioner as can be seen apparently from the joint inspection report.
(3) With reference to failing of samples, a circular dated 5.10.2020 at Annexure-K has also been brought to our notice, which indicates that as per the terms of contract, samples of pipes are being tested from CIPET and GIRDA. In case, when the work of pipeline is targeted to be completed by one month, in such case, it is not prudent to wait for 15 days to one month for results of the pipes and in such an event, it was instructed that work of laying of pipes could be started and sample may be sent for testing as parallel activity. It has also been indicated in the said circular that in case sample fails, it may be tested from the laboratory other than initially tested and representative of the pipe manufacturer and contractor would witness the testing at the laboratory. Now, reading of this circular would indicate that samples of pipes are to be tested from two agencies, one of which is GIRDA and joint inspection report which has been placed on record before us at Annexure-G, which is the report of authorized agency, i.e. GIRDA dated 20.5.2022 and said report is reflecting result, as already indicated above by us. (4) Furthermore, it also appears from the reference column that on 19.4.2022, even WASMO was also requested for testing and as such, test reports which are reflecting from the record are indicating that authorized testing agency is not indicating anything adverse to the petitioner. (5) Yet another clause No.13 if can be seen from the document, named as Vendor Selection Procedure, where-from, random sample test can be carried out either from CIPET/GIRDA laboratories, which indicates clearly that agency which has given report of May 2022 is an authorized laboratory of respondent Board. Hence, it appears that authority is required to reconsider at least this aspect also. (6) Apart from that, we have also found an undisputed position that wherever the authority has indicated about quality of pipes, same have been replaced by petitioner which fact has also not been disputed by any authority. Instead, an attempt has been made to indicate that test report was obtained in the absence of respondent Board and as such, same cannot be given due weightage.
Instead, an attempt has been made to indicate that test report was obtained in the absence of respondent Board and as such, same cannot be given due weightage. This stand which has been taken by the authority cannot be digested in a situation where on one hand, authority is clearly indicating in the circular dated 5.10.2020 that samples of pipes are to be tested from CIPET and GIRDA which are undisputedly the authorized laboratories of the respondent Board and there is no mention about the fact that board’s representative presence is required. In fact, in case where sample fails, same may be sent for retesting to the laboratory other than initially tested and representative of pipe manufacturer and contractor should remain present as witnesses at the laboratory. Thus, plain reading of this circular is indicating that when authorized laboratories are being utilized for the purpose of testing, presence of Board’s representative is not required and this report which has been prepared and signed by the experts and as such, simply because Board’s representative might not have been there, report does not become redundant. In that view of the matter, it appears to this Court that too technical approach appears to have been taken by the Board, which deserves re-consideration as contended by learned counsel for petitioner as an alternative submission namely to direct the authority to reconsider the decision. (7) Aforesaid conclusion which is arrived at for directing the authority to reconsider is in the light of circular as well as in the light of joint inspection report dated 20.5.2022 and in addition thereto, while considering the contents of notice by which petitioner has been called upon on 25.3.2022, if compared with the order which has been passed by the authority dated 18.6.2022, some more circumstances than notice appears to have been taken into consideration while exercising the direction. Notice dated 25.3.2022 is indicating in general that in scheme, some samples were found failed as per the sample report of CIPET and as such, punitive action to be initiated against petitioner has been suggested.
Notice dated 25.3.2022 is indicating in general that in scheme, some samples were found failed as per the sample report of CIPET and as such, punitive action to be initiated against petitioner has been suggested. Now, against this brief notice having been given, if it were be compared with the impugned order, it can be observed that petitioner has failed repetitively (six samples) during post-delivery testing carried out by CIPET) and it has been further mentioned by the respondent that reply received from petitioner was not found to be satisfactory to the department and as such, imputation has been made against the petitioner that conscious and deliberate attempt has been made by the petitioner to produce and supply substandard quality material and to handover to WASMO projects in expectation of taking undue advantage. From the impugned order, it appears that authority has taken into consideration other aspects also and lastly, it has been observed that pipe samples have failed on so many occasions and such incidents cannot be let go off, just because the failed samples’ lots have been replaced. So, two main factors which has weighed with this Court to pass an order of reconsideration are that some more material/circumstance has been considered which was not put to notice of petitioner and further, it has been indicated that on many occasions, petitioner has failed to maintain the quality. When that be so, it was obligatory on the part of the authority to put the petitioner on notice about such circumstance and as such, on overall consideration it is leading us to the conclusion that authority is expected to reconsider afresh the explanation offered by petitioner by extending appropriate opportunity to the petitioner. Hence, we deem it proper to remand the matter back to the authority for fresh consideration. 10. Accordingly, we dispose of the present petition with following directions as we are of the view it would meet the ends of justice:- ORDER : (1) Impugned order dated 18.6.2022 is hereby quashed and set aside with a consequential direction to the authority to reconsider the decision with regard to present controversy and shall pass a fresh order. (2) While undertaking this exercise of reconsideration and to decide afresh, proper opportunity be given to petitioner and thereupon fresh order in accordance with law be passed by assigning reasons.
(2) While undertaking this exercise of reconsideration and to decide afresh, proper opportunity be given to petitioner and thereupon fresh order in accordance with law be passed by assigning reasons. (3) Since this Court is remanding the matter back to the authority, we make it clear that we have not expressed any opinion on merits with regard to any of the issues raised and what has been observed by us hereinabove is for the limited purposes of remanding the matter back to respondent authority and respondent authority would examine the matter and take decision afresh without being influenced by aforesaid observations. (4) This exercise of taking fresh decision shall be undertaken and at any rate within a period of EIGHT WEEKS from the date of receipt of copy of this order. With the aforesaid observations, petition stands DISPOSED OF.