Research › Search › Judgment

Rajasthan High Court · body

2022 DIGILAW 1924 (RAJ)

Ram Pratap Singh v. State Of Rajasthan

2022-07-01

DINESH MEHTA

body2022
JUDGMENT 1. By way of present writ petition, the petitioner has challenged the orders dated 13.08.2019 & 14.08.2019 whereby, he has been blacklisted, his earnest money forfeited and further a penalty of Rs.50 lacs has been imposed. 2. So far as blacklisting for a period of two years is concerned, learned counsel for the parties submit that the writ petition has been rendered infructuous because the period of blacklisting (two years) has since elapsed from the date of order dated 13.08.2019. 3. In relation to petitioner's grievance qua order dated 13.08.2019 (Annexure-15) whereby, penalty of Rs. 50 lacs has been imposed upon the petitioner under Section 42 of the Rajasthan Transparency in Public Procurement Act, 2012 (hereinafter referred as 'RTPP Act') and order of even date (Annexure-16) forfeiting the earnest money of Rs. 17,50,000/- is concerned, learned counsel for the petitioner argued that these orders are per-se illegal as no opportunity of hearing was granted to the petitioner. 4. Mr. Mathur, learned counsel appearing for the respondent - corporation submitted that the tender and letter of intent (LOI) issued to the petitioner stood cancelled on account of his failure to do the needful in accordance with law, in spite of indulgence granted by this Court by way of order dated 18.07.2019. Learned counsel argued that since the petitioner has failed to abide by the terms of Letter of Acceptance (LOA), the forfeiture of earnest money and imposition of fine under Section 42(2)(d) of the RTPP Act was the natural consequence and thus, no opportunity of hearing was required to be given to the petitioner. 5. Mr. Bothra, learned counsel for the petitioner in rejoinder contended that it was the respondents who failed to provide infrastructure for toll booths such as building, barriers etc. due to which the petitioner was not in a position to commence toll collection and thus unable to comply with the terms of the LOA. 6. Be that as it may. The question whether the petitioner was justified in not complying with the condition of LOA and order passed by this Court has no relevance now, particularly in the face of the order dated 18.07.2019 passed by this Court. 6. Be that as it may. The question whether the petitioner was justified in not complying with the condition of LOA and order passed by this Court has no relevance now, particularly in the face of the order dated 18.07.2019 passed by this Court. But then, concededly the impugned orders dated 13.08.2019 (Annexure-16 & 17) have been passed without affording the opportunity of hearing to the petitioner, which according to this Court is mandatory as per Section 42 (2) (d) of the RTPP Act, which reads thus:- "42.Interference with procurement process- (1)........(2) A bidder who-(d) fails to provide performance security or any other document or security required in terms of the bidding documents after being declared the successful bidder, without valid grounds, shall, in addition to the recourse available in the bidding documents or the contract, be punished with fine which may extended to fifty lakh rupees or ten per cent of the assessed value of procurement, whichever is less." 7. A simple look at the aforesaid provision particularly the expression "without valid ground" presupposes that a bidder/contractor has a right to satisfy the respondent about the existence of valid ground due to which he failed to provide the performance security or execute the contract or failed to furnish any other documents. Once, a right vests in a bidder to satisfy the competent authority, then, one cannot claim that no notice was required to be given. Hence, providing opportunity of hearing to the bidder before imposing penalty becomes essential. 8. It is pertinent to note that on 13.08.2019, the project Director sent three orders being order No.407, 420, 419, blacklisting the petitioner for two years, imposing a penalty of Rs.50 lacs and forfeiting the earnest money of Rs.17,50,000/- but then chose to send a show cause notice through Registered AD Post (Annexure-17). The communication/notice dated 14.08.2019 (Annexure-17) seems to have been issued for post decisional hearing, but in view of the discussion made in earlier para since predecisional audience is envisaged in Section 42(2)(d) of RTPP Act, the impugned order dated 13.08.2019 (Annexure-15) is contrary to law. 9. This Court finds that forfeiture of earnest money is a natural consequence of cancellation of LOA as given in the Clause 23 of the NIT and neither terms of LOA nor the statutory provisions envisage issuance of notice. 9. This Court finds that forfeiture of earnest money is a natural consequence of cancellation of LOA as given in the Clause 23 of the NIT and neither terms of LOA nor the statutory provisions envisage issuance of notice. Hence, while holding that forfeiture of earnest money does not call for issuance of notice, impugned order to the extent of forfeiture of earnest money is upheld, particularly when the notice dated 14.08.2019 was not issued for earnest money, it has rather been noted therein that the earnest money (Rs.17,50,000/-) stands forfeited. 10. The writ petition, therefore, succeeds. The impugned order dated 13.08.2019 (Annexure-15) having been passed without providing opportunity of hearing to the petitioner is hereby quashed. 11. It will be open for the respondent - corporation to issue notice to the petitioner if they propose to levy penalty under Section 42(2)(d) briefly indicating the reasons for the same. The respondents shall provide at least 15 days' time to the petitioner to file his response, and then pass a speaking order in accordance with law. 12. It is hereby made clear that the present direction to issue notice has been given notice in relation to forfeiting of security amount has been given in peculiar facts of the case and the same shall be precedent. 13. The stay petition also stands disposed of accordingly.