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2022 DIGILAW 993 (JHR)

Verma Enterprises, Dhanbad through its Partner Rajesh Vishwakarma v. State of Jharkhand through its Principal Secretary, Department of Health, Medical Education & Family Welfare

2022-08-08

RAJESH SHANKAR

body2022
ORDER : W.P.(C) No. 2802 of 2020 has been filed for quashing the order as contained in Memo No. 1267 dated 11.09.2020 (Annexure-8 to the writ petition) issued by the Superintendent, Patliputra Medical College & Hospital, Dhanbad (the respondent no.2) whereby e-tender being Tender Ref. No. 1467/PMCH dated 14.08.2019 as well as work order as contained in memo no. 1907 dated 23.10.2019 issued in favour of the petitioner by the said respondent have been cancelled with immediate effect with a direction to the petitioner to continue with the work related to complete sanitation and housekeeping with collection, segregation, storage and safe transportation of Municipal waste and segregation of Bio-Medical waste at Patliputra Medical College & Hospital, Dhanbad till finalization of new tender process or for a period of one month whichever is later. Further prayer has been made for issuance of direction upon the respondents to produce a copy of letter as contained in memo no. 562(6) dated 20.08.2020 issued by the Principal Secretary, Department of Health, Medical Education & Family Welfare, Government of Jharkhand (the respondent no. 1) whereby the respondent no. 2 has been directed to ensure cancellation of the work order issued to the petitioner in connection with Tender No. 1467 dated 14.08.2019, to take steps for floating a fresh tender in relation to the said work at Patliputra Medical College & Hospital, Dhanbad and to submit his opinion regarding blacklisting of the petitioner. The petitioner has also prayed for quashing the letter as contained in memo No. 562(6) dated 20.08.2020 issued by the respondent no. 1. 2. W.P.(C) No. 1886 of 2021 has been filed for quashing letter no. 559 dated 07.04.2021 (Annexure-5 to the writ petition) issued by the Superintendent, Sahid Nirmal Mahto Medical College & Hospital (earlier known as Patliputra Medical College & Hospital) (the respondent no.2) whereby the petitioner has been blacklisted. Further prayer has been made for quashing the work order as contained in memo no. 561 dated 07.04.2021 (Annexure-8 to the writ petition) issued by the respondent no.2 in favour of the respondent no.3 for executing the work of “complete sanitation and housekeeping with collection, segregation, storage and safe transportation of municipal waste and segregation of bio-medical waste” in terms with tender notice being Tender Ref. No. 52/SNMMCH dated 11.01.2021. 3. In course of argument, Mr. No. 52/SNMMCH dated 11.01.2021. 3. In course of argument, Mr. Indrajit Sinha, learned counsel appearing for the petitioner in both the writ petitions, has confined the prayer to the extent of quashing the order of blacklisting as contained in letter no. 559 dated 07.04.2021 issued by the respondent no.2. 4. Learned counsel for the petitioner submits that the petitioner-firm is primarily engaged in the business of sanitation and housekeeping with complete collection, segregation, storage and transportation of municipal waste and segregation of bio-medical waste having good reputation in the said field. The respondent no.2 floated e-tender being Tender Ref. No.1467/PMCH dated 14.8.2019 for outsourcing the work of "complete sanitation and house keeping with collection, segregation, storage and safe transportation of municipal waste and segregation of bio-medical waste" for a minimum period of one year, which was extendable up to three years. The petitioner being eligible participated in the aforesaid e-tender and was found technically qualified in the said tender process. After opening of the financial bid, the petitioner was declared L-1 and subsequently, work order was issued on 23.10.2019 and to that effect an agreement was executed on 25.10.2019 between the petitioner and the respondent no.2. However vide office order as contained in memo no.1267 dated 11.09.2020 [Annexure-8 to W.P.(C) No. 2802 of 2020], the respondent no.2 cancelled the said e-tender and work order with immediate effect, directing the petitioner to continue with the work till finalization of the new tender process or for a period of one month whichever is later. Being aggrieved and dissatisfied with the order dated 11.9.2020, the petitioner moved this Hon'ble Court by way of filing a writ petition, being W.P.(C) No.2802 of 2020 which was heard on 21.10.2020 and on the said date, the respondents were directed to file counter affidavit and the petitioner was allowed to participate in the new tender process unless an order of debarment/blacklisting was appropriately served to it. In the meantime, the respondent no.2 floated another tender being Tender Ref. No.52/SNMMCH dated 11.1.2021 for the same work in which the petitioner along with the respondent no.3 of W.P.(C) No. 1886 of 2021 participated and were declared technically qualified. Thereafter, their financial bids were opened and the petitioner was declared L1. The respondent no. 2, vide Letter no. 389 dated 9.3.2021, sought guidance from the respondent no. 1 who, vide letter no.333(6) dated 6/7.4.2021, asked the respondent no. Thereafter, their financial bids were opened and the petitioner was declared L1. The respondent no. 2, vide Letter no. 389 dated 9.3.2021, sought guidance from the respondent no. 1 who, vide letter no.333(6) dated 6/7.4.2021, asked the respondent no. 2 regarding non-compliance of letter no. 749(6) dated 08.10.2020 whereby the said respondent was directed to ask explanation from the petitioner and proceed to blacklist it. It was further informed that the Tender Committee was competent to take an appropriate decision for disposal of the tender/issuance of work order. However, surprisingly, the respondent no.2, without issuing any show cause notice to the petitioner and in utter violation of the principles of natural justice, issued the order of blacklisting of the petitioner as contained in letter no. 559 dated 7.4.2021. On the same day, the respondent no.2 issued work order in favour of the respondent no. 3 of W.P.(C) No. 1886 of 2021 for the said work vide memo no. 561 dated 7.4.2021. 5. It is also submitted that the work order issued to the private respondent i.e. the respondent no. 3 of W.P.(C) No. 1886 of 2021 and order of blacklisting of the petitioner dated 7.4.2021 are bad in law inasmuch the same have been passed by the respondent no. 2 without following due procedure of law. The petitioner was neither given any opportunity of hearing nor was issued show cause notice prior to passing of the impugned order of blacklisting. The respondent authorities, particularly, the respondent no.2 with vested interest, has issued work order in favour of the respondent no.3 without following due procedure of law. The said action of the respondent authorities is wholly illegal and arbitrary and the same is liable to be quashed. Moreover, blacklisting the petitioner without affording opportunity of hearing to it is violative of the principles of natural justice. 6. Mr. Mohan Kumar Dubey, learned A.C. to A.G. appearing on behalf of the State respondents, while referring to counter affidavit filed on behalf of the respondent no. 1 in W.P.(C) No. 1886 of 2021, submits that an outsourcing agency, namely Jagjiwan Sramik Sahyog Samity Ltd. made complaint before the Health Minister, Government of Jharkhand alleging that the tender process pursuant to NIT No. 1467 dated 14.08.2019 was completed by ignoring the tender conditions. 1 in W.P.(C) No. 1886 of 2021, submits that an outsourcing agency, namely Jagjiwan Sramik Sahyog Samity Ltd. made complaint before the Health Minister, Government of Jharkhand alleging that the tender process pursuant to NIT No. 1467 dated 14.08.2019 was completed by ignoring the tender conditions. On the said complaint, a probe was ordered for which the Principal Secretary, Department of Health, Medical Education & Family Welfare, Government of Jharkhand constituted a three members high level inquiry team vide letter no. 291(6) dated 13.5.2020. After inquiry, the team submitted its report as contained in memo no.933 dated 7.8.2020. On the basis of findings of the Enquiry Committee, an explanation was sought from the petitioner vide letter no.1183 dated 21.8.2020 issued by the respondent no. 2. The explanation submitted by the petitioner to the respondent no. 2 was forwarded to the respondent no. 1 vide letter no. 1197 dated 26.8.2020 for taking appropriate decision in the matter. Thereafter, the respondent no. 2, vide office order as contained in memo no. 1267 dated 11.9.2020, cancelled NIT No.1467 dated 14.8.2019 as well as the work order as contained in memo no. 1907 dated 23.10.2019. It is further submitted that vide letter no. 749(6) dated 8.10.2020, a clear order was issued to the respondent no. 2 by the Joint Secretary, Department of Health, Medical Education & Family Welfare, Government of Jharkhand asking him to inform the said department within a week regarding action taken with respect to blacklisting the petitioner on the allegation of submitting wrong papers to get the said tender. However, by that time, due to spread of COVID-19 pandemic, a COVID care centre was also being operated at Shahid Nirmal Mahto Medical College Dhanbad where the employees of the petitioner were rendering their services and as such the process of blacklisting the petitioner was not implemented. Subsequently, vide letter no. 333(6) dated 7.4.2021 issued by the Secretary, Department of Health, Medical Education & Family Welfare, Government of Jharkhand, explanation was sought from the petitioner for non-compliance of the order as contained in letter no. 749(6) dated 8.10.2020 and then letter no.559 dated 7.4.2021 was issued by the respondent no. 2 blacklisting the petitioner, information of which was also given to the said department. The petitioner was continuing with the work of house-keeping and sanitization at Shahid Nirmal Mahto Medical College Dhanbad by the order of the respondent no. 749(6) dated 8.10.2020 and then letter no.559 dated 7.4.2021 was issued by the respondent no. 2 blacklisting the petitioner, information of which was also given to the said department. The petitioner was continuing with the work of house-keeping and sanitization at Shahid Nirmal Mahto Medical College Dhanbad by the order of the respondent no. 2 till filing of the said counter affidavit. It is further submitted that since the petitioner was blacklisted, the work has been awarded to the L2 bidder i.e. the respondent no. 3 of W.P.(C) No. 1886 of 2021. 7. Heard learned counsel for the parties and perused the materials available on record. The petitioner is aggrieved with the order of blacklisting as contained in Letter No. 559 dated 07.04.2021 issued by the respondent no. 2. 8. In a recent judgment rendered by this Court in the case of Lava International Limited, Noida, Uttar Pradesh Versus The State of Jharkhand & Others reported in 2022 (2) JLJR 583 , after referring several judgments of the Hon’ble Supreme Court as well as this Court, the law on the issue of blacklisting/debarment has been summarized which reads as under:- “(i) The power to blacklist is inherent in the party allotting the contract which is unqualified. There is no need for any such power being specifically conferred by the statute or reserved by contractor because the blacklisting is merely a business decision not to enter into contractual relationship with the party committing the breach. However, such decision is open to scrutiny on the touchstone of fairness, relevance, natural justice, non-discrimination, equality, reasonableness and proportionality. (ii) A person has no right to enter into a contract but is entitled to equal treatment. The Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. (iii) Blacklisting has long-lasting civil consequences for the future business prospects of the blacklisted person. It also tarnishes the blacklisted person's reputation and brings the person's character into question. In the matter of blacklisting a valid, particularised and unambiguous show-cause notice should be served stating the grounds on which the action is proposed to be taken as well as the proposed action so as to enable the notice to answer the case. It also tarnishes the blacklisted person's reputation and brings the person's character into question. In the matter of blacklisting a valid, particularised and unambiguous show-cause notice should be served stating the grounds on which the action is proposed to be taken as well as the proposed action so as to enable the notice to answer the case. (iv) In order to fulfil the requirement of principle of natural justice, a show cause notice should meet two requirements i.e. the materials/grounds to be stated which according to the department necessitates an action and particular penalty which is proposed to be taken.” 9. Reverting back to the present case so as to examine as to whether the law laid down in the aforesaid case has been followed by the respondents while passing the order of blacklisting the petitioner. The learned counsel for the State respondents has assiduously contended that a prior show cause notice was issued to the petitioner vide letter no.1183 dated 21.08.2020. I have gone through the said letter, on perusal of which, it appears that the petitioner has been asked to submit explanation on point nos. 2(ii), 2(iii) and 2(iv) of the departmental level enquiry report. The petitioner has not specifically been asked to show cause for the proposed punishment of blacklisting and thus, the said show cause notice cannot be treated as sufficient compliance of the principles of nature justice before passing the impugned order of blacklisting. Moreover, it appears that explanation submitted by the petitioner pursuant to the show cause notice dated 21.08.2020 was sent to the respondent no.1 for taking appropriate decision whereupon the respondent no.1, vide letter no. 333(6) dated 07.04.2021, showed displeasure observing that earlier direction issued vide letter no. 749(6) dated 08.10.2020 for passing order of blacklisting the petitioner after obtaining explanation from it was not complied. Pursuant to letter dated 07.04.2021, the respondent no. 2 passed the impugned order of blacklisting the petitioner without asking any explanation from it. Thus, it appears that the impugned order has been passed without issuing any specific show cause notice of blacklisting/debarment to the petitioner, that too, with a preoccupied mind just to comply the direction of the respondent no.1 as in the impugned order itself it has been stated that the same is being passed pursuant to letter no. 749(6) dated 08.10.2020 and letter no. 333(6) dated 07.04.2021 issued by the respondent no.1. 749(6) dated 08.10.2020 and letter no. 333(6) dated 07.04.2021 issued by the respondent no.1. Otherwise also, the said order does not mention the period of blacklisting and thus the same is for an indefinite period which is in the teeth of the judgment rendered by the Hon’ble Supreme Court in the case of Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Ltd. & Ors. reported in (2014) 14 SCC 731 . 10. Under the aforesaid facts and circumstance of the case, the impugned order as contained in letter no. 559 dated 07.04.2021 issued by the respondent no.2 blacklisting the petitioner is hereby quashed. The respondent no.2 is however at liberty to take a fresh decision in this regard in terms with the law laid down by the Hon’ble Supreme Court and this Court as discussed hereinabove. 11. The writ petitions are, accordingly, disposed of. 12. I.A. No. 426 of 2021 filed in W.P.(C) No. 2802 of 2020 as well as I.A. No. 2453 of 2021 and I.A. No. 4450 of 2021 filed in W.P.(C) No. 1886 of 2021 also stand disposed of.