Madras High Court
M/S.Hi-Tech Engineering And ... vs The State Of Tamil Nadu Rep. By Its on 12 March, 2014
Author: T.Raja
Bench: T.Raja
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE: 12.03.2014
CORAM
THE HONOURABLE MR.JUSTICE T.RAJA
Writ Petition No.28421 of 2010 and
M.P.Nos.1 and 2 of 2010
M/s.Hi-Tech Engineering and Construction,
Rep. by its Sole Proprietor S.V.Rangarajan,
No.10, SIDCO Industrial Estate,
Sammandalam, Cuddalore 607 001 .... Petitioner
Versus
1. The State of Tamil Nadu rep. by its
Secretary to Government,
Housing and Urban Development Department,
Fort St., George, Chennai 600 009.
2.The Managing Director,
Tamil Nadu Slum Clearance Board,
Kamarajar Salai, Chennai 600 005
3.The Chief Engineer,
Tamil Nadu Slum Clearance Board,
Kamarajar Salai, Chennai 600 005
4.The District Collector,
Cuddalore District, Cuddalore ... Respondents
Prayer: This petition has been filed seeking for a writ of Certiorarified Mandamus to call for the records relating to the order of the 3rd respondent in Lr.No.SCB/T.Cell/17887/D1/09 dated 22.10.2009 and the consequential order of the first respondent in G.O.Ms.No.209, Housing and Urban Development (SC2(1) Department dt.21.09.2010 and to quash the same.
For Petitioner : Mr.R.Gandhi,
Senior Counsel
for Mr.V.S.Sivasundaram
For Respondents : Mr.A.Kumar (R1 and R4)
Special Government Pleader
Mr.S.P.Prabhakaran (R2 and R3)
O R D E R
This writ petition has been filed challenging the correctness of the impugned order passed by the third respondent, The District Collector, Cuddalore District in Lr.No.SCB/T.Cell/17887/D1/09 dated 22.10.2009 and the consequential order of the first respondent in G.O.Ms.No.209, Housing and Urban Development (SC2(1) Department dated 21.09.2010 and to quash the same.
2.Mr.R.Gandhi, learned senior counsel appearing for the petitioner has submitted that one Mr.G.M.Kamaluddin was a qualified Class I Contractor in the Public Works Department. The petitioner along with said G.M.Kamaluddin have established a partnership firm under the name and style of M/s.Hi-Tech Engineering and Construction engaged in the business of civil engineering contracts. However, the petitioner individually invested a sum of Rs.10,00,000/- as his share in the partnership business. Since, the said Kamaluddin was having rich experience in the field and as he was a registered Class-I contractor, the petitioner has totally trusted him and given the total functioning of the firm for participating in the tenders and for obtaining the contracts subsequent to the establishment of the firm. The firm had participated in the tender called for by the fourth respondent for construction of 125 houses under Rajiv Gandhi Rehabilitation Packages (RGRP) Scheme at Periyakuppam Village, Cuddalore Taluk. Since, the firm was a lowest bidder, the contract was awarded and for which the contract of agreement was executed and signed by the said Kamaluddin on 31.01.2008. The total value of the contract was Rs.2,49,000/- x 125 totaling to the tune of Rs.3,12,20,743/- out of which 75% work was successfully completed in the month of February 2010 and remaining 25% work, namely, weathering course of tiles, electrical works etc. were to be completed within one month from February, 2010 and the fourth respondent also effected payment to the tune of Rs.2,13,62,745/-.
3. It has been further stated that when the matter stood as above, the petitioner's partner G.M.Kamaluddin had on behalf of the firm participated in the tender called for by the second respondent Board for the work of construction of 23 number of permanent houses for Tsunami Vulnerable Areas at Kottakuppam T.P.Phase-II in Villupuram District under RGRP on 07.01.2009. In these circumstances, the fourth respondent issued a show cause notice in Na.Ka.No.Ma.Se.A4/1777/07 dated 23.03.2010 referring a letter dated 9.2.2010 from the third respondent herein under which it is stated that the earnest money deposit Rs.5,00,000/- dated 14.06.2007 drawn on Union Bank of India, Cuddalore Branch, submitted by the firm was forged one and thereby the firm was permanently banned from participating in any tender of Slum Clearance Board and further even in the contract/tender for construction of 125 houses under RGRP at Periakuppam Village, Cuddalore Taluk, the very same irregularity has been committed and on verification as to the genuinity of earnest money deposit (EMD) and fixed security deposit (FSD) was found as forged one and therefore explanation was called for. The petitioner was totally unaware of the same as the said Kamaluddin has only indulged in such a fraud behind his back. However, the petitioner sent a reply dated 25.03.2010 explaining in detail as to how the said Kamaluddin has cheated the petitioner and indulged in such fraud.
4. It has been further stated that the fourth respondent vide proceedings in Ma.Se.A4/1777/07 dated 30.03.2010 has cancelled the contract of construction of 125 houses of Periakuppam Village, Cuddalore Taluk, that too, when 2/3rd of contract was successfully completed leaving behind only 25% of minor works which is to be completed within one month. Therefore, the petitioner challenging the proceedings of the fourth respondent has filed the writ petition in W.P.No.8084 of 2010 and the same was dismissed by this Court on 15.07.2010. Against which a writ appeal was filed. The petitioner came to know about the entire background on which the second respondent Board has already blacklisted the petitioner through the counter filed in the above writ petition. Thereafter, the petitioner approached the third respondent on several occasions requesting him to furnish the blacklisting/banning order but nothing had came out fruitfully. Left with no other option, the petitioner has filed an application dated 21.09.2010 under the Right to Information Act for furnishing the copy of the order of ban or blacklist. During the pendency of the such application under the Right to Information Act, the first respondent issued Government Order in G.O.Ms.No.209, Housing and Urban Development (SC2(1) Department, dated 21.09.2010 permanently banning the order based on the report or recommendation of the third respondent. Subsequently, the third respondent has issued a letter in Letter No.SCB/T. /17887/D1/09 dated 21.09.2010 which are impugned in this writ petition. The said letter also states that as if the said blacklisting order has already been despatched from this office on 23.10.2010 but the fact remains that no such order received by the petitioner. As against the permanent blacklisting/permanent ban order, the petitioner has come forward with this writ petition seeking for the relief as stated above.
5. Adding more it has been submitted that the impugned order of the third respondent permanently blacklisting the petitioner and the consequential banning order of the fourth respondent are arbitrary, unfair, unreasonable, illegal and without jurisdiction. The petitioner has been held responsible for having used the forged demand draft for Rs. 5,00,000/- dated 14.06.2007 drawn on Union Bank of India, Cuddalore Branch. Even in the reply given by the petitioner to the respondents, it has been explained as to how the irregularity has taken place at the instance of his partner one Mr.G.M.Kamaluddin. Therefore, when the petitioner cannot be found responsible for having illegally produced only the copy of the Demand Draft for a sum of Rs.5,00,000/-, cancelling the entire contract that was completed to the extent of 72% and also imposing the lifelong indefinite ban is against law and there is no by law or rule or provisions to empower the first respondent to pass the impugned order of indefinite ban. Therefore, the orders impugned in this writ petition is liable to be setaside.
6. In support of his contentions, the learned counsel for the petitioner has relied on the Judgment of the Apex Court in a case in M/s. Southern Printers Versus Fertilizers and Chemicals Travancore Limited and another reported in AIR 1994 Supreme Court 1277 for a preposition that before passing an order imposing ban, the person against whom such order is passed has to be given an opportunity of being heard.
7. On the basis of the above ratio it is to be noted it is pleaded that when no notice was issued by the competent authority before passing the impugned order, mere notice issued by the Superintending Engineer on behalf of the third respondent cannot be construed as a valid notice and relying on one another Judgments of the Supreme Court in a case in M/s.Erusian Equipment and Chemicals Limited Versus State of Bengal and Another and Union Bank of India and others Versus A.K.Mithiborwala and others reported in (1975) 1 Supreme Court Cases 70 it has been stated that blacklisting has the effect of preventing a person from privilege and advantage of entering into lawful relationship with the Government for the purposes of gains. The fact of disability created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist. In the present case, there is no proper valid notice issued by the fourth respondent. Hence, the impugned orders are liable to be set aside, learned counsel pleaded.
8. He had also relied on one another Judgment of this Court in a case in A.Rajendran Managing Partner of M/s. Rajendran and Company Melakuppam Post, Neyveli Versus the General Manager, Thermal Power Station, Neyveli Lignite Corporation Limited,Neyveli reported in 2004 Writ L.R. 584 for the preposition that as the period of blacklisting has not been specified, it is blacklisting for indefinite period and therefore the impugned orders are liable to be quashed.
9. Opposing the contentions of the learned counsel for the petitioner, learned counsel for the respondents would submit that the first argument placed by the learned counsel for the petitioner to the effect that there was no show cause notice issued to the petitioner is absolutely unfair and unjustified, when the Superintending Engineer by his letter dated 27.04.2009 informed the petitioner that while tendering for the construction of the 23 houses at Kottakuppam Phase-II in Villupuram District under Rajiv Gandhi Rehabilitation Package, the petitioner has enclosed the Deposit Reinvestment Certificate bearing No.EM/TBA/A 898154 dated 14.06.2007 for a sum of Rs.5,00,000/- as earnest money deposit for the above work, obtained in favour of the EE/Dn-IV from Union Bank of India, Cuddalore Branch and while confirming the genuineness of the deposit from the above said bank, it was clearly confirmed that such deposit for Rs.5,00,000/- said to have been issued from Union Bank of India, Cuddalore was not issued by them and the petitioner was requested to offer his explanation on the issue for the submission of the fake deposit receipt. The petitioner in his reply dated 9.06.2009, submitted that only his partner has wrongly enclosed the xerox copy of the Deposit Reinvestment Certificate drawn on Union Bank of India for a sum of Rs.5,00,000/- instead of enclosing the original certificate. The petitioner has not taken any action on his partner who is said to have enclosed the xerox copy of the fixed deposit receipt and the petitioner has not even tendered unconditional apology for the mistake and also replaced the original F.D.R certificate.
10. Secondly, before issuing the notice, the Superintending Engineer, Chennai Circle-I has sent a letter dated 12.01.2009, addressed to the Manager, Union Bank of India enclosing the Deposit Reinvestment Certificate bearing No.EM/TBA/A 898154 dated 14.06.2007 to confirm the correctness of the Deposit Reinvestment Certificate. The bank also in reply sent a letter dated 21.03.2009 informing the Superintending Engineer that they have not issued such deposit receipt in the name of the Executive Engineer Division 4, Tamilnadu Slub Clearance Board account Mr.S.V.Rajan. Therefore, even if the petitioner was correct in saying that they have wrongly enclosed the copy of the Deposit Reinvestment Certificate, the Manager of the Union Bank of India would have stated that they have issued such deposit receipt. Therefore, it goes without saying that the petitioner also put hand in glow with his partner, hence, when there was no proper explanation from his reply dated 09.06.2009, the third respondent by a letter dated 22.10.2009 has blacklisted the petitioner from bidding any contractual activities in the Board for ever in future as per Rule 11 of Registration Contractor of Tamil Nadu Slum Clearance Board. Consequent thereto, the government after examining the proposal of the Chief Engineer, Tamil Nadu Slub Clearance Board, Chennai, in order to prevent the contractor from entering into contracts with Government Department in future have decided for "banning of business dealings" of the contractor, M/s.Hi-Tehc Engineering and Constructions, with the government as per the provisions of Para 6.2.(i) of the Standardised Code for Works Contractors and accordingly has directed the Chief Engineer, Tamil Nadu Slum Clearance Board, Chennai to take necessary follow up action in this regard. Therefore, it is to be seen that the petitioner was given appropriate notice and the principles of natural justice has been duly complied with, hence, the question of not affording fair and proper opportunity to the petitioner does not arise.
11. While dealing with the second contention as to whether impugned order permanently blacklisting the petitioner is proper, the learned counsel for the respondents has submitted that this is not the first time the petitioner had committed serious criminal offence which is punishable under the Indian Penal Code, but the petitioner has done the same on earlier occasion also, therefore, the respondents are entitled to pass the impugned orders properly blacklisting from taking part in bidding any contractual activities in the Board.
12. Although, this court agrees with the first contention made by the learned counsel for the respondent that the principles of natural justice have been complied with as per the notice of the Superintending Engineer followed by the explanation offered by the petitioner dated 09.06.2009, this Court is unable to persuade itself to accept the quantum of punishment viz., imposing indefinite blacklisting of the petitioner from any Government contract in future.
13. The learned counsel for the respondents although taken this Court to paragraph 6.2(1) of the Standardised Code for Works Contractors , no where he is able to say that the respondent while passing the impugned order and followed by Government Order can impose indefinite ban. Similarly in an identical issue this Court in a case A.Rajendran Managing Partner of M/s.Rajendran and Company Melakuppam Post Neyveli Vs. The General Manager Thermal Power Station, I Neyveli Lignite Corporation Limited Neyveli, in 2004 Writ L.R. 584. Paragraph 4 of the Judgment it has been held as under:
"4.In support of his contention, the learned counsel for the petitioner referred to a Division Bench decision of this Court in M/s.P.T.Sumber Mitra Vs. The National Highways Authority of India (2003 Writ L.R.327), wherein Paragraph 47 reads as follows:
"Then it was pointed out that the Court should interfere only where the 'public interest' was involved when it came to interfere with the Government's discretion in respect of non statutory contracts. We have already clarified above that this was not a simple question of terminating the contract or accepting or non-accepting a tender. Here is an order which stigmatised the appellant permanently. We have already clarified that this shows a total non-application before taking a drastic action like blacklisting of the appellant permanently. A subsequent assurance given in the Court that the action was meant only for one year would really be of no consequence in the wake of specific language of the impugned order of blacklisting. From the language at least, it appears that blacklisting is permanent."
14. A mere perusal of the above clearly indicates that this Court has considered the issue holding that when the period of blacklisting has not been specified and such blacklisting is for an indefinite period, the same is liable to be quashed, since there cannot be infinite blacklisting. Of course, the fourth respondent as well as the first respondent specifically mentioned in the impugned order that the petitioner is permanently blacklisted from participating in any of the contract work in future. But paragraph 6(2)(i) does not say that the respondents are having power to impose the punishment of permanent blacklisting. In that view of the matter, the impugned orders of the first and the third respondents are quashed only in respect of the indefinite blacklisting and the petitioner is directed to approach the appellate authority, the first respondent with a request not to insist upon the indefinite blacklisting and also requires to satisfy the respondents thereon and it is for the first respondent to consider the request and pass orders.
This writ petition has been disposed of accordingly. No costs. Consequently, connected Miscellaneous Petitions are closed.
12.03.2014 arr To
1. The State of Tamil Nadu rep. by its Secretary to Government, Housing and Urban Development Department, Fort St., George, Chennai 600 009.
2.The Managing Director, Tamil Nadu Slum Clearance Board, Kamarajar Salai, Chennai 600 005 T.RAJA,J arr
3.The Chief Engineer, Tamil Nadu Slum Clearance Board, Kamarajar Salai, Chennai 600 005
4.The District Collector, Cuddalore District, Cuddalore Writ Petition No.28421 of 2010 12.03.2014