Kerala High Court
Mir Projects And Consultants Pvt. Ltd vs The State Of Kerala on 1 November, 2012
Author: T.R.Ramachandran Nair
Bench: T.R.Ramachandran Nair
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE T.R.RAMACHANDRAN NAIR
THURSDAY, THE 1ST DAY OF NOVEMBER 2012/10TH KARTHIKA 1934
WP(C).No. 19826 of 2012 (C)
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PETITIONER:
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MIR PROJECTS AND CONSULTANTS PVT. LTD.,
M.M. BUILDING, KALABHAVAN ROAD,
ERNAKULAM, PIN-682 018.
REP. BY ITS GENERAL MANAGER P.M.RAMESH
BY SRI.HARESH JAGTIANI, SENIOR ADVOCATE.
ADVS. SRI.SIDDHESH BHOLE,
SRI.KHALID KHIMANI.
SRI.R.D.SHENOY, SENIOR ADVOCATE.
ADVS. SRI.RAJESH NAIR,
SRI.S.VINOD BHAT.
RESPONDENT(S):
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1. THE STATE OF KERALA,
REP. BY ITS PRINCIPAL SECRETARY TO THE GOVERNMENT,
PORTS DEPARTMENT, SECRETARIAT,
THIRUVANANTHAPURAM-695 001.
2. KANNUR INTERNATIONAL AIRPORT LIMITED,
'PARVATHY', T.C.36/1, CHACKA,
NH BYE PASS, THIRUVANANTHAPURAM, KERALA-695 024,
REPRESENTED BY ITS MANAGING DIRECTOR.
3. M/S.STUP CONSULTANTS PVT LTD.,
1004 & 5, RAHEJA CHAMBERS, 213,
NARIMAN POINT, MUMBAI-400 021,
REPRESENTED BY ITS CHAIRMAN
AND MANAGING DIRECTOR.
R1 BY ADDL. ADVOCATE GENERAL MR.K.A. JALEEL.
R2 BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR, SC,
SRI.P.GOPINATH,
SRI.P.BENNY THOMAS,
SRI.K.JOHN MATHAI.
R3 BY ADVS. SRI.M.P.SREEKRISHNAN,
SMT.M.H.BINDU.
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD
ON 16-10-2012, ALONG WITH W.P.(C)NO. 21036 OF 2012, THE
COURT ON 01-11-2012 DELIVERED THE FOLLOWING:
rs.
WP(C).No. 19826 of 2012 (C)
APPENDIX
PETITIONER'S EXHIBITS:-
EXT.P1:- TRUE COPY OF REVISED REQUEST FOR PROPOSAL ISSUED IN
THE MONTH OF JULY 2012 BY THE 2ND RESPONDENT.
EXT.P2:- TRUE COPY OF COVERING LETTER OF THE TECHNICAL BID
SUBMITTED ON 23-7-2012 BY THE CONSORTIUM OF THE PETITIONER.
EXT.P3:- TRUE COPY OF THE COVERING LETTER OF THE FINANCIAL BID
SUBMITTED ON 23-7-2012 BY THE CONSORTIUM OF THE PETITIONER.
EXT.P4:- PHOTOCOPY OF NEW PAPER REPORT/CAPTION PUBLISHED IN
THE MATHRUBHUMI DAILY ON 17 TH AUGUST 2012.
EXT.P5:- TRUE COPY OF THE APPLICATION SUBMITTED UNDER RTA ACT
SUBMITTED BY THE REPRESENTATIVE OF THE PETITIONER'S
CONSORTIUM.
EXT.P6:- TRUE COPY OF THE REPLY TO EXT.P5
EXT.P7:- TRUE COPY OF THE ORDER ISSUED BY THE UTTARAKHAND
STATE INFRASTRUCTURE DEVELOPMENT CORPORATION LTD.
REF NO. 704/USIDCL/131CB/11 DTD. 30/07/2011.
EXT.P8:- TRUE COPY OF THE COMMUNICATION SHOWING THE FORFEITURE
OF THE BANK GUARANTEE SUBMITTED BY THE 3RD RESPONDENT
WHICH IS REF NO. 692/USIDCL-13118/11 DTD. 26/7/2011.
EXT.P9:- TRUE COPY OF THE NEWSPAPER REPORT CARRIED OUT IN THE
INDIAN-EXPRESS, POSTED ONLINE BY BY EXPRESS NEWS SERVICE
ON 28/05/2009.
EXT.P10:- TRUE COPY OF THE REPORT CARRIED OUT IN THE WEBSITE OF
DAILY NEWS AND ANALYSIS ON 28/04/2012.
EXT.P11:- TRUE COPY OF THE APPENDIES FORMING PART OF EXT.P1 REVISED
REQUEST FOR PROPOSAL/BID DOCUMENT FOR APPOINTMENT OF
PROJECT CONSULTANT FOR KANNUR INTERNATIONAL AIRPORT
PROJECT.
EXT.P12:- TRUE COPY OF THE REPORT PUBLISHED IN MALAYALA MANORAMA
DAILY ON 04/09/2012 COVERING LETTER OF THE TECHNICAL BID
SUBMITTED ON 23/07/2012 BY THE CONSORTIUM OF THE PETITIONER.
EXT.P13:- COPY OF THE REPLY UNDER RTA ACT BY 2ND RESPONDENT
TO THE QUERY SUBMITTED BY VINOD G.
RESPONDENT'S EXHIBITS:- NIL.
//TRUE COPY//
P.S. TO JUDGE
rs.
T.R.RAMACHANDRAN NAIR, J.
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W.P.(C).Nos. 19826 & 21036 of 2012
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DATED THIS THE 1ST DAY OF NOVEMBER, 2012
JUDGMENT
Both these writ petitions are filed by the respective petitioners who have submitted their bids in response to the Request for Proposal issued by the second respondent in both the writ petitions, viz. the Kannur International Airport Limited for appointment of Project Consultant for Kannur International Airport.
2. The petitioner in W.P.(C) No.19826/2012 mainly challenges the decision taken by the second respondent to grant Letter of Award to the third respondent who is the petitioner in W.P.(C) No.21036/2012. In W.P. (C) No.21036/2012, the petitioner challenges the subsequent termination of the agreement by Ext.P14 order. Therefore, a decision in W.P.(C) No.21036/2012 will have bearing in W.P.(C) No.19826/2012. First I shall refer to the grievances raised by the petitioner in W.P.(C) No.21036/2012.
3. The petitioner in W.P.(C) No.21036/2012 is a private limited company and is the lead partner of STUP-DARASHAW consortium. Ext.P1 is the copy of the Request for Approval (RFP)(revised one) dated 11.7.2012 which was issued in modification of the earlier proposal dated W.P.(C).Nos.19826/12 & 21036/12 -2- 18.5.2012. After the completion of the bidding procedures, the petitioner was granted a Letter of Award as per Ext.P3 dated 9.8.2012. Ext.P4 is the copy of the letter of acceptance issued by the petitioner. Ext.P5 is the copy of the first show cause notice issued by the second respondent proposing to cancel the same on the ground that there is violation of clause 6.4.4. of the RFP. This was replied by the petitioner by Ext.P6. In fact, the allegation in the show cause notice pertains to certain orders of blacklisting issued by the Uttarakhand State Infrastructure Development Corporation Ltd. as well as Rajkot Municipal Corporation. After furnishing reply, the petitioner submitted a detailed affidavit by Ext.P7. Finally, further actions were dropped and the petitioner executed the agreement which is effective from 17.8.2012 (Ext.P8).
4. The present proceedings started after the filing of W.P.(C) No.19826/2012 by the rival bidder, after the execution of the agreement. Based on the same, a fresh show cause notice was issued to the petitioner as per Ext.P9 dated 1.9.2012. Therein, it was pointed out that the Government of Punjab by an order dated 27.3.2009 had blacklisted the petitioner from the list of Punjab Infrastructure Development Board and as the said blacklisting order will result in violations of the eligibility condition in W.P.(C).Nos.19826/12 & 21036/12 -3- clause 6.4.4 as well as against the undertaking given by the petitioner as per Ext.P2 and the affidavit filed as per Ext.P7, the petitioner was asked to explain. Ext.P10 is the copy of the reply given by the petitioner to the said show cause notice. It is averred that again the petitioner has submitted another explanation along with certain documents, as per email dated 4.9.2012, a copy of which is produced as Ext.P11. In between, the petitioner had met the Managing Director of the second respondent on 4.9.2012. The petitioner has caused to send another email as per Ext.P13 after it came across a news item published in Hindu Daily that the agreement with the petitioner is proposed to be cancelled. The petitioner challenges the order Ext.P14 mainly on the plea of violation of the principles of natural justice, in that the petitioner was not offered a personal hearing. Various other contentions have been taken in the grounds of the writ petition.
5. As far as the pleadings in W.P.(C) No.19826/2012 are concerned, the petitioner alleges disqualification based on three orders of blacklisting issued against the rival. The first order mentioned is the one issued by the Uttarakhand State Infrastructure Development Corporation Ltd., cancelling a Letter of Award issued to the third respondent. Exts.P5 to P8 W.P.(C).Nos.19826/12 & 21036/12 -4- are the documents produced in support of the above plea. In support of the plea of blacklisting by Rajkot Municipal Corporation, Ext.P9 has been produced. It is also alleged in para 5 of the writ petition that the Punjab Infrastructure Development Corporation has also blacklisted the third respondent from participating in the projects. Accordingly, the petitioner prays for quashing the Letter of Award issued in favour of the third respondent and to issue a direction to respondents 1 and 2 to award the Letter of Award to the petitioner.
6. Heard learned Senior Counsel Shri Haresh Jagtiani, appearing for the petitioner in W.P.(C) No.21036/2012, Shri R.D. Shenoy, learned Senior Counsel appearing for the petitioner in W.P.(C) No.19826/2012, Shri K.A. Jaleel, learned Addl. Advocate General appearing for the State and M/s. Menon & Pai appearing for the second respondent.
7. First I will refer to the crucial clause contained in the RFP, viz. clause 6.4.4 which reads as follows:
"Any entity which has been barred by the Central/any State Government in India (or any entity controlled by them), from participating in any project, and the bar subsists as on the date of Proposal/Bid, would not be eligible to submit a Proposal/Bid. A bidder should, in the last three years, have neither failed to perform W.P.(C).Nos.19826/12 & 21036/12 -5- on any agreement, as evidenced by imposition of a penalty by an arbitral or judicial authority or a judicial pronouncement or arbitration award against the Bidder, nor been expelled from any project or agreement nor have had any agreement terminated for break by such Bidder.
An undertaking to this effect should be furnished in the first envelope for qualification by the bidder."
The undertaking given by the petitioner in terms of the said clause is produced as Ext.P2.
8. It is submitted by the learned Senior Counsel for the petitioner in W.P.(C) No.21036/2012 that the show cause notice gave only 48 hours time to the petitioner to respond, which included one Sunday. The order Ext.P14 has been passed hastily and arbitrarily without giving an opportunity of personal hearing to the petitioner. The petitioner could have explained various facts, if a personal hearing was granted. It is submitted that there is no suppression of facts as far as the various aspects concerning the petitioner. The order of Punjab Infrastructure Development Board ('PIDB' for short) is silent on the period of blacklisting and therefore the same is a void one as nobody can be blacklisted for an indefinite period. Apart from the same, the authority which issued the order engaged the petitioner for W.P.(C).Nos.19826/12 & 21036/12 -6- various works and therefore it was never acted upon and thus is not a bar. Under clause 6.4.4. the bar should subsist as on the date of Proposal/Bid. Several of the later bids submitted by the petitioner have been accepted and none of them have been invalidated and many consultancy works have been awarded by the PIDB itself. Learned Senior Counsel submitted that the second respondent ought to have evolved a fair procedure and should not have acted hastily in passing Ext.P14 order. The order is without any application of mind to the contentions raised by the petitioner. It was specifically pointed out that there is no reference to the replies submitted by the petitioner as per Exts.P11 and P13, in the order Ext.P14. There is no proper consideration of the points raised in the replies also and none of the documents produced have been considered which will show that there has not been any rational consideration at all. It is pointed out that the order is a pre determined one as evident from the hasty manner in which the same has been passed, after the rival bidder approached this Court by filing W.P. (C) No.19826/2012. It is submitted that there is no suppression or misrepresentation of the facts as far as the petitioner is concerned, as the order of blacklisting had never come to stay and therefore the petitioner cannot be attributed of any suppression and it has not indulged in any W.P.(C).Nos.19826/12 & 21036/12 -7- fraudulent practice also. It is submitted that the petitioner believed, in the light of the subsequent award of contract, that there was no such bar. By relying upon Ext.P16 communication, it is vehemently pointed out that the bar did not subsist as on the date on which the RFP was submitted by the petitioner.
9. With regard to the blacklisting order itself, learned Senior Counsel submitted that the documents produced by the petitioner will show that the same was under challenge before the High Court of Punjab & Haryana and the writ petition was allowed directing reconsideration of the matter. The first of the orders is dated 3.12.2007 and the order of the High Court is dated 26.8.2008. As per Ext.P11 the petitioner has produced various documents including the orders of blacklisting as well as the subsequent work orders and it is pointed out that the order dated 27.3.2009 blacklisting the petitioner was never given effect to. It is submitted that the same is a crucial and important aspect which ought to have been considered by the second respondent. By referring to the various decisions relied upon and produced along with Ext.P11, it is submitted that the legal position is well settled that a blacklisting order cannot be for an indefinite period. Accordingly, it is pointed out that those aspects also should have been W.P.(C).Nos.19826/12 & 21036/12 -8- considered. Learned Senior Counsel therefore submitted that the whole action is arbitrary and illegal and vitiated by non conformity with the principles of natural justice.
10. Learned Additional Advocate General, while opposing the contentions of the learned Senior Counsel appearing for the petitioner, submitted that the only factor relevant to consider is whether there was a blacklisting order as on the date of submission of the RFP and the petitioner cannot wriggle out of the same by trying to explain away the order of blacklisting. It is submitted that the respondents need not look beyond the blacklisting order or enter into any interpretation of the same or consider whether the same is void or not, since the validity of the same has not been challenged by the petitioner in any forum and the order subsists as on the crucial date. It is therefore submitted that clause 6.4.4 will squarely apply. My attention was also invited to clause 10 of Ext.P1 under the heading "Fraudulent and Corrupt Practices". "Fraudulent Practice" means misrepresentation or omission of facts in order to influence the selection process. It is submitted that there is clear misrepresentation made by the petitioner and the attempt was to cheat the respondents. By the singular act of misrepresenting true facts, the petitioner has committed fraudulent W.P.(C).Nos.19826/12 & 21036/12 -9- practice and therefore also the petitioner is not entitled for any reliefs. It is thus pointed out by the learned Additional Advocate General that as the proceedings were issued after issuance of a show cause notice as well as an opportunity to submit explanation, there is no violation of the principles of natural justice, as the absence of oral hearing has not caused any prejudice to the petitioner.
11. Learned counsel Shri P. Gopinath Menon appearing for the second respondent pointed out that there cannot be any quarrel with the procedure adopted by the second respondent, as it was fair and transparent. It is submitted that at two stages show cause notices were issued to the petitioner and the same procedure was adopted on both occasions and therefore the petitioner cannot complain of about any arbitrary action. It is submitted that to the first show cause notice issued, the petitioner submitted a reply and thereafter, after being satisfied about the matters, the agreement was executed. It is pointed out that after the filing of W.P.(C) No.19826/2012 the petitioner had produced the comments of the writ petition and specifically admitted the existence of an order of blacklisting issued by the Government of Punjab from the list of PIDB which was never disclosed at the time of consideration of the bid. It is from the information W.P.(C).Nos.19826/12 & 21036/12 -10- furnished by the petitioner alone, the matter was verified and the second show cause notice was issued. It is submitted that there is no substance in the argument raised by the learned Senior Counsel for the petitioner that the bar does not subsist and the order blacklisting is void. Since the second respondent cannot sit in appeal over the order, they cannot ignore the order as the petitioner has not challenged it successfully in any forum and got it set aside. Relying upon the decisions of the Apex Court, learned counsel for the second respondent submitted that even if a party chooses to describe an adverse order as a void one, it should be challenged and the party should obtain a declaration, as otherwise the order is binding on the person concerned.
12. With regard to the alleged violation of the principles of natural justice by not granting an oral hearing, learned counsel for the second respondent submitted that the petitioner never asked for the same in any of the representations and therefore they cannot complain about the same now. It is further pointed out that the subsequent explanation offered by the petitioner about the awarding of contract and other matters are not crucial to decide the bar under clause 6.4.4, as the order subsists on the crucial date. Learned counsel therefore submitted that there is no invalidity in the W.P.(C).Nos.19826/12 & 21036/12 -11- proceedings. It is pointed out that the petitioner was granted ample time to furnish reply and they had appraised various factors before the Managing Director of the second respondent also and therefore there is little to complain of about any alleged violation of the principles of natural justice. Learned counsel further submitted that a decision had to be taken promptly and urgently since a delay in the matter will only prejudice the second respondent, as the all important work cannot be delayed. Therefore, all actions have been taken in conformity with the principles of natural justice. Urgent execution of the various stages of the project is required and the matter has been finalised accordingly.
13. Learned Senior Counsel appearing for the petitioner in W.P.(C) No.19826/2012, Shri R.D. Shenoy submitted that even though the Letter of Award in favour of the third respondent in the writ petition has been subsequently terminated, prayer (d) in the writ petition survives and it is submitted that once the third respondent is disqualified, the contract has to be awarded to the petitioner. It is submitted that while accepting the explanation to the show cause notice issued at the first stage, as far as the orders issued by the Uttarakhand State Infrastructural Development Corporation Ltd. as well as Rajkot Municipal Corporation are concerned, W.P.(C).Nos.19826/12 & 21036/12 -12- the second respondent's stand that there is no violation of clause 6.4.4 is not correct. It is pointed out that with regard to the first of the orders, the writ petition filed by the third respondent is still pending and there is no final adjudication in their favour. Therefore, the pendency of the writ petition filed by the third respondent is not a ground to exonerate them from the alleged bar and the second respondent could not have ignored the same. Learned Senior Counsel further submitted that there is misrepresentation on the part of the third respondent. Ext.P11 is the form of Appendix-I to the bid document, wherein para 1.4 earmarks five questions to be answered by giving the answers either as "Yes/No". Question No.(iv) therein specifically relates to any blacklisting during the last five years, which has to be answered as above. It is pointed out that the Note therein is important and if the answer is 'yes' in respect of any of the items (ii) to (v), the applicant will not be eligible. Learned Senior Counsel, by relying upon the documents obtained under the Right to Information Act relating to the bid document of the third respondent, submitted that the third respondent has really answered as 'No' to the crucial question, viz. item No.(iv) which will be evident from Ext.P13 produced along with I.A. No.13944/2012. Thus, it is pointed out that the same itself is sufficient to support the finding W.P.(C).Nos.19826/12 & 21036/12 -13- regarding misrepresentation and fraudulent practice by the third respondent. It is also pointed out that the column therein specifically asked the parties whether they have been blacklisted and hence the contrary argument raised by the learned Senior Counsel for the third respondent cannot be countenanced at all. It is pointed out by referring to the decisions of the Apex Court that there is no violation of the principles of natural justice and since the third respondent is not entitled for a personal hearing, the contentions raised by the learned Senior Counsel for the third respondent will have to be overruled.
14. Learned Senior Counsel for the petitioner in W.P.(C) No.21036/2012 opposed the above contentions by pointing out that the petitioner in W.P.(C) No.19826/2012 cannot contend for the position that there is disqualification and that the various aspects pointed out by the petitioner in W.P.(C) No.21036/2012 will show that there is no subsisting blacklisting order. Learned Senior Counsel reiterated the contentions and pointed out further that Ext.P16 will also show that there is no fraud or misrepresentation.
15. In support of the arguments, learned Senior Counsel Shri Haresh Jagtiani for the petitioner in W.P.(C) No.21036/2012 relied upon the W.P.(C).Nos.19826/12 & 21036/12 -14- following decisions: Indian Transformers Ltd. v. Asst. Collector & Another (1983 E.L.T.2293), Raghunath Thakur v. State of Bihar & others {(1989) 1 SCC 229} and State of Orissa v. Dr. Binapani Dei & others (AIR 1967 SC 1269).
16. Shri P. Gopinath Menon, appearing for the second respondent relied upon the following decisions: M.P. Industries v. Union of India (AIR 1966 SC 671), Union of India v. Jyoti Prakash Mitter {(1971) 1 SCC 396}, Dharmarathmakara Raibahadur Arcot Ramaswamy Mudalliar Educational Institution v. Educational Appellate Tribunal and another {(1999) 7 SCC 332}, State Bank of India and others v. Luther Kondhpan {(1999) 9 SCC 268}, Krishna devi Malchand Kamathia and others v. Bombay Environmental Action Group and others {(2011) 3 SCC 363} and Kisan Sahkari Chini Mills Limited v. Vardan Linkers and others {(2008) 12 SCC 500}.
17. Shri R.D. Shenoy, learned Senior Counsel appearing for the petitioner in W.P.(C) No.19826/2012 relied upon the following decisions:
Haji T.M. Hassan Rawther v. Kerala Financial Corporation (AIR 1988 SC 157), M/s. Michigan Rubber (India) Ltd. v. State of Karnataka & others (AIR 2012 SC 2915) and M/s. Patel Engineering Limited v. W.P.(C).Nos.19826/12 & 21036/12 -15- Union of India & another (2012 (5) SCALE 374).
18. The important argument raised by the learned Senior Counsel for the petitioner in W.P.(C) No.21036/2012 is about the absence of effective opportunity, including the denial of personal hearing. The averments in the writ petition will show that the show cause notice Ext.P9 is dated 1.9.2012 to which the petitioner gave a reply as per Ext.P10 dated 3.9.2012. It is averred in para 9 that the petitioner thereafter met the Managing Director of the second respondent on 4.9.2012 and again forwarded an email as per Ext.P11. The last of the explanations offered is clear from Ext.P13.
19. In Ext.P14 reference has been made to the clauses in the affidavit filed by the petitioner as per Ext.P7 dated 17.8.2012 and paragraphs 14(a), 14(b), 17, 18 and 19 of the said affidavit have been extracted therein. Paragraphs 14(a), 14(b) and 17 therein are explanations of the petitioner about the orders issued by Uttarakhand Infrastructure Development Corporation Ltd. As well as Rajkot Municipal Corporation. In paragraphs 18 and 19 the petitioner again reiterated that there is no other violation with regard to any other order to attract clause 6.4.4. It is mentioned thereafter that from the comments of the writ petition No.19826/2012 sent to the second respondent by the Legal Adviser of the petitioner, it has come out W.P.(C).Nos.19826/12 & 21036/12 -16- that there is an order dated 27.3.2009 issued by the Department of Transport, Government of Punjab, blacklisting the petitioner for an indefinite period. It is therefore found that the same is in clear violation of the eligibility conditions in clause 6.4.4. and after considering the explanation it is concluded that the order blacklisting the petitioner dated 27.3.2009 subsisted on the date of submission of the bid, viz. 11.6.2012. The same amounts to a clear violation of the eligibility condition in clause 6.4.4. of the RFP, the undertaking given by the petitioner along with the proposal and the affidavit dated 17.8.2012 relating to the cancellation of the agreement.
20. The replies furnished by the petitioner, viz. Exts.P10 and P13 will show that the petitioner did not specifically ask for a personal hearing. The petitioner denies the violation of clause 6.4.4. in those replies. It is true that the communications Exts.P11 and P13, are not specifically referred to in Ext.P14. But as explained by the second respondent, the crucial aspect is whether there is an order blacklisting the petitioner which is an admitted fact, going by the reply Ext.P10 and documents supplied by the petitioner along with Ext.P11. The requirement of a personal hearing has not been specifically projected by the petitioner in any of the replies and in the W.P.(C).Nos.19826/12 & 21036/12 -17- counter affidavit filed by the second respondent, in para 16 it is averred that the petitioner had requested for an appointment with the Managing Director of the company which was granted and the meeting took place on 5.9.2012. The officials of the petitioner discussed and clarified the position with the Managing Director.
21. As far as the issuance of the order of blacklisting is concerned, it is beyond dispute. The initial order passed by the Government of Punjab is Ext.P11(4) dated 3.12.2007 produced in W.P.(C) No.21036/2012. It is an order blacklisting the petitioner. This was under challenge in C.W.P. No.19464/2007 before the High Court of Punjab & Haryana which was disposed of as per Ext.P11(8) order. Finding that the order impugned is without hearing the petitioner, the same was quashed giving liberty to the concerned respondent to pass a fresh order. A copy of the fresh order has been produced as Ext.P11(10) which is dated 27.3.2009. The petitioner has been blacklisted from the list of PIDB. This was never challenged by the petitioner. In fact, various other pleas have been raised by the petitioner while trying to explain away the effect of the said order; that the order was not served in the proper address; the authority had again granted certain contracts to the petitioner; the same is a void order as the period is indefinite W.P.(C).Nos.19826/12 & 21036/12 -18- and like other contentions. The fact that the petitioner has not disclosed about the same in the bid document, is also clear, especially in the light of Ext.P13 produced in W.P.(C) No.19826/2012. Coupled with the same is the undertaking given by the petitioner as per Ext.P2 and the detailed affidavit filed as per Ext.P7.
22. The plea for giving a personal hearing will have to be understood in the above factual setting also. The learned counsel for the second respondent had relied upon the similar steps taken by the second respondent as regards the first show cause notice Ext.P5 as well as the second show cause notice Ext.P9. It is therefore clear that on both occasions show cause notices were issued granting sufficient time to furnish replies. Herein, the personal hearing is sought for, according to the learned Senior Counsel for the petitioner, for enabling the petitioner to convince the second respondent about the various aspects pleaded. But as rightly pointed out by the learned counsel for the second respondent and learned Addl. Advocate General, the only question was regarding the existence of the blacklisting order as on the date of submission of the RFP to attract clause 6.4.4. The second respondent cannot obviously sit in appeal over the order or try to interpret the order in a different manner, as W.P.(C).Nos.19826/12 & 21036/12 -19- the order of blacklisting was subsisting. The argument raised by the petitioner to show that the order is not subsisting, is that subsequent contracts have been entered into. But the learned counsel for the second respondent pointed out that such circumstances cannot be gone into by the second respondent. The averments of the second respondent in the counter affidavit in paragraphs 6 and 7 are relevant in this context which are extracted below:
"6. STUP prepared its para-wise comments in respect of the allegations raised by M/s. Mir Projects and Consultants Pvt. Ltd. In W.P.(C) No.19826/2012. On going through the same it was noticed that there was a blacklisting order by the Department of Transport, Government of Punjab against STUP for violating the terms of the agreement and irregularities in execution of some work in Jalandhar. The blacklisting order issued on 27.3.2009 did not specify the period of blacklisting, in other words the said order amounted to blacklisting for indefinite period. As such the blacklisting subsisted on the date of submission of proposal by STUP Consultants to KIAL. In view of the above development and on being the ground that there is misrepresentation of facts under clause 10 of the RFP and a clear violation of clause 6.4.4 of the RFP by suppressing the material facts, KIAL issued a second show cause notice to STUP Consultants Pvt. Ltd. On 1.9.2012 (Ext.P9) as to why the consultancy agreement which was signed W.P.(C).Nos.19826/12 & 21036/12 -20- between STUP and KIAL on 21.8.2012 should not be cancelled without any further notice and without prejudice to the right of KIAL to claim from STUP cost escalations, losses, damages, compensation and other expenses incurred or to be incurred by KIAL, in terms of the affidavit and indemnity provided by them. For the said show cause notice, the reply given by them was not at all convincing. It was very clear from the order passed by the Government of Punjab that STUP Consultants was blacklisted from the list of Punjab Infrastructure Development Board for various violations and irregularities committed by STUP in execution of the work at Jalandhar. The order of the Department of Transport, Government of Punjab, blacklisting STUP was a speaking order narrating the various violations committed by STUP and after considering the order dated 26.8.2008 passed by the Hon'ble High Court of Punjab and Haryana in Writ Petition No.19464/2007 filed by STUP.
7. It is evident from facts admitted by STUP that the State of Punjab by its order dated 3.12.2007 blacklisted STUP. The said order was challenged before the Hon'ble High Court of Punjab and Haryana in Writ Petition No.19464/2007 on the ground that the blacklisting order was passed without giving STUP a hearing. By the decision dated 26.8.2008, the High Court quashed the blacklisting order and the Government of Punjab in the Department of Transport was directed to pass a fresh order, in that regard after hearing the petitioner. Thereafter, the Government of W.P.(C).Nos.19826/12 & 21036/12 -21- Punjab, Department of Transport issued a speaking order dated 27.2.2009 blacklisting STUP Consultants Pvt. Ltd. from the list of Punjab Infrastructure Development Board without specifying the period of blacklisting. The said blacklisting was not revoked and it was subsisting at the time when the proposal was submitted by STUP to KIAL. Their contention that they were not aware of such a blacklisting, since the blacklisting order was posted to some obscure site office of another project of the petitioner at Chandigarh and not at their Delhi office does not hold good since these facts came to the attention of KIAL on the basis of their own submission, as explained above. Hence, there is absolutely no merit in their contention that they were not aware of the blacklisting by the Government of Punjab. This is very material and it is clear that relevant facts were deliberately suppressed by STUP with a malafide intention. Their further contention that they have not been given sufficient time to reply for the second show cause notice is also baseless. STUP never requested for further time to reply to the notice. They never requested for any opportunity to present the matter in person. So from admitted facts it was clear that STUP Consultants indulged in fraudulent practice as defined under clause 10 of the RFP. KIAL cannot consider the legality of the blacklisting order while considering the question regarding violation of the clause 6.4.4 of the RFP. Hence KIAL decided to terminate the contract and issued the letter dated 5.9.2012 (Ext.P12)."
W.P.(C).Nos.19826/12 & 21036/12 -22- It is specifically stated in para 7 that the petitioner never requested for further time to reply or any opportunity to present the matter in person.
23. In support of the plea that the petitioner is entitled to be granted a personal hearing, the first decision relied upon by the learned Senior Counsel for the petitioner is Indian Transformers Ltd.'s case (1983 ELT 2293 (Ker.)), wherein, after referring to the various principles this Court in para 7 laid down the following principles:
"7. Bearing the above principles of law in mind, I am of opinion, that in the following cases an oral hearing must be afforded in order to comply with the principles of natural justice. I should say, that the enumeration of the cases herein below are not exhaustive but are only illustrative:
(1) Where the facts in the case, to be marshalled and the questions of law that arise for consideration, are complicated. For example, where the matter in issue calls for discussion of technical matters or a variety of facts and circumstances and the application of the relevant principles of law or the facts involved cover a wide range, the party likely to be adversely affected should be heard.
(2) Where the authority, who is deciding the matter either expressly or by necessary implication (by his conduct or otherwise) has created the impression that the person likely to be affected will be heard orally, oral hearing must W.P.(C).Nos.19826/12 & 21036/12 -23- be afforded before an adverse order is passed.
(3) Where the decision in the case, will depend upon largely on the evidence and credibility and veracity of the person affected or likely to be affected.
(4) Where the proceedings taken against the person who is likely to be affected, requests that he may be heard in person and the authority who is to decide, is of opinion that personal hearing will facilitate a fair and effective or satisfactory disposal of the controversy involved oral hearing must be afforded. If the request of the person that "he may be heard orally" is rejected, it must be evident from the order and/or other records that the concerned authority had applied his mind pointedly to this aspect and in his opinion, no such oral hearing is necessary, for reasons stated.
(5) Where a penalty or penal consequence is proposed to be inflicted against the person, ordinarily, the person concerned must be heard unless the imposition of the penalty or the penal consequences is "automatic" and a mandate of the relevant statutory provision."
Specific reliance is placed on sub paragraphs (1) and (3) therein. Sub para (1) will apply in a case where the facts in the case to be marshalled and the questions of law that arise for consideration, are complicated which may not apply herein, since what was relevant to consider was only whether the W.P.(C).Nos.19826/12 & 21036/12 -24- eligibility condition provided in clause 6.4.4 is attracted or not. Sub para (3) also will not apply to the facts of this case.
24. In Dr.(Miss) Binapani Dei's case (AIR 1967 SC 1269), in para 12 the Apex Court held that "even an administrative order which involves civil consequences, as already stated, must be made consistently with the rules of natural justice, after informing the first respondent of the case of the State, the evidence in support thereof and after giving an opportunity to the first respondent of being heard and meeting or explaining the evidence." The petitioner therein had approached the High Court challenging an order of compulsory retirement. The violation of Article 311 of the Constitution of India was pointed out. It is in that context the findings have been rendered on the special facts of the case.
25. In Raghunath Thakur's case {(1989) 1 SCC 229}, an order blacklisting a contractor was issued without any notice. In para 4 of the judgment, it was held that "any order having civil consequences should be passed only after following the principles of natural justice." But finally, after setting aside the order, the Apex Court issued the following directions:
"This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for W.P.(C).Nos.19826/12 & 21036/12 -25- blacklisting the appellant if the government is so entitled to do in accordance with law, i.e. After giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefor."
This was also on the special facts of the said case. True that an adverse order which visits with civil consequences to the party, cannot be passed in violation of the principles of natural justice. But herein, the question is whether the absence of a personal hearing will vitiate the proceedings, since a show cause notice was issued to the petitioner and opportunity was given to furnish reply also and in fact the petitioner had replied to the show cause notice.
26. In Jyoti Prakash Mitter's case {(1971) 1 SCC 396} relied upon by the respondents, a Constitution Bench of the Apex Court, while considering Article 217(3) of the Constitution of India, was of the view that it is not necessarily an incident of the rules of natural justice that personal hearing must be given to a party likely to be affected by the order. Para 26 explained the legal position thus:
"26. Article 217 (3) does not guarantee a right of personal hearing. In a proceeding of a judicial nature. the basic rules of natural justice W.P.(C).Nos.19826/12 & 21036/12 -26- must be followed. The respondent was on that account entitled to make a representation. But it is not necessarily an incident of the rules of natural justice that personal hearing must be given to a party likely to be affected by the order. Except in proceedings in Courts, a mere denial of opportunity of making an oral representation will not without more, vitiate the proceeding. A party likely to be affected by a decision is entitled to know the evidence against him, and to have an opportunity of making a representation. He however cannot claim that an order made without affording him an opportunity of a personal hearing is invalid. The President is performing a judicial function when he determines a dispute as to the age of a Judge, but he is not constituted, by the Constitution a Court. Whether in a given case the President should give a personal hearing is for him to decide. The question is left to the discretion of the President to decide whether an oral hearing should be given to the Judge concerned. The record amply supports the view that the President did not deem it necessary to give an oral hearing........."
27. The decision of the Apex Court in Luther Kondhpan's case {(1999) 9 SCC 268} was concerning a departmental enquiry and the complaint that a personal hearing was not given, was considered in para 3 of the judgment. It was found that in the reply no such request was made. The Apex Court therefore declined to grant a further opportunity. In para 3 it was held thus:
W.P.(C).Nos.19826/12 & 21036/12 -27- "Learned counsel appearing for the respondent then urged that the respondent was denied an opportunity of personal hearing before the disciplinary authority. We have perused the reply filed by the respondent to the show cause notice. In the said reply it is nowhere stated that the respondent desires personal hearing. Under such circumstances the order of termination cannot be held to be vitiated on that account."
28. In Dharmarathmakara Raibahadur Arcot Ramaswamy Mudaliar Educational Institution's case {(1999) 7 SCC 332}, it was held that in a case where the facts are almost admitted and is apparent on the face of the records, no interference is called for. The said view was taken in para 8 in the following words:
"Giving of opportunity or an enquiry of course is a check and balance concept that no one's right be taken away without giving him/her opportunity or without enquiry in a given case or where the statute requires. But this cannot be in a case where allegation and charges are admitted and no possible defence is placed before the authority concerned. ............. In a case where the facts are almost admitted, the case reveals itself and is apparent on the face of the record and in spite of opportunity no worthwhile explanation is forthcoming as in the present case, it would not be a fit case to interfere with the termination order."
29. The question has been considered in detail by a Full Bench of this W.P.(C).Nos.19826/12 & 21036/12 -28- Court in Sudheer v. Susheela (2009 (4) KLT 29 - FB). The crucial question considered was whether hearing should be a personal hearing itself. After considering various decisions including State of Maharashtra v. Lok Shikshan Sanstha {(1971) 2 SCC 410}, it has been held in para 13 thus:
"Hearing need not always be personal hearing or hearing by words of mouth. If a representation is filed by a contesting party and a decision is given adverting to the contentions, the decision must be held to be valid, even though, there was no hearing by words of mouth."
The observations in the decision of the Apex Court in Carborandum Universal Co. v. Central Board of Direct Taxes (1989 (Supp) 2 SCC 462) to the following effect were also relied upon:
"Personal hearing, in every situation, is not necessary and there can be compliance of the requirements of natural justice of hearing, when a right to represent is given and a decision is made on a consideration thereof."
Another decision relied upon is Jain Exports v. Union of India {(1988) 3 SCC 579}, wherein the Apex Court held that "once the show cause notice is issued and explanation submitted by the parties is considered, natural justice cannot be said to have been violated on the ground that opportunity for W.P.(C).Nos.19826/12 & 21036/12 -29- personal hearing was not afforded, as a huge amount was at stake" and finally it was held by the Full Bench in Sudheer's case (supra) as follows:
"Going by the above decisions, it cannot be held that an opportunity for personal hearing is always essential to satisfy the requirement of natural justice. But, when complex and difficult questions are involved, the Apex Court held that it is only appropriate that personal hearing is provided to the parties."
Therefore, checks and balances have been provided and it cannot be adopted as a rule, that in all cases personal hearing should be granted.
30. Herein, a personal hearing was never asked for by the petitioner and any prejudice for want of a personal hearing could not be sufficiently established also. On both occasions, show cause notices were issued and replies were called for. It cannot be said that the second respondent was acting with a pre determined mind since the explanation to the first show cause notice was properly considered and accepted and the very same procedure was adopted at the second stage also for giving a show cause notice and for furnishing explanation. In a project like this, undue delay has to be avoided also which fact is pointed out in the counter affidavit of the second respondent. What was relevant for consideration is the bar under clause 6.4.4 which is an eligibility condition for submitting the bid itself. If W.P.(C).Nos.19826/12 & 21036/12 -30- there is an adverse order against the petitioner, like the one herein, the bar will squarely apply and therefore no complex and difficult questions have arisen for consideration. I am satisfied that the principles of natural justice have been fully complied with and the absence of a personal hearing, especially in the absence of a request for the said purpose, has no effect on the validity of Ext.P14 order.
31. The next aspect is whether the petitioner's contention that there were subsequent award of contracts and its non consideration, according to the petitioner, has any adverse impact on the validity of Ext.P14 order. That the existence of an order alone is required to attract clause 6.4.4. admits of no doubt. Such an order was in force in respect of the petitioner in W.P.(C) No.21036/2012. As rightly pointed out by the learned counsel for the second respondent and the learned Additional Advocate General, the second respondent cannot sit in appeal over the effect of the said order, and the order was never challenged successfully by the petitioner in W.P.(C) No.21036/2012. Learned Senior Counsel for the petitioner submitted that since the period is indefinite, the same is a void order and reliance is placed on the judgments of the Madras High Court produced as Exts.P10(10) and P10(11). Therein, their Lordships have taken the view that the period of W.P.(C).Nos.19826/12 & 21036/12 -31- blacklisting being indefinite, the orders impugned therein are liable to be quashed. But as rightly pointed out by Shri Gopinath Menon, learned counsel appearing for the second respondent, the petitioner has not obtained any declaration that the order is bad in law, since no period was provided. The invalidity of an order adverse to a party, will have to be successfully established by the party concerned as evident from the principles stated by the Apex Court in Krishnadevi Malchand Kamathia's case {(2011) 3 SCC 363}. Therein, in paragraphs 16 to 19, the said principle has been explained thus:
"16. It is a settled legal proposition that even if an order is void, it requires to be so declared by a competent forum and it is not permissible for any person to ignore the same merely because in his opinion the order is void. In State of Kerala v. M.K. Kunhikannan Nambiar Manjeri Manikoth Naduvil, AIR 1996 SC 906; Tayabbhai M. Bagasarwalla and Anr. v. Hind Rubber Industries Pvt. Ltd. etc, AIR 1997 SC 1240; M. Meenakshi and Ors. v. Metadin Agarwal (2006) 7 SCC 470 : (2006 AIR SCW 4323); and Sneh Gupta v. Devi Sarup, (2009) 6 SCC 194, this Court held that whether an order is valid or void, cannot be determined by the parties. For setting aside such an order, even if void, the party has to approach the appropriate forum.
17. In State of Punjab and Ors. v. Gurdev Singh, Ashok Kumar, W.P.(C).Nos.19826/12 & 21036/12 -32- AIR 1991 SC 2219, this Court held that a party aggrieved by the invalidity of an order has to approach the court for relief of declaration that the order against him is inoperative and therefore, not binding upon him. While deciding the said case, this Court placed reliance upon the judgment in Smith v. East Ellore Rural District Council, [1956] 1 All ER 855 wherein Lord Radcliffe observed :-
"An order, even if not made in good faith is still an act capable of legal consequences. It bears no brand of invalidity on its forehead. Unless the necessary proceedings are taken at law to establish the cause of invalidity and to get it quashed or otherwise upset, it will remain as effective for its ostensible purpose as the most impeccable of orders."
18. In Sultan Sadik v. Sanjay Raj Subba and Ors., AIR 2004 SC 1377, this Court took a similar view observing that once an order is declared non-est by the Court only then the judgment of nullity would operate erga omnes i.e. for and against everyone concerned. Such a declaration is permissible if the court comes to the conclusion that the author of the order lacks inherent jurisdiction/competence and therefore, it comes to the conclusion that the order suffers from patent and latent invalidity.
19. Thus, from the above it emerges that even if the order/notification is void/voidable, the party aggrieved by the W.P.(C).Nos.19826/12 & 21036/12 -33- same cannot decide that the said order/notification is not binding upon it. It has to approach the court for seeking such declaration. The order may be hypothetically a nullity and even if its invalidity is challenged before the court in a given circumstance, the court may refuse to quash the same on various grounds including the standing of the petitioner or on the ground of delay or on the doctrine of waiver or any other legal reason. The order may be void for one purpose or for one person, it may not be so for another purpose or another person."
Therefore, a declaration from a competent court is lacking here and the order cannot be ignored as void. The petitioner being the party aggrieved, should have established its invalidity by successfully challenging it. The very same question was considered by a Full Bench of this Court in Pavithran v. State of Kerala (2009 (4) KLT 20 - FB) and the Full Bench in para 8 explained the legal position thus:
"8. Whenever an adverse order is passed against a person, unless the same is challenged before the appropriate forum, within the prescribed time limit, the said order will become final and the person, affected by it, will also be bound by it. It is a well settled principle in Administrative Law that, there are no void orders in absolute sense in administrative matters. There are only voidable orders. Unless a person aggrieved takes recourse to the appropriate remedy at the appropriate time, even an illegal order W.P.(C).Nos.19826/12 & 21036/12 -34- will be treated as valid and binding. See the observations of Wade in Administrative Law, 6thEdn."
"The truth of the matter is that the court will invalidate an order only if the right remedy is sought by the right person in the right proceedings and circumstances. The order may be hypothetically a nullity, but the court may refuse to quash it because of the plaintiff's lack of standing, because he does not deserve a discretionary remedy, because he has waived his rights, or for some other legal reason. In any such case the 'void' order remains effective and is, in reality, valid. It follows that an order may be void for one purpose and valid for another, and that it may be void against one person but valid against another. A common case where an order, however void, becomes valid is where a statutory time limit expires after which its validity cannot be questioned. The statute does not say that the void order shall be valid; but by cutting off legal remedies it produces that result:"
Therefore, a party will have to challenge the order before the appropriate forum within the prescribed time limit and if not, the order would become final and the party affected will be bound by it also. In the same paragraph the Full Bench was of the view that such an order cannot be ignored or W.P.(C).Nos.19826/12 & 21036/12 -35- treated as void ab initio. K. Balakrishnan Nair, J. (as he then was), speaking for the Full Bench, laid down the principle thus: "Those orders are to be treated as valid and they cannot be ignored or treated as void ab initio and therefore of no effect now." This principle will squarely apply herein also.
32. Learned Senior Counsel for the petitioner tried to distinguish the decisions of the Apex Court in Krishnadevi Malchand Kamathia's case {(2011) 3 SCC 363}, Luther Kondhpan's case {(1999) 9 SCC 268} and Jyoti Prasad Mitter's case {(1971) 1 SCC 396}, by referring to the facts of those cases. It is evident from those decisions that general principles of law governing such matters, have been laid down therein.
33. A similar situation like herein had come up for consideration before the Apex Court in Patna Regional Development Authority and others v. Rashtriya Pariyojana Nirman Nigam and others (AIR 1996 SC 2074). There, the facts of the case show that the bid of the first respondent was the lowest, but the Tender Committee took into account the fact that the first respondent has been blacklisted for a period of five years by the Department of Water Resources, Government of Bihar and decided not to award the contract to the first respondent. This order as well as the order blacklisting, were challenged before the Patna High Court. The writ W.P.(C).Nos.19826/12 & 21036/12 -36- petition challenging the order blacklisting, was dismissed by the learned Single Judge on the ground of delay and the writ petition challenging the order not to award the contract was allowed for want of show cause notice. The Division Bench in the appeals, held the view that the order of blacklisting has to be set aside, since the order was not communicated to the first respondent and directed re-examination of the question of awarding contract, in the light of the above judgment. These judgments were reversed by the Apex Court after a detailed consideration of the relevant facts. With regard to the decision of the Tender Committee not to award the contract to the first respondent, the Apex Court took the view that relevant facts alone were considered and the crucial findings contained in para 7 reads as follows:
".................The very basis for this finding is defective. In considering whether the decision of the Tender Committee to award the tender to the fourth respondent is arbitrary or unreasonable, one will have to examine the existing circumstances at the time when the decision was taken. The Tender Committee rightly took into account the fact that the Water Resources Department of the State of Bihar had black listed the first respondent for a period of five years. This was a relevant consideration in deciding whether a tender should be W.P.(C).Nos.19826/12 & 21036/12 -37- awarded to the first respondent. There was no challenge to the black-listing order at the relevant time. The performance record of the first respondent while executing previous contracts was relevant in deciding whether to award the contract to the first respondent or not. The impugned decision thus took into account relevant factors. It cannot be considered as arbitrary or unreasonable." (Emphasis supplied) Their Lordships were of the view that to find out whether there is arbitrariness, the matter will have to be examined in the light of the existing circumstances at the time when the decision was taken. The blacklisting order was a relevant consideration in deciding whether the tender should be awarded to the first respondent. There was no challenge against the blacklisting order at the relevant time. Thus, it was held that the impugned decision was taken based on relevant aspects and there is no arbitrariness also. In fact, para 8 of the judgment will show that therein also a similar argument was raised that there were two other subsisting contracts even after the order of blacklisting. Those contentions were rejected also. With regard to the question of issuance of any show cause notice before taking a decision by the Tender Committee also, the Apex Court held that the Tender Committee was merely taking note of an existing order and there was no W.P.(C).Nos.19826/12 & 21036/12 -38- question of them sitting in judgment over the blacklisting order. Para 10 which contains the said view, is extracted below:
"10. There was also no question of issuing of any show cause notice to the first respondent before the Tender Committee of the appellants took the decision on 30-5-1995. The appellants were merely taking note of an existing order. There was no question of their sitting in judgment over the black-listing order. Nor was this a case of the appellants themselves issuing an order black-listing the first respondents."
The above judgment applies on all fours to the facts of this case also. Whether the blacklisting order is an existing one or not, alone has been taken note of by the second respondent. They cannot sit in judgment over the blacklisting order and the existence of such an order is a relevant factor. Therefore, there is no arbitrariness or unreasonableness in the order Ext.P14.
34. The arguments raised by the learned Senior Counsel for the petitioner in W.P.(C) No.21036/2012 relying upon Ext.P16 which is a reply furnished pursuant to an application submitted under the Right to Information Act, have to be considered now. It is submitted that the same will show that there is no blacklisting order against the petitioner after W.P.(C).Nos.19826/12 & 21036/12 -39- 31.12.2011. In answer to the said contention, learned counsel for the second respondent submitted that both the questions and answers therein are misleading, as no specific question was asked about the crucial order herein, viz. of the year 2009, but the question was only concerning any blacklisting order from 31.12.2011. It is therefore submitted that Ext.P16 has no effect on the validity of Ext.P14 order.
35. A reading of Ext.P16 shows that the question posed was whether the petitioner has been blacklisted or debarred from participating as a consultant in the projects of PIDB for the period December 31, 2011 onwards and the answer is the following: "As per the records of Legal Wing of PIDB, M/s. STUP Consultants has not been blacklisted or debarred by PIDB for the period December 31, 2011 onwards." As rightly pointed out by the learned counsel for the second respondent, the question does not relate to the blacklisting order in force, but was about any order from 31.12.2011 onwards. No material is relied upon or produced by the petitioner other than Ext.P16 to show that the order blacklisting of the year 2009 was varied or withdrawn. Apart from that, the query and the reply furnished under the Right to Information Act relating to the said aspect is not relevant here, obviously since it was only concerning any order from W.P.(C).Nos.19826/12 & 21036/12 -40- December 31, 2011, whereas the order herein is of the year 2009. Therefore, Ext.P16 cannot advance the case of the petitioner to any extent. The order of blacklisting the petitioner was effective from the year 2009 onwards and no specific question has been posed in respect of the said order.
36. Another point raised by the learned Senior Counsel for the petitioner is by relying upon clause 13.3 of Ext.P8 agreement which provides for a 30 days notice for effecting termination. Learned counsel for the second respondent submitted that the same will not apply to the facts of this case because the said clause covers cases where after the starting of the work in question, if there arises any further dispute between the parties either of the party can terminate the agreement after giving the other party 30 days notice in writing. Clause 13 is under the heading "Termination, Suspension and Resumption". Clauses 13.1, 13.2 and 13.3 are covered by the clauses for termination. The above clauses are extracted below:
"13.1. the First Party may terminate his obligations under this Agreement:
13.1.1. in the event of any fundamental breach by the Second Party of his obligations hereunder, which breach has not been remedied within 14 days of written notice W.P.(C).Nos.19826/12 & 21036/12 -41- from the First Party requiring the breach to be remedied; or 13.1.2. by giving the Second Party 30 days written notice of his intention to do so.
13.2. The Second Party may terminate his obligations under this Agreement:
13.2.1. in the event of either
(a) any fundamental breach by the First Party of his obligations hereunder, which breach has not been remedied within 14 days of written notice from the Second Party requiring the breach to be remedied; or
(b) Force Majeure which prevents the Services from being completed pursuant to Clause 14.
13.3. Termination as mentioned hereinabove shall be effected only after giving to the other party 30 days of notice in writing." It applies in a case where during the execution of the contract various disputes may arise. Under clause 13.1, the the First Party may terminate his obligations under the agreement by giving the Second Party 30 days written notice of his intention to do so and under clause 13.2, the second party may termination his obligations under the agreement. The termination as mentioned above, shall be after giving to the other party 30 days written notice. The words "as mentioned hereinabove" are quite important. Such is not the case herein. Therefore, the said argument cannot help the petitioner.
37. Shri R.D. Shenoy, learned Senior Counsel for the petitioner in W.P.(C).Nos.19826/12 & 21036/12 -42- W.P.(C) No.19826/2012, in support of the plea that as far as judicial review is concerned, this Court can only consider whether there is any arbitrariness or unreasonableness, especially in a contractual matter, relied upon the decision of the Apex Court in M/s. Michigan Rubber (India) Ltd. v. State of Karnataka & others (AIR 2012 SC 2915), in para 19 various principles have been discussed and sub para (a) is relied upon by the learned Senior Counsel which reads as follows:
"(a) The basic requirement of Article 14 is fairness in action by the State; and non-arbitrariness in essence and substance is the heartbeat of fair play. These actions are amenable to the judicial review only to the extent that the State must act validly for a discernible reason and not whimsically for any ulterior purpose. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities."
38. The next decision is M/s. Patel Engineering Limited's case (2012 (5) SCALE 374), wherein in para 7 one of the arguments was whether there should have been an oral hearing before the impugned decision regarding blacklisting was taken. In para 26, the said argument has been met in the following words:
"26. Coming to the submission that R-2 ought to have given an oral hearing before the impugned order was taken, we agree with W.P.(C).Nos.19826/12 & 21036/12 -43- the conclusion of the High Court that there is no inviolable rule that a personal hearing of the affected party must precede every decision of the State. This Court in Union of India and another v. Jesus Sales Corporation (1996) 4 SCC 69, held so even in the context of a quasi-judicial decision. We cannot therefore, take a different opinion, in the context of a commercial decision of State. The petitioner was given a reasonable opportunity to explain its case before the impugned decision was taken."
It was held that there is no inviolable rule that a personal hearing to the affected party must precede every decision. It was found that the person was given a reasonable opportunity. Even though learned Senior Counsel for the petitioner in W.P.(C) No.21036/2012 submitted that the said view was taken after elaborately considering the facts also, the question whether the absence of personal hearing will vitiate the order, was specifically dealt with in the said judgment. Therefore, the same also will apply to the facts of this case.
39. The Apex Court in Kisan Sahkari Chini Mills Limited's case {(2008) 12 SCC 500} reiterates the principles concerning judicial review under Article 226 of the Constitution of India, in respect of contractual matters.
40. No malafides or bias have been attributed by the petitioner in W.P.(C).Nos.19826/12 & 21036/12 -44- W.P.(C) No.21036/2012. In the light of the fact that clause 6.4.4 is one of the eligibility conditions which is not fulfilled by the petitioner, the order Ext.P14 does not suffer from any infirmity. Of course, learned Senior Counsel also submitted that for the applicability of clause 6.4.4 an order of blacklisting may not be a criteria. But I cannot agree, in the light of the plain terms of clause 6.4.4 itself. All the parties including the petitioner have also not approached the question in that manner, while raising the contentions. Evidently, a blacklisting order will come within the purview of the same, especially in the light of the view taken in respect of a similar order in Patna Regional Development Authority's case (AIR 1996 SC 2074). Hence, I do not find any reason to interfere with Ext.P14 order challenged in W.P.(C) No.21036/2012.
41. As far as the reliefs sought for in W.P.(C) No.19826/2012 are concerned, even though a direction is sought to grant the Letter of Award to the petitioner, learned counsel for the second respondent submitted that fresh tenders have been invited and the petitioner has also applied. But the crucial questions argued therein are with regard to the acceptance of the explanations offered by the third respondent in respect of the first show cause notice. It cannot be termed that the decision is so arbitrary or W.P.(C).Nos.19826/12 & 21036/12 -45- unreasonable. After considering the explanations of the third respondent with regard to the alleged orders terminating the contract, the second respondent has arrived at a conclusion that clause 6.4.4 is not attracted to the orders issued by Uttarakhand State Infrastructural Development Corporation as well as Rajkot Municipal Corporation. The same also does not call for any interference. The petitioner had also filed an application for impleading them as an additional respondent in W.P.(C) No.21036/2012, as per I.A. No.12785/2012. Arguments have been addressed by the learned Senior Counsel Shri R.D. Shenoy opposing the contentions in W.P.(C) No.21036/2012 also.
W.P.(C) No.21036/2012 is dismissed. W.P.(C) No.19826/2012 is disposed of accordingly, recording that the petitioner has also applied pursuant to the fresh advertisement. No costs.
(T.R.RAMACHANDRAN NAIR, JUDGE) kav/