Orissa High Court
Kalinga Warriors vs The Orissa Minerals Development ..... ... on 5 February, 2024
Author: B.R.Sarangi
Bench: B.R.Sarangi
ORISSA HIGH COURT: CUTTACK
AFR W.P.(C) NO. 28472 of 2023
In the matter of an application under Articles 226 and
227 of the Constitution of India.
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Kalinga Warriors ..... Petitioner
-Versus-
The Orissa Minerals Development ..... Opp. Parties Co. Ltd., Keonjhar and others.
For petitioner : M/s P.C. Rath and S.S. Rath, Advocates For opp. parties : Mr. P.K. Parhi, DSGI along with Mr. S.S. Kashyap, Central Government Counsel, [O.Ps. No. 1 & 2] Mr. Subham Sharma, Advocate [O.P.No.3] P R E S E N T:
THE HONOURABLE ACTING CHIEF JUSTICE DR. B.R.SARANGI AND THE HONOURABLE MR JUSTICE MURAHARI SRI RAMAN Date of Hearing and Judgment : 05.02.2024 DR. B.R. SARANGI, ACJ. The petitioner, by means of this writ petition, seeks to quash the order dated // 2 // 10.08.2023 passed by opposite party no.3 under Annexure-1 in blacklisting and debarring the petitioner from participating in the future tenders to be floated by the Orissa Minerals Development Company Limited for a period of one year.
2. The facts leading to filing of this writ petition, in a nutshell, are that the Orissa Mineral Development Company (OMDC) Limited invited public tender, vide tender call notice dated 17.03.2023 under Annexure-2, from the experienced agencies for "Maintenance of Security Services at Thakurani Colony and Office premises of OMDC, Barbil in the district of Keonjhar"
with various terms and conditions. As per the tender conditions, the security personnel deployment will be made by the successful agency and further duties and responsibility of the security personnel engaged by the agency are independent, as stipulated in the tender documents. Pursuant to the above tender call notice, the petitioner participated in the process of tender by submitting all required documents. The bid of the petitioner was accepted by opposite party no.2.
// 3 // Thereafter, the Letter of Acceptance (LoA) was issued, vide letter no.OMD/Pers/2023/533 dated 29.04.2023, in favour of the petitioner. But due to violation of terms of the tender, the petitioner declined to accept the LoA vide letter dated 29.04.2023 under Annexure-4.
Thereafter, vide letter dated 03.05.2023 under Annexure-5, the petitioner intimated opposite party no.2 regarding discussion in the meeting with regard to violation of terms of the tender. After receiving the letter dated 03.05.2023 from the petitioner, opposite party no.2, without considering the discussion in the meeting, cancelled the LoA vide order dated 19.05.2023 under Annexure-6. Thereafter, opposite party no.3, without issuing notice of show cause and granting opportunity of hearing to the petitioner, passed the order of blacklisting dated 10.08.2023 under Annexure-1 and debarred the petitioner from participating in future tenders to be floated by Orissa Minerals Development Company Limited for a period of one year. Hence, this writ petition.
// 4 //
3. Mr. P.C. Nayak, learned counsel appearing for the petitioner contended that the order under Annexure-1 is non-speaking one and has been passed by the authority without providing opportunity of hearing to the petitioner. In the said order, it has only been indicated that the petitioner has been blacklisted from participating in future tender of OMDC for a minimum period of one year from the date of issue of the letter in accordance with sub-clause (d) of clause 11 of Chapter-II of the NIT, which has been placed on record at page-28. It is further contended that while blacklisting the contractor, OMDC ought to have followed the procedure and given opportunity of hearing to the petitioner. But without doing so the order under Annexure-1 has been passed which also non-speaking one.
4. Mr. Subham Sharma, learned counsel appearing for opposite party no.3 contended that opposite party-OMDC issued the tender notice under Annexure-2 in company's website on 17.03.2023 and also published the same in daily English Newspaper // 5 // "The Times of India" and Odia Daily "The Samaj" for maintenance of security services at different premises of OMDC. The petitioner was declared as L-1 bidder in all the five tenders for a contract period of one-year with effect from 01.05.2023. The present writ petition relates to Tender Notice No. OMD/Mines/Pers./Sec/2022- 123/497 dated 17.03.2023 at Takhurani Colony & Office Premises of OMDC, Barbil. The petitioner since was declared as L-1 bidder, OMDC issued Letter of Acceptance (LoA) on 29.04.2023 intimating the petitioner agency that deployment of security personnel will be for a contract period of one-year w.e.f. 01.05.2023 and that the terms and conditions as stipulated in NIT shall remain the same throughout the contract period. Pursuant to the issuance of LoA intimating to deploy security personnel w.e.f., 01.05.2023 in the concerned premises, the petitioner, vide its letter dated 29.04.2023 under Annexure-4, on the very same day declined to accept the LoA citing reasons that the petitioner's manager went for site visit and after discussion with some officials and other security related persons it was observed by him that // 6 // existing security guards will continue on the pay roll of the petitioner company and the existing security guards are protesting against recruitment of outsiders and are dictating their own terms and further some security personnel have intimated that they have not been paid their wages since last four months and basing upon this presumptive context, the LoA issued by OMDC was declined. Therefore, opposite party no.3 passed the order impugned invoking sub-clause (d) of clause 11 of Chapter-II of the NIT.
5. This Court heard Mr. P.C. Nayak, learned counsel appearing for the petitioner; and Mr. Subham Sharma, learned counsel appearing for opposite party no.3 in hybrid mode. Pleadings having been exchanged between the parties, with the consent of learned counsel for the parties the writ petition is being disposed of finally at the stage of admission.
6. Having heard learned counsel for the parties and after going through the records, this Court finds that the order under Annexure-1 has been passed without assigning any reason. Reasons being a // 7 // necessary concomitant to passing an order, the authority can thus discharge its duty in a meaningful manner either by furnishing the same expressly or by necessary reference to those given by the original authority.
7. In Union of India v. Mohan Lal Capoor, AIR 1974 SC 87, it has been held that reasons are the links between the materials on which certain conclusions are based and the actual conclusions. They disclose how the mind is applied to the subject-matter for a decision whether it is purely administrative or quasi-judicial and reveal a rational nexus between the facts considered and conclusions reached. The reasons assure an inbuilt support to the conclusion and decision reached. Recording of reasons is also an assurance that the authority concerned applied its mind to the facts on record. It is vital for the purpose of showing a person that he is receiving justice.
8. Similar view has also been taken in Uma Charan v. State of Madhya Pradesh, AIR 1981 SC 1915, Patitapaban Pala v. Orissa Forest // 8 // Development Corporation Ltd. & another, 2017 (I) OLR 5 and in Banambar Parida v. Orissa Forest Development Corporation Limited, 2017 (I) OLR 625.
9. But the order impugned does not reflect such reason and, therefore, by way of filing counter affidavit, reasons cannot be supplemented or supplanted to the order impugned in the writ petition. As such, the subsequent explanation given in the counter affidavit filed by opposite parties no.1 and 2 cannot be taken into consideration in view of the judgment of this Court in M/s Shree Ganesh Construction v. State of Orissa, 2016 (II) OLR 237, which has been passed by following the judgment of the apex Court in Mohinder Singh Gill v The Chief Election Commissioner, New Delhi, AIR 1978 SC 851. In paragraphs-7 and 8 of the judgment in Shree Ganesh Construction mentioned supra, this Court observed as under:-
"7. In the counter affidavit filed, the reasons have been assigned, which are not available in the impugned order of cancellation filed before this Court in Annexure-4 dated 5.2.2016. More so, while cancelling the tender, the principles of natural justice have not been complied with. It is well settled principle of law laid down by the Apex Court in Mohinder // 9 // Singh Gill and another v. The Chief Election Commissioner, New Delhi and others, AIR 1978 SC 851 that :
"When a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise an order bad in the beginning may by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out."
8. In Commissioner of Police, Bombay v. Gordhandas Bhanji, AIR 1952 SC 16, the Apex Court held as follows :
"Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Orders are not like old wine becoming better as they grow older."
10. In Oryx Fisheries Pvt Ltd v. Union of India (2010) 13 SCC 427 where reliance has been placed on Kranti Associates Pvt Ltd v. Masood Ahmed Khan, // 10 // (2010) 9 SCC 496, in paragraph-41 it was observed as follows:-
"41. In M/s Kranti Associates (supra), this Court after considering various judgments formulated certain principles in para 51 of the judgment which are set out below a. In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.
b. A quasi-judicial authority must record reasons in support of its conclusions.
c. Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.
d. Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi- judicial or even administrative power.
e. Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.
f. Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.
g. Reasons facilitate the process of judicial review by superior Courts. // 11 // h. The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the life blood of judicial decision making justifying the principle that reason is the soul of justice.
i. Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.
j. Insistence on reason is a requirement for both judicial accountability and transparency.
k. If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.
l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or `rubber-stamp reasons' is not to be equated with a valid decision making process.
m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence // 12 // of Judicial Candor (1987) 100 Harward Law Review 731-737).
n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". o. In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process".
11. Nothing has been placed on record to substantiate the same. Therefore, mechanically the order dated 10.08.2023 has been passed blacklisting the petitioner without affording opportunity of hearing.
12. In Gorkha Security Services v. Government of NCT of Delhi, AIR 2014 SC 3371, it has been held that blacklisting causes civil death. Such a grave consequence, therefore, attracts exercise of power of judicial review.
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13. In Nova Steel (India) Ltd v. M.C.D. And Ors, AIR 1995 SC 1057 the apex Court held that the question of blacklisting of the contracts have been considered by the Courts time and again and it has categorically been held that such order cannot be passed without giving opportunity of hearing to the party.
14. In Urusian Equipment & Chemicals Ltd. v. State of West Bengal, AIR 1975 SC 266, the apex Court held that a fair hearing to the party being blacklisted thus becomes an essential pre-condition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The order itself being reasonable, fair and proportionate to the gravity of offence is similarly examinable by a writ Court. The apex Court also declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and the authority passing any such order is required to give a fair hearing before passing an order of blacklisting in certain entity.
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15. In Mr. B.S.N. Joshi & Sons Ltd v. Nair Coal Services Ltd. & Ors, (2006) 11 SCC 548 : AIR 2007 SC 437 and a long line of decisions have followed the ratio of that decision and applied principle of audi alteram partem to the process that may eventually culminate in the blacklisting of a contractor.
16. In TELSA Transformers Limited v. Odisha Power Transmission Corporation Limited, 2016 (II) ILR CUT-37, this Court also taking into consideration the ratio of Gorkha Security Services v. Government (NCT of Delhi), AIR 2014 SC 3371 held that merely because clause in notice inviting tender empowers the department to impose such penalty that does not mean that such penalty can be imposed without putting defaulting contractor to notice to this effect.
17. In Isolators and Isolators v. Madhya Pradesh Madhya Kshetra Vidyut Vitran Co. Ltd., (2023) 4 SCR 445, it has been laid down that finality attaching to the action of cancellation cannot be read as a due notice for imposition of penalty even if the respondents chose to employ the expression 'cancelled // 15 // with imposition of penalty' in the orders. If at all penalty was considered to be leviable, the same could not have been carried out without affording adequate opportunity of response to the appellant. It is, thus, held in the said case that the action of the respondents in imposing penalty without even putting the appellant to notice as regards proposed action could not be approved.
18. In Kulja Industries Limited v. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and others, (2014) 14 SCC 731, the apex Court held, if State or its instrumentality takes decision on blacklisting then such decision is subject to judicial review on grounds of principles of natural justice, doctrine of proportionality, arbitrariness and discrimination under Article 14 of the Constitution of India.
19. In UMC Technologies Private Limited v Food Corporation of India (2020) 13 SCR 1175, the apex Court has also taken note of the decision of the apex Court in Erusian Equipment & Gorkha Security // 16 // (supra) and has come to a conclusion that a prior show cause notice granting a reasonable opportunity of being heard is an essential element of all administrative decision-making and particularly so in decisions pertaining to blacklisting which entail grave consequences for the entity being blacklisted. Therefore, furnishing of a valid show cause notice is critical and a failure to do so would be fatal to any order of blacklisting pursuant thereto.
20. In view of the fact and law, as discussed above, this Court is of the considered opinion that the order dated 10.08.2023 under Annexure-1, having been passed by opposite party no.3 without affording opportunity of hearing to the petitioner and the same being non-speaking and non-reasoned one, is liable to be quashed and is hereby quashed. The matter is remitted to the authority concerned to take a decision afresh in accordance with law by affording opportunity of hearing to the petitioner.
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21. In the result, the writ petition is allowed. However, under the facts and circumstances of the case, there shall be no order as to costs.
(DR. B.R. SARANGI)
ACTING CHIEF JUSTICE
M.S. RAMAN, J. I agree.
(M.S. RAMAN)
JUDGE
Orissa High Court, Cuttack
The 5th February, 2024, Arun
Signature Not Verified
Digitally Signed
Signed by: ARUN KUMAR MISHRA
Designation: ADR-cum-Addl. Principal Secretary Reason: Authentication Location: Orissa High Court Date: 09-Feb-2024 14:48:52