Punjab-Haryana High Court
M/S Stup Consultants Pvt.Ltd vs State Of Punjab & Ors on 4 September, 2014
Author: Ritu Bahri
Bench: Ritu Bahri
Civil Writ Petition No.5531 of 2013 (O&M) 1
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
Civil Writ Petition No.5531 of 2013 (O&M)
Date of decision : 04.09.2014
M/s STUP Consultants Pvt. Ltd.
......Petitioner
versus
State of Punjab and others
........Respondents
CORAM: HON'BLE MS. JUSTICE RITU BAHRI
Present: Mr. Puneet Bali, Senior Advocate,
with Mr. Parveer Moudgil, Advocate,
and Mr. Ankur Lal, Advocate,
for the petitioner.
Ms. Anu Pal, AAG, Punjab.
Mr. V.M. Gupta, Advocate,
for respondent No.4.
****
RITU BAHRI , J.
The petitioner is seeking a writ in the nature of certiorari for quashing the impugned order dated 27.03.2009 (Anexure P-20), vide which, petitioner company has been blacklisted from the list of Punjab Infrastructure Development Board (PIDB).
The petitioner-company is a renowned full service project delivery consultancy company, offering integrated planning, architectural, engineering and project management services for power, transportation, telecommunications, nuclear, commercial, institutional, recreational and manufacturing facility infrastructure since 1963. It is an international organization with over 1200 professionals in various offices and at global project locations. The petitioner-company was established in 1963. AJAY PRASHERThereafter, consultancy groups came up in America, Africa, Asia and the 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 2 Middle East to attract and train local professionals, thereby creating centres of excellence. Petitioner company's wide range of resources and expertise offer comprehensive and single umbrella solutions (incorporating architectural, building and infrastructure engineering, mechanical, electrical and HVAC services) to technically challenging projects and services from planning to construction, for local and national governments, international financing institutions, private sector owners, contractors and public sector institutions. The company provides optimized and innovative state of the art designs utilizing specialized expertise developed over 5 decades for the design and rehabilitation of building and major structure, which are locally adapted for economic constructability, as per Annexure P-1.
The Punjab Infrastructure Development Board (PIDB) has been established as an independent statutory body under Section 18 of the Punjab Infrastructure (Development & Regulation) Act, 2002 to be the apex body in the State of Punjab for overall planning for development of infrastructure sectors and projects. In the year 2004, a tender was floated by the Director, State Transport, Department of Transport, Punjab-respondent No.3 for development of Jalandhar Bus Terminal on Built, Operate and Transfer (or short 'BOT') basis. M/s MSK Projects India Ltd., was selected for implementing the project vide concessio agreement dated 22.06.2005, executed between the Director, State Transport-respondent No.3 and the petitioner-company. As per Article 2.1 (d) read with Article 21 of the said agreement, an independent Engineer was to be appointed to review and approve all activities AJAY PRASHER associated with planning, design, construction, operation & maintenance 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 3 and operationalization of the concession agreement dated 22.06.2005. Accordingly, the petitioner-company was appointed as "Independent Engineer" for the development of Jalandhar Bus Terminal on BOT basis on a monthly fee of Rs.88,000/-. A bank guarantee of Rs.7.50 Lakhs was give in favour of the Director, State Transport-respondent No.3. Accordingly, an agreement dated 10.08.2005 (Annexure P-2) for independent Engineer was signed between respondent No.3 and the petitioner-company. As per the said agreement, the tenure of the independent Engineer was to be counted from the compliance date to the date of issuance of the construction Completion Certificate.
A show cause notice dated 10.07.2007 (Annexure P-3) was issued by respondent No.3 to the petitioner-company, seeking explanation within three days, as to why the petitioner-company had allowed the Concessionaire to make the changes without prior sanction. A detailed reply dated 11.07.2007 (Annexure P-4) was given by the petitioner-company, explaining the existing position at the site and informing that the relevant drawings had been approved by the Sectoral Sub-Committee in the meeting held on 27.12.2005. The said notice was challenged by the petitioner-company before this Court by filing C.W.P. No. 10366 of 2007. Vide order dated 13.07.2007, the aid petition was disposed of by this Court by giving a direction to the respondents to give personal hearing to the petitioner-company before passing any order for revoking the bank guarantee. Thereafter, the petitioner-company gave its reply dated 13.08.2007 (Annexure P-6). Vide letter dated 21.08.2007 (Annexure P-7), respondent No.3 waived the show cause notice dated AJAY PRASHER 10.07.2007 (Annexure P-3). Thereafter, vide letter dated 25.09.2007 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 4 (Annexure P-9), the petitioner-company was asked to workout the variations as per Schedule-I of the concession agreement. The petitioner-company gave its reply dated 29.09.2007 (Annexure P-10). Eventually, vide order dated 03.12.2007 (Annexure P-17), performance security of the petitioner-company was forfeited and the company was blacklisted from the list of PIDB. The said order was challenged by the petitioner-company before this Court by filing CWP No.19464 of 2007 on the ground that the same had been passed without issuing show cause notice and giving opportunity of hearing. Vide order dated 26.08.2008 (Annexure P-18), the Division Bench of this Court quashed the order dated 03.12.2007 (Annexure P-17) and directed the respondents to pass a fresh order after giving opportunity of hearing. Pursuant to the directions given by this Court, the order dated 27.03.2009 (Annexure P-
20) blacklisting the petitioner-company has been passed.
The petitioner-company in consortium with another entity i.e. Darashaw, submitted a bid for appointment as a project consultant for the Kannur International Airport Project. After evaluation of the bids, STUP-Darashaw Consortium was appointed as the project consultant or he said project, as they were the top scoring consortium in the technical bid and secured highest marks in the techno financial assessment based on their credentials. On 21.08.2012, the Project Consultancy Service Agreement was signed by the petitioner-company on behalf of STUP- Darashaw Consortium with Kannur International Airport Ltd. However, on 21.08.2012, a disgruntled unsuccessful bidder namely MIR Projects & Consultants Pvt. Ltd., filed a Writ Petition bearing No.19826 of 2012 AJAY PRASHER before the High Court of Kerala, challenging the decision of the Kannur 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 5 International Airport Ltd. in awarding the Kannur International Airport Project to the petitioner-company on the ground that the petitioner- company has been blacklisted from the list of PIDB by the Government of Punjab vide order dated 27.03.2009 (Annexure P-20) and this made the petitioner-company ineligible in participation in the bid and the petitioner had obtained the project by concealing the blacklisting orders in the affidavit filed. At that stage, the petitioner made an attempt to find out, "whether the order dated 27.03.2009 (Annexure P-20) was served upon the petitioner-company at its official address at Delhi or not." Later on it had come out that the said order was served at its Chandigarh address.
Thereafter, vide order dated 05.09.2012 (Annexure P-23), the Kannur International Airport Ltd., terminated the Consultancy Agreement dated 17.08.2012 with the petitioner-company. The said order was challenged by the petitioner before the High Court of Kerala by filing Writ Petition (Civil) No.21036 of 2012. A third party also filed Writ Petition (C) No.19826 of 2012 seeking quashing of the order of tender in favour the present writ petition. Both the petitiones were taken up together and decided by the High Court of Kerala vide a common judgment dated 01.11.2012. The petition filed by the petitioner-company was dismissed and the second petition was disposed of. The termination of the contract was upheld. The said judgment was challenged before the Division Bench of the Kerala High Court by filing WA No.2038 of 2012. At that time a attempt was made to arrive at a compromise between the parties to avoid unnecessary litigation. Thereafter, a cordial settlement took place and the terms were incorporated in a joint statement. The writ AJAY PRASHER appeal, after settlement, was disposed of accordingly on 21.03.2013. 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 6
The petitioner is seeking quashing of the order of blacklisting dated 27.03.2009 (Anexure P-20) on the ground that the same cannot be made for an indefinite period and it can be only for a specified period. Moreover, the PIDB has not implemented the said decision. In support of his argument, learned counsel for the petitioner has made reference to the judgment delivered by the Hon'ble Supreme Court in Raghunath Thakur Vs. State of Bihar and others, 1989 (1) SCC 229 and the judgments passed by the Delhi High Court in Vinay construction Co. & others Vs. Municipal Corporation of Delhi & another, 2005 (4) AD (Delhi) 467 & Thermo Blow Engineers (M/S) Vs. DDA and others, 2013 (6) AD (Delhi) 740 and contended that blacklisting order cannot be passed for an indefinite period.
Learned counsel for the respondents, on the other hand, has argued that the impugned order has been passed after giving due opportunity of hearing/seeking reply of the petitioner-company. The petitioner-company could not carry out the terms of the agreement with the transport department, therefore, it was necessary to forfeit the security and pass an order of blacklisting the company.
Heard, counsel for the parties.
It is not being disputed by the respondent-State that even after passing the impugned order dated 27.03.2009 (Annexure P-20), the petitioner-company has been given contracts by the other departments. It could not be disputed that the petitioner-company has been granted the following works by the other departments:-
1. Work order of the Municipal Corporation, Jalandhar, AJAY PRASHER appointing the petitioner company as Independent Quality 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 7 Assurance Consultant on 05.10.2009;
2. Construction of District Administrative Complex at Tarn Taran (Punjab) at an estimated cost of Rs.25,01,49,297/-, vide agreement No.38/2010-2011 awarded to the petitoner company based on its impanelment with PIDB and the Department of Finance, Memo. Dated 17.07.2008;
3. Work of construction of Judicial Court Complex at Tarn Taran (Punjab) at an estimated cost of Rs.43,05,11,767/-
awarded to the petitioner company based on its impanelment with PIDB and the Department of Finance, Memo. Dated 17.07.2008.
Thereafter, the petitioner-company has been shortlisted by the office of the Chief Engineer (IP), Pb. PWD B&R Branch, Chandigarh as well as the PIDM as an Independent Engineer for the Development, Operation and Maintenance of Morinda-Kurali-Siswan road upto the State Boundary vide letter dated 28.12.2012 (Aannexure P-27).
In the reply filed by the Punjab Infrastructure Development Board (PIDB)-respondent No.4, it has been stated that the PIDB has not passed any order affecting the right of the petitioner-company in any manner. As per the order dated 17.07.2008 (Annexure P-19), the petitioner is in the empanelled list of IQAC's of PIDB. The impugned order is not in the records of the PIDB. Respondent No.4 has not taken any adverse action against the petitioner-company and the name of the petitioner has not been deleted from this list.
As per Annexure P-19, the Government of Punjab has AJAY PRASHER decided to engage the services of an Independent Quality Assurance 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 8 Consultant (IQAC) for each project executed by all its departments. All projects with an outlay of Rs. 3.00 crore or more were required to have an Independent Quality Assurance Consultant (IQAC). The list of IQACs was to be empanelled by the PIDB and all the departments/agencies were free to engage any IQAC out of the prepared list by following their own procedure/criteria. The petitioner-company's name has been empanelled in this list of consultants for highways, bridges, fly-overs, buildings, water supply, sewerage projects etc. this list has been circulated in 11 departments of the State. The specific stand in the written statement was that the respondents have not removed the name of the petitioner-company despite the order dated 27.03.2009 (Anexure P-20). Moreover, it is not disputed that after the impugned order was passed, the petitioner-company has been still allotted certain works by other departments of the State of Punjab. Therefore, the conclusion is that despite the order dated 27.03.2009 (Anexure P-20) having been passed, the PIDB had not removed the name of the petitioner-company from the empanelled list (Annexure P-19) and thus, the other departments had been associating/engaging the petitioner-company in their projects.
On the other hand, the petitioner-company was made to suffer when a contract was awarded to it in the State of Kerala, which was cancelled as one of the competitor had got the order of blacklisting the petitioner (Annexure P-20) and sought termination of the agreement with the Kerala Government on the ground that the petitioner had not disclosed that it had been blacklisted by the State of Punjab. However, AJAY PRASHER the dispute was settled amicably and vide judgment dated 01.11.2012, 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 9 the matter was disposed of by the Division Bench of Kerala High Court on 21.03.2013.
The impugned order dated 27.03.2009 (Annexure P-20) has been passed after giving due notice to the petitioner and the petitioner has been blacklisted for an indefinite period. Recently, the Hon'ble Supreme Court in Kulja Industries Limited Vs. Chief General Manager W.T. Proj., BSNL and others, 2013 (13) JT 242, has set aside an order blacklisting a firm on account of committing gross misconduct and irregularities by receiving excessive payments amounting to `7,98,55,508/- from BSNL. The excessive amount was received back by the BSNL, but the order blacklisting the company was affirmed. However, the matter was remanded back to the competent authority to determine the time period, for which, the company could be blacklisted. In paragraph 26 of the judgment, the Hon'ble Supreme Court has observed as under:-
"26..............Firstly, because blacklisting is in the nature of penalty the quantum whereof is a matter that rests primarily with the authority competent to impose the same. In the realm of service jurisprudence this Court has no doubt cut short the agony of a delinquent employee in exceptional circumstances to prevent delay and further litigation by modifying the quantum of punishment but such considerations do not apply to a company engaged in a lucrative business like supply of optical fibre/HDPE pipes to BSNL. Secondly, because while determining the period for which the blacklisting should be effective the respondent-Corporation may for the sake of objectivity and transparency formulate broad guidelines to be followed in such cases. Different periods of debarment depending upon the gravity of the offences, violations and breaches may be prescribed by such guidelines. While, it may not be possible to exhaustively enumerate all types of offences and acts of misdemeanour, or violations of contractual obligations by a contractor, the respondent-Corporation AJAY PRASHER may do so as far as possible to reduce if not totally eliminate 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 10 arbitrariness in the exercise of the power vested in it and inspire confidence in the fairness of the order which the competent authority may pass against a defaulting contractor."
In the present case, as per reply filed by the Punjab Infrastructure Development Board-respondent No.4, after being blacklisted vide order dated 27.03.2009 (Annexure P-20), the name of petitioner-company has not been removed from the empanelled list of consultants for highways, bridges, fly-overs, buildings, water supply, sewerage projects etc. This list has been circulated in 11 departments of the State and the petitioner-company has been still allotted certain works by other departments of the State of Punjab.
The impugned order (Annexure P-20) blacklisting the petitioner-company was passed in the year 2009 and as per the stand taken by the respondents, this order has not been implemented till date. Moreover, a period of five years has elapsed so far.
In view of the judgment delivered by the Hon'ble Supreme Court in Kulja Industries Limited's case (supra), the matter could have been remanded back to the appropriate authorities for deciding the period of blacklisting. However, since the stand of the respondents, in the written statement, is that this order has not been implemented till date, therefore, the respondents are not required to pass a fresh order on the period of blacklisting, as five years have already gone by.
Since the petitioner-company had entered into an agreement with Kannur International Airport Ltd. on 21.08.2012 and this agreement was cancelled in view of the order dated 27.03.2009 (Annexure P-20) whereby the petitioner had been blacklisted, the company was forced to AJAY PRASHERfile a writ petition before the Kerala High Court, whereby a compromise 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh Civil Writ Petition No.5531 of 2013 (O&M) 11 was finally arrived on 21.03.2013. On the other hand, in para No.3 of the reply dated 06.07.2013 filed by respondent No.4, it has been mentioned that the impugned order was never implemented and the same is not even available in the records of the PIDB.
In the light of the above discussion, the impugned order dated 27.03.2009 (Anexure P-20) is set aside with costs of `50,000/-.
Petition stands allowed accordingly.
(RITU BAHRI) 04.09.2014 JUDGE ajp AJAY PRASHER 2014.09.17 17:20 I attest to the accuracy and authenticity of this document High Court Chandigarh