Delhi High Court
Theme Engineering Services Pvt Ltd. & ... vs National Highways Authority Of India & ... on 1 February, 2021
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
Signature Not Verified
Digitally Signed By:DINESH
SINGH NAYAL
Signing Date:02.02.2021
22:57:50
$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 1st February, 2021
+ W.P.(C) 1173/2021 & CM APPL. 3305/2021
THEME ENGINEERING SERVICES
PVT. LTD. & ANR. ..... Petitioners
Through Mr. Amit Sibal, Sr. Advocate with
Ms. Nandadevi Deka, Mr. Sudhir
Yadav, Mr. Savyasachi Rawat, Mr.
Aishvary Vikram and Mr. Ambar
Bhushan, Advs. (M: 8130788166)
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA
& ORS. ..... Respondents
Through Mr. Sudhir Nandrajog, Sr. Advocate
with Ms. Padma Priya and Mr. Dhruv
Nayar, Advocates for R-1/NHAI.
CORAM:
JUSTICE PRATHIBA M. SINGH
Prathiba M. Singh, J.(Oral)
1. This hearing has been done through hybrid mode (physical and virtual hearing).
CM APPL. 3306/2021 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 1173/2021 & CM APPL. 3305/2021 (for interim stay)
3. The present petition challenges the debarment order dated 12th January, 2021, arising out of the show-cause notice dated 23rd March, 2020, issued by the Respondent No.1 - National Highway Authority of India (hereinafter, "NHAI"), vide which the earlier debarment issued on 17th December 2020, for a period of two years, has been reduced to a period of six months.
W.P.(C) 1173/2021 Page 1 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:504. The brief background is that on 30th April 2019, tenders were invited by the Respondent- NHAI, for Supervision Consultancy Services for Authority's Engineer for Construction supervision of Balance work of 4 laning of Ranchi-Rargaon- Mahulia section from 114.00 to km 277.568 of NH-33 in the State of Jharkhand. In response to the same, the Petitioner herein, submitted its bids on 20th June, 2019. It identified and submitted Curriculum Vitae's (hereinafter, "CV's") of ten shortlisted professionals, as its key managerial personnel, who would work as consultants in the above project. The Respondent- NHAI issued a letter of award of successful bidder to the Petitioner on 23rd August 2019. Subsequently, on 24th September, 2019, the Respondent No. 1- NHAI and the Petitioner entered into a contract with respect to the said project.
5. According to Mr. Amit Sibal, ld. Senior Counsel appearing for the Petitioner, the said CVs were identified and shortlisted by the Petitioner on the basis of what was uploaded by the said consultants on Respondent no.3's portal, as is required by NHAI. It was subsequently revealed that out of the ten CVs which were uploaded, two CVs, in respect of two of the personnel who were shortlisted, had incorrect information to the extent that a period of one and a half years which was shown as experience by the said personnel with two separate entities, was incorrect. The said entities had informed the Petitioner, after the bid was awarded, that these two individuals never worked with them. Accordingly, this fact was brought to the notice of Respondent- NHAI by the Petitioner itself, vide letter dated 16th October, 2019. This led to the issuance of a letter dated 18th December 2019 vide which, NHAI accepted the request for replacement of the said two W.P.(C) 1173/2021 Page 2 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:50 personnel. It is stated that at that stage, there was no communication by the NHAI with respect to the debarment of the Petitioner.
6. Thereafter, on 23rd March 2020, a show-cause notice letter was issued by NHAI, listing various alleged breaches by the Petitioner, and seeking a response as to why action, amounting to debarment of the Petitioner for a period of two years, ought not to be taken. The said show- cause notice was preliminarily replied to by the Petitioner vide letter dated 24th March 2020, where the Petitioner requested for an opportunity to meet in person and make a detailed explanation before NHAI. However, the order of debarment, dated 17th December, 2020, was passed debarring the Petitioner for a period of two years from participating in tenders issued by NHAI. The said debarment order was under challenge in WP(C) No. 11167/2020, titled Theme Engineering Services Private Ltd. v. National Highway Authority of India, in which an interim order, dated 24th December 2020, was passed by the ld. Single judge of this court. The operative portion of the said order reads as under:-
"1. One of the grievance of the petitioner is that the impugned Show Cause Notice was issued just at the outset of the lockdown declared by the Central Government. In the reply dated 24.03.2020 submitted by the petitioner to the Show Cause Notice, the petitioner had highlighted its handicap in submitting a proper reply to the respondent on the Show Cause Notice. The Impugned Order has, however, been passed without granting any further opportunity to the petitioner.
2. The learned senior counsel for the respondent submits that the respondent could have always submitted a supplementary reply, if so advised, to the Show Cause Notice after the lockdown was lifted and the respondent had no option but to proceed with the consideration of the Show Cause Notice resulting in the Impugned Order.W.P.(C) 1173/2021 Page 3 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:50
3. Be that as it may, keeping in view the handicap that was expressed by the petitioner in its reply to the Show Cause Notice, the respondent shall grant an opportunity of hearing to the petitioner, without prejudice to its rights and contentions. The petitioner shall be entitled to submit a supplementary response to the Show Cause Notice within a period of one week from today. The respondent shall thereafter grant a hearing to the petitioner within a period of two weeks and communicate its decision to the Court by way of an affidavit.
4. List on 27th January, 2021."
7. Pursuant to the above order, a hearing was granted to the Petitioner by the Respondent, and finally vide the impugned order dated 12th January 2021, the debarment period of two years has been reduced to six months. The said order upheld the debarment of the Petitioner but reduced the period from two years to six months. In the meantime, vide order dated 21st January, 2021, the earlier writ petition - WP(C) No. 11167/2020 has been withdrawn by the Petitioner with liberty to approach this court. Hence the present writ petition challenging the order dated 12th January 2021.
8. Mr. Amit Sibal, ld. Senior Counsel appearing for the Petitioner, submits that the mistake of the two managerial personnel, and them furnishing false information on their CV's, cannot be attributed to the Petitioner. The Petitioner, in fact voluntarily disclosed the information which it had collected in respect of the incorrect claim of experience made by the said two personnel. He submits that under such circumstances, after having accepted the said communication and having conveyed the approval for replacing the said two personnel, issuance of the show- cause notice and the order of debarment, debarring the Petitioner on the said ground, is not valid in law. He also relies on the policy of the Respondent issued in 2020 to W.P.(C) 1173/2021 Page 4 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:50 the effect that if there is any incorrect information that is furnished, then the consequences were to be faced by the personnel and not the company, which is a third party bidder.
9. Mr. Sudhir Nandrajog, ld. Senior Counsel appearing for the Respondent No. 1- NHAI on the other hand, submits that the issue is not limited only to the CV's and experience claimed by the two managerial personnel, but also involves various other deficiencies in the services rendered by the Petitioner.
10. Heard ld. Senior Counsels appearing for the parties. Insofar as the impugned debarment order dated 12th January 2021 is concerned, the operative portion of the same reads as under:
"9. AND WHEREAS, the details furnished by the consultant have been examined threadbare vis-a-vis the records available with NHAI HQ and those of the Regional Office of NHAI at Ranchi and Project Implementation Unit of NHAI at Ranchi and are enclosed at Annexure-VI. On consideration of the same, it is clearly established that there are deficiencies in the services rendered by the consultant during the progress of the project and make them liable to be debarred for a period of 2 years in accordance with the CI. 3.7 (ix) (b) of Section-2 of APPENDIX-L of the Consultancy Agreement which stipulates that "if any information is found incorrect, at any stage, action including termination and debarment from future projects upto 2 years may be taken by Employer on the personnel and the Firm".
10. Having considered the explanations and other relevant material submitted by Supervision Consultant, more particularly, set out in Annexure-VI, the Review Committee after due consideration of representations of Consultant and facts, is of the view that the same are W.P.(C) 1173/2021 Page 5 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:50 not tenable for the reasons recorded therein. The Review Committee, therefore, reject all the contentions raised by Supervision Consultant. As regards the debarment period of 2 years, the Review Committee is of the view that it would be Just and fair to reduce it to 6 months and to give opportunity to the Consultant to improve the quality of its services."
11. It is clear from the perusal of the above order that debarment has been effected on the basis of the power vested in Respondent- NHAI, by Clause 3.7 (ix) (b) of Section 2 of the Contract entered into by the Petitioner and the NHAI. The said clause reads as under:
"3.7 The Technical Proposal should provide the following information using but not limited to the formats attached in Section 4:
.......
(ix) Requirement for submission of CVs. .......
(b) Key information should Include years with the firm and degree of responsibility held in various assignments: In CV format, at summary, the individual shall declare his qualification & total experience (in years) against the requirements specified in TOR for the position (Ref. Annexure-
I, II & Ill of TOR). If any information is found incorrect, at any stage, action including termination and debarment from future projects upto 2 years may be taken by Employer on the personnel and the Firm."
12. A perusal of the above Clause of the contract, clearly shows that the reason why the debarment order has been issued is due to the alleged mistake in the CVs of the two managerial personnel, in respect their incorrect experience which was mentioned on the CV's. The said Clause permits the Respondent- NHAI, to debar an entity for two years if the W.P.(C) 1173/2021 Page 6 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:50 information on the CV of the personnel is later found to be false and incorrect.
13. Since the power has been exercised by the Respondent- NHAI, under this Clause, the scope of the present petition would be restricted to only the CVs of the two managerial personnel. The Petitioner has already served approximately one and a half months of the period of debarment.
14. There is a separate policy which the NHAI has already introduced w.e.f. 20th July, 2020, titled NHAI Policy Guidelines/ Consultancy/ 2020 No. 10.2.23. The subject line of the said policy reads:
"Uniform Policy to decide the deterrent action against the consultant firms/ key personnel- Reg"
The said policy provides that in cases of incorrect disclosure by managerial personnel in their CV's, the direct consequence of the same would be to debar the said personnel for three years. The relevant extract from the said policy reads as under:
S. Type of Default Action to be taken
No.
2 At any stage, if the CV of key (i).......
personnel is found to be (i) After Commencement of
inflated/ false & the AE & IE Contracts:
experience is claimed with a Key personnel to be
firm other than the bidder. blacklisted for a period of 3
years
Monetary penalty to be
imposed as per clause 9 of the
GCC on Fake CVs.
15. This court is of the prima facie opinion that the debarment of the Petitioner, as an entity, from bidding for NHAI contracts for a period of six W.P.(C) 1173/2021 Page 7 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41 Signature Not Verified Digitally Signed By:DINESH SINGH NAYAL Signing Date:02.02.2021 22:57:50 months, would be a very disproportionate and a drastic measure since the incorrect data was furnished by the managerial personnel and not the Petitioner company. Moreover, the Petitioner had also voluntarily disclosed the same to the Respondent and permission to replace the said personnel was also granted. Although, there is no doubt that diligence ought to be exercised by the bidding firm, while engaging the said personnel, in the present facts, the Petitioner cannot be completely made liable for the misrepresentation, if any, by the managing personnel.
16. However, on the order of debarment on an overall reading of the policy of the NHAI, dated 20th July, 2020, this Court is prima facie of the view that the said policy would be applicable to the present case.
17. Accordingly, the order of debarment, dated 12th January, 2021, shall remain stayed prospectively until the next date of hearing. If at a later stage, the Petitioner is found unsuccessful in this petition, the Petitioner may, at that stage, be made to undergo the remaining period of debarment. Insofar as the other alleged contractual breaches are concerned, the Respondent has the liberty to proceed in accordance with the terms of the Contract.
18. Let counter affidavit be filed within four weeks. Rejoinder, thereto, if any, be filed within four weeks thereafter.
19. List on 11th May, 2021.
PRATHIBA M. SINGH JUDGE FEBRUARY 1, 2021/mw/Mr/Ak W.P.(C) 1173/2021 Page 8 of 8 Signature Not Verified Digitally Signed By:PRATHIBA M SINGH Signing Date:02.02.2021 21:41