Gujarat High Court
Shri Arbuda Roadlines vs Nuclear Power Corporation Of India Ltd on 4 September, 2017
Equivalent citations: AIR 2018 (NOC) 740 (GUJ.)
Bench: M.R. Shah, B.N. Karia
C/SCA/8176/2017 CAV JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 8176 of 2017
For Approval and Signature:
HONOURABLE MR.JUSTICE M.R. SHAH Sd/
and
HONOURABLE MR.JUSTICE B.N. KARIA Sd/
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1 Whether Reporters of Local Papers may be allowed to see No
the judgment ?
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as No
to the interpretation of the Constitution of India or any
order made thereunder ?
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SHRI ARBUDA ROADLINES, THROUGH PARTNER....Petitioner(s)
Versus
NUCLEAR POWER CORPORATION OF INDIA LTD.....Respondent(s)
=============================================
Appearance:
MR ARCHIT P JANI, ADVOCATE for the Petitioner(s) No. 1
MR YOGI K GADHIA, CAVEATOR for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 04/09/2017
CAV JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0] RULE. Shri Yogi K. Gadhia, learned Advocate waives service of notice of Rule on behalf of the respondent. In the facts and circumstances of the case and with the consent of learned Advocates appearing for respective parties, present petition is taken Page 1 of 18 HC-NIC Page 1 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT up for final hearing today.
[2.0] By way of this petition under Article 226 of the Constitution of India, the petitioner initially had prayed for the following reliefs.
"9(A) Your Lordships may be pleased to issue an appropriate writ, order or direction quashing and setting aside the letter/communication dated 03.04.2017 (AnnexureY) and the showcause notice dated 05.04.2017 bearing No.KAPS/E&US/TPT/2017/S/448 (AnnexureZ) issued by the respondent;
(A1) Your Lordships may be pleased to issue appropriate writ, order or directoin quashing and setting aside the letter/communication dated 20.04.2017 bearing nos. KGuj.Site/E&US/2017/12 and KGuj.Site/E&US/2017/13 and also the letter / communication dated 21.04.2017 bearing nos. KAPS/CTC/2017/S/330 (AnnexureCC);
(B) Your Lordships may be pleased to issue an appropriate writ, order or direction to declare that the notification dated 19.01.2017 and the circular dated 31.01.2017 bearing no.AH/3/MWA/2016 issued by the Ministry of Labour and Employment, Government of India have no applicability in the tender issued by the respondent bearing no.
KAPS/CTC/COMMON/TRANSPORT/2016/ET/373 and tender no. KAPS/CTC/COMMON/TRANSPORT/2016/ET/374 so far as it relates to computing the base rate of labour component for contract price adjustment;
(C) Pending admission, hearing and final disposal of the petition, Your Lordships be stay the letter / communication dated 03.04.2017 (AnnexureY) and the show cause notice dated 05.04.2017 bearing no. KAPS/E&US/TPT/2017/S/448 (AnnexureZ) issued by the respondent;
(C1) Pending admission, hearing and final disposal of the present petition, Your Lordships may be pleased to stay the letter/communication dated 20.04.2017 bearing nos. Kguj.Site/E&US/2017/12 and Kguj.Site/E&US/2017/13 and also the letter/communication dated 21.04.2017 bearing nos.KAPS/CTC/2017/S/329 and KAPS/CTC/2017/S/330 (AnnexureCC); and further be pleased to restrain the Page 2 of 18 HC-NIC Page 2 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT respondent from issuing any work order to any party by maintaining statusquo;
(D) Pending admission, hearing and final disposal of the present petition, Your Lordships be pleased to direct the respondent not to give effect to the notification dated 19.01.2017 and the circular dated 31.01.2017 bearing no. AH/3/MWA/2016 issued by the Ministry of Labour and Employment, Government of India in computing the base rate of labour component for contract price adjustment;
(E) Your Lordships may be pleased to grant exparte ad interim relief in terms of prayers (C) and (D) above;"
[2.1] However, today when the present petition is taken up for final hearing, learned Advocate appearing on behalf of the petitioner has stated at the Bar that the petitioner does not challenge the impugned order / communication to the extent of canceling the work order and the present petition be restricted to challenge the impugned order debarring the petitioner for a period of 2 years. Therefore, the present petition be confined to challenge to the impugned order debarring the petitioner for a period of 2 years.
[3.0] The facts leading to the present Special Civil Application in nutshell are as under:
[3.1] That the respondent herein issued notices inviting the tenders on 10.01.2017 for "supply and operation of light vehicles" for a period of 3 years. The petitioner also submitted its bid. That e Tender Notices were issued for two bids bearing Nos.KAPS / CTC / COMMON / TRANSPORT / 2016 / ET / 373 and KAPS / CTC / COMMON / TRANSPORT / 2016 / ET / 374. That the estimated Page 3 of 18 HC-NIC Page 3 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT cost of Tender No. KAPS / CTC / COMMON / TRANSPORT / 2016/ET/373 was Rs.3,77,30,155/ and the estimated cost of Tender No. KAPS/CTC/COMMON/TRANSPORT/2016/ET/374 was Rs.4,20,80,226/. That the prebid meeting was scheduled on 23.01.2017. That the last date for submitting online Tender was 30.01.2017. That alongwith the Tender Notice / Form the respondent also issued General Conditions of Contract in 2009, which was also made applicable with respect to the aforesaid Tenders also. That general conditions provide the applicability of the Minimum Wages Act also and as per Clause No.20 the contractor shall strictly comply with all the provisions of the Labour Laws including the Minimum Wages Act. In the Tender Notice / general conditions, even the respondent also mentioned that the prevailing rate for minimum wages of construction or maintenance for unskilled, semiskilled, skilled and highly skilled categories of industrial workers are Rs.288.80, Rs.296.80, Rs.353/ and Rs.414/ per day respectively. Note (ii) of Clause 20 also provides that revision in rates will be communicated to contractor from time to time by EIC. Therefore, when the petitioner submitted the bids and the base rate, the petitioner considered the minimum wages mentioned in the Tender Notice i.e. Rs.353/ per skilled labourer and Rs.414/ for highly skilled labourers. However, it so happened that by Notification issued by the Ministry of Labour and Employment dated 19.01.2017 the wages for skilled workers and and highly skilled labourers came to be revised to Rs.494/ and Rs.579/ respectively. However, at the time when the bids were submitted, nobody was aware of the Notification dated 19.01.2017.
However, the Deputy Chief Labour Commissioner (Central), Page 4 of 18 HC-NIC Page 4 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT Ministry of Labour and Employment issued the Circular on 31.01.2017 bringing it to the notice of all the concerned, the notification dated 19.01.2017 revising the wages under the Minimum Wages Act and informing that the minimum wages are revised with effect from 19.01.2017. At this stage it is required to be noted that by that time the petitioner have already submitted its bid with the base rate considering the minimum wages prerevised and as per the wages mentioned in the Tender Notice. That thereafter the financial bid came to be opened on 18.02.2017, however before the work order could be issued, the petitioner sent representations on 25.02.2017 and 17.03.2017 for a clarification in light of the Notification dated 19.01.2017 revising the minimum wages and requested to consider the base rate considering the minimum wages pre19.01.2017. Despite without any clarification as sought by representations dated 25.02.2017 and 17.03.2017, the respondent issued the work order. As per the work order the petitioner was required to pay the minimum wages considering the base rate as per the revised minimum wages as per Notification dated 19.01.2017 and therefore, the petitioner communicated to the respondent that in such a situation the petitioner would not be interested in continuing the work and therefore, the petitioner did not commence the work. That thereafter the petitioner was served with the showcause notice dated 05.04.2017 by which the petitioner was called upon to show cause as to why the work order in favour of the petitioner may not be canceled as per Clause 13.2.1(a)(b) of General Conditions of Contract (GCC), why further actions as per Clause 13.2.2 of the GCC cannot be taken at his risk and cost and why as per Clause 10.4(c) of Section 1 of the Tender Page 5 of 18 HC-NIC Page 5 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT Document, he shall not be debarred from participation in any of the Tender of NPCIL for 2 years. That the petitioner replied to the same. That thereafter by impugned order dated 20.04.2017 firstly canceling the work order dated 22.03.2017 with immediate effect at its risk and cost under the provisions of the General Conditions of Contract. That thereafter a further order has been passed on 21.04.2017 debarring the petitioner for a period of 2 years. At this stage it is required to be noted that at the relevant time when the petitioner preferred the petition on 11.04.2017, no order was passed either canceling the work orders or debarring the petitioner, which as such came to be passed on 20.04.2017 and 21.04.2017. It is required to be noted that the petition came up for hearing before the Division Bench on 24.04.2017 and the notice was made returnable on 01.05.2017. However, the Division Bench refused the interim relief and in the meantime the petitioner was communicated the orders dated 20.04.2017 and 21.04.2017 and by way of amendment the petitioner had challenged the orders dated 20.04.2017 canceling the work orders and the order dated 21.04.2017 debarring the petitioner for a period of 2 years. As observed hereinabove, the present petition is restricted to the challenge to the order dated 21.04.2017 debarring the petitioner for a period of 2 years. Therefore, the question which is posed for the consideration of this Court is that whether in the facts and circumstances of the case, the respondent is justified in debarring the petitioner for a period of 2 years?
[4.0] Shri Archit Jani, learned Advocate has appeared on behalf of the petitioner and Shri Yogi Gadhia, learned Advocate has Page 6 of 18 HC-NIC Page 6 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT appeared on behalf of the respondent.
[5.0] Shri Jani, learned Advocate appearing on behalf of the petitioner has vehemently submitted that the impugned order debarring the petitioner for a period of 2 years is bad in law and most arbitrary which deserves to be quashed and set aside.
[5.1] It is further submitted by Shri Jani, learned Advocate appearing on behalf of the petitioner that in the facts and circumstances of the case, the respondent has materially erred in passing the order of debarring the petitioner for a period of 2 years. It is submitted that in the facts and circumstances of the case, the order debarring the petitioner for a period of 2 years was not at all warranted and therefore, as such the respondent is not justified in debarring the petitioner for a period of 2 years.
[5.2] It is vehemently submitted by Shri Jani, learned Advocate appearing on behalf of the petitioner has submitted that while passing the impugned order of debarring the petitioner for a period of 2 years, the respondent authority is not at all considered the reason for the petitioner not to accept the work order and/or not to continue with the work order. It is submitted that therefore as such there is a total nonapplication of mind on the part of the respondent and the relevant aspect has not at all been considered by the Authority while debarring the petitioner, which as such can be said to be punitive in nature.
[5.3] It is further submitted by Shri Jani, learned Advocate Page 7 of 18 HC-NIC Page 7 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT appearing on behalf of the petitioner that by passing the impugned order debarring the petitioner for a period of 2 years, the respondent authority has not at all considered the fact that as such there was no other suppression and/or malafide intention on the part of the petitioner in refusing to execute the work order. It is submitted that as such there are no allegations of any type of malpractice. It is submitted that the circumstances compelled the petitioner not to execute the work order. It is submitted that at the relevant time when the petitioner and other bidders submitted their bids as such nobody was were of the Notification dated 19.01.2017 revising the minimum wages. It is submitted that even the respondent authority was also not aware of the revised minimum wages as per the Notification dated 19.01.2017. It is submitted that only after 31.01.2017, when respondent issued the circular was published on net, all came to know about the revision of the minimum wages. It is submitted that by the time the petitioner had already submitted its bid with the base rate considering the minimum wages pre19.01.2017 and as such considering the minimum wages mentioned in the tender notice itself. It is submitted that immediately when the petitioner came to know about the revision of the minimum wages with effect from 19.01.2017, the petitioner sought clarification and requested the authority to consider his bid / base rate considering the minimum wages which were prevailing prior to 19.01.2017. However, without responding to the said representation and/or without clarifying anything, thereafter the respondent issued the work orders. It is submitted that therefore even prior to the issuance of the work orders, the petitioner made it very much clear that their Page 8 of 18 HC-NIC Page 8 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT bid be considered considering the base rate as per the minimum wages prior to 19.01.2017. It is submitted that therefore if the authority was not agreeable to same, in that case, the respondent authority ought not to have issued the work orders.It is submitted that despite the above, the respondent issued the work orders on 22.03.2017 and 31.03.2017 and thereafter when the petitioner refused to carry out the work / execute the work as per the work orders as it was not financially viable for the petitioner and thereafter the work orders came to be canceled, as such no malafides can be attributed to the petitioner. It is submitted that therefore while passing the impugned order of debarring the petitioner, the respondent authority has not at all considered the aforesaid relevant aspect.
[5.4] Shri Jani, learned Advocate appearing on behalf of the petitioner has further submitted that even otherwise the impugned order passed by the respondent authority debarring the petitioner for a maximum period of 2 years is otherwise bad in law and is a nonspeaking and nonreasoned order. It is submitted that even as per the General Conditions of Contract for a valid reason a contractor may be debarred, however the contractor can be debarred for a maximum period of 2 years. It is submitted that therefore there shall be a discretion with the respondent Authority to debarr the contractor upto the maximum period of 2 years. It is submitted that therefore, when the discretion is vested in the authority, in that case, the discretion is required to be exercised judiciously and the reasons are required to be given by the authority to debarr the contractor for a maximum period of 2 Page 9 of 18 HC-NIC Page 9 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT years. It is submitted that when the contractor is debarred for maximum period, it is incumbent upon the authority to give the reasons why the debarrment cannot be for a lesser period and/or why in the facts and circumstances of the case the debarrment can be for the maximum period. It is submitted that while passing the impugned order of debarring the petitioner for a period of 2 years, no such reasons have been given as to why the petitioner be debarred for a maximum period of 2 years and why in the facts and circumstances of the case the debarrment cannot be for a period lesser than 2 years. It is submitted that therefore also, the impugned order to that extent can be said to be bad in law which deserves to be quashed and set aside.
Making above submissions and relying upon the decision of the Hon'ble Supreme Court in the case of Kulja Industries Limited vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and Others reported in (2014) 14 SCC 731, it is requested to allow the present petition and quash and set aside the impugned order debarring the petitioner for a period of 2 years.
[6.0] Present petition is vehemently opposed by Shri Gadhia, learned Advocate appearing on behalf of the respondents. It is vehemently submitted by Shri Gadhia, learned Advocate appearing on behalf of the respondents that as such the petitioner has not challenged the orders dated 20.04.2017 canceling the work orders. It is submitted that therefore once the work orders are ordered to be canceled because of nonperformance of the contract / work order by the petitioner and that the respondent authority may have Page 10 of 18 HC-NIC Page 10 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT to suffer loss / damages by inviting the fresh tender and therefore, the impugned order of debarring the petitioner for a period of 2 years is just and proper and absolutely in consonance with the Clause 10.4(c) of section 1 of the tender document.
[6.1] It is further submitted by Shri Gadhia, learned Advocate appearing on behalf of the respondents that as such the impugned order of debarring the petitioner has been passed after the show cause notice and giving opportunity to the petitioner. It is submitted that therefore the impugned order cannot be said to be in breach of principles of natural justice. It is submitted that even the impugned order also cannot be said to be a nonspeaking and/or nonreasoned order. It is submitted that as such the petitioner was aware and/or was supposed to be aware of the Notification issued by the Department issued from time to time revising the minimum wages and at the time when the petitioner submitted the bid on 31.01.2017, the petitioner was aware that the wages rates prevailing from 31.01.2017 are applicable and binding on it, as the same was due to change in law and therefore, demand of the petitioner to consider the base rate and/or its bid considering the minimum wages prevailing from 19.01.2017 was absolutely unjustified and as such was contrary to the General Conditions of Contract / tender notice. It is submitted that therefore when the cancelation of the work order was as such attributable to the petitioner, the respondent authority is justified in passing the impugned order of debarring the petitioner for a period of 2 years. It is further submitted by Shri Gadhia, learned Advocate appearing on behalf of the respondents that as such the dispute between the Page 11 of 18 HC-NIC Page 11 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT petitioner and the respondent can be said to be a contractual dispute and therefore, the Court in exercise of powers under Article 226 of the Constitution of India may not enter into the contractual dispute and may not entertain the petition. It is further submitted that even as held by the Hon'ble Supreme Court in the case of Kulja Industries Limited (Supra), the decision which has been relied upon by the learned Advocate for the petitioner, power to blacklist a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is inherent in the party allotting the contract and it is a method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission. It is submitted that for how much duration the contractor may be blacklisted and/or debarred shall always be left to the party alloting the contract.
Making above submissions, it is requested to dismiss the present petition.
[7.0] Heard learned Advocates appearing for respective parties at length.
At the outset it is required to be noted that now what is challenged in the present petition is the impugned order passed by the respondent in debarring / blacklisting the petitioner for a period of 2 years. At the outset it is required to be noted and it cannot be disputed and even as observed by the Hon'ble Supreme Court in the case of Khulja Industries Limited (Supra) that though the freedom to contract or not to contract is unqualified in the case of private parties but any such decision is subject to judicial review when the same is taken by the State or any of its instrumentalities.
Page 12 of 18HC-NIC Page 12 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT It is further observed that any such decision will be open to scrutiny not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. It is further observed that the order itself being reasonable, fair and proportionate to the gravity of the offence is similarly examinable by a writ Court.
[7.1] In the aforesaid decision the Hon'ble Supreme Court had an occasion to consider various earlier decisions of the Hon'ble Supreme Court on blacklisting and the purpose and object of blacklisting. In the aforesaid decision it is further observed by the Hon'ble Supreme Court that "debarment" is recognized and often used as an effective method for disciplining deviant suppliers / contractors who may have acted acts of omission and commission of frauds including misrepresentation, falsification of records and other breaches of the regulations under which such contracts were allotted. It is further observed that "debarment" is never permanent and the period of debarment would invariably depend on the nature of the offence committed by the contractors. In paras 17 to 20 and 25 the Hon'ble Supreme Court has observed and held as under:
"17. That apart, the power to blacklist a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is in our opinion inherent in the party allotting the contract. There is no need for any such power being specifically conferred by statute or reserved by contractor. That is because "blacklisting" simply signifies a business decision by which the party affected by the breach decides not to enter into any contractual relationship with the party committing the breach. Between two private parties the right to take any such decision is absolute and untrammelled by any constraints whatsoever. The freedom to contract or not to contract is unqualified in the case of private parties. But any such decision is subject to judicial review Page 13 of 18 HC-NIC Page 13 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT when the same is taken by the State or any of its instrumentalities. This implies that any such decision will be open to scrutiny not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. A fair hearing to the party being blacklisted thus becomes an essential precondition 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 the offence is similarly examinable by a writ Court.
18. The legal position on the subject is settled by a long line of decisions rendered by this Court starting with Erusian Equipment & Chemicals Ltd. v. State of W.B. where this Court declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the Authority passing any such order was required to give a fair hearing before passing an order blacklisting a certain entity. This Court observed (SCC p. 75, para 20) "20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."
Subsequent decisions of this Court in M/s Southern Painters v. Fertilizers & Chemicals Travancore Ltd.; Patel Engineering Ltd. Union of India; B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd.; Joseph Vilangandan v. Executive Engineer (PWD) among others have followed the ratio of that decision and applied the principle of audi alteram partem to the process that may eventually culminate in the blacklisting of a contractor.
19. Even the second facet of the scrutiny which the blacklisting order must suffer is no longer res integra. The decisions of this Court in Radha krishna Agarwal v. State of Bihar; E.P. Royappa v. State of T.N.; Maneka Gandhi v. Union of India; Ajay Hasia and Ors. v. Khalid Mujib Sehravardi; Ramana Dayaram Shetty v. International Airport Authority of India and Dwarkadas Marfatia and Sons v. Port of Bombay have ruled against arbitrariness and discrimination in every matter that is subject to judicial review before a Writ Court exercising powers under Article 226 or Article 32 of the Constitution.
20. It is also well settled that even though the right of the writ Page 14 of 18 HC-NIC Page 14 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT petitioner is in the nature of a contractual right, the manner, the method and the motive behind the decision of the authority whether or not to enter into a contract is subject to judicial review on the touchstone of fairness, relevance, natural justice, nondiscrimination, equality and proportionality. All these considerations that go to determine whether the action is sustainable in law have been sanctified by judicial pronouncements of this Court and are of seminal importance in a system that is committed to the rule of law. We do not consider it necessary to burden this judgment by a copious reference to the decisions on the subject. A reference to the following passage from the decision of this Court in M/s Mahabir Auto Stores v. Indian Oil Corpn. should, in our view, suffice:
"12. It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this Court in Radha Krishna Agarwal v. State of Bihar ...... In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable....... It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and nondiscrimination in the type of the transactions and nature of the dealing as in the present case."
25. Suffice it to say that 'debarment' is recognised and often used Page 15 of 18 HC-NIC Page 15 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the 'debarment' is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor."
[7.2] Considering the law laid down by the Hon'ble Supreme Court in the aforesaid decision and the purpose and object of "debarment" or "blacklisting" the contractor it is required to be considered whether in the facts and circumstances of the case the acts of omission and/or commission committed by the petitioner do warrant as such blacklisting and/or debarring the petitioner? If yes, for how much period?
[7.3] As observed hereinabove the reason for the petitioner not to continue with the work order was the change in rate of minimum wages. It is true that at the relevant time when the petitioner and others submitted the bids, Notification dated 19.01.2017 revising the minimum wages was already issued, but nobody was aware of the said Notification including even the respondent and everybody came to know about the Notification revising the minimum wages with effect from 19.01.2017 subsequently i.e. on or after 31.01.2017. By the time the petitioner as such submitted the bid with the base rate considering the minimum wages pre19.01.2017. It is required to be noted that as such as soon as the petitioner came to know about the above, before even the work orders were issued, the petitioner sought clarification and requested to consider its bid considering the minimum wages pre19.01.2017. Without clarification and/or responding to the said representations, the Page 16 of 18 HC-NIC Page 16 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT respondent issued the work order which as such the petitioner was not agreeable. Therefore, in the aforesaid peculiar facts and circumstances, the petitioner showed its inability to go on with the work order. It is required to be noted that as such the work order has been canceled vide order dated 20.01.2017 at the risk and cost of the petitioner under the provisions of the Contract Conditions. Therefore, as such there shall not be any loss or damage to the respondent authority. It cannot be disputed that as observed hereinabove, as such there are no other allegations of fraud and/or misrepresentation and/or any other similar misconduct. Therefore, in the facts and circumstances of the case, we are of the opinion that there was no justification for the respondent to debar / blacklist the petitioner for a period of 2 years. In the facts and circumstances of the case the blacklisting / debarment of the petitioner is not warranted. There does not appear to be any other malafide intention on the part of the petitioner contractor in not proceeding further with the work order. Under the circumstances and in the facts and circumstances of the case, therefore the impugned order insofar as blacklisting and/or debarring the petitioner for a period of 2 years is not sustainable and the same deserves to be quashed and set aside. However, at the same time it is required to be clarified that the petitioner may not claim any right to apply and/or consider its case with respect to the tender for which as such the Tender Notices are already issued and the bids are invited. Meaning thereby the present decision shall be applicable prospectively from the date of the present order, to which even the learned Advocate for the petitioner is agreeable. [8.0] In view of the above and for the reasons stated above, present Page 17 of 18 HC-NIC Page 17 of 18 Created On Sun Oct 01 12:44:15 IST 2017 C/SCA/8176/2017 CAV JUDGMENT petition succeeds in part. Impugned order passed by the respondent in blacklisting and/or debarring the petitioner for a period of 2 years is hereby quashed and set aside. However, it is made clear that the petitioner shall not claim any right to apply and/or consider its case with respect to the tender for which Tender Notices are already earlier issued and the bids are already received / accepted. Meaning thereby the present order shall be made applicable prospectively to which even the learned Advocate appearing on behalf of the is agreeable. Rule is made absolute to the aforesaid extent. No costs.
Sd/ (M.R. SHAH, J.) Sd/ (B.N. KARIA, J.) Ajay Page 18 of 18 HC-NIC Page 18 of 18 Created On Sun Oct 01 12:44:15 IST 2017