Jharkhand High Court
M/S. Ram Lal Agarwalla vs The Central Coalfields Limited (A ... on 7 December, 2021
Author: Rajesh Shankar
Bench: Rajesh Shankar
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No.2607 of 2020
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M/s. Ram Lal Agarwalla, through its Proprietor,
Manoj Kumar Agarwalla. ... ... Petitioner.
-Versus-
1. The Central Coalfields Limited (a subsidiary of Coal India Limited),
a Government of India Undertaking, through its Chairman-cum-
Managing Director, Darbhanga House, Ranchi.
2. The Director (Tech./OPRM), Central Coalfields Limited, Darbhanga
House, Ranchi.
3. The General Manager (Finance), Central Coalfields Limited,
Darbhanga House, Ranchi.
4. The General Manager (CMC), Central Coalfields Limited, Darbhanga
House, Ranchi.
5. The General Manager, Central Coalfields Limited, Rajhara Area,
Chandwa, District Latehar.
6. The Project Officer (Engineer In-charge), Central Coalfields Limited,
Tetariakhar OCP, Balumath, District Latehar.
7. The Area Finance Manager, Central Coalfields Limited, Rajhara Area,
Balumath, District Latehar.
8. The Staff Officer (Min.), Central Coalfields Limited, Rajhara Area,
Chandwa, District Latehar.
... ... Respondents.
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CORAM: HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioners : Mrs. Pinky Anand, Sr. Advocate
Mr. Rohit Ranjan Sinha, Advocate
For the Respondents: Mr. Amit Kumar Das, Advocate
Mr. Shivam Utkarsh Sahay, Advocate
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CAV on 01.10.2021 Pronounced on 07.12.2021
Rajesh Shankar, J.:
1. The present writ petition has been filed for quashing the letter under Ref. No. PO/TTK/Ramlal Agarwalla/NIT-11/Cancellation of contract/2020-21/1278 dated 11.09.2020 (Annexure-49 to the writ petition) issued under the signature of the Project Officer/Engineer-in- charge, Tetariakhar OCP, Rajhara Area- respondent no.6, whereby the management of the respondent-Central Coalfields Limited has taken decision to take penal actions against the petitioner, namely, (i) Termination/cancellation of contract awarded to the petitioner in terms of Clause 9(a) of the GTC; (ii) Forfeiture of EMD of Rs.27.78 lakh in terms with Clause 6.1 of the GTC; (iii) debarring it from participating in future bids for a period of three years in terms with Clause 6.1 of the GTC; (iv) as per Clause 9.2(c), recovery is to be made from the 2 petitioner to the extent of 20% of the contract value (20% of Rs.93,43,08,500/-) i.e. Rs.18,68,61,700/- being higher than the performance security and additional performance security deposited by the petitioner; (v) recovery is to be done by encashment of B.G. amounting to Rs.1,95,52,050/- submitted against performance security for Rs.93,43,100/- and additional performance security for Rs.1,02,08,950/-; and (vi) balance amount i.e. Rs.16,73,09,650/- (18,68,61,700-1,95,52,050) is to be recovered from any other contract of the petitioner-company or by institution of recovery suit in terms of Clause 9.2(c)(ii) of the GTC.
2. During pendency of the present writ petition, the petitioner prayed for grant of interim relief which was declined by this Court vide order dated 22.09.2020. Aggrieved thereby, the petitioner filed intra court appeal being L.P.A No. 298 of 2020 before learned Division Bench and the same was disposed of on 21.10.2020, observing as under:-
"10. Upon such submission of the learned counsel for the parties and taking into consideration the nature of issue involved in this case as also considering the undertaking furnished by the competent authorities as has been informed by learned counsel for the respondent-CCL, this Court, deems it fit and proper to dispose of the appeal at this stage, with a request to learned writ Court to decide the writ petition itself at an early date.
11. In view thereof, the learned Single Judge is requested to dispose of the writ petition itself at an early date on opening of the Court after Puja Holidays.
The parties are at liberty to make a motion before the learned Single Judge for listing of the writ petition.
So, far as passing of the interim order is concerned in view of the undertaking furnished by Mr. Das, on instruction of the competent authority of the respondents-CCL to the effect that no further recovery would be made till the disposal of the writ petition, this Court orders accordingly. Let no further recovery be made till the disposal of the writ petition."
3. The factual background of the case as stated in the writ petition is that the respondent-CCL issued e-tender notice dated 24.05.2019 being NIT No.:CCL/GM(CMC)/Rajhara/2019/11 for hiring of HEMM for OB removal, extraction and transportation of coal at Tetariakhar OCP of Rajhara Area for a period of five years (hereinafter referred as 'the said work'). The petitioner submitted its bid document and was found L-1 and the General Manager (CMC) issued letter of acceptance vide letter no.520 dated 25.10.2019, specifying that the term of completion of the work would be 1825 days which would be deemed to have commenced on the expiry of 30 days from the date of issuance of letter of acceptance or one week from the date of handing over the site of 3 work, whichever is later, however, preparatory works would be started from 10th day of issue of LoA. Thereafter, the respondent no.8 issued letter of award vide letter no.347 dated 07.11.2019 for the aforesaid work. In compliance of the aforesaid letters, the petitioner submitted performance security through bank guarantee dated 19.11.2019 for Rs.93,43,100/- and the additional performance security through three bank guarantees, all dated 19.11.2019, for Rs.30,62,685/-, Rs.51,04,475/- and Rs.20,41,790/- respectively. The petitioner vide letter dated 15.12.2019 communicated the General Manager, Rajhara Area that the villagers were preventing it from working on the land and they were seeking compensation and, accordingly, a request was made by the petitioner that the land dispute should be resolved so that site be made available to it as soon as possible. The respondent no.6 vide letter No.2203 dated 24.12.2019 made notional handing over of the site along with site plan to the petitioner and requested it to start the work immediately. The respondent no.6 vide letter No.2231 dated 28.12.2019 requested the Officer In-charge, Balumath Police Station to deploy police force at the site for start of the work safely from 29.12.2019. Thereafter, the petitioner sent letter dated 01.01.2020 to the respondent no.6, stating that when it tried to mobilize the site on 15.12.2019 as well as on 29.12.2019, the villagers did not allow it to start the work. Subsequently, the petitioner repeatedly sent e-mail to the respondent authorities as well as Balumath police station to resolve the said dispute. A meeting was also called on 06.01.2020 by the CCL with the villagers, but no conclusion was reached in the said meeting. The respondent no.5 vide letter no.2417 dated 13.01.2020 requested the Deputy Commissioner, Latehar to look into the matter regarding obstruction made by the villagers in starting the said work and to help the petitioner so that the work could be started as early as possible. The respondent no.6 vide letter No.2441 dated 15.01.2020 informed the petitioner that the work was not started in spite of handing over the site and it was also advised to start the same immediately, failing which action would be taken against it as per the relevant provisions of the NIT. The petitioner wrote letter dated 18.01.2020 to the respondent no.6 stating that the dispute with the villagers was not resolved and again requested to resolve the same to enable it to start the work. Pursuant to the letter dated 15.01.2020 issued by the 4 respondent no.6, the petitioner also sent its reply on 27.01.2020, stating that it was ready to start the work expeditiously as its manpower and machines were lying idle at the site for the last one and half months and a request was made to the respondent no.6 to hand over the site to the petitioner without any local disturbance so that it could start the work immediately. The respondent no.6 again issued letter no.2622 dated 31.01.2020, directing the petitioner to start the work immediately as the site along with plan was already handed over to it, failing which necessary action would be taken as per the provisions of the NIT. The petitioner vide letter dated 05.02.2020 communicated the respondent authorities that it was not in a position to start the work within one day and, accordingly, requested to give peaceful possession of the site without any local hindrance. As per the petitioner, the respondent authorities did not hand over peaceful possession of the site and the matter was kept pending and again during the period of lockdown owing to Covid-19 pandemic, the respondent no.5 issued letter no. 792 dated 04.04.2020 to the petitioner for starting the work immediately, failing which action as deemed fit might be initiated against it as per the provisions of the NIT. The respondent no.6 issued letter no. 4082 dated 09.04.2020 stating that in spite of repeated letters the work was not started by the petitioner and accordingly 15 days' notice was being served to it to commence the work immediately failing which the management of the respondent-CCL would be compelled to take penal action against it as per Clause 6.1 of GTC of the contract. The petitioner replied the said letter on 10.04.2020, stating that the necessary manpower and machines were near the site and they could start the work within a day if the site was handed over without any hindrance. The petitioner also informed that due to lockdown owing to Covid-19 pandemic, it could not start the work. It was also stated that till said date, the work order was not issued, as finalization of the agreement was pending with the respondent authorities. It needed the work order and a copy of the agreement prior to start of work, as the same was required to be submitted before the bank and oil companies for working capital and procurement of diesel in bulk quantity from the company directly. The respondent no.8- Staff Officer (Min.), Rajhara Area wrote letter to the petitioner bearing letter No. 628 dated 11.04.2020 informing that the 5 work order was already issued to it on 07.11.2019. The petitioner vide letter dated 16.04.2020 requested the respondent no.6 to issue formal work order after executing agreement as well as by giving peaceful possession of site, issuing passes to trailers, trippers and machines so that the same could be brought at the site during lockdown period and to issue security instructions to CISF and local administration to safeguard its machines and manpower from local villagers. The respondent no.6 wrote letter no.33 dated 16.04.2020 to the petitioner for submitting time line and progress chart of the work at the earliest for further needful action like execution of agreement etc., whereupon the petitioner vide letter dated 17.04.2020 communicated the respondent nos.5 and 6 for providing security for mobilization of HEMM. The respondent no.6 vide letter No.54 dated 18.04.2020 again directed the petitioner to submit the time line and progress chart giving month-wise quantity of extraction of coal and removal of OB so that the same would be sent to area office for execution of agreement and further needful. The petitioner made an application before the Officer- in-charge, Balumath police station on 19.04.2020, requesting that since the work was going to be started, sufficient police force may be deployed at worksite. The petitioner also wrote letter dated 20.04.2020 to the respondent no.6 for providing security to start the work immediately, as the dispute between the respondent-CCL and villagers was not yet resolved. According to the petitioner, its men and machines were attacked by the local villagers on 20.04.2020 for which an FIR was lodged on 21.04.2020 itself. Thereafter, again on 22.04.2020, 26.04.2020 and 03.05.2020, the petitioner made applications before the respondent authorities to deploy police force at the site, in pursuance thereof, the respondent no.6 vide letter no. 170 dated 03.05.2020 requested the Officer-in-Charge, Balumath police station for deployment of police force at Tetariakhar OCP on 05.05.2020 for starting the work safely. In the meantime, the respondent no.8 forwarded a copy of "Article of Agreement dated 30.04.2020" to the petitioner executed between the respondent no.5 and the petitioner being agreement no.GM(RA)/Min/0/S OB & Coal/2020/01. The petitioner, however, made an application before respondent no.5 requesting to refund its earnest money of Rs.27,78,000.00 deposited by it through online payment mode. The 6 Police Inspector-cum-Officer In-charge, Balumath police station vide letter dated 04.05.2020 communicated the respondent no.6, expressing apprehension that on 05.05.2020 local raiyats and villagers would object execution of the work in the said OCP giving rise to law and order problem and as such the presence of a Magistrate was necessary. Accordingly, a request was made for deputation of a magistrate to start the work. The petitioner made an application before the respondent no.6 on 08.05.2020, explaining all the circumstances and requested to sincerely look into the matter and to instruct the petitioner as how the work could be started and further to give peaceful possession of the site without any hindrance. The petitioner also requested to refund the earnest money of Rs.27,78,000/-. It made an application before the respondent authorities on 09.05.2020, requesting inter alia not to take action in pursuance of notice dated 09.04.2020 issued by the respondent no.6. However, the respondent no.6, while giving reference of the earlier letters issued by the respondent authorities, particularly the letters dated 04.04.2020 and 09.04.2020, finding the reply to 15 days' notice not satisfactory and the work having not commenced resulting in loss to the CCL, issued letter No.405 dated 04.06.2020 as final notice for commencement of the work, whereby the petitioner was directed that if it failed to start the work within 7 days of the receipt of the said final notice, the respondent-CCL would be compelled to take penal action against it in terms of Clause 6.1 of GTC for which the petitioner would be solely responsible. Pursuant to the letter dated 4.6.2020, the petitioner submitted explanation vide letter dated 07.06.2020, narrating all the circumstances and requested to withdraw the final notice. The respondent no.6 vide letter No. 488 dated 13.06.2020 observed that the petitioner was awarded the contract and it was its responsibility to get the HEMM at the work site and to start the work accordingly. The petitioner vide e-mail dated 16.06.2020 informed the respondent no.5 that it was ready to start the work immediately after resolution of the dispute between the CCL and the local villagers or if the responsibility for security of the manpower as well as machines was taken by the CCL. The respondent no.6 vide letter no.527 dated 17.06.2020 again served a notice to the petitioner to commence the work immediately, stating inter alia that if it failed to start the work within seven days of 7 receipt of this notice, the respondent-CCL would be compelled to take action against it in terms with Clause No. 6.1 and 9(a) of GTC for which it would be solely responsible. On 26.06.2020, the petitioner again made an application to the Officer-in-charge, Balumath police station for deployment of police force at Teteriakahr OCP on 29.06.2020, as it wanted to bring the machines to start the work at the aforesaid site, copies of which were also forwarded to the Deputy Commissioner, Latehar, Superintendent of Police, Latehar and Sub Divisional Magistrate, Latehar. The respondent no.5 wrote letter No. 843 dated 27.06.2020 to the Superintendent of Police, Latehar, stating therein that a meeting was held with the villagers at his office on 26.06.2020 and the contractor was advised to shift its HEMM within the mine premises on 29.06.2020 with a request to the Superintendent of Police, Latehar to ensure that there should not be any law and order problem at the mines on 29.06.2020. In the meantime, the respondent no.6 issued public notice vide letter under Ref. no.588 dated 26.06.2020 informing all the employees of Tetariakhar Project that the project was going to be closed in near future and all the employees would be transferred to another area. Accordingly, they were directed to submit their applications giving choice of their new place of posting in the Project office, Balumath. The respondent no.6 also issued public notice vide letter no. 589 dated 26.06.2020, informing all the DO holders, lifters and truck owners that from 30.06.2020, the road sale of Tetariakhar mines was to be closed and as such, the entire empty trucks were directed to stop entering the said mines with immediate effect. The petitioner again made representation before the respondent no.5 on 04.07.2020 for refund of the earnest money deposited by it amounting to Rs.27,78,000.00 at the earliest. The petitioner also made an application before the respondent no.6 on 27.07.2020 stating that it had suffered heavy loss without any fault on its part. It was claimed that all the terms and conditions of the agreement were complied by it and as such to avoid litigation and dispute in course of execution as well as intending to settle the same with the CCL, requested to refer the said dispute to the Area CGM/GM in terms with Clause 13 of GTC. The petitioner again made an application to the respondent no.6 on 06.08.2020 requesting that it should be allowed to demobilize the site and the performance bank 8 guarantee be released in its favour till such time it was not possible to commence the said work at site and the earnest money should also be released immediately as per the terms and conditions of the NIT. The respondent no.6 vide letter No. 957 dated 07.08.2020 again issued notice to the petitioner to commence the work within seven days from the date of receipt of the same failing which the company would be compelled to take action against it as per Clause No. 6.1 and 9(a) of GTC. The respondent no.6 vide letter no. 1002 dated 12.08.2020 issued final notice to commence the work within seven days from the date of receipt of the said notice alleging that the petitioner had not made even a single effort to commence the work. It was further stated in the said letter that if the petitioner failed to commence the work within the aforesaid period, action as laid down under Clause 6.1 and 9(a) of GTC would be initiated against him. The petitioner responded the said letter of the respondent no.6 on the same day requesting to demobilize the site and release its earnest money as well as performance bank guarantee. It was assured that once the CCL was able to resolve the dispute with the local villagers, the petitioner would remobilize the site and resubmit the performance bank guarantee. The petitioner, however, subsequently wrote letter dated 07.09.2020 to the Deputy Commissioner, Latehar and the Superintendent of Police, Latehar, requesting to provide police protection, as it expressed its intention to bring machines at the site on 11.09.2020 to start the work. However, the respondent no.6 issued the impugned letter dated 11.09.2020 terminating the contract in terms with Clause 9(a) of the GTC along with other penal actions in terms of Clauses 6.1, 9.2(c) and 9.2(c)(ii) of the GTC. Hence, the present writ petition.
4. Mrs. Pinky Anand, the learned senior counsel for the petitioner, submits that since the date of issuance of letter of acceptance, the petitioner continuously attempted to start the work and the respondent authorities were well aware of agitation being made by the villagers for which several meetings were convened with them, but the respondent authorities time and again issued notices to the petitioner threatening penal action unless the work was commenced within the notice period. It is also submitted that there was no fault on the part of the petitioner, which always tried to commence the work, but due to agitation of the villagers, it could not do so. The petitioner 9 cannot be said to have committed default in non-commencement and non-execution of the work, rather it was prevented from executing the same due to hindrance caused by the villagers and as such Clause 6.1 of GTC is not attracted at all. It is further submitted that Clause 9(a) of the GTC is not applicable in the present case, as the petitioner cannot be said to have committed default in commencing the work. The petitioner made sincere efforts to commence the work, but the local villagers repeatedly obstructed it in the said process even in presence of police officials and the officials of the respondent-CCL for which several meetings were convened in presence of the petitioner, however, the dispute could not be resolved. Under the said circumstance, if the work could not be started, the petitioner's sincerity cannot be doubted, rather its diligent effort in commencing the work looms large and as such Clause 9(a) of the GTC is not applicable in the given facts of the present case. It is further submitted that the action taken by the respondent authorities is also in violation of the principles of natural justice. Moreover, notional handing over of the site is totally different from actual handing over of the site which the respondent authorities failed to do preventing the petitioner to commence the work. The respondent authorities cannot shift their burden of peaceful handing over of the site to the petitioner and the said action on the part of the respondent authorities is highly illegal and arbitrary.
5. Learned senior counsel for the petitioner further submits that the respondent-CCL has filed Money Suit No.02/2020 in the court of Civil Judge (Sr. Division)-I, Latehar, claiming compensation from the villagers who were involved in obstructing execution of the work in question, however, the said fact was not disclosed by the respondents at the time of filing of the counter affidavit in this case. The stand of the respondents in the said suit is that the work could not be commenced due to agitation made by the villagers and not on account of any failure on the part of the petitioner. It is also submitted that the petitioner was asked to commence the work on a particular land and not on the adjoining land, as stated by the respondent-CCL in its counter affidavit and, thus, it is irrelevant on its part to contend that five contractors had duly executed the work in the adjoining sites. Moreover, the said stand was never taken earlier by the respondents and is against the settled proposition of law delineated by the Hon'ble 10 Supreme Court in the case of Mohinder Singh Gill Vs. the Chief Election Commissioner, reported in (1978) 1 SCC 405.
6. It is further submitted by the learned senior counsel for the petitioner that the minutes of the meeting held on 26.06.2020 among the officials of CCL, petitioner and the villagers would clearly reflect that the loading machines were standing on the public road for two months as the villagers were not allowing entry of the same at the work site. It is also contended that the main reason for unrest of the villagers was with respect to transportation of coal from coal face to Balumath Siding. They were opposing on the ground that if the tipping trucks were allowed to ply, their livelihood, which was dependent on coal despatch through trucks/road sale, would be severely endangered. Hence, they demanded that all coal should be dumped in stockyard and tipping trucks should not be deployed for transportation of coal from coal face to Balumath Siding. As per the contract, the petitioner was required to extract total 80 Lakhs Te of coal during five years. Out of total extracted coal of 80 Lakhs Te, 12 Lakhs Te of coal was required to be stacked at surface coal stockyard and balance 68 lakhs Te of coal was required to be transported to Balumath Railway Siding. The said arrangement was, however, being opposed by the villagers. They were demanding that approx. 9.00 lakhs Te per annum of coal (i.e. 45 Lakhs Te over the period of five years) should be transported to the stockyard and less amount of coal to Balumath Railway Siding so that it could provide more employment to the locals by engaging their own trucks in road side of Tetariakhar OCP. The terms of the new tender floated by the respondents would indicate that they have agreed with the said demand of the villagers, however, after termination of the contract of the petitioner.
7. Learned senior counsel for the petitioner also contends that the respondents made communication with the Deputy Commissioner, Latehar only on acknowledging the hostilities being faced by the petitioner at the site and the respondents may not be allowed to take contrary stand before this Court. The petitioner had visited the site prior to participating in the tender process, but the physical situation got unearthed only when it arrived at the site for commencement of the work.
118. Learned senior counsel for the petitioner further submits that the issue of sub-letting the contract has been raised by the CCL for the first time in the counter affidavit that too without any supporting document. The allegation of sub-letting the work by the petitioner is an afterthought and was neither the subject matter of any of the notices issued by the respondents nor the subject matter of the letter of termination dated 11.09.2020. The respondents cannot be allowed to raise new ground before this court in view of the ratio laid down by the Hon'ble Supreme Court in the case of Mohinder Singh Gill (Supra).
9. Per contra, Mr. Amit Kumar Das, learned counsel for the respondent-
CCL, submits that the petitioner cannot seek simultaneously remedy against the impugned action of the respondents by invoking arbitration clause (i.e. Clause 13A of the GTC) and by filing the present writ petition. On this ground alone, the present writ petition is liable to be dismissed as not maintainable. The petitioner has not only raised various disputed question of facts but has also gone to the extent of making false statements which cannot be sought to be adjudicated under Article 226 of the Constitution of India. The respondents have taken the action strictly in accordance with law and as per the terms and conditions of the GTC. The petitioner having been awarded the work failed to mobilize its equipment and manpower to commence the work causing huge loss to the respondent-Company which had no option but to take suitable action available under the GTC of the contract and it does not suffer from any illegality or infirmity warranting any interference of this Court. The land in question was acquired by the respondent-CCL long ago and the petitioner was put in possession of the site. There was no dispute at the site at all, which is apparent from the fact that the works were duly executed by the other contractors at the adjoining sites without raising any grievance or any objection from the villagers. The respondent no.6 vide letter No.2203 dated 24.12.2019 had handed over the site along with the site plan to the petitioner asking it to execute the work immediately, but it never took any interest in the same. It is further submitted that neither any villager had assembled nor any one had prevented the petitioner from deployment of Hywa or excavator at the site as alleged, rather the true fact is that no Hywa or excavator was ever brought by the petitioner at the site or even in the vicinity. No earth moving machinery or 12 transport vehicle can enter the mines without prior permission of the respondents and the petitioner never intimated the respondents that it was intending to bring any machine or equipment at the site. The General Manager, Rajhara Area vide letter no. 2417 dated 13.01.2020 had requested the Deputy Commissioner, Latehar to look into the matter of obstruction in execution of the work only with a view to help petitioner though it was not required as per the GTC, as it had visited the site before participating in the tender to assess the local situation. In fact, there was no hindrances at all. The land in question which comprised of the road earmarked for "Over Burden" dumping was acquired by the CCL long back. The petitioner neither mobilized its equipments /machines at the site nor furnished any information to the respondent-CCL about its intention to mobilize the necessary equipments and manpower at the site. A meeting was convened by the management of the respondent-CCL with the villagers and thereafter none of the villagers raised any objection regarding execution of the work at the site. Hence, no agreement was required between the villagers and the management of the respondent-CCL with respect to any issue relating to execution of the work over the site in question or for the purpose of transportation of Hywa vehicles and other equipments by the petitioner. Tetaraikhar OCP was being operated since 1993 and at the present is being operated without objection by any villager and, therefore, the entire allegation made by the petitioner that the villagers stopped it from execution of the work, is false on the face of it. The respondent no.6 had issued letter to the petitioner to start the work, as the site had already been handed over to it. The petitioner submitted its reply on 27.01.2020 stating the facts with respect to the letter dated 13.01.2020 written by the respondent no.5 to the Deputy Commissioner, Latehar, but the petitioner intentionally and falsely has stated in the writ petition that he was ready to start the work expeditiously as its manpower and machineries were lying idle since long. As a matter of fact, no manpower or machinery was ever brought to the site by the petitioner till the date of cancellation of the contract. The plea of the petitioner that it was not given peaceful possession is an afterthought, as it failed to start the work. The respondent no.6 issued letter No.2622 dated 31.01.2020 to the petitioner to start the work immediately, as the site 13 had already been handed over to it along with site plan directing that in case of failure to do so, necessary action would be taken as per the provision of the NIT. It had also been mentioned in the said letter that if any problem was faced during execution of the work, the same would be resolved, but the petitioner did not take any interest to shift its machines to the mine premises and no manpower was deployed. It was also denied in the said letter that the petitioner had mobilized two excavators and 8 Tippers at the site and its manpower and machineries were deployed and standing idle for want of work. Since the petitioner did not mobilize any equipment or machinery at the site, question of it being able to commence the work does not arise. The respondent no.5 vide letter No.792 dated 04.04.2020 advised the petitioner to commence the work immediately failing which appropriate action would be taken as per the relevant provisions of the NIT. Despite said notice, the petitioner did not commence the work, which compelled the respondents to give final notice of fifteen days to the petitioner for commencement of the work vide letter No.4082 dated 09.04.2020 issued by the Project Officer/Engineer-in-Charge of Tetariakhar OCP. The petitioner was advised by the said notice to commence the work immediately and it was mentioned inter alia that if it failed to commence the work within fifteen days, the respondent authorities would be compelled to take penal action against it as per Clause 6.1 of the GTC. The said notice was issued as per the terms and conditions of the Contract after giving sufficient opportunities and allowing sufficient time to the petitioner since the date of issuance of LOA but the petitioner failed to even commence the work during the entire period. The delay in execution of the agreement was due to delay in physical confirmation of bank guarantee of the petitioner and SFMS confirmation by the bank as well as non-submission of time and progress chart by it which was required to be prepared on the basis of the work schedule to be submitted by the contractor. As such, the delay in execution of the agreement is due to failure on the part of the petitioner itself. It is also submitted that the petitioner had signed the agreement with its open eyes and as such it cannot, after committing a breach, be allowed to challenge any action taken in accordance with the terms and condition of the GTC. The petitioner never intended to execute the work and it sublet the same to a third party in violation of 14 the terms and conditions of the contract who was incompetent and inexperienced person to execute the work and the petitioner by making false claim has tried to find out a escape route. It is further submitted that a fresh tender for almost similar work was subsequently issued by the respondents which was finalized in favour of one M/s Pranab Naman Minerals Pvt. Ltd. and the work has already been commenced by the said party. It is also submitted that though there was some agitation by the villagers for certain issues, yet after 30.06.2020, the villagers did not obstruct the petitioner to execute the work. Since the petitioner did not commence the work in spite of the repeated reminders sent to it, the impugned action has been taken against it in terms with the provisions of the GTC.
10. Heard the learned counsel for the parties and perused the materials available on record. The petitioner has assailed the impugned letter dated 11.09.2020, whereby the contract awarded to it for execution of the said work has been terminated coupled with certain penal actions including forfeiture of earnest money deposit, encashment of bank guarantees and blacklisting it for three years in purported exercise of the power conferred under different provisions of the GTC.
11. The respondents have primarily challenged the maintainability of the present writ petition on the ground of an alternative remedy being available to the petitioner to invoke arbitration clause under the contract which it has already invoked. Learned counsel for the respondents by inviting attention of this court to Section 21 of the Arbitration and Conciliation Act, 1996 submits that an arbitral proceeding commences on the date on which a request for particular dispute to be referred to arbitration is received by the respondent.
12. Learned counsel for the respondents has also relied on the judgments rendered by the Hon'ble Supreme Court in the cases of ABL International Ltd. & Another Vs. Export Credit Guarantee Corporation of India & Others, reported in (2004) 3 SCC 553, and Joshi Technologies International Inc. & Others Vs. Union of India, reported in (2015) 7 SCC 728. In paragraph no.14 of the judgment rendered in the case of ABL International Ltd. (supra), the Hon'ble Supreme Court has held as under:-
"14. This judgment again, in our opinion, does not help the first respondent in the argument advanced on its behalf that in contractual matters remedy under Article 226 of the Constitution does not lie. It is seen from the above extract that in that case because of an arbitration 15 clause in the contract, the Court refused to invoke the remedy under Article 226 of the Constitution. We have specifically inquired from the parties to the present appeal before us and we have been told that there is no such arbitration clause in the contract in question. It is well known that if the parties to a dispute had agreed to settle their dispute by arbitration and if there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration, unless of course both the parties to the dispute agree on another mode of dispute resolution. Since that is not the case in the instant appeal, the observations of this Court in the said case of Bridge & Roof Co. [(1996) 6 SCC 22] are of no assistance to the first respondent in its contention that in contractual matters, writ petition is not maintainable."
13. Learned counsel for the respondents has also relied upon paragraph no.69.2 of the judgment rendered in the case of Joshi Technologies (Supra.), which is quoted as under:-
"69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration."
14. In the aforesaid judgments, Their Lordships have held that if the parties to a dispute have agreed to settle their dispute by arbitration and if there is an agreement in that regard, the courts will not permit recourse to any other remedy without invoking the remedy by way of arbitration, unless the parties to the dispute agree on another mode of dispute resolution and in such case the High Court would refuse to exercise its discretion under Article 226 of the Constitution.
15. The aforesaid argument advanced by the learned counsel for the respondents has been countered by the learned senior counsel for the petitioner by submitting that initially the arbitration clause was invoked by the petitioner for altogether different relief and under different fact situation, however after issuance of impugned letter of termination and taking other penal actions, separate cause of action has arisen for which the present writ petition has been filed. Moreover, it is a settled law that availability of alternative remedy by way of arbitration cannot be a sole ground to dismiss a writ petition as not maintainable if it appears that certain public law element is involved in the case and there are sufficient grounds for invoking extraordinary writ jurisdiction.
16. In support of the aforesaid contention, learned senior counsel for the petitioner has relied upon few judgments of the Hon'ble Supreme Court. It would be appropriate to refer the relevant paragraphs of those judgments for better appreciation of the argument of the learned senior counsel for the petitioner.
1617. In the case of Union of India & Others Vs. Tantia Construction Private Limited, reported in (2011) 5 SCC 697, the Hon'ble Supreme Court has held as under:-
"33. Apart from the above, even on the question of maintainability of the writ petition on account of the arbitration clause included in the agreement between the parties, it is now well established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. The various decisions cited by Mr Chakraborty would clearly indicate that the constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities. Injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution.
34. We endorse the view of the High Court that notwithstanding the provisions relating to the arbitration clause contained in the agreement, the High Court was fully within its competence to entertain and dispose of the writ petition filed on behalf of the respondent Company. We, therefore, see no reason to interfere with the views expressed by the High Court on the maintainability of the writ petition and also on its merits."
18. In the case of Harbanslal Sahnia & Another Vs. Indian Oil Corpn.
Ltd. & Others, reported in (2003) 2 SCC 107, the Hon'ble Supreme Court has held as under:-
"7. So far as the view taken by the High Court that the remedy by way of recourse to arbitration clause was available to the appellants and therefore the writ petition filed by the appellants was liable to be dismissed is concerned, suffice it to observe that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, in spite of availability of the alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights;
(ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corpn. v. Registrar of Trade Marks [(1998) 8 SCC 1] .) The present case attracts applicability of the first two contingencies. Moreover, as noted, the petitioners' dealership, which is their bread and butter, came to be terminated for an irrelevant and non-existent cause. In such circumstances, we feel that the appellants should have been allowed relief by the High Court itself instead of driving them to the need of initiating arbitration proceedings."
19. The learned Senior counsel for the petitioner has also put reliance on the judgment rendered by the Hon'ble Supreme Court in the case of Joshi Technologies (Supra.) and has referred paragraph nos.70.7, 70.8 and 70.9 of the same, which read as under:-
"70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice. 70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction.
70.9. The distinction between public law and private law element in the contract with the State is getting blurred. However, it has not been 17 totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary."
20. It is well settled that an alternative remedy is not an absolute bar to invocation of writ jurisdiction. In an appropriate case, in spite of availability of alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies: (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure to comply the principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. It has further been held that writ can be issued against the action of the executive authority unsupported by law or against the denial of equality before law or equal protection of law. If it is found from the nature of the activity that there involves public law element, the matter can be examined by the High Court in writ petition under Article 226 of the Constitution of India to see whether the action of the State and/or its instrumentality/agency is fair, just and equitable or to see as to whether relevant factors have been taken into consideration or irrelevant factors have gone into the decision-making process or to see whether decision itself is arbitrary.
21. Thus, in normal circumstance a writ petition is not entertained in a case where the petitioner has the remedy to invoke arbitration clause under an agreement or has some other alternative efficacious remedy elsewhere provided under a particular statute. However, under the circumstances as enumerated in the aforesaid cases, the writ petitions may be entertained. The writ court has to examine the maintainability of a particular case under the guiding principles laid down by the Hon'ble Supreme Court in the aforesaid cases as also in the facts and circumstance of a particular case.
22. Now the question before this court is as to whether the present case is fit to be entertained under the writ jurisdiction in spite of availability of alternative remedy.
1823. The thrust of the argument of the learned senior counsel for the petitioner is that the petitioner was always ready and willing to execute the work, however, the respondents failed to handover peaceful physical possession of the site to the petitioner due to agitation of the villagers. In support of the said contention, the petitioner has brought on record various letters written by it to the respondent authorities as well as to the local administration. The learned senior counsel for the petitioner has heavily relied upon the minutes of the meeting dated 26.06.2020 held between the CCL authorities and the villagers wherein it was admitted by the respondent-CCL that there was a dispute between the villagers and CCL due to which the petitioner was restrained by the villagers to reach the site and its dumpers were lying on road for two months. The petitioner has also brought on record the plaint of the money suit filed by the respondent-CCL against the villagers wherein it has been admitted that the villagers did not allow the petitioner to commence the work.
24. The respondents have admitted the fact that there was agitation by the villagers due to certain grievance which delayed the commencement of the work, however, according to their stand they have already condoned the said period. It has been contended that after 30.06.2020 the dispute between the villagers and the respondent-CCL was resolved as well as the petitioner was assured that it would be given sufficient protection during execution of work, however, it failed to execute the same and did not even mobilize the equipments at the site. It has further been contended that the petitioner was repeatedly sent notices to commence the work specifically stating that if the said direction was not complied, suitable action in accordance with the terms and conditions of the GTC of the contract would be taken. However, the petitioner kept idle even after acknowledging the notices of the respondents and as such having no other option, the impugned letter has been issued. Further contention of the respondent-CCL is that the petitioner never intended to execute the work and in support of the said stand they have claimed that five contractors were peacefully executing the work in the nearby patch. The petitioner had, in fact, sub-let the work to an incompetent sub- contractor due to which the work could not commence. It has been submitted by the learned counsel for the respondents that on bare 19 perusal of para 9 of the minutes of the meeting dated 26.06.2020 it would be evident that GM(operation), CCL had specifically stated that if anybody tried to violate law and order, appropriate action would be taken. It was assured that the security personnel of the project and the local police picket would provide security, however, the petitioner did not take any step to commence the work.
25. I have perused the plaint of the money suit no.02 of 2020 filed by the respondent-CCL and on bare perusal of the same it appears that the same is for getting compensation from some of the villagers who were responsible for agitation and the last occurrence is said to have taken place on 29.06.2020. It also appears from the notice dated 12.08.2020 issued by the respondent no.6 to the petitioner that it was alleged to have not taken step to commence the work after 29.06.2020. Some evidence has been brought on record by the petitioner to controvert the claim of the respondents to the extent that even after 30.06.2020, it failed to deploy its men and machineries at the site. Though the petitioner had claimed in the email dated 27.07.2020 that it had set a site office and the same was equipped with all necessary equipments, yet the said factual assertion has been controverted by the respondent no.6 in the letter dated 12.08.2020. Thus, the petitioner has not been able to bring home uncontroverted facts for grant of relief under writ jurisdiction.
26. In the case of Modi Projects Ltd., Ranchi Vs. State of Jharkhand & Others, reported in 2012 SCC Online Jhar. 425, as has been relied upon by the learned Senior Counsel for the petitioner, learned Division Bench after having considered various letters written by the officers of the tender inviting authority as well as the uncontroverted documents on record, found that the reasons for delay in execution of the work was not without any basis rather was due to agitation of local residents and coercion/obstruction created by the MCC extremists which appeared to be beyond control of the awardee of the contract. It was further found that the respondents could not justify the rescission of the contract without giving prior notice to the awardee of the contract and any opportunity of representation.
27. In the present case the facts and circumstances are not similar to the case cited by the learned senior counsel. Here for the reasons, as aforesaid, the fact as to whether the petitioner was prevented by the 20 villagers from executing the work even after 30.06.2020 is still disputed. Moreover, the impugned letter has been issued after giving prior notice to the petitioner to commence the work failing which the penal actions were taken against it.
28. The fact that five contractors were executing similar nature of work in the adjoining piece of land without any objection, has not been denied by the petitioner, however, it has claimed that the same is not relevant in the present facts and circumstances of the case. This Court is of the view that since claim of the petitioner is that it was impossible for it to execute the work as the villagers did not allow its men and machineries to reach the site, the aforesaid facts come in its way of claim of impossibility.
29. The learned senior counsel for the petitioner has also submitted that the said ground has not been taken in the impugned order or any previous proceeding and as such the same cannot be allowed to be raised before this court so as to supplement the impugned order. I do not find substance in the said submission of the learned senior counsel since the aforesaid factual plea has not been taken by the respondents as a ground for passing the impugned order, rather the said fact has been brought to this court to controvert the claim of the petitioner that it was impossible for it to execute the work under the prevailing facts and circumstances.
30. The next limb of the argument of learned senior counsel for the petitioner is that there must be a valid reason for taking action under Clause 6.1 of the GTC and from the facts of the case it would be evident that the petitioner had sufficient cause for not commencing the work. However, the cause for not commencing the work as claimed by the petitioner has been disputed by the respondent-CCL and the respondent no.6 in the final notice dated 12.08.2020 has specifically stated that the petitioner had not made single effort to commence the work after 29.06.2020, which suggested that it was not interested in execution of the work.
31. One of the arguments of the learned senior counsel for the petitioner is that on bare perusal of the scope of work mentioned in the fresh tender notice dated 11.10.2020, it would be evident that the CCL has changed the terms and conditions of the earlier tender to resolve the dispute with the villagers which supports the case of the petitioner that 21 the villagers were agitating against the terms and conditions of the earlier tender and the same was not resolved in the meeting dated 26.06.2020.
32. This Court is of the considered view that mere change in the scope of the work cannot be regarded as conclusive piece of evidence to suggest that even after 30.06.2020, the petitioner was prevented from commencing the work due to the agitation of the villagers in spite of all its efforts to commence the work. The agitation made by the villagers was one thing and the impossibility to do the work was another. The petitioner can claim relief under writ jurisdiction only when uncontroverted evidence is produced by it to show that the agitation was of such a nature which made the commencement of the work impossible. In absence of any such evidence, no relief can be granted to the petitioner in exercise of writ jurisdiction.
33. The petitioner has also raised the issue of violation of the principles of natural justice while passing the impugned order especially the order of blacklisting which carries severe civil consequences. Learned senior counsel for the petitioner has relied upon few judgments of the Hon'ble Supreme Court rendered on the issue of blacklisting.
34. In the case of Erusian Equipment & Chemicals Ltd. Vs. State of W.B. & Another, reported in (1975) 1 SCC 70, the Hon'ble Supreme Court has held as under:-
"12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the proved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality.
15. The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are "instruments of coercion".
17. The Government is a Government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This 22 privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person's character and personality. Blacklisting tarnishes one's reputation.
18. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods in discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Just as exclusion of the lowest tender will be arbitrary, similarly exclusion of a person who offers the highest price from participating at a public auction would also have the same aspect of arbitrariness.
19. Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may be under a duty to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein.
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."
35. In the case of Kulja Industries Ltd. Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited & Others, reported in (2014) 14 SCC 731, the Hon'ble Supreme Court has 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 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.
21. The legal position governing blacklisting of suppliers in USA and UK is no different. In USA instead of using the expression "blacklisting"
23the term "debarring" is used by the statutes and the courts. The Federal Government considers "suspension and debarment" as a powerful tool for protecting taxpayer resources and maintaining integrity of the processes for federal acquisitions. Comprehensive guidelines are, therefore, issued by the Government for protecting public interest from those contractors and recipients who are non- responsible, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily. These guidelines prescribe the following among other grounds for debarment:
(a) Conviction of or civil judgment for.--
(1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;
(2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging;
(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; or (4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility;
(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as.--
(1) A wilful failure to perform in accordance with the terms of one or more public agreements or transactions;
(2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or (3) A wilful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction;
(c)***
(d) Any other cause of so serious or compelling a nature that it affects your present responsibility."
36. In the case of State of Uttar Pradesh & Others Vs. Ashok Kumar Nigam, reported in (2013) 3 SCC 372, the Hon'ble Supreme Court has held as under:-
"14. Total non-application of mind and the order being supported by no reason whatsoever would render the order passed as "arbitrary".
Arbitrariness shall vitiate the administrative order. The rules provide a procedure and even require the State Government to consider the case for renewal of the Government Counsel whose term is coming to an end. The scheme of Para 7.06 of the Manual is that appointment of a Government Pleader is to be made for a period of one year and at the end of the period, the District Officer in consultation with the District Judge is required to submit a report on the work and conduct to the Legal Remembrancer together with the work done in Form 9. It is only when his work or conduct is found to be unsatisfactory that it is so reported to the Government for appropriate orders. If the report is satisfactory, the rule requires that he may be furnished with a deed of engagement in Form 1, for a term not exceeding three years, on his first engagement.
18. The order dated 3-4-2008 is even liable to be quashed on another ground, that it is a non-speaking order also suffering from the vice of non-application of mind. As already discussed, the Government has taken an en bloc decision, without recording any reason, not to renew the term of any of the Government Counsel. That itself shows that there is no application of mind. In Shrilekha [(1991) 1 SCC 212] , this Court expressed the opinion that it would be alien to the constitutional scheme to accept the argument of exclusion of Article 14 in contractual matters. The arbitrary act of the State cannot be excluded from the ambit of judicial review merely on the ground that it is a contractual 24 matter. The expression "at any time without assigning any cause", can be divided into two portions, one "at any time", which merely means the termination may be made even during the subsistence of the term of appointment and second, "without assigning any cause" which means without communicating any cause to the appointee whose appointment is terminated. However, "without assigning any cause" is not to be equated with "without existence of any cause."
37. In the case of Gorkha Security Services Vs. Govt. (NCT of Delhi), reported in (2014) 9 SCC 105, the Hon'ble Supreme Court has held as under:-
"Necessity of serving show-cause notice as a requisite of the principles of natural justice. It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts.
Contents of the show-cause notice
21. The central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of show-cause notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action.
22. The High Court has simply stated that the purpose of show-cause notice is primarily to enable the noticee to meet the grounds on which the action is proposed against him. No doubt, the High Court is justified to this extent. However, it is equally important to mention as to what would be the consequence if the noticee does not satisfactorily meet the grounds on which an action is proposed. To put it otherwise, we are of the opinion that in order to fulfil the requirements of principles of natural justice, a show-cause notice should meet the following two requirements viz:
(i) The material/grounds to be stated which according to the department necessitates an action;
(ii) Particular penalty/action which is proposed to be taken.
It is this second requirement which the High Court has failed to omit.
We may hasten to add that even if it is not specifically mentioned in the show-cause notice but it can clearly and safely be discerned from the reading thereof, that would be sufficient to meet this requirement."
38. In the case of UMC Technologies Private Limited Vs. Food Corporation of India & Another, reported in (2021) 2 SCC 551, the Hon'ble Supreme Court has held thus:-
"14. Specifically, in the context of blacklisting of a person or an entity by the State or a State Corporation, the requirement of a valid, particularised and unambiguous show-cause notice is particularly crucial due to the severe consequences of blacklisting and the 25 stigmatisation that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into government contracts. This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting take away this privilege, it also tarnishes the blacklisted person's reputation and brings the person's character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.
19. In light of the above decisions, it is clear 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. In these cases, 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."
39. In the aforesaid judgments, the Hon'ble Supreme Court has held that blacklisting involves civil consequences. Fundamentals of fair play require that a person concerned should be given an opportunity to represent his case before he is put on the blacklist. The freedom to contract or not to contract is unqualified in the case of private parties. However, any such decision is subject to judicial review when the same is taken by the State or any of its instrumentalities not only on the ground of violation of the principles of natural justice but also on the doctrine of proportionality. It has been held that a show-cause notice should contain the grounds of contemplated action as well as the proposed penalty/action.
40. To justify the order of blacklisting, the learned counsel for the respondents has also relied upon the judgment of learned Single Bench of this Court rendered in the case of the KEM and PCR Joint Venture firm, through its authorized signatory namely Yugpradhan Mehta Vs. Central Coalfields Limited through its Chairman- cum Managing Director, and Others, reported in 2019 SCC OnLine Jhar 832, paragraph nos.36 and 38 of which read as under:-
"36. The respondent authorities have invoked Clause 6.1 to GTC by issuing notice of commencing the work within 15 days' and even then the work has not been commenced which shows the attitude of the petitioner since he has failed to act bonafidely even by not initiating the work hence acted contrary to the terms of contract, therefore, the respondents have forfeited the Earnest Money Deposit in terms of the condition stipulated under Clause 6.1 of the GTC.
38. This Court has gathered from the material available on record that the reason of debarment as has been reflected by the respondents in non-commencing of the work and when this Court has gone across the show cause and the impugned order, wherefrom it transpires that the specific reason has been assigned in show cause and the impugned decision assigning the reason of invoking the penal part as provided under Clause 6.1 of the GTC and the reason is non-commencing of work in spite of repeated requests and hence it cannot be said that the show cause or the impugned order is without any reason."26
41. In the case in hand, the petitioner was served repeated show cause notices to commence the work and final notice was served on 12.08.2020 specifically stating the grounds of contemplated action as well as the proposed action itself. It was mentioned in the said notice that the petitioner had not started the work in spite of the ample opportunities given to it. The petitioner was directed to commence the work within seven days failing which it would be presumed that it was no more interested in execution of the work and the actions mentioned in Clause 6.1 and 9(a) of GTC would be initiated against it. One of the proposed actions under Clause 6.1 was debarment of the tenderer for a period of three years. The said notice was also replied by the petitioner denying the allegations levelled against it and also requesting the respondent-CCL to resolve the dispute with the local villagers so as to enable it to remobilize the site. It thus appears that there was no violation of the principles of natural justice in passing the impugned order dated 11.09.2020 as alleged by the petitioner. The petitioner had sufficient knowledge of the consequence of non- compliance of the notice dated 12.08.2020.
42. Under the aforesaid facts and circumstances of the case, I do not find sufficient ground to interfere with the impugned letter dated 11.09.2020 issued by the respondent no.6 under extraordinary writ jurisdiction. It is, however, observed that there has been no adjudication of the rival factual pleas raised by the parties in present order. Thus, the petitioner will be at liberty to seek adjudication of the dispute through arbitration as has been provided under the GTC of the contract or to work out any other legal remedy as available under law.
43. The writ petition is, accordingly, dismissed with the aforesaid observation and liberty.
(Rajesh Shankar, J.) Sanjay/AFR