Ms Patel Engineering Limited Th Its ... vs Water Resources Department on 2 March, 2016

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Jharkhand High Court

Ms Patel Engineering Limited Th Its ... vs Water Resources Department on 2 March, 2016

Petitioner participated earlier in N.I.T No. WRD/IGC/SCD/Turnkey01/201516 issued by Water Resources Department for construction of Canal Tunnel from 12.22 to 13.95 Km. of Kharkai Right Main Canal on Turnkey Basis for estimated cost of Rs. 137 Crores. When the Tender Committee sat to consider the financial bid of two bidders, petitioner being one of them, in its meeting held on 16th December, 2015, it came to their notice that petitioner's firm had been debarred by National Highways Authority of India and his bid became disqualified for not confirming to condition no. 20 of N.I.T which required that the interested bidder should not have been blacklisted for the last 5 years and affidavit should have been enclosed. The said NIT had to be aborted as it became a matter of single bidder. Annexure4 to the writ petition is the minutes of meeting of Tender Committee dated 16th December, 2015. That decision admittedly remain unchallenged by the petitioner who participated in fresh N.I.T issued thereafter bearing no. WRD/IGC/SCD/Turnkey01/201516 for the same work with the same estimated cost. This time the Tender Committee in its decision for 2. evaluation of the prequalification bid on 17th February, 2016 has found that petitioner was ineligible to participate on account of the debarment order issued by National Highway Authority of India within a period of 5 years prior to the date of N.I.T. His bid was declared as nonresponsive. This time the petitioner had disclosed about his debarment by National Highway Authority of India. In the previous bid, petitioner had only disclosed that he was not debarred or blacklisted by the State Government of Jharkhand. That order of Departmental Tender Committee dated 17th February, 2016 (Annexure2) has been challenged by the petitioner .

As has been brought on record by the respondents, in their counter affidavit, petitioner challenged the order of debarment dated 20th May, 2011 issued by National Highway Authority of India up to Apex Court and the decision of debarment was upheld by the judgment passed in Special Leave Petition (Civil) No. 20359 of 2011 dated 11th May, 2012 reported in (2012) 11 SCC 257.

Counsel for the petitioner has made efforts in the aforesaid background of facts to submit that the decision of the respondent to include such a condition at Clause 21 of present N.I.T cannot operate across all such orders of debarment/blacklisting passed by any other State or its instrumentality but has to be confined only to such debarment/blacklisting order of Respondent State of Jharkhand. Reliance has been placed on Article 298 of the Constitution of India.

Counsel for the petitioner has strenuously tried to read out such proposition of law from the judgments rendered by Apex Court in the case of M/s. Erusian Equipment & Chemicals Ltd. vs. State of West Bengal and another reported in (1975) 1 S.C.C 70 paragraphs 15, 16 thereof and also 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, paragraphs 17, 20 and 25.

However, the judgments relied upon by the petitioner as aforesaid lay down the proposition of law that the government is a government of 3. laws and in matters of public contracts it has to conform to the provisions of Article 14 of the Constitution of India by giving equality of opportunity and exclude discrimination. The decision of the authority whether or not to enter into a contract when subjected to powers of judicial review is to be tested on the touchstone of fairness, relevance, natural justice, non discrimination, equality and proportionality. In case of Kujla Industries Limited (Supra), the Hon'ble Apex Court had found that the permanent debarment of the appellant contractor for all times to come may sound too harsh and heavy and not proportionate. The quantum of penalty to be imposed is in the domain of competent authority taking into account all relevant factors which are enumerated at paragraph 28 depending upon the gravity of the offence, violations and breaches that may be prescribed by such guidelines. No such proposition of law as advanced by the petitioner can be culled out from the aforesaid judgment.

Hon'ble Court has on consideration found the legal position governing blacklisting of suppliers in USA and UK as no different. In USA instead of using the expression "blacklisting" the 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 nonresponsible, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily. The guidelines prescribed have been referred to at paras 21 and 22 of the judgment rendered by Apex Court in the case of Kujla Industries Limited (Supra). In the light of what has been held by the Apex Court, contention of the petitioner that incorporation of condition at Clause 21 of NIT should be read to be confined to debarment/blacklisting only by the State of Jharkhand is not made out. The upper most concern 4. of the State or its instrumentality is to ensure that contractors, who are nonresponsible, lack business integrity or engage in business or illegal conduct or are otherwise unable to perform satisfactorily be not allowed to compete in award of works related to public projects where the taxpayer money is involved. It is also required to maintain integrity of the tender process where persons with clean record compete and are entrusted with works involving public project and expenditure of huge public money.

It is well within the domain of executive i.e., State to lay down the terms and conditions under NIT which should operate equally and uniformally to all interested bidders. In the circumstances and for the reasons discussed hereinabove, when earlier NIT for the same purpose was aborted on account of becoming a single bid due to the fact that petitioner's bid was found to be nonresponsive for failure to comply the requirement of disclosure of his debarment and that remain unchallenged, the decision of the Tender Committee to treat the bid of the petitioner as non responsive in the present NIT on the same grounds relying upon Clause 21 of NIT cannot be said to be an arbitrary and unfair. decision. After filing of the writ petition petitioner has however chosen to challenge Clause 21 of NIT by I.A No. 1300 of 2016 filed Yesterday on 1.3.2016. On both occasions petitioner has consciously participated in the bid and thereafter belated challenge to the said Clause is being made which cannot be entertained at the stage for the reasons discussed hereinabove.

In such circumstances, the challenge to the decision of Departmental Tender Committee dated 17th February, 2016 (Annexure2) has to fail and accordingly the writ petition is dismissed. I.A. No. 1321 of 2016 is also dismissed.

The interim order dated 23rd February, 2016 stands vacated.

(Aparesh Kumar Singh,J) jk

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Jharkhand High Court