Jharkhand High Court
District: Noida Through Its Authorised ... vs State Of Jharkhand Through The Chief ... on 11 May, 2020
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
[1]
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No.5253 of 2019
Abhilasha Commercial Pvt. Ltd., a Company registered under the Indian
Companies Act, 1956 having address at G-69, Sector 6, Noida-201301
District: Noida through its Authorised Representative, Harsh Arora,
Aged about -30 Years, Son of Sri Pankaj Arora, having office at-69,
Sector 6, Noida-201301 District: Noida.
. ... Petitioner
Versus
1. State of Jharkhand through the Chief Secretary, Project Bhawan,
P.O., P.S. - Dhurwa, District-Ranchi.
2. Jharkhand Education Project Council, through the State Project
Director, Jharkhand Education Project Council J.S.C.A. Stadium
Road, Sector-3, Dhurwa, Ranchi-834004 District: Ranchi.
... Respondents
With
W.P.(C) No.5290 of 2019
M/s MB RUBBER Pvt. Ltd. Having office at D-13, 14, 15 & A 16/2,
Site-IV, Industrial Area, Sahibabad, Ghaziabad, (U.P.), through its
director Vipan Mehta aged about 55 years, S/o Late Sh. Ved Parkash
Mehta, R/o 195 (Ground Floor) GaganVihar, P.O. & P.S. GaganVihar,
District-Delhi-110051.
. ... Petitioner
Versus
1. The State of Jharkhand.
2. Jharkhand Education Project Council through State Project Director,
J.S.C.A. Stadium Road, Jagannathpur, Sector-3, Dhurva, P.O.
Dhurwa, P.S. Jagannathpur, District Ranchi, Jharkhand.
3. The Principal Secretary (School Education, Government of
Jharkhand), Human Resources Department, having office at MDI
Building, P.O. Dhurwa, P.S. Jagannathpur, District Ranchi,
Jharkhand.
... Respondents
With
W.P.(C) No.5432 of 2019
[2]
M/s XO Footwear Pvt. Ltd., through its Authorized Representative,
Rajeev Kumar Jha, S/o Shri Saroj Jha, aged about 35 years, r/o 10,
Balmukund Mackar Road, Kokata-700007.
. ... Petitioner
Versus
1. State of Jharkhand, through the Chief Secretary, Project Bhawan,
HEC, PO & PS, Dhurwa, District-Ranchi.
2. Jharkhand Education Project Council, through Secretary, J.S.C.A.
Stadium Road, Jagannathpur, Sector-3, Dhurwa, P.O.-Dhurwa, P.S.-
Jagannathpur, Ranchi-834004, Email:[email protected].
3. Mr. Uma Shankar Singh, State Project Director, Jharkhand
Education Project Council, J.S.C.A. Stadium Road, Jagannathpur,
Sector-3, Dhurwa, P.O.-Dhurwa, P.S.-Jagannathpur, Ranchi-
834004,Email:[email protected].
... Respondents
With
W.P.(C) No.6025 of 2019
M/s Liberty shoes Ltd., a Company registered under the Indian
Companies Act, 1956 having its registered office at Liberty Puram
(Kutail), 13th Milestone, G.T. Road, P.O. & P.S. Bastara, Distt. Karnal,
Haryana through its Authorised Representative, Tarun Khurana, son of
Shri Chaman Lal Khurana, Aged about 44 years, resident of 383/208
Chak Raghu Nath Naini, P.O. & P.S.-Naini, District-Prayagraj, Uttar
Pradesh.
. ... Petitioner
Versus
1. State of Jharkhand through the Chief Secretary, Project Bhawan,
P.O., P.S. - Dhurwa, District-Ranchi.
2. Jharkhand Education Project Council, through the State Project
Director, Jharkhand Education Project Council J.S.C.A. Stadium
Road, Sector-3, Dhurwa, Ranchi-834004 District: Ranchi.
... Respondents
-------
CORAM:HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
-------
[3]
[In W.P.(C) No.5253 of 2019]:
For the Petitioner : Mr. IndrajitSinha, Advocate
Mr. ShresthGautam, Advocate
Mr. AnirudhWadhwa, Advocate
For the Respondents : Mr. Mukesh Kumar Sinha, Advocate
Mr. Krishna Murari, Advocate
[In W.P.(C) No.5290 of 2019]:
For the Petitioner : Mr. A.K. Bajpai, Advocate
Mr. Lukesh Kumar, Advocate
For the Respondents : Mr. Mukesh Kumar Sinha, Advocate
Mr. Krishna Murari, Advocate
[In W.P.(C) No.5432 of 2019]:
For the Petitioner : Mr. R.S. Mazumdar, Sr. Advocate
Mr. Arun, Advocate
Mr. D.K. Rastogi, Advocate
For the Respondents : Mr. Mukesh Kumar Sinha, Advocate
Mr. Krishna Murari, Advocate
[In W.P.(C) No.6025 of 2019]:
For the Petitioner : Mr. Rahul Kumar, Advocate
Ms. Amrita Sinha, Advocate
For the Respondents : Mr. Mukesh Kumar Sinha, Advocate
Mr. Krishna Murari, Advocate
----------------------------
C.A.V. on 28.04.2020 Pronounced/Delivered on 11.05.2020
1. All these writ petitions have been listed before this Court on being
mentioned by learned counsel for the petitioners by making e-mail
mention memo before the Registrar General of this Court to be
placed before the Hon'ble The Chief Justice for considering the
urgency for its listing and accordingly, Hon'ble The Chief Justice
has been pleased to list these cases before this Court for its hearing
through Video Conferencing (V.C.).
2. All these writ petitions having similar cause of action and as such on
behest of the submission made on behalf of the learned counsel for
[4]
the parties, all the writ petitions have been directed to be heard
analogous and accordingly the matters have been heard analogous.
3. The petitioners have been represented through different counsel as
reflected in the cause title, two of the learned counsel have
represented through V.C. from New Delhi while rest of the leaned
learned counsel have represented the petitioners through V.C. from
Ranchi.
4. Learned counsel for the parties, being fully satisfied with the audio
and video connectivity have argued the matters for about three and a
half hours through V.C.
After conclusion of the argument, this Court has asked
the learned counsel if they choose to file written submission, they
may do so but no such written submission has been filed.
5. The writ petitions are having the common issues of quashing of the
order dated 18.09.2019 issued with different reference numbers
whereby and whereunder the petitioners' firm have been debarred
from participating in any tender issued by the respondent No.2 for a
period of one year in W.P.(C) No.5253 of 2019 and W.P.(C)
No.5290 of 2019 while the relief sought for in W.P.(C) No.5432 of
2019 is also for quashing of the order dated 18.09.2019 apart from
that the action of the authorities in obstructive to participate in the
second call has been sought to be deprecated and to be quashed
while in the W.P.(C) No.6290 of 2019 mainly it has been prayed for
quashing of the order dated 18.09.2019, the show cause notice dated
29.08.2019 and for stay of the tender process for second call.
[5]
6. This Court before proceeding further to deliberate the issue, require
to refer the order passed by this Court on 11.11.2019, being Order
No.04 whereby and whereunder the learned counsel for the
petitioners have made submission to the effect that they are not
questioning the tender process inviting applications by way of
second call since the process has attained its finality and they have
confined the writ petitions only with respect to the issue of
debarment as decided against them vide order dated 18.09.2019, the
order dated 11.11.2019 reads hereunder as:
―Learned counsel for the petitioners, with the consent
of petitioners who are present in Court, has submitted that they
are not insisting upon the relief sought for extension of the last
date of submission of bids for the tender 01/SB/EPC/2019-20/
for cancellation of tender order, in order to allow the
petitioner and other similar situated bidders to participate in
the tender proceeding for the second call.
Such prayer has been made, jointly by learned
counsel for the petitioners in these writ petitions on the ground
that tender has already been finalized and the successful
bidder has already been allotted with the work.
Learned counsel for the petitioners are confining
their prayer with respect to the decision of black-listing, as
contained in Letter dated 18.09.2019
No.JEPC/MRE/33/164/2018-19/3123 (in W.P.(C) No.5253 of
2019), Letter dated 18.09.2019 No.JEPC/MRE/33/164/2018-
19/3126 (in W.P.(C) No.5432 of 2019) and Letter dated
18.09.2019 No.JEPC/MRE/33/164/2018-19/3124 (in W.P.(C)
No.5290 of 2019).
The matter has been heard, but due to paucity of time,
hearing could not be completed.
As such, with the consent of learned counsel for the
parties, let these matters be listed on 20th November, 2019.‖
[6]
7. The argument has been advanced on behalf of the learned counsel
for the petitioners today assailing the order by which they have been
debarred from participating in the bid for a period of one year and as
such this Court is now proceeding to appreciate the argument
advanced on behalf of the parties by referring to the factual matrix of
the case.
8. The respondent No.2, Jharkhand Education Project Council, has
issued a notice inviting e-tender for the supply of school bags for
students studying in Class I-VIII for the academic session 2019-20
in the State of Jharkhand being Tender No.01/SB/EPC/2019-20.
The school bags are required to reach the destination
point within 30 days from the date of signing of contract/work order
by the concerned district.
The consideration of the bidders is only of fulfilling the
eligibility criteria as mentioned in Section VI of the bid document.
9. It is the case of the petitioners that they after fulfilling all the
eligibility criteria as referred in the tender documents as under
Section VI under the caption heading ‗Eligibility Criteria' enclosing
therein a certificate from the Government Laboratory with regard to
the quality of the school bags supplied being as per the specification
laid down in Section V-Technical Specification by submitting a
report issued by the Department of Industries & Commerce, Haryana
stating therein that the petitioners' school bags were meeting the
technical specification as referred in the tender documents, the
[7]
petitioners have been declared to be successful being amongst the
seven bidders i.e.,
i. Shiv Naresh Sports Pvt. Ltd.
ii. Desire Overseas Pvt. Ltd.
iii. XO Footwear Pvt. Ltd.(W.P.(C) No.5432 of 2019)
iv. Vinishma Technologies Pvt. Ltd.
v. Liberty Shoes Ltd.(W.P.(C) No.6025 of 2019)
vi. MB Rubber Pvt. Ltd.(W.P.(C) No.5290 of 2019)
vii. Abhilasha Commercial Pvt. Ltd. (W.P.(C) No.5253 of 2019)
10. The respondent No.2 has convened a meeting of its working
committee on 22.08.2019 taking a decision for sending the sample to
test its polyester fabric (300 x 300 denier) from any government lab
from where none of the bidders have got the sample tested and in
pursuance to the aforesaid decision the samples were send to the
Textile Laboratory, Ministry of Textile, Government of India,
Gurugram Haryana and from the report supplied by the said
laboratory only two bidders have been found to be fulfilling the
required specification of 300 x 300 denier while the rest of the
bidders have not been found to have required specification of 300 x
300 denier and as such, the decision was taken not to open the
financial bid and to cancel the notice inviting e-tender
No.01/SB/JEPC/2019-20 with a further decision to come out with a
short term notice for inviting fresh applications. All the four
companies are Abhilasha Commercial Pvt. Ltd., MB Rubber Pvt.
[8]
Ltd., Liberty Shoes Ltd. and XO Footwear Pvt. Ltd., the petitioners
herein.
11. The petitioners have received an e-mail on 29.08.2019 containing a
show cause dated 29.08.2019 making therein a reference of not
fulfilling the required technical specification of polyester fabric (300
x 300 denier) basis upon which the petitioners have been declared to
be technically qualified and according to the authorities, the said
conduct of the petitioners have prima facie found to be a case of
cheating, as such a reply has been asked for up to 04.09.2019 as to
why the institution/firm be not debarred from participating in any
tender, failing in reply the petitioners would be debarred from
participating in the next tender.
12. The petitioners have replied to the show cause notices which have
been found to be not satisfactory and the conduct of the petitioners'
firm have been found to be within the purview of corrupt/fraudulent
practices as referred under Clause 22 of Section II-Information to
Bidders and accordingly, the petitioners have been debarred from
participating in the bid for a period of one year.
The order of debarment for a period of one year vide
order dated 18.09.2019 have been assailed in all these four writ
petitions inter alia on the following grounds as has been agitated by
the learned counsel for the petitioners:
i. Duration of debarment has not been disclosed in the show
cause by way of proposed punishment, not referring the same
prejudices the case of the petitioners as because if it would
[9]
have been indicated, the petitioners would have been in a
position to demonstrate the facts and circumstances to put
forth proper defence by knowing the proposed punishment
saying it to be not proportionate.
ii. The show cause notices says about corrupt/fraudulent
practices but ingredient of corrupt/fraudulent practices as
referred under Clause 22 of e-tender document is not
applicable.
iii. Fraud has been defined under Section 17 of the Contract Act
but no such ingredient is available calling the action of the
petitioners to be fraud within the meaning of fraud as defined
under Section 17 of the Contract Act.
iv. Reliance has been placed upon the report of the laboratory but
no such report has ever been supplied and as such adequate
opportunity, to defend, has not been provided.
v. No reason has been shown in the impugned order and
accordingly referring the reply to show cause as not
satisfactory, the reply has been rejected and hence, the
authority has not followed the principle of fair play in absence
of which the impugned order will be said to be in violation of
principles of natural justice.
vi. The authority, even though, has refunded the EMD which
means that they have accepted no fault on the part of the
petitioners but even thereafter, the show cause notices have
[10]
been issued and impugned orders have been passed which is
nothing but an arbitrary exercise of power of the authority.
13. Learned counsel arguing for the petitioner in W.P.(C) No.5290 of
2019 has raised additional point of mala fide by referring to the
statement made in the writ petition at paragraph-8. Further he has
contended about non-consideration of second reply which the
petitioner of W.P.(C) No.5290 of 2019 has submitted after issuance
of impugned order dated 18.09.2019.
The common submission on quantum of penalty has been
raised, as according to the petitioners, irregularity even though said
to have committed, the same is not so serious warranting debarment
of one year in participating in the bid.
14. Per contra, learned counsel for the respondent No.2 while referring
to the stand taken by the concerned respondent in the counter
affidavit has argued out the case at length by raising the issue of
maintainability of the writ petitions under Article 226 of the
Constitution of India, as there is no material to establish patent mala
fide or perversity or procedural impropriety, necessitating this Court
to exercise the power of judicial review under Article 226 of the
Constitution of India.
He has submitted that the power of judicial review which
is to be exercised by the High Court under Article 226 of the
Constitution of India is only if there is any error in the decision
making process and not in the decision taken by the authority,
according to him, there is no error in the decision making process as
[11]
because the order of debarment for a period of one year has been
passed after providing an opportunity of hearing by way of issuance
of show cause notices, which have duly been replied by each
petitioners.
He, with emphasis, has submitted that if the replies
furnished by the petitioners would be perused, it would be evident
therefrom that they have admitted the irregularity as has been
alleged in the show cause and once there is admission on their part
about the commission of irregularity there is no question of raising
the point on behalf of the petitioners as has been raised by way of
various grounds in assailing the orders.
He further submits that the condition of tender is to be
complied with by each bidders in strict sense and since there is a
condition stipulated under Section VI of the bid document that the
sample of the bags would be tested in the laboratory and when some
complaint has been received about the standard of specification from
amongst the technically qualified bidders, in a pre-tender meeting
the decision was taken to send the samples to the Central Laboratory
to test the veracity of the samples as to whether they are meeting out
the specifications as stipulated in the tender document and when the
reports have been received it has been found by the authority that the
bags were not as per the specifications as reflected in the tender
document since the polyester fabric (300 x 300 denier) which has
been mentioned by the petitioners basis upon which they have
technically been qualified have been found to be lesser and hence,
[12]
the entire tender process has been decided to be cancelled and
accordingly, it has been cancelled.
According to him, it has been stipulated in the first tender
that the bags are to be supplied within a period of 30 days but it is
due to the irregularity having been committed by the petitioners by
referring to the quantum of polyester fabric (300 x 300 denier) but
subsequently on laboratory test it has been found to lesser which
ultimately led for cancellation of the first bid which ultimately
caused delay in supply of the bags which has been decided to be
supplied within the period of 30 days and since the delay has been
caused due to the misrepresentation of the petitioners, therefore, the
show cause notices have been issued on the basis of the samples test
report of the Central Laboratory but very surprisingly they have
neither questioned the test report of the Central Laboratory nor a
word has been stated in denial of the irregularities as leveled in the
show cause rather they have stated that if any irregularity has been
committed, the same may be ignored with an assurance that the same
would not be repeated in future, this reply has been treated to be
admission on the part of the petitioners and as such, the said reply
has been said to be not satisfactory and in consequence, the
debarment of period for one year has been imposed.
He further submits in reply to the ground agitated about
no proposed penalty in the show cause which according to the
learned counsel is absolutely incorrect as because the show cause
refer about debarment from participating in the bid which does
suggest that the show cause issued for debarment in participating in
[13]
the bid for all time to come but the authority after taking lenient
view since there was no financial loss, came out with the decision of
debarment for one year.
15. With respect to the ground about non-availability of any ingredient
of fraudulent practice as stipulated under Clause 22 of the tender
document, according to the learned counsel, is correctly made
applicable as because as per the standard of specification, the
polyester fabric (300 x 300 denier) which has been mentioned in the
tender document but on the report of the Central Laboratory it has
been found to be less, therefore, it is nothing but a misrepresentation
on the part of the petitioners and once there is misrepresentation it
will come under the fraudulent practice.
He further submits by referring to the definition of fraud
as defined under Section 17 of the Contract Act wherein fraud has
been defined having any misrepresentation and misrepresentation
means the active concealment of the fact, herein the fact of the case
is that the petitioners were knowing fully well about the
specification of the materials to be supplied although the
reference of the materials has been referred as per the
specification referred in the tender document but on physical
verification through the laboratory test it has been found to be
misleading and as such it is nothing but the active concealment by
way of misrepresentation, hence, the same would come under the
fold of the definition of fraud as defined under Section 17 of the
Contract Act.
[14]
16. So far as the quantum of penalty is concerned, submission has been
made that by taking lenient view only debarment of one year has
been imposed, however, with respect to the submission as to what
led the authority to impose debarment of one year and not six
months or two years, no reason has been assigned, it has been
submitted that for assigning reason to that effect, the matter may be
remitted without interfering with the irregularities which has been
established on the admission on the part of the petitioners.
So far as the comment of laboratory which has reported
about the denier as referred in the communication dated 09.09.2019
under Memo No.177 to which the petitioners are taking the report as
in their favour it has been submitted that the said report cannot be
construed to be in favour of the petitioners rather the concerned
laboratory has only stated that whatever sample has been provided
by the petitioners, reporting has been done and it would be evident
from the reply to the show cause that there is admission on the part
of the petitioners that if any irregularity has been committed, the
same may be condoned with the undertaking that the same would
not be repeated in future, this shows that admission of commission
of misrepresentation is there and as such the report dated 09.09.2019
is of no aid to the petitioners
17. This Court after having heard the learned counsel for the parties and
after going through the documents brought on record, deem it fit and
proper to refer certain admitted facts.
18. The respondent/State of Jharkhand has taken a decision to distribute
school bags to the children studying in government schools from
[15]
Class I to VIII under the School Kit Scheme within the State budget
through Jharkhand Education Project Council, in short JEPC-
respondent no.2which is an implementing agency of the Samagra
Shiksha in the State has been assigned the duty to fix rate for the
whole State to purchase school bags through e-tender for the year
2019-20. The specification of the bag under category no. 1, 2 and
3 for classes 1 and 2, classes 3 to 5 and classes 6 to class 8
respectively has been earmarked as would appears from Section
5 under the e-tender document under the caption heading
Technical Specification under which the requirement has been
referred as polyester fabric (300 x 300 denier), polyester fabric
(300 x 300 denier) and polyester fabric (300 x 300 denier)
respectively for each category under section VI under the
caption heading "Eligibility Criteria" certain conditions have
been referred to be fulfilled by the respective bidders, one of
which is a certificate to be enclosed with the tender document issued
from any NABL, accredited agency, with regard to the quality of the
school bags supplied being as per as the specifications laid down in
Section V, ―Technical Specification.‖
The similar condition has also been reflected under
section-VII under the caption heading under ―Technical Bid
Information‖-Form ―A‖ wherein under the condition No.(r) it has
been provided for enclosing certificate from NABL accredited
agency with regard to the quality of the school bags manufactured as
per the specifications of the contract.
[16]
The petitioners have participated in the bid, their bid
document have been opened and they have been allowed to
participate in the technical bid on the basis of the certificate issued
by laboratory wherein reference has been made about the polyester
fabric between 300 x 300 denier but before opening price bid i.e. in
the pre-bid meeting conducted on 13.08.2019 on a complaint made
by two of the bidders out of seven bidders who have been found to
be technically qualified complaining therein that five bidders have
not furnished the certificate of having polyester fabric (300 x 300
denier).In the pre-bid meeting decision was taken by the authority to
get the sample examined from the laboratory where the bags have
not been sent for its sample testing and accordingly decision was
taken to send the sample to the laboratory under the control of
Ministry of Textile, Government of India where from the report has
come about the of count yarn i.e. polyester fabric having found to be
lesser than 300 x 300 denier as would appear from the test report
annexed as Annexure-C series annexed to the counter affidavit. The
authorities after receiving the said report have decided to cancel the
first bid and to come for a short term tender notice by inviting
applications afresh vide decision dated 22.08.2019 and accordingly
the second call has been invited.
The petitioners have not questioned the decision of
committee dated 13.08.2019 or 22.08.2019.
The show cause notices have been issued to the
petitioners on 29.08.2019 which has been replied which having not
[17]
found to be satisfactory, the petitioners have been debarred from
participating in bid for a period of one year.
On the basis of the aforesaid admitted fact according to
this Court following issues requires examination which reads
hereunder as:-
I. Whether the commission of alleged irregularities as admitted
by the petitioners, if yes, whether it is necessary for the
authority to assign reasons for showing the reply to be not
satisfactory when the report of central laboratory has not been
disputed?
II. Whether the action of the petitioners is coming under the
purview of corrupt/fraudulent practices as per Clause 22 of the
e-tender document?
III. Whether the proposed penalty, if not mentioned, entire
proceeding will vitiate when the fact has been admitted in the
reply to the show cause filed by the petitioners?
IV. Whether non-supply of report vitiates the order when it has
not been demanded and without questioning the said report,
the reply has been submitted?
V. Whether the refund of EMD preclude the authority in issuing
the show cause?
VI. Whether the plea of mala fide stands in absence of any
specific pleading of mala fide against particular functionary of
the State of Jharkhand or the respondent no.2?
[18]
VII. Whether after passing of the final order does it require the
authority to consider further reply in absence of any power of
review/revision?
VIII. Whether quantum of penalty requires interference in absence
of reason of justification by imposing penalty of debarment
for one year, if yes, how to correct it?
19. This Court deem it fit and proper, before answering the issues as
aforesaid, to refer certain judicial pronouncements which are
relevant for answering the issues.
First, the power of judicial review of High Court under
Article 226 of the Constitution of India is required to be discussed.
Judgment rendered by Hon'ble Apex Court in the case of
Syed TA Naqsnbandi and Ors. vs. State of J&K and Ors., reported
in (2003) 9SCC 592, the Hon'ble Supreme Court observed:
―judicial review is permissible only to the extent of finding
whether the process in reaching the decision has been observed
correctly and not the decision itself, as such. Critical or
independent analysis or appraisal of the materials by the Courts
exercising powers of judicial review unlike the case of an
appellate court, would neither be permissible nor conducive to
the interests of either the officers concerned or the system and
institutions......‖
The Hon'ble Apex Court in the case of Tata Cellular Vs.
Union of India, reported in (1994) 6 SCC 651 has been pleased to
hold that so far as the judicial review is concerned, with reviewing
not the merit of the decision in support of which application for
judicial review is made but the decision making process itself. It is
[19]
thus different from an appeal with hearing an appeal, the court of
concerned within the merits of the decision under appeal since
before all judicial review is not an appeal from the decision, the
court cannot substitute its own decision. It has further been held that
it is not for the court to determine whether a particular policy or
particular decision taken in the fulfillment of that policy is fair.
The Hon'ble Apex Court therefore, has held the
following principles i.e.
i. The modern trend points to judicial restraint in administrative
action.
ii. The Court does not sit as a court of appeal but merely reviews
the manner in which the decision was made.
iii. The court does not have the expertise to correct the
administrative decision. If a review of the administrative
decision is permitted it will be substituting its own decision,
without the necessary expertise which itself may be fallible.
iv. The terms of the invitation to tender cannot be open to judicial
scrutiny because the invitation to tender is in the realm of
contract. Normally speaking, the decision to accept the tender
or award the contract is reached by process of negotiations
through several tires. More often than not, such decisions are
made qualitatively by experts.
v. The Government must have freedom of contract. In other
words a fair play in the joints is a necessary concomitant for
an administrative body functioning in an administrative sphere
[20]
or quasi-administrative sphere. However, the decision must
not only be tested by the application of wednesbury principle
of reasonableness but must be free from arbitrariness not
affected by bias or actuated by mala fides
vi. Quashing decisions may impose heavy administrative burden
on the administration and lead to increased and unbudgeted
expenditure.
In the Case of Raunaq International Ltd. Vrs. I.V.R.
Construction Ltd. & Ors. reported in (1999)1 SCC 492 the scope of
judicial review has been laid down by holding therein that the
decision making process suffers from bias of arbitrariness, the same
will be scrutinized under the power of judicial review. In the case of
Jagdish Mandal Vrs. State of Orissa &Ors. reported in (2007) 14
SCC 517, it has been laid down that the power of judicial review in
the contractual matters is permissible only if (i) Whether the process
adopted or decision made is mala fide or intended to favour someone
or the same is so arbitrary and irrational that the court can say: ‗the
decision is such that no responsible authority acting reasonably and
in accordance with law could have reached.' (ii) Whether public
interest is affected.
Judgment rendered in the case of Ramana Dayaram
Shetty Vrs. The International Airport Authority of India & Ors.,
reported in (1979) 3 SCC 489, the Hon'ble Apex Court observed as
under Paragraph-10. It is a well settled rule of administrative law
that an executive authority must be rigorously held to the standards
by which it professes its actions to be judged and it must
[21]
scrupulously observe those standards on pain of invalidation of an
act in violation of them.
Further judgment which would be relevant in the context
is that as to whether a condition if stipulated in the notice inviting
tender is to be adhered to, the issue has been decided by the Hon'ble
Apex Court in the catena of judgment. Some of them are being are
referred hereunder:
In the case of Air India Ltd. v. Cochin International
Airport Ltd. and Ors., reported in (2000) 2 SCC 617 wherein it has
been laid down that the State can fix its own terms of invitation of
tender and that is not incumbent to judicial scrutiny and the same is
strictly to be adhered to.
In the case of Directorate of Education and Others v.
Educomp DataMatics Ltd. and Ors., reported in (2004) 4 SCC 19 it
has been held therein that the Court would not interfere with the
terms of the tender notice unless it was shown to be either arbitrary
or discriminatory or actuated by malice. It was further held that
while exercising the power of judicial review of the terms of the
tender notice the court cannot order change in them.
In the case of Kanhaiya Lal Agrawal-Vs.-Union of India
and Others reported in (2002) 6 SCC 315, it has been held therein at
paragraph 6 by taking note of the judgment rendered by the Hon'ble
Apex Court in the case of G.J. Fernandez-Vs.-State of Karnataka
and Ors. reported in (1990) 2 SCC 488 that when an essential
condition of tender is not complied with, it is open to the person
[22]
inviting tender to reject the same. Whether a condition is essential or
collateral would be ascertained by reference to the consequence of
non-compliance thereto. If non-fulfillment of the requirement results
in rejection of the tender, then it would be an essential part of the
tender otherwise it is only a collateral term.
―6. It is settled law that when an essential condition of
tender is not complied with, it is open to the person inviting
tender to reject the same. Whether a condition is essential
or collateral could be ascertained by reference to the
consequence of noncompliance thereto. If non-fulfilment of
the requirement results in rejection of the tender, then it
would be an essential part of the tender otherwise it is only
a collateral term. This legal position has been well
explained in G.J. Fernandez v. State of Karnataka.‖
The other judgment on the issue of observance of
principles of natural justice of blacklisting is in the case of Kulja
Industries Ltd vs. Chief Gen. Manager W.T. Proj. Bsnl and Ors.,
reported in (2014) 14 SCC 731 wherein the Hon'ble Apex Court
while laying down the proposition of observing the principles of
natural justice before blacklisting has been dealt with and while
holding therein that blacklisting in absence of observing the
principles of natural justice will be said to be invalid. Further it has
been held in the said judgment that every action of the State
Executive Authority must be subject to rule of law and must be
informed by reasons. 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. Paragraph 18 & 20
thereof are being reproduced hereinunder for ready reference:
[23]
―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 West Bengal 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:
―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.‖
20. It is also well settled that even though the right of the writ
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, non-
discrimination, 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 &Ors. 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 RadhaKrishna Agarwal and
Ors. 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
[24]
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 non-discrimination in the type of
the transactions and nature of the dealing as in the present
case.‖‖
In the case of Gorkha Security Services vs Govt. (Nct of
Delhi) & Ors, reported in(2014) 9 SCC 105 it has been laid down
therein that in absence of action of blacklisting being not proposed
in the show cause whether order of blacklisting can be passed while
holding therein that if the proposed punishment pertaining to
blacklisting is not available in the show cause and if order of
blacklisting has been passed by the authority, the same would not
stand in the eye of law, reference of paragraph 22 is being
reproduced hereinunder:
―22.The High Court has simply stated that the purpose of show
cause notice is primarily to enable the noticee to meet the
[25]
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 on 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 be clearly and safely be
discerned from the reading thereof, that would be sufficient to
meet this requirement:‖
20. The proposition of law pertaining to observation of principles of
natural justice is also required to be dealt with in a case where even
if for want of natural justice the matter would be remitted before the
authority and when the fact is not in dispute whether the principles
of natural justice can be directed to be followed by remitting the
matter before the authority and if yes, whether it will not lead to
empty formality and futile exercise, while answering such issue,
the Hon'ble Apex Court in the case of Escorts Farms Ltd. Vrs.
Commissioner, Kumaon Division, Nainital, U.P. and Ors., reported
in (2004) 4 SCC 281 has held at paragraph-64 which is being quoted
herein below:-
―64. Right of hearing to a necessary party is a valuable right.
Denial of such right is serious breach of statutory procedure
prescribed and violation of rules of natural justice. In these
[26]
appeals preferred by the holder of land and some other
transferees, we have found that the terms of government grant
did not permit transfers of land without permission of the State
as grantor. Remand of cases of a group of transferees who were
not heard, would, therefore, be of no legal consequence, more so,
when on this legal question all affected parties have got full
opportunity of hearing before the High Court and in this appeal
before this Court. Rules of natural justice are to be followed for
doing substantial justice and not for completing a mere ritual of
hearing without possibility of any change in the decision of the
case on merits. In view of the legal position explained by us
above, we therefore, refrain from remanding these cases in
exercise of our discretionary powers under Article 136 of the
Constitution of India‖.
In the case of Dharampal Satyapal Ltd Vrs. Deputy
Commissioner of Central Excise, Gauhati and Ors., reported in
(2015) 8 SCC 519 wherein their Lordships have held at paragraph-
39 which is being quoted herein below:-
―39. We are not concerned with these aspects in the present case
as the issue relates to giving of notice before taking action. While
emphasizing that the principles of natural justice cannot be
applied in straight jacket formula, the aforesaid instances are
given. We have highlighted the jurisprudential basis of adhering
to the principles of natural justice which are grounded on the
doctrine of procedural fairness, accuracy of outcome leading to
general social goals, etc. Nevertheless, there may be situations
wherein for some reason perhaps because the evidence against
the individual is thought to be utterly compelling- it is felt that a
fair hearing ―would make no difference‖- meaning that a
hearing would not change the ultimate conclusion reached by the
decision-maker‖.
21. On the issue as to whether the reason which has not been reflected in
the order can be allowed to be improved by way of an affidavit, the
same issue has been dealt with by the Hon'ble Apex Court in the
case of Mohinder Singh Gill and another v. The Chief Election
[27]
Commissioner, New Delhi and others, reported in (1978) 1 SCC
405, pr. 8reads hereunder as:
―8. The second equally relevant matter is that when a statutory
functionary makes an order based on certain grounds, its validity
must be judged by the reasons so mentioned and cannot be
supplemented by fresh reasons in the shape of affidavit or
otherwise. Otherwise, an order bad in the beginning may, by the
time it comes to Court on account of a challenge, get validated
by additional grounds later brought out. We may here draw
attention to the observations of Bose, J. in Gordhandas Bhanji:
―Public orders, publicly made, in exercise of a
statutory authority cannot be construed in the light of 3
explanations subsequently given by the officer making the
order of what he meant, or of what was in his mind, or
what he intended to do. Public orders made by public
authorities are meant to have public effect and are intended
to affect the actings and conduct of those to whom they are
addressed and must be construed objectively with reference
to the language used in the order itself.‖
Orders are not like old wine becoming better as they
grow older.‖
In the case of East Coast Railway and Anr. vs. Mahadev
Appa Rao and Ors., (2010) 7 SCC 678: (2010) 2 SCC (L&S) 483,
at page 682, it has been held as under:
―9. There is no quarrel with the well-settled proposition of law
that an order passed by a public authority exercising
administrative/executive or statutory powers must be judged by
the reasons stated in the order or any record or file
contemporaneously maintained. It follows that the infirmity
arising out of the absence of reasons cannot be cured by the
authority passing the order stating such reasons in an affidavit
filed before the court where the validity of any such order is
under challenge. The legal position in this regard is settled by
the decision of this Court in Commr. of Police v. Gordhandas
Bhanji1 wherein this Court observed: (AIR p. 18, para 9)
[28]
―9. ... public orders, publicly made, in exercise of a
statutory authority cannot be construed in the light of
explanations subsequently given by the officer making the
order of what he meant, or of what was in his mind, or
what he intended to do. Public orders made by public
authorities are meant to have public effect and are intended
to affect the actings and conduct of those to whom they are
addressed and must be construed objectively with reference
to the language used in the order itself.‖
In the case of United Air Travel Services v. Union of
India, (2018) 8 SCC 141, at page 146 it has been held as under:
―11. The learned counsel for the petitioner has, thus, rightly
drawn our attention to the Constitution Bench judgment of this
Court in Mohinder Singh Gill v. Chief Election Commr. to
submit that such a plea cannot be accepted. We may note that
this is a well-settled legal position in many judicial
pronouncements of this Court, but it is not necessary to revert to
the same. In para 8 of the aforesaid judgment, V.R. Krishna Iyer,
J., in his inimitable style states as under:
―8. The second equally relevant matter is that when a
statutory functionary makes an order based on certain
grounds, its validity must be judged by the reasons so 4
mentioned and cannot be supplemented by fresh reasons in the
shape of affidavit or otherwise. Otherwise, an order bad in the
beginning may, by the time it comes to court on account of a
challenge, get validated by additional grounds later brought
out. We may here draw attention to the observations of Bose, J.
in Gordhandas Bhanji4: (AIR p. 18, para 9)
9. ...public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.' [29] Orders are not like old wine becoming better as they grow older.‖
22. On the issue of mala fide the Hon'ble Apex Court in the case of State of Bihar and Anr. vs. P.P. Sharma, IAS and Anr., reported in 1992 Supp (1) SCC 222 has laid down that the person against whom mala fides or bias was imputed should be impleaded eo nomine as a party respondent to the proceedings and given an opportunity to meet those allegations. In his/her absence no enquiry into those allegations would be made. Otherwise it itself is violative of the principles of natural justice as it amounts to condemning a person without an opportunity. (para 55).
23. On the issue that in absence of a condition to blacklist in the tender document, whether the authority of the State can blacklist, while answering the issue the Hon'ble Apex Court in the case of Patel Enginnering Ltd vs Union Of India & Anr., reported in (2012) 11 SCC 257 wherein at paragraph-15 it has been observed which is being quoted herein below:
―15.It follows from the above Judgment in Erusian Equipment case that the decision of State or its instrumentalities not to deal with certain persons or class of persons on account of the undesirability of entering into contractual relationship with such persons is called blacklisting. The State can decline to enter into a contractual relationship with a person or a class of persons for a legitimate purpose. The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such power. The only legal limitation upon the exercise of such an authority is that State is to act fairly and rationally without in any way being arbitrary - thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to [30] be achieved by the State in a given case can vary depending upon various factors.‖
24. Issue No.I-Whether the commission of alleged irregularities as admitted by the petitioners, if yes, whether it is necessary for the authority to assign reasons for showing the reply to be not satisfactory when the report of central lab has not been disputed?
The show cause notices have been issued on 29.08.2019 levelling therein allegation that the specification of polyester fabric (300 x 300 denier) as stipulated in the e-tender document has been found to be less and as such for such irregularity why the firm or the institution be not debarred from participating in the bid. The content of the show cause is being reproduced hereinbelow:
― 01/SB/JEPC/2019-20 28.06.2019 I, II III Polyster Fabric (300 x 300 denier) Textile Committee, Ministry of Textile, Govt. of India , Polyster Fabric denier [31] 04.09.2019 ‖ For answering this issue, the relevant would be to refer the replies filed on behalf of the petitioners:
In W.P.(C) No.5253 of 2019 at Annexure-7:
―Respected Sir, We are in receipt of your above letter and are very sorry for the inconvenience, and would like to mention that there has been no bad intention from our side.
We are manufacturing top quality of School bags and are supplying them to different states regularly, and satisfactorily.
We procure the raw material like cloth/zip/pipe etc. from different sources, and suppliers, and are dependent on them for the supplies, and in the past there has been no complaint, in quality otherwise, for the raw material or the bags.
After manufacturing the bags with the raw material procured from market the bag was got tested from a Govt. Lab, and are very sorry to here that there has been variation in the results of bags after you got it tested from a different lab, and we assure you that in future we will take extra care and get the sample double checked before submitting to you. Please be rest assured that there were no bad intention, while submitting the sample for approval from you.
Usually there is some difference in results are noted whenever different labs are used and also some difference is seen when the finished product is tested, after pasting the cloth with Polyester.
We once again apologies for the inconvenience caused and assure you that in your next tender which is already announced, this will not happen as we will get our sample tested twice and this variation will not happen again, and would request you to kindly allow us to participate in the newly published tender and we assure you that we will give the supplies at most competitive rate if [32] we are selected, to your full satisfaction and as per your requirement. We look forward to our positive response and assure you our best services, always.
Thanking you, Yours truly, For Abhilasha Commercial Pvt. Ltd.‖ In W.P.(C) No.5290 of 2019 at Annexure-10:
―Dear Sir, This is in reference to your letter dated 29-08-2019 regarding clarification on difference noticed in Polyster Fabric (Denier).
In this regard we have to submit that Denier is derived from filament yarn and to check Denier lab has to remove quoting of PVC cloth with some chemicals, while de-treatment quanity of chemicals used to dissolve PVC quoting can effect on Yarn filament and denier may vary.
Further, the tender enquiry was published on 28-06-2019. Accordingly, we had arranged cloth and submitted samples to lab on 15-07-2019.
Later on department vide their corrigendum no.2 Dated 19-07- 2019 issued amendments in printing matter of School Bag. As cloth purchased was already usedup in sample preparation, trusting on vendor credibility, we again ordered for same specified cloth and supplier may had supplied different lot.
Lab samples and samples submitted to department were manufactured from two different lots of cloth. Variation noticed in testing may be due to different lots of cloth and de-treatment process.
It is respectfully submitted that, we are a SSI unit supplying stores to various Government department for the last 25 years and have clean and satisfactory past record. We have no intention to deceit the department.
In the light of above noted facts, we request your goodself kindly donot debar/disqualify our firm from participation in forthcoming tender enquiries. We can assure you that we can supply high quality product as per your specification at very economical prices.[33]
Thanking you, Yours truly From M.B. RUBBER PVT.LTD.‖ In W.P.(C) No.5432 of 2019 at Annexure-9:
―We hereby submit that there has been no such intention to submit such type of school bags sample. The raw material of bag is sourced from the importer who are in turn sourcing it specially from China. They do assure the product.
However, the calculation of denier is based on small piece of cloth of 12x12 inch. And as cloth is coated, hence, while testing the coating, is to be removed. The results are extrapolated in a big way. The results are approximations and cannot be very accurate. Therefore, the variations are large. It is seen from your letter the results of denier parameter vary of all parties.
The denier count is indicated as guidelines for manufacture of cloth. The denier does not affect quality as far as strength and durability is concerned. The lower the denier the finer the cloth. This is not a critical test parameter for finished school bag.
Our intention at no stage was to give product of such nature.
We deeply regret the same and assure your good self that in future we will take all precautions to avoid the same.
We earnestly request your good self to kindly review your decision.
Thanking You and assuring you our best services. Your faithfully For XO FOOTWEAR PVT.LTD.‖ In W.P.(C) No.6025 of 2019 at Annexure-7:
―Dear Sir, In reference to your above mentioned letter we would like to sincerely apologize for the incident. We wish to mention that there has been no such intention at all from our side.
In this regard we would like to further say that denier test is of yarn and the fabric is of lamination/coating of polyester and the testing is done only after removing the upper coating which may affect/vary the final result.[34]
We are the reputed company nation vide famous for our good quality product supplying school bags/shoes/socks etc throughout the country in many of the department with clean for clear record.
Further again would like to request you that this type of incident will not be repeated again from our end.
kindly allow us for participating in your further tenders.
Thanks & Regards For Liberty Shoes Limited‖ In this context the reference of specific denial in pleading as introduced by the judicature Acts in England to carry out this Principle--specific denial--and to force the pleader to deal with each separate allegation of fact in the previous pleading of his opponent of which he did not admit the truth. If he wished to deny, he was obliged to deny specifically.
A capital summary of, and commentary upon, these rules is given in the introduction to Cunningham and Mattinson's Precedents of Pleading; (1) Every allegation of fact. . . . .if not denied specifically of by necessary implication, or stated to be not admitted. . . . .shall be taken to be admitted. (2) It shall not be sufficient . . . . .to deny generally the grounds alleged by the statement of claim. . . . .but each party must deal specifically with each allegation of fact of which he does not admit the truth, except damages. (3) When a party in any pleading denies an allegation of fact in a previous pleading of the opposite party, he must not do so evasively, but answer the point to substance, etc., etc. [Extract: Adkiks v. North Metropolitan Trams. Co., 63 L. J. Q. B. 361] [35] In this regard the judgment rendered by Hon'ble Apex Court in the case of Balraj Taneja and Anr. vs. Sunil Madan and Anr., reported in (1999) 8 SCC 396, wherein referring to the provision of Order VIII Rule 5 of Code of Civil Procedure, which deals with denials and observed that sub-rule (1) of Rule 5 provides that any fact stated in the plaint, if not denied specifically or by necessary implication or stated to be not admitted in the pleading of the defendant, shall be treated as admitted. It further observed that the denial by the defendant in his written statement must be specific with reference to each allegation of fact made in the plaint. A general denial or an evasive denial is not treated as sufficient denial, if it is not definite, positive and unambiguous, the allegations of facts made in the plaint shall be treated as admitted under this Rule.
This Court, after considering the aforesaid proposition of law has examined the contents of the replies to show cause notices, as quoted above, wherefrom it is evident that in replies there is no denial about the polyester fabric having found to be lesser as per the report of the Central Laboratory rather it has been stated in the reply that in future extra care would be taken and it has been stated that variation as informed in the report of the Central Laboratory have been admitted set to have done due to use of different labs of cloths, meaning thereby there is no specific denial about the report of lesser polyester fabric and further it has not been pleaded and it is not the case of the petitioners also rather it is the admitted on their part that the report of central laboratory showing the polyester fabric lesser than 300 x 300 denier as would appear from the word as has been [36] written in the reply to show causes to the effect that such variations will not happen in future, this according to the considered view of this Court is admission of irregularity and violations of specifications.
This Court, therefore is not hesitant in coming to the conclusion that the polyester fabric lesser than 300 x 300 denier since has not been denied/disputed, therefore it is admission on the part of the petitioners as because as per the settled position of law as referred in the preceding paragraph that if any specific allegation/irregularity is levelled upon a party and for that purpose if show cause notice has been issued it is incumbent upon such noticee to rebut the allegation specifically and in absence of any rebuttal it will be said to be admitted. Here in the case there is no denial of the irregularity, what to say about specific denial as would appear from the discussion made as above.
In this circumstances when the allegations leveled against the petitioners have been admitted by petitioners, is it necessary for the authority to assign reason while holding the reply as not satisfactory by rejecting the same, the answer of this Court would be that in a case where the fact has been admitted there is no question of any deliberation on the issue by the authority rather the question of consideration would only come if the extent of allegation, as has been leveled in the show cause, has been disputed specifically then only the application of mind would require for consideration of reply but in a case where the fact has been admitted there is no occasion or reason to assign any reason by the authority.[37]
The settled position of law in this regard is that if the fact is an admission there is no question of any inquiry since inquiry is only in the context if the fact is in dispute, reference in this regard be made to the judgment rendered in the case of Dharmarathmakara Raibahadur Arcot Ramaswamy Mudaliar Educational Institution vs. Educational Appellate Tribunal, reported in (1999) 7 SCC 332, paragraph-8 thereof reads hereunder as:
"8. The contention of learned counsel for the respondent is confined that there was no enquiry in terms of Section 6 of the said Act. There is no submission of any defence on merit. Even before us when we granted learned counsel an opportunity to give any prima facie or plausible explanations on record to defend her actions, nothing could be placed before us. Giving of opportunity or an enquiry of course is a check and balance concept that no one's right be taken away without giving him/her opportunity or without enquiry in a given case or where the statute requires. But this cannot be in a case where allegation and charges are admitted and no possible defence is placed before the authority concerned. What enquiry is to be made when one admits violations? When she admitted she did not join M.Phil. course, she did not report back to her duty which is against her condition of leave and contrary to her affidavit which is the charge, what enquiry was to be made?
In a case where the facts are almost admitted, the case reveals itself and is apparent on the face of the record, and in spite of opportunity no worthwhile explanation is forthcoming as in the present case, it would not be a fit case to interfere with the termination order.‖ Further question would be that if the irregularity said to have been referred in the show cause has been admitted the same requires a reason to be reflected in the impugned judgment as has been decided by the Hon'ble Apex Court in the cases of Mohinder Singh Gill and another v. The Chief Election Commissioner, New [38] Delhi and others (supra), East Coast Railway and Anr. vs. Mahadev Appa Rao and Ors., (2010) 7 SCC 678: (2010) 2 SCC (L&S) 483 (supra) and United Air Travel Services vs. Union of India, (2018) 8 SCC 141(supra), wherein it has been laid down that the reason which has not been assigned in the impugned order cannot be allowed to be improved by way of an affidavit but equally it is settled position of law that the proposition as laid down by the court of law is to be made applicable depending upon the facts and circumstances and as such the ratio as has been laid down in the judgment relied upon by the learned counsel for the petitioners in this context, according to the considered view of this Court, is not applicable it is for the reason that herein the commission of irregularity has been admitted by the petitioners and when it is an admission there is no question of assigning any reason by the authority since the reason is known to the party who have furnished their reply.
In view of the legal proposition and the facts and circumstances leading to this case, this Court is now answering the first issue against the petitioners by holding it that non-reference of the reason by holding reply of the show cause as not satisfactory will not vitiate the impugned order for the reason as referred above.
In view of such reasoning the contention as has been agitated by the learned counsel for the petitioners that it is a fit case which require remand for passing a fresh order but such submission is not acceptable to this Court, it is for the reason that remand of issue can be made if there is any chance of change in the finding on [39] consideration of reply but if the irregularity/violation of technical specification has been admitted in that situation, there is no chance of any change for the situation and if the matter would be remitted it will be nothing but empty formality and futile exercise as has been held in the case of Escorts Farms Ltd. Vrs. Commissioner, Kumaon Division, Nainital, U.P. (supra)and Dharampal Satyapal Ltd Vrs. Deputy Commissioner of Central Excise, Gauhati (supra).
In the facts and circumstances of this case since would be evident from the reply that the irregularity/violation of technical specification has been admitted and even if the matter would be remitted, the Central Laboratory report having not been questioned there is no denial about the less denier of the polyester fabric and if in such prevailing situation if the issue will be remitted for the purpose of passing fresh order with reason, it will be nothing but empty formality and futile exercise, hence, the contention to remit the matter before the authority for passing fresh order on the point of irregularity is having no substance, accordingly rejected.
25. Issue No.II-Whether the action of the petitioners is coming under the purview of corrupt/fraudulent practices as per Clause 22 of the e- tender document?
This Court, in order to answer the issue, deem it fit and proper to refer Clause 22 of the e-tender document containing the definition of corrupt practice and fraudulent practice, which reads hereunder as:
―Corrupt Practice means the offering, giving, receiving or soliciting of anything of value to influence the action of a public official in the procurement process or in contract execution; and [40] Fraudulent Practice means misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the JEPC, and includes collusive practice among Bidders (prior to or after Bid submission) designed to establish Bid prices at artificial non-competitive levels and to deprive the JEPC of the benefits of free and fair competition.‖ It is evident from the definition of the corrupt practice and the fraudulent practice as under Clause 22.1 that corrupt practice means the offering, giving, receiving or soliciting of anything of value to influence the action of a public official in the procurement process or in contract execution while fraudulent practice means misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the JEPC, and includes collusive practice among Bidders designed to establish Bid prices at artificial non-competitive levels and to deprive the JEPC of the benefits of free and fair competition. Thus, the meaning of fraudulent practice is in the exhaustive terms which means and includes misrepresentation of facts in order to influence a procurement process or the execution of a contract to the detriment of the JEPC and includes collusive practice among Bidders.
In this context, the definition of fraudulent as defined under Section 17 of the Contract Act is required to be referred, which reads hereunder as:
―17.‗Fraud' defined.--'Fraud' means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract:--
(1) the suggestion, as a fact, of that which is not true, by one who does not believe it to be true;[41]
(2) the active concealment of a fact by one having knowledge or belief of the fact;
(3) a promise made without any intention of performing it; (4) any other act fitted to deceive;
(5) any such act or omission as the law specially declares to be fraudulent.‖ It is evident from the definition of fraud as defined under Section 17 (2) of the Contract Act as referred above that if there is any misrepresentation it means active concealment of fact which amounts to fraud.
In the facts and circumstances of the present case, it is admitted position that the specification of the Polyester Fabric has been referred in the e-tender document as under Section V under the caption heading ―Technical Specification‖ for category 1, 2 & 3 of having Polyester Fabric (300 x 300 denier) with the other condition in the e-tender that a certification of NABL will have to be enclosed with the tender document showing the specification of Polyester fabric.
The petitioner while submitting the e-tender document has enclosed the certificate issued from NABL showing therein the Polyester fabric of 300 x 300 denier for each category but the same, on its testing from the Central Laboratory, have been found to be incorrect since the Polyester fabric has been found to lesser in denier as required as would be evident from the report of the Central Laboratory as has been annexed as Annexure-C series to the counter affidavit filed on behalf of the respondent No.2 wherein the count of yarn has been found to be less than 300 x 300 denier, for ready [42] reference the extract of the report as under Annexure-C is being reproduced herein below:
TEST REPORT T.R. No. 194 /TC/SE/LDE/2019-20 Date: 20.08.19 Name and address of Customer M/s. Jharkhand Education Project Council, J.S.C.A., Stadium Road Jagannathpur, Sector-3 Dhurwa, Ranchi 834004 Sample forwarding letter No.&Date JEPC/MRE/33/164/2018-19/2785 dated 19.8.2019 Date of receipt of sample 20.08.19 Test Performed on 20.8.19 Buyer Name & Address (Optional) --
Customer Name Description Colour Lab. Sample No. M/s Abhilasha Commercial Pvt. Ltd., Bag --- CCO-315 Noida Cat.I Bid No. 01/SB/JEPC/2019-20 Test Results 1 Count of Yarn One Direction 237.2D Other Direction 229.8D TEST REPORT T.R. No. 195 /TC/SE/LDE/2019-20 Date: 20.08.19 Name and address of Customer M/s. Jharkhand Education Project Council, J.S.C.A., Stadium Road Jagannathpur, Sector-3 Dhurwa, Ranchi 834004 Sample forwarding letter No.&Date JEPC/MRE/33/164/2018-19/2785 dated 19.8.2019 Date of receipt of sample 20.08.19 Test Performed on 20.8.19 Buyer Name & Address (Optional) --[43]
Customer Name Description Colour Lab. Sample No. M/s Abhilasha Commercial Pvt. Ltd., Bag --- CCO-316 Noida Cat.II Bid No. 01/SB/JEPC/2019-20 Test Results 1 Count of Yarn One Direction 242.9D Other Direction 235.9D TEST REPORT T.R. No. 196 /TC/SE/LDE/2019-20 Date: 20.08.19 Name and address of Customer M/s. Jharkhand Education Project Council, J.S.C.A., Stadium Road Jagannathpur, Sector-3 Dhurwa, Ranchi 834004 Sample forwarding letter No.&Date JEPC/MRE/33/164/2018-19/2785 dated 19.8.2019 Date of receipt of sample 20.08.19 Test Performed on 20.8.19 Buyer Name & Address (Optional) --
Customer Name Description Colour Lab. Sample No. M/s Abhilasha Commercial Pvt. Ltd., Bag --- CCO-317 Noida Cat.III Bid No. 01/SB/JEPC/2019-20 Test Results 1 Count of Yarn One Direction 241.5D Other Direction 233.8D As the misrepresentation means active concealment which means as fraud and when this Court has gone across the certificate furnished by the petitioners at the time of submitting the [44] e-tender document although they have furnished the report of having Polyester Fabric of 300 x 300 denier but it has been found to be lesser as would be evident from the extract of the report referred above which emphatically means that the petitioners have misrepresented about the quantum of denier by showing it 300 x 300 denier while actually it was found to be lesser and hence, it is nothing but active concealment by way of misrepresentation, basis upon which the petitioners have been found to be technically qualified and as such there is no hesitation in holding that the petitioners in order to mislead the authority, by concealing the fact by way of misrepresentation, have shown the extent of denier as per the specification referred in the e-tender document and therefore, as per the definition of fraudulent practice the conduct of the petitioners will certainly come under its fold.
It also require to refer in the context that the condition which has been mentioned in the bid document is required to be strictly adhered to as has been held in the case of Air India Ltd. v. Cochin International Airport Ltd. (supra), Directorate of Education and Others v. Educomp DataMatics Ltd. and Ors.,(supra) Kanhaiya Lal Agrawal-Vs.-Union of India and Others and G.J. Fernandez-Vs.-State of Karnataka and Ors (supra).
Admittedly herein, as per the specification, the petitioners have not been found to be fulfilling the mandatory condition of having the Polyester fabric of 300 x 300 denier and in such a admitted fact, if the reply furnished by the petitioners to the show causes would have been said to be satisfactory by the [45] authority, it will be nothing but to give premium to such bidders for consideration of their candidature even though they have not fulfilled the condition and if it would be allowed, the same will be contrary to the settled propositions of law as settled by the Hon'ble Apex Court, as referred above in the preceding paragraph. Accordingly, this issue is answered against the petitioners.
26. Issue No.III-Whether the proposed penalty, if not mentioned, entire proceeding will vitiate when the fact has been admitted in the reply to the show cause filed by the petitioners?
It is settled position of law after the reversal of the judgment rendered by the Hon'ble Apex Court in the case of Union of India and Ors. vs. Md. Ramzan Khan, reported in (1991) 1 SCC 588 wherein the principle of law was that in case of non-serving of second show cause the entire departmental proceeding will vitiate but the judgment rendered in the case of Union of India and Ors. vs. Md. Ramzan Khan (supra) has been overruled by the another Constitution Bench judgment in the case of Managing Director Ecil Hyderabad and Ors. vs. B. Karunakar and Ors., reported in (1993) 4 SCC 727 while reversing the judgment it was laid down that in case an employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, the theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights and as such it is required to see whether, in fact, prejudice has been caused to the employee or not on account of denial to him of the report. Where, therefore, even after [46] furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to a "unnatural expansion of natural justice" which in itself is antithetical to justice. [Extract: paragraph 30 of the judgment] It has been argued in the context of this issue by the learned counsel for the petitioners that in absence of proposed punishment in the show cause they could not be able to put forth their defence by demonstrating before the authority that no such penalty be imposed as proposed while on the other hand learned counsel for the respondent No.2 has submitted by referring to the show cause that contents of the show cause if it would be scrutinized goes to show that the show cause notice proposes for debarring the petitioners for all times to come and as such it is incorrect to say that there is no proposed punishment in the show cause.
Further it has been submitted that when the factum of irregularity has been admitted by the petitioners there is no question of raising the issue of being prejudiced.
This Court, after appreciating the rival submissions of the parties in the context, is in agreement with the contention raised by the learned counsel for the respondent No.2 since after going across the show cause it would be evident therefrom that the show cause has been asked to the effect as to why the institution/firm be not debarred from participating in any of the bid, this very line indicates [47] that the submission which has been advanced by the learned counsel for the respondent has got substance since the reference has been made in the show cause as to why the petitioners be not debarred from participating in the bid, meaning thereby, debarment as referred in the show cause is for indefinite period and as such, contention which has been raised by the learned counsel for the petitioners that there is no proposed punishment, according to the considered view of this Court, is having no substance.
Further the question of prejudice would only come if the factum of allegation is in dispute but as referred while answering issue No.1 neither the report of the Central Laboratory has been questioned nor any rebuttal reply has been furnished in the show cause and therefore, in a case of admitted fact there is no question of any prejudice. Accordingly, this issue is being answered against the petitioners.
27. Issue No.IV-Whether non-supply of report vitiates the order when it has not been demanded and without questioning the said report, the reply has been submitted and further whether the report dated 09.09.2019 under Memo No.177, making comment upon variation of denier of the material supplied can be treated to be in favour of the writ petitioners?
It has been argued by the learned counsel for the petitioners that the report, basis upon which the entire proceeding has been vitiated since has not been supplied being the material document, the petitioners have been deprived from putting forth their proper defence while on the other hand learned counsel for the [48] respondent No.2 has submitted that the report of the Central Laboratory has never been demanded rather straightaway reply to the show cause has been furnished admitting the fault not to repeat in future such activities.
This Court, after due appreciation of the rival submission of the parties, is of the view that the position of law as settled is that if any action of the authority is based upon a report the same has to be supplied to the aggrieved and in case of non-supply the entire proceeding will be questioned being in violation of principles of natural justice but this principle is to be tested on the basis of the facts and circumstances governing the case. Herein, the admitted fact is that in presence of the petitioners while pre-tender meeting was conducted on 13.08.2019 decision was taken to send the samples to the Central Laboratory under the Ministry of Textiles, Government of India which has not been objected by the petitioners as would be evident from the minutes of meeting dated 13.08.2019 as available on record, in pursuance thereto, the samples have been sent to the Central Laboratory and report has come showing therein the polyester fabric less than 300 x 300 denier as would be evident from the extract of the report referred above.
The petitioners have never demanded such report and further no objection has ever been made before the authority questioning the veracity of the report and when the show cause notices have been issued making reference of the said report even at the time of making replies to the said show causes no such demand of seeking report has been made and as such according to the [49] considered view of this Court once the petitioners have furnished their replies without questioning the decision of the authority dated 13.08.2019 and the report furnished by the Central Laboratory when the adverse decision has been taken it is not available to the petitioners to raise the issue of non-supply of the report. If the petitioners would have any grievance seeking the report it was incumbent upon them to make a requisition for supply of report before furnishing the replies but herein there is no question of seeking such report in view of the nature of replies to the show cause wherein the commission of irregularity has been admitted, meaning thereby, the report of the Central Laboratory has been accepted by the petitioners.
In view of such reasoning at the belated stage the point of non-supply of report is not available to the petitioners warranting vitiation of entire proceeding, accordingly, this issue is also being answered against the petitioners.
The submission has been made on behalf of the petitioners that the laboratory from where the yarn has been tested and due report was submitted is in their favour as would be evident from the communication dated 09.09.2019 as contained under Memo No.177, with respect to that, this Court,after going across the said report as has been brought on record, is of the view that the laboratory has given report not in favour of the petitioners rather it has been stated therein that the report has been furnished on the basis of the samples placed before the laboratory but the said report is silent about the specification of having 300 x 300 denier and as such [50] as has been submitted by the learned counsel for the petitioners, the communication dated 09.09.2019 is in their favour, is having no substance, accordingly, rejected.
28. Issue No.V-Whether the refund of EMD preclude the authority in issuing the show cause?
It has been contended by the learned counsel for the petitioners that after the report of the Central Laboratory having been received earnest money has been refunded and once the EMD has been refunded there is no occasion and reason for the authority to issue show cause and to proceed by passing the order of penalty of debarment for a period of one year. While on the other hand learned counsel for the respondent has submitted by referring to paragraph 28 of the counter affidavit that after the second tender having been floated on 31.08.2019 the petitioners along with others have applied for refund of EMD furnished at the time of first tender process and accordingly EMD was released due to no financial loss but that does not mean that the authority will preclude from issuing show cause notice to deal with such bidders due to whose fault delay has been caused and second tender has been floated.
This Court, after due deliberation of the submissions advanced on behalf of the respective parties on the issue, is of the view that refund of EMD has got nothing to do with the power of the authority to deal with in a situation where due to mis-representation committed on the part of the petitioners delay has been caused in supply of school bags to the students which was decided to be distributed within 30 days from the date of the contract. [51]
The power to blacklist is an inherent power of the authority to carry on the trade or business and making of contract for any parties and if the authority comes to the conclusive finding that the bidders have faulted with any of the conditions of contract or tried to mislead before entering into the contract it is the inherent power of the authority to deal with such contractors so that they be put in discipline.
However, learned counsel for the petitioners have agreed to the same by fairly submitting that there is no dispute about the fact that the power to blacklist is intrinsic and inherent upon the authority who is to take decision after consideration of candidature of one or the other bidders for the purpose of allocating some work for public cause.
So far as the refund of EMD is concerned, the authorities have taken such decision since there is no financial loss to the authority but simultaneously to deal with such bidders, petitioners herein, who even though knowing fully well about the condition of the bid including the specification of the material to be supplied misrepresented by making reference of polyester fabric lesser in denier as provided in the specification leading to cancellation of first bid and coming to the second call since the same has caused public inconvenience in achieving the object and intent to distribute the school bags under the scheme for which the tender has been floated, therefore, to deal with such bidders if the show cause notice has been issued even after refund of EMD it cannot be said that any [52] illegality has been committed by the authority. In view thereof this issue is also answered against the petitioners.
29. Issue No.-VI-Whether the plea of mala fide stands in absence of any specific pleading of mala fide against particular functionary of the State of Jharkhand or the respondent no.2?
Learned counsel for the petitioner in W.P.(C) No.5290 of 2019 by referring to the statement made at Paragraph-F wherein it has been stated that the second call of the tender was issued having schedule of the tenders from 31.08.2019 to 20.09.2019 and the petitioner submitted its bid on 19.09.2019 at 12:16 pm (noon) and thereafter on the same day at about 12:36 pm (noon) petitioner was informed about debarment order passed by the respondent no.1 through e-mail with the view to restrain the petitioner from further participation in the short term e-tender (second) which clearly indicate the mala fide action of the respondents.
The submission has been made on behalf of the petitioners that since there is mala fide and in order to debar from the second call the decision of debarment for the period of one year has been taken, therefore, on the ground of mala fide itself the order of punishment is not sustainable, while on the other hand learned counsel for the respondent has submitted that the allegation of mala fide cannot be established unless the mala fide has been leveled against the particular functionary and if proved but no such averment has been made in the writ petition save and accept at paragraph-F of the writ petition.
[53]
This Court after hearing learned counsel for the parties on the issue is in agreement with the submission made on behalf of the learned counsel for the respondent on the ground that mala fide can only be alleged against the person and in order to prove the mala fide against the person requirement of law is to implead such person as party to the proceeding so that the allegation of mala fide can be proved by providing an opportunity to the concerned against whom allegation of mala fide has been leveled as has been held by Hon'ble Apex Court in the case of State of Bihar and Anr. vs. P. P. Sharma, IAS and Anr. (supra). But this Court, after going across the pleading of the writ petitions, has not found any such statement and as such according to the considered view of this Court in absence of such pleading and non-impleadment of functionary party to the proceeding leveling allegation of mala fide, the ground as has been agitated, has got no substance. Accordingly, this issue is also being answered against the petitioners.
30. Issue No.-VII-Whether after passing of the final order does it require the authority to consider further reply in absence of any power of review/revision?
Learned counsel for the petitioners appearing in W.P.(C) No.5290 of 2019 has submitted that the action of the authority is further arbitrary in not taking any decision in the second reply which has been filed by the petitioners after passing of the impugned order 18.09.2019 while on the other hand learned counsel for the respondent No.2 has submitted that there is no question of [54] consideration of the second reply after passing of the final order once the decision has been taken by the authority.
This Court, after hearing the parties on the issue, is of the view that when the show cause notices have been issued which have duly been responded by the parties basis upon which final decision has been taken, thereafter, a review/revision will only lie that too if provided under the statute or the terms of the contract but the learned counsel for the petitioners has failed to draw attention of any such clause under the e-tender document or any provision of law of power of review or revision for consideration of further reply after taking final decision, as such, according to the considered view of the Court, the ground of non-consideration of reply filed after the decision having been taken on 18.09.2019 is having no substance. Accordingly, this issue is also answered against the petitioners.
This Court after answering the issues as aforesaid now proceeded to examine as to whether there is any error in decision making process warranting interference by this Court in the impugned order.
As has been referred hereinabove about the settled position of law about scope of Judicial Review by the High Court in the administrative decision, i.e. in the case of Syed TA Naqsnbandi and Ors. vs. State of J&K and Ors. (supra), Tata Cellular Vs. Union of India (supra), Raunaq International Ltd. vs. I.V.R. Construction Ltd. &Ors (supra) and Jagdish Mandal vs. State of Orissa & Ors (supra), is only if whether process adopted or decision made is mala fide or intended to favour someone or the same is [55] arbitrary and irrational that the Court can say: the decision is such that no responsible authority acting reasonably and in accordance with law could have reached and whether public interest is affected.
This Court, after due deliberations of the issues, which have been answered against the petitioners, is of the view that no such materials have been found holding the decision of proving the irregularity as alleged, suffers from vice of mala fide as answered while answering the issue no.VII, no material has been brought on record showing the action of the authority to favour someone or it is arbitrary and irrational as because it is the admitted fact that in the pre-bid meeting dated 13.08.2019 in presence of all seven bidders including the petitioners, decision to send the sample to the Central Laboratory has been taken which has duly been accepted by the petitioners, since nothing has been brought on record showing an objection to that effect rather it is admitted by the petitioners that no such objection has been made, even the report of Central Laboratory has not been questioned and further the conditions of tender has also been flouted.
In view of such admitted facts and issues having been answered by this Court as above, this Court is of the considered view that there is no error in decision making process and as such this Court if shows any interference in the decision taken by the authority as impugned it will be nothing but an exercise of power of appeal sitting under Article 226 of the Constitution of India, which is not permissible as has been laid down recently by the Hon'ble Apex Court in the case of Sanjay Kumar Jha vs. Prakash Chandra [56] Choudhary in Civil Appeal Nos.11860-11862 of 2018 wherein at paragraph 16 it has been laid which reads hereunderas:
―It is well settled that proceedings under Article 226 of the Constitution of India, the High Court cannot sit as a Court of Appeal over the findings recorded by a competent administrative authority, nor reappreciate evidence for itself to correct the error of fact, that does not go to the root of jurisdiction.‖ It also requires to refer the principle of interference by the High Court in exercise of power conferred under Article 226 of the Constitution of India by issuing writ of certiorari, in this regard reference is required to be made of the judgment rendered by Hon'ble Apex Court in the case of Hari Vishnu Kamath vs. Syed Ahmad Ishaque and Ors., reported in AIR 1955 SC 233, paragraphs 21 & 23 of which reads hereunder as:
―21. Then the question is whether there are proper grounds for the issue of certiorari in the present case. There was considerable argument before us as to the character and scope of the writ of certiorari and the conditions under which it could be issued. The question has been considered by this Court in Parry & Co. v. Commercial Employees' Association, Madras, AIR 1952 SC 179 (L): VeerappaPillai v. Raman and Raman Ltd, AIR 1952 SC 192 (M);- Ibrahim Aboobaker v. Custodian General of Evacue Property New Delhi, AIR 1952 SC 319 (N), and quite recently in AIR 1954 SC 440 (C).On these authorities, the following propositions may be taken as established: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it. (2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exercise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous. This is on the principle that a Court which has jurisdiction over a subject-matter [57] has jurisdiction to decide wrong as well as right, and when the Legislature does not choose to confer a right of appeal against that decision, it would be defeating its purpose and policy, if a superior Court were to re-hear the case on the evidence, and substitute its own findings in certiorari. These propositions -are well settled and are not in dispute.
23. It may therefore be taken as settled that a writ of certiorari could be issued to correct an error of law. But it is essential that it should be something more than a mere error; it must be one which must be manifest on the face of the record. The real difficulty with reference to this matter, however, is not so much in the statement of the principle as in its application to the facts of a particular case. When does an error cease to be mere error, and become an error apparent on the face of the record? Learned Counsel on either side were unable to suggest any clear-cut rule by which, the boundary between the two classes of errors could be demarcated. Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C. J. in Batuk K. Vyas v. SuratBorough Municipality, AIR 1953 Bom 133 (R), that no error could be said to be apparent on the face of the record if it was not self-evident, and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. But there must be cases in which even this test might break down, because judicial opinions also differ, and an error that might be considered by one Judge as self-evident might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case.‖.
In the case of Syed Yakoob vs. K.S. Radhakrishnan reported in A.I.R. 1964 SC 477 Supreme Court wherein at paragraph no.7 it has been laid down as follows:-
―The question about the limits of the jurisdiction of High Courts in issuing a writ of certiorari under Art. 226 has been frequently considered by this Court and the true legal position in that behalf is no longer in doubt. A writ of certiorari can be issued for correcting errors of jurisdiction committed by inferior courts or [58] tribunals : these are cases where orders are passed by inferior courts or tribunals without jurisdiction, or is in excess of it, or as a result of failure to exercise jurisdiction. A writ can similarly be issued where in exercise of jurisdiction conferred on it, the Court or Tribunal Acts illegally or improperly, as for instance, it decides a question without giving an opportunity to be heard to the party affected by the order, or where the procedure adopted in dealing with the dispute is opposed to principles of natural justice. There is, however, no doubt that the jurisdiction to issue a writ of certiorari is a supervisory jurisdiction and the Court exercising it is not entitled to act as an appellate Court. This limitation necessarily means that findings of fact reached by the inferior Court or Tribunal as result of the appreciation of evidence cannot be reopened or questioned in writ proceedings. An error of law which is apparent on the face of the record can be corrected by a writ, but not an error of fact, however grave it may appear to be. In regard to a finding of fact recorded by the Tribunal, a writ of certiorari can be issued if it is shown that in recording the said finding, the tribunal had erroneously refused to admit admissible and material evidence, or had erroneously admitted inadmissible evidence which has influenced the impugned finding. Similarly, if a finding of fact is based on no evidence, that would be regarded as an error of law which can be corrected by a writ of certiorari. In dealing with this category of cases, however, we must always bear in mind that a finding of fact recorded by the Tribunal cannot be challenged in proceedings for a writ of certiorari on the ground that the relevant and material evidence adduced before the Tribunal was insufficient or inadequate to sustain the impugned finding. The adequacy or sufficiency of evidence led on a point and the inference of fact to be drawn from the said finding are within the exclusive jurisdiction of the Tribunal, and the said points cannot be agitated before a writ Court. It is within these limits that the jurisdiction conferred on the High Courts under Art. 226 to issue a writ of certiorari can be legitimately exercised (vide Hari Vishnu Kamath v. Ahmad Ishaque, 1955-1 SCR 1104 : ((S) AIR 1955 SC 233); NagendraNath v. Commr. Of Hills Division, 1958 SCR 1240 : (AIR 1958 SC 398) and Kaushalya Devi v. Bachittar Singh, AIR 1960 SC 1168.‖ [59] In the case of M/s Parry & Co. Ltd vs. P.C. Pal & Ors, reported in AIR 1970 SC 1334, it has been laid down at paragraph-
11, which reads hereunder as:
―11.The grounds on which interference by the High Court is available in such writ petitions have by now been well- established. In Basappa v. Nagappa, 1955 SCR 250=(AIR 1954 SC 440) it was observed that a writ of certiorari is generally granted when a court has acted without or in excess of its jurisdiction. It is available in those cases where a tribunal, though competent to enter upon an enquiry, acts in flagrant disregard of the rules of procedure or violates the principles of natural justice where no particular procedure is prescribed. But a mere wrong decision cannot be corrected by a writ of certiorari as that would be using it as the cloak of an appeal in disguise but a manifest error apparent on the face of the proceedings based on a clear ignorance or disregard of the provisions of law or absence of or excess of jurisdiction, when shown, can be so corrected. In Dharangadhara Chemical Works Ltd. v. State of Saurashtra, 1957 SCR 152= (AIR 1957 SC 264) this Court once again observed that where the Tribunal having jurisdiction to decide a question comes to a finding of fact, such a finding is not open to question under Art. 226 unless it could be shown to be wholly unwarranted by the evidence.Likewise, in the State of Andhra Pradesh &Ors. v.S. Sree Ram Rao, AIR 1963 SC 1723 this Court observed that where the Tribunal has disabled itself from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case or where its conclusion on the very face of it is so wholly arbitrary and capricious that no reasonable person can ever have arrived at that conclusion interference under Art. 226 would be justified. The question for our determination, therefore, is whether the learned Single Judge was within the aforesaid well recognised limits when he set aside the award.
Before, however, we examine that aspect of the case we may first consider the scope of the Tribunal's jurisdiction in cases of retrenchment arising under section 25F of the Act.‖ In the case of Mukand Ltd. vs. Mukand Staff & Officers' Association, reported in (2004) 10 SCC 460, wherein at [60] paragraph 47, 48 & 49 it has been laid down which reads hereunder as:
47. In support of his contention that this Court while exercising its power under Article 136 of the Constitution of India in an appeal from the judgment of the High Court rendered in exercise of its powers under Articles 226 and 227 of the Constitution of India will exercise the same power which the High Court could exercise and will not interfere with the finding of facts recorded by a Tribunal, learned counsel cited the judgment in the case of Parry & Co. Ltd. vs. P.C. Pal. In the said case, this Court held as under: (AIR p. 1341, para 13) "13. Since this is an appeal arising from a writ petition for certiorari, we also would not interfere with the conclusions arrived at by the Tribunal except on grounds on which the High Court could have done."
48. In the case of Fuel Injection Ltd. vs. KamgarSabha, this Court observed as under: (SCC p.157, para 3) "..... But the present appeals are from a judgment of the High Court under Art. 226 and so the jurisdiction of this Court in entertaining an appeal by special leave under Art 136 must ordinarily be confined to what the High Court could or would have done under Art. 226."
49. In our view, the material that was placed before the Tribunal was not considered or discussed and that there was, as such, no adjudication by the Tribunal. The whole award of the Tribunal, in our view, is liable to be set aside on the ground of non-
application of mind by the Tribunal to the material on record. In the first place, the Tribunal has no jurisdiction to entertain and decide a dispute which covered within its fold "persons who are not workmen". That the material on record before the Tribunal as regards the comparable concerns was admittedly "sketchy" and incomplete as observed by the learned single Judge of the High Court and that the award based on such material could not have been sustained.
The Hon'ble Apex Court, on the basis of the propositions as laid down in the above referred cases, has, in the case of General [61] Manager, Electrical Rengali Hydro Electric Project, Orissa and Ors. vs. Sri Giridhari Sahu and Ors., passed in Civil Appeal No.8071 of 2010 at paragraph 29, laid down to the effect that :
"29. On the conspectus of the decisions and material, we would hold as follows:
The jurisdiction to issue writ of certiorari is supervisory and not appellate. The Court considering a writ application of Certiorari will not don the cap of an Appellate Court. It will not reappreciate evidence. The Writ of Certiorari is intended to correct jurisdictional excesses. A writ of prohibition would issue when a Tribunal or authority has not yet concluded its proceedings. Once a decision is rendered by a body amenable to Certiorari jurisdiction, certiorari could be issued when a jurisdictional error is clearly established. The jurisdictional error may be from failure to observe the limits of its jurisdiction. It may arise from the procedure adopted by the body after validly assuming jurisdiction. It may act in violation of principles of natural justice. The body whose decision which comes under attack may decide a collateral fact which is also a jurisdictional fact and assume jurisdiction. Such a finding of fact is not immune from being interfered with by a Writ of Certiorari. As far as the finding of fact which is one within the jurisdiction of the court, it is ordinarily a matter ‗off bounds' for the writ court.This is for the reason that a body which has jurisdiction to decide the matter has the jurisdiction to decide it correctly or wrongly. It would become a mere error and that too an error of fact. However, gross it may amount to, it does not amount to an error of law. An error of law which becomes vulnerable to judicial scrutiny by way of Certiorari must also one which is apparent on the face of the record. As held by this Court in Hari Vishnu Kamath (supra), as to what constitutes an error apparent on the face of the record, is a matter to be decided by the court on the facts of each case. A finding of fact which is not supported by any evidence would be perverse and in fact would constitute an error of law enabling the writ court to interfere. It is also to be noticed that if the overwhelming weight of the evidence does not support the finding, it would render the decision amendable to certiorari jurisdiction. This would be the same as a finding which [62] is wholly unwarranted by the evidence which is what this Court has laid down [See M/s. Perry and Co. Ltd (supra)].‖ This Court after considering the proposition of law in the matter of issuance of writ of certiorari, as referred above, has examined the factual aspects in the light of the context and is of the view that no such plea as of jurisdictional error has been agitated and after going across the facts as discussed in detail, has found that no such fact is also available.
Now the question would be in absence of such pleading of jurisdictional error, whether this Court interfere with the finding arrived of by the administrative authority on the basis of admitted facts of not meeting out the terms of specifications of having polyester fabric (300 x 300 denier), the report to this effect has not been challenged, the decision to send the report in the pre-bid meeting dated 13.08.2019 has not been questioned rather it was consented, no mala fide has been alleged, will it be proper for this Court to interfere with the impugned order of coming to conclusive finding of proved irregularity be an administrative decision.
This Court is of the view that it will not be proper to exercise such power since there is no error in decision making process as dealt with above and further there is no issue of jurisdictional error and as such this Court is not inclined to interfere with the impugned order dated 18.09.2019, and accordingly the writ petition stands dismissed so far as it relates to decision of the authority dated 18.09.2019 debarring the petitioners for one year.[63]
31. Issue No.-VIII-Whether quantum of penalty requires interference in absence of reason of justification by imposing penalty of debarment for one year, if yes, how to correct it?
Learned counsel for the petitioners has submitted that debarring the petitioners for a period of one year is not based upon any reason as to why the debarment of one year and why not for the period lesser than one year when debarment is having civil consequence it is the requirement on the part of the authority to come out with the reason of debarring the petitioners for a period of one year.
Learned counsel for the respondent is fair enough to submit that the reason for imposing debarment for a period of one year is lacking in the impugned order, however, he has tried to demonstrate from the averment made in the counter affidavit that although the debarment initially decided to be forever but considering the fact that there was no financial loss, as such, the authorities have taken a lenient view by debarring the petitioners for a period of one year. While responding to the same, it has been submitted by the learned counsel for the petitioners that why the debarment is for one year and why not for lesser than one year that can only be reflected if the reason for debarment for one year would have been reflected in the impugned order. Otherwise also, the fair play and the transparency require a reason of quantum of punishment and in absence thereof, the quantum cannot be said to have a justification.
[64]
This Court, after having heard learned counsel for the parties on the issue, is of the view that every action of the State Executive Authority must be subject to rule of law so that it should meet the test of Article 14 of the Constitution of India.
The issue of fair play has been dealt with by the Hon'ble Apex Court in the case of Kulja Industries Ltd vs. Chief Gen. Manager W.T. Proj. Bsnl (supra) wherein it has been laid down at paragraph-20, as referred above that 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 as because the 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.
It is not in dispute herein as would be evident as per the impugned order that the debarment for a period of one year has been inflicted upon the petitioners but not supported with any reason and it is settled position of law that in absence of reason, the order would be arbitrary, unfair and unjust.
It is further not in dispute that the authorities have got the power to inflict punishment of debarring as per the gravity of the offence but while determining the quantum what would be the period of debarment depends upon the gravity of irregularity/offence and the period of debarment is to be fixed on the basis of gravity and while fixing the said quantum it is incumbent upon the authority to assign the reason by reflecting the nature of gravity vis-a-vis, its proportionality and the quantum of debarment.
[65]
In the present case as has been submitted by the learned counsel for the petitioners that why the debarment of one year has been inflicted why not it is for less than the period of one year or higher than one year, i.e., for two years or more, but no such reason has been assigned and hence, according to the considered view of this Court, in absence of reason for debarment of one year, the punishment of debarment as inflicted vide impugned order, cannot be held to be sustainable in the eye of law, as such, this Court is in agreement with such submission of the learned counsel for the petitioners, it is for the reason that when the authorities have come to conclusion about commission of any irregularity its gravity is to be assessed by assigning reason leading the authority for inflicting the debarment for a particular period.
Herein, why the debarment for one year has been inflicted why not six months or why not for two years, the same is required to be reflected in the impugned order, therefore, this Court is of the view that the quantum of debarment for a period of one year in absence of reason cannot be said to be sustainable in the eye of law.
It is equally settled that the quantum of debarment is only to be inflicted by the authority by considering the nature of gravity which can well be considered by the authority itself and therefore, according to the considered view of this Court, the matter is required to be considered by the authority afresh. Accordingly, this issue is being answered in favour of the petitioners.
[66]
32. Before parting with the judgment, this Court deem it fit and proper to deal with the judgment rendered by Hon'ble Apex Court in the case of Kulja Industries Ltd vs. Chief Gen. Manager W.T. Proj. Bsnl and Gorkha Security Services vs Govt. (Nct of Delhi) (supra) upon which learned counsel for the petitioners have given much emphasis wherein it has been laid down that before blacklisting, an opportunity of hearing is required to be provided.
So far as the reliance put forth by the learned counsel for the petitioners upon the judgment wherein it has been laid down about observance of principles of natural justice in a case of blacklisting, the same cannot be disputed, more particularly, in the facts and circumstances of a case of blacklisting which leads to civil consequence and before passing any order of blacklisting it is incumbent upon the authority to issue show cause and after proper consideration, the order of blacklisting is to be passed.
So far as the applicability of judgment rendered in the case of Kulja Industries Ltd vs. Chief Gen. Manager W.T. Proj. Bsnl (supra) in the facts of this case is not applicable as because it is not the case of the petitioners that no show cause notice has been issued rather the case of the petitioners is that there is no consideration of reply of show cause but as has been dealt with in detail as above is that since the irregularity has been admitted there is no question of consideration of reply as because the word ‗consider' means that there must be active application of mind, in other words, the term ―consider‖ postulates consideration of all relevant aspects of a matter. The word ―consideration‖ has been [67] dealt with by the Hon'ble Apex Court in the case of Chairman LIC Of India & Ors vs. A Masilamani, reported in (2013) 6 SCC 560 wherein at paragraph-19 it has been laid down which reads hereunder as:
"19. The word ―consider‖ is of great significance. The dictionary meaning of the same is, ―to think over‖, ―to regard as‖, or ―deem to be‖. Hence, there is a clear connotation to the effect that there must be active application of mind. In other words, the term ―consider‖ postulates consideration of all relevant aspects of a matter. Thus, formation of opinion by the statutory authority should reflect intense application of mind with reference to the material available on record. The order of the authority itself, should reveal such application of mind. The appellate authority cannot simply adopt the language employed by the disciplinary authority, and proceed to affirm its order.‖ This Court, therefore, is of the view that since the term ―consider‖ postulates consideration of all relevant aspects of a matter that is only to be done if the fact will be in dispute but where the fact is not in dispute there is no question of consideration of relevant aspects of a mater as the fact of the case in hand is where the irregularity alleged to have committed not been disputed as per the detail discussion of the fact made herein above, and as such, case of Kulja Industries Ltd vs. Chief Gen. Manager W.T. Proj. Bsnl (supra) on the facts and circumstances of the instant case is not applicable.
Likewise, in the case of Gorkha Security Services vs. Govt. (Nct of Delhi) (supra) the fact is quite different since in the said case the order of blacklisting was passed without indicating in the show cause about proposed action of blacklisting and in that context order of blacklisting has been quashed on the ground that [68] there was no show cause notice given to that effect before taking action of blacklisting against the appellant but the factual aspect in the present case is quite different wherein the show cause has been issued with the proposed punishment that has been responded by admitting the irregularities as alleged and thereafter the orders have been passed of debarment for a period of one year, and hence the judgment rendered in the case of Gorkha Security Services vs Govt. (Nct of Delhi) (supra) is not applicable in the facts of this case.
33. This Court has answered issue No.VIII in faovur of the petitioners, therefore, the authority is directed to take a fresh decision on the quantum of debarment by assigning reason within a period of four weeks from the date of receipt/production of the copy of the order.
34. Accordingly, all the writ petitions are disposed of in the terms as indicated above.
35. Interlocutory application(s), if any, also stands disposed of.
(Sujit Narayan Prasad, J.) Saurabh A.F.R.