Allahabad High Court
M/S Trident Engineers vs Dakshinanachal Vidyut Vitran Nigam ... on 13 December, 2019
Equivalent citations: AIRONLINE 2019 ALL 2637
Bench: Ramesh Sinha, Samit Gopal
HIGH COURT OF JUDICATURE AT ALLAHABAD ?AFR Court No. - 1 Case :- WRIT - C No. - 41082 of 2019 Petitioner :- M/S Trident Engineers Respondent :- Dakshinanachal Vidyut Vitran Nigam Limited And Another Counsel for Petitioner :- Tarun Agrawal,Mohit Kumar Shukla Counsel for Respondent :- Baleshwar Chaturvedi Hon'ble Ramesh Sinha,J.
Hon'ble Samit Gopal,J.
(Per Samit Gopal,J. for the Bench)
1. Heard Sri Tarun Agrawal, learned counsel for the petitioner and Sri Baleshwar Chaturvedi, learned counsel for the Respondent-Corporation.
2. The matter was taken up on 12.12.2019 and instructions were supplied by learned counsel for the respondent (Corporation) which were taken on record. Today with the consent of both the counsels the matter is being finally heard and decided.
3. The petitioner has filed the present writ petition for issuance of writ, order or direction in the nature of Certiorari quashing the order dated 12.09.2019 passed by the respondent No. 2 by which the petitioner has been put on holiday list for three years. The said order is Annexure 10 to the writ petition. The facts of the present case relate to tender No. 45-EWCA / 2016-17 floated by the respondent No. 2 for the supply and erection of material for construction of 33KV single circuit solar power plant line from 220KV s/s, Gokul, Mathura to proposed Solar Power plant of 5MW in District Mathura on semi turnkey basis. The petitioner emerged as the lowest bidder for the said work and was thus issued a letter of intent dated 22.03.2017 by the respondent No. 2. A copy of the same has been annexed as Annexure No. 1 to the writ petition. Subsequently, a formal contract was executed between the respondent No. 1 and the petitioner on 03.04.2017. As per the contract the work was to be completed by 22.07.2017 but the contract also envisaged extension of time in the event of unforeseen circumstances. The total value of the contract was provided in Clause 5 of the same. As per Clause 5.1 of the contract 60% of the material cost was to be paid after successful inspection and delivery of material at site, further Clause 5.2 provided 30% payment of the material cost upon erection of the material, Clause 5.3 provided that the balance payment of 10% against supplies will be done after satisfactory commission and handing over of the project. The petitioner was further required to deposit permanent security deposit equivalent to 10% of the contract value as per Clause 7 of contract. The said amount worked out to Rs. 34 lakhs.
4. Learned counsel for the petitioner argued that the present writ petition is confined to the fact that the claim of the petitioner of the security amount of Rs. 34 lakhs which has been withheld by the respondents even after the expiry of 18 months from the date of completion of the project and just in order to defeat the legitimate claim of the petitioner the impugned order of blacklisting the petitioner's firm has been passed so as to defeat the legitimate refund of the security deposit. It has further been argued that the work of the project was completed on 29.12.2017 and thereafter letter dated 29.12.2017 was sent to the Executive Engineer in the office of the respondent No. 1 informing him about the completion of the project and requesting him to take over the said line and it has further been argued that an inspection was conducted by the Deputy Director, Electrical Safety, Government of U.P., Aligarh Region, Aliagarh and after the said inspection he gave permission of the line by energizing it. It has further been pointed out that a letter dated 17.01.2018 was issued by the said Deputy Director in which he has categorically recorded that the solar link line erected by the petitioner be completed with all the relevant rules and regulations. The said argument is based on Annexures 5 and 6 of the writ petition. It has further been argued that the testing and commissioning of the line was thereafter completed and the petitioner requested the respondent No. 2 to take over the plant vide various letters dated 20.02.2018, 12.03.2018, 31.07.2018, 12.09.2018 and 12.11.2018 but for the reasons best known to them the said plant was not formally taken over by the respondents. It has further been pointed out that in spite of the same the respondents were satisfied by the performance of the plant and thereby they released the entire payment to the petitioner and only the security amount of Rs. 34 lakhs was withheld. On the strength of the averment in paragraph 22 of the writ petition it has been argued that by releasing the balance amount of 10% which would thereby make the payment to the petitioner complete for the satisfactory commissioning and handing over of the project the respondents had satisfied themselves about the successful commissioning of the plant. The balance amount was thus drawn on 09.07.2019. It has further been argued that till 29.06.2019 the plant was working as desired and there was no reported defect by the respondents. Upon the lapse of the period of 18 months the petitioner requested the releasing of the security amount of Rs. 34 lakhs but instead of releasing the said amount a notice dated 03.09.2019 was issued by the respondents which is Annexure 8 to the writ petition.
5. Our attention has been drawn to the said notice whereby it has been observed that on preliminary enquiry some shortcomings have been found in the plant which have been mentioned in the said notice and subsequently the petitioner has been called upon to submit his reply on 06.09.2019 by 03 p.m. The petitioner submitted his detailed reply on 06.09.2019 itself which was duly received in the office of the respondent No. 2 on 06.09.2019. The said reply is Annexure 10 to the writ petition which bears the signature and date of the concerned receiving person. It has further been argued that the impugned order dated 12.09.2019 Annexure 11 to the writ petition has been passed in an arbitrary manner and in utter violation of principles of natural justice without even considering the detailed reply of the petitioner and even the fact that there was no reference in the said notice of blacklisting of the petitioner due to the insufficiencies in the work as mentioned in the same. The question of blacklisting as referred to in the notice dated 03.09.2019 was only in the event the petitioner could not furnish his reply within the stipulated period as mentioned in the said notice. Further the learned counsel for the petitioner argued that the principles of natural justice have not been followed in the present case at all as the respondents have not considered the reply dated 06.09.2019 of the petitioner and even the petitioner was not heard.
6. Learned counsel for the respondent (Corporation) to the contrary has argued that the impugned order dated 12.09.2019 has been passed after considering the matter in detail and also considering the reply of the petitioner dated 06.09.2019. The said argument of the learned counsel for the respondents is based on the basis of his instructions dated 11.09.2019 which have been supplied by him to the Court on 12.12.2019 which is on record. He further argued that there is no illegality and arbitrariness in the impugned order dated 12.09.2019 but he could not dispute the fact that the reply of the petitioner submitted to respondent No. 2 on 06.09.2019 to the show cause notice dated 03.09.2019 does not find mention in the impugned order.
7. From the facts as emerge from the records and arguments of the learned counsel for the petitioner and the learned counsel for the respondent (corporation) the impugned order dated 12.09.2019 does not anywhere reflect that the reply of the petitioner dated 06.09.2019 was considered by the authorities. From perusal of the impugned order dated 12.09.2019 it is clear that there is no reference by the authority concerned that the reply of the petitioner dated 06.09.2019 was considered and any hearing was afforded to the petitioner before passing of the said order. The impugned order is confined only to the fact that the same is being passed as some deficiencies have been found in the newly constructed 33KV line and hence the petitioner is being blacklisted for a period of three years from the date of the said order. In the notice dated 03.09.2019 it was not mentioned that if the authorities are not satisfied with the reply of the petitioner then they shall proceed to initiate steps for blacklisting of the petitioner. The said notice is related to the question of blacklisting the petitioner was only confined to the fact that if the reply to the said notice was not given within the said stipulated period then proceedings for blacklisting shall be taken up. Further there is no adjudication in the impugned order about the point-wise reply given by the petitioner to the said notice. In the judgment of Gorkha Security Services vs. Government (NCT of Delhi and others) reported in 2014 (9) SCC 105 it has been held that the authorities must issue a specific show cause notice to the contractor indicating a clear intention to blacklist him before passing any order of blacklisting. The Hon'ble Supreme Court has in para 21 of the same held as follows:-
"The central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of show-cause notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action."
8. That as per the settled principles of law it has been held that before any executive decision maker proposed any action like blacklisting, adverse action or debarring it is necessary that opportunity of hearing & representation against the said proposed action be given to the affected party. The Hon'ble Supreme Court in the matter of Raghunath Thakur vs. State of Bihar & Ors reported in 1989 (1) SCC 229 has held:-
"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 objection satisfaction. Fundamental of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."
9. In the present case the respondent authorities have failed to give specific notice to the petitioner showing their intention to blacklist him on the strength of the alleged irregularities. Further the impugned notice does not anywhere reflect that the authorities have considered the detailed reply of the petitioner dated 06.09.2019 (Annexure 9 to the writ petition). In view of the settled proposition of law by the Apex Court in catena of decisions some of which as has been referred above, it is absolutely clear that before blacklisting or putting a person on a holiday list a person has to be given full opportunity of hearing as the order of blacklisting or keeping on holiday list has an adverse civil consequences and is a harshest possible action. Thus we are of the considered opinion that there has been a complete violation of the principles of natural justice in the instant case. The impugned order is not sustainable in the eyes of law and deserves to be set aside.
10. Hence, a writ in the nature of certiorari is issued quashing the impugned order dated 12.09.2019 passed by the respondent No. 2 vide letter No. 1037 /??0??0/?/?/0 (Annexure 10 to the writ petition).
11. It is hereby further provided that the petitioner shall submit fresh reply to the notice dated 03.09.2019 to the respondent No. 2 within a period of three weeks from today along with a certified copy of this order and the respondent No. 2 is further directed to decide the same afresh within a further period of three weeks from the date of receipt of the said reply with a reasoned and speaking order in accordance with law.
12. The writ petition thus succeeds and is allowed.
13. No order as to cost.
Order Date :- 13.12.2019 AS Rathor (Samit Gopal,J.) (Ramesh Sinha,J.)