Jammu & Kashmir High Court - Srinagar Bench
Feedback Infra Private Ltd vs State Of J&K & Ors on 11 August, 2014
IN THE HIGH COURT OF JAMMU AND KASHMIR AT SRINAGAR
OWP no. 1363 of 2013
CMP nos. 2260 of 2013 & 2201 of 2013
Feedback Infra Private Ltd.
Petitioners
State of J&K & ors.
Respondents
!Mr. Muzaffar Hussain Baigh, Sr. Advocate
Ms. Aditiya Tripati, Advocate
^Mr. M. A. Chashoo, AAG
Honble Mr. Justice Ali Mohammad Magrey, Judge
Date: 11/08/2014
: J U D G M E N T :
1. The petitioner-firm participated in the tendering process initiated by Development Commissioner, Power, J&K Power Development Department, Jammu, pursuant to NIT no. DC/PD/RPF-2 of 2013 dated 26.03.2013, and was declared as the lowest bidder. The respondents also entered into negotiations with the petitioner for reducing the price rates offered by him and the petitioner duly submitted the revised reduced offer to the respondents on 04.07.2013. However, subsequently, acting on a complaint that the petitioner had violated Clause VII (f) of the eligibility criteria of the NIT, the respondents on 05.09.2013 seem to have taken decisions, inter alia, to re-tender the work. Consequent thereupon, the respondents issued a fresh Notice Inviting Tender bearing RFP Identification No. CE/S&O/K/RFP-01 of 2013 specifying the start date for sale / download of RFP document with effect from 13.09.2013. Thereafter, respondent no. 4 also issued a notice dated 29.09.2013 under the caption Show Cause Notice for Debarment to the petitioner informing it about the decisions taken in the meeting of 05.09.2013, and sought an explanation from it to explain as to why the firm / agency be not debarred and why its EMD be not forfeited for concealing the information and violating the clause VII (f) of eligibility criteria. The petitioner has challenged the decisions taken by the respondents in the meeting held on 05.09.2013, the fresh tender notice no. CE/S&O/K/RFP-01 of 2013 and the Show Cause Notice for Debarment dated 25.09.2013, and has prayed for a mandamus commanding the respondents to award the Project advertised vide RFP bearing no. DC/PD/RPF-2 of 2013 dated 26.03.2013 in favour of the petitioner.
2. Respondent no. 4, i.e., the Development Commissioner (Power), J&K Government Power Development Department, Janipur, Jammu, had issued Notice, RFP Identification No. DC/PD/RPF-2 of 2013 dated 26.03.2013, inviting request for proposal for Project Management Services in Kashmir Province of Jammu and Kashmir State for Design, Engineering, Bid Process Management, Construction, Erection / Commissioning, Supervision, Inspection, Testing, Monitoring and overall Contract Administration of R-APDRP Part-B works including handholding of the Project from concept to commissioning upto final execution and acceptance for 19 towns. The aforesaid notice stipulated that the RFP could be downloaded from the office website and that the tender documents must be accompanied with demand draft in favour of Accounts Officer, Development Commissioner, Power, J&K PDD, Jammu. The notice also stipulated, among others, the following calendar of events relating to the Bid process:
Event Date Start Date for Sale / Download of RFP Document 26.3.2013 Receipt of Pre-Bid Queries at email address Upto 04.04.2013 Pore-Bid Conference 16.04.2013 Last Date and time for submission of bid 25.04.2013 upto 1:00 PM Date and Time for opening of Technical Bid 25.04.2013 upto 3:00 PM Date and Time for opening of Price Bid To be notified later through emails and website Cost of Bid documents Earnest Money Deposit (EMD) (Bid Security) Demand Draft for Rs.25,00,000/- (Rupees Twenty five Lakhs only) According to the petitioner, the bid was to be submitted in four parts in separate sealed envelops in the following manner:
Part-I: Earnest Money Deposit and Tender Document Cost;
Part-II: Eligibility Criteria;
Part III: Technical and Commercial Bid; and
Part IV: Price Bid.
The date for submission of the tenders was subsequently extended from 25.04.2013 to 07.05.2013. The petitioner is stated to have submitted its bid on 06.05.2013. On account of poor response, as only the petitioner and another contractor had submitted their tenders, respondent no. 4 is stated to have re-
scheduled the bid submission date and extended the same to 23.05.2013 upto 1:00 PM. The Technical Bids were ultimately opened on 27.05.2013. Subsequent thereto, the Price Bids were opened on 21.06.2013. After the said event, respondent no. 4 is stated to have contacted the petitioner on 03.07.2013 to negotiate the price quoted by it. It is averred that the petitioner submitted its revised financial offer after negotiations on 03.07.2013 itself. However, on further negotiations held at the instance of respondent no. 4, the petitioner is stated to have submitted second revised financial offer on 04.07.2013.
3. It is the case of the petitioner that while its bid was pending consideration, the petitioner on or around 31.07.2013 was verbally informed that the Evaluation Committee of respondent no.4 was concerned about an alleged blacklisting order dated 22.03.2013 passed by the Public Works Department of the State of Chhattisgarh purportedly debarring the petitioner for a period of 3 years from participating in any tender or bid for consultancy of any kind issued by the State of Chhattisgarh.
4. The petitioner claims that it did not have any knowledge about the alleged blacklisting order dated 22.03.2013 passed by the Public Works Department of the State of Chhattisgarh purportedly debarring it from participating in any tender or bid. Accordingly, on the basis of the oral information received by it, the petitioner on 08.08.2013 is stated to have filed a writ petition, (Civil) no. 1221 of 2013, before the High Court of Chhattisgarh at Bilaspur challenging the said debarment dated 22.03.2013, specifically pleading therein that it had neither been supplied a copy of the order nor was it aware of the same until it was informed orally by the Evaluation Committee of respondent no.4.
5. Simultaneous with the filing of the aforesaid writ petition before the High Court of Chhattisgarh, petitioner is said to have written to respondent no.4 that the petitioner was unaware of the alleged action of PWD of Chhattisgarh and that the petitioner had challenged the same in writ petition, on the grounds of being arbitrary, wrongful and capricious, as detailed above. It is averred in the petition that the aforesaid writ petition, (Civil) no. 1221 of 2013, was listed for consideration before the High Court of Chhattisgarh on 14.08.2013, on which date, subsequent to oral directions of the Court, the petitioners counsel there was supplied a copy of the debarment order dated 22.03.2013 by the Advocate for the State of Chhattisgarh. This fact is borne out by the copy of the Court order dated 14.08.2013 placed by the petitioner as annexure P/9 on record of this writ petition.
6. It is averred that on receipt of the said debarment order dated 22.03.2013 for the first time on 14.08.2013, the petitioner filed another writ petition, being writ petition (C) No. 1275 of 2013, before the High Court of Chhattisgarh, and specifically challenged the same therein. The writ petition was allowed by the High Court of Chhattisgarh on 04.09.2013, holding the debarment order dated 22.03.2013 as illegal and setting aside the same.
7. Consequent upon setting aside of the debarment order dated 22.03.2013 by the High Court of Chhattisgarh on 04.09.2013, it is stated that the petitioner on the very same date, i.e. 04.09.2013, sent a letter to respondent no.4, informing him, inter alia, that the High Court of Chhattisgarh had set aside the debarment order dated 22.03.2013 followed by another letter dated 11.09.2013 enclosing copy of the aforesaid High Court order.
8. It is stated by the petitioner that, since despite aforesaid letters and order, lapse of substantial time from the date negotiations on price bids had been held, outcome of the bid was not being announced, the petitioner on 17.09.2013 again addressed a letter to the respondent stating therein the necessary and relevant facts concerning the debarment order dated 22.03.2013, the legal action taken by the petitioners and the ultimate result thereof. The petitioner reiterated its stand that till 31.07.2013 it did not have any knowledge of passing of the aforesaid order dated 22.03.2013. The petitioner requested respondent no. 4 that it believed, while assessing and evaluating the petitioners bid, the office of respondent no. 4 would not be detained by any ill-informed and motivated propaganda by any vested interest alleging or stating any facts to the contrary.
9. However, on 17.09.2013 itself, it is stated, through an advertisement in a local newspaper, the petitioner learnt that respondent no.2 had on 13.09.2013 re- tendered the Project in respect of which the petitioner had already been declared the lowest tenderer, by issuing notice bearing RFP Identification No.CE/S&O/K/RFP-01 of 2013. The new RFP provided that bids could be submitted in the prescribed format from 27.09.2013 to 07.10.2013.
10. The petitioner avers that, being aggrieved of the decision to re-tender the Project and the notice so issued, Mr. Ravi Kathpal, Associate Director, Energy Division of the petitioner-firm, met the Development Commissioner, J&K Power Development Department (PDD) on 20.09.2013. Thereafter, on 24.09.2013, Mr. Vinayak Chatterjee, Chairman; Mr. P. Ramesh, Director; and Mr. Ravi Kathpal, Associate Director, Energy Division, of the petitioner-firm met the Principal Secretary (Power) of respondent no.1 and brought to his attention that re- tendering was prejudicial to the petitioners interests.
11. Thereafter, on 25.09.2013, respondent no.3 issued a Show Cause Notice for Debarment to the petitioner on the ground of concealment of the order passed by the Public Works Department of the State of Chhattisgarh. The contents of the said Show Cause Notice for Debarment have a vital bearing on the out come of this writ petition; therefore, it would be advantageous to reproduce the same herein at the appropriate place. For now, it would suffice to mention that the petitioner has averred that the petitioner was neither issued any communication nor was intimated, at any stage, till the date of issue of aforesaid Show Cause Notice for Debarment, that its tender had been rejected or that the respondents had decided to re-tender the project.
12. The petitioner feeling aggrieved thus by the aforesaid acts of omission and commission on the part of the respondents, has filed this writ petition for the reliefs as first above mentioned.
13. Respondents in their objections / reply have admitted the facts as narrated above. It is admitted that the final evaluation concluded that petitioner M/s Feedback Infrastructure Services Pvt. Ltd. turned out to be the lowest among the four responsive bidders. It is averred that the Contract Committee-I of the Department convened a meeting on 03.07.2013 to discuss the outcome of the evaluation of the bids and allotment of the instant contract and that all the members of the Contract Committee were of the unanimous opinion that petitioner, M/s Feedback Infrastructure Services Pvt. Ltd., the lowest tenderer, should be asked to offer some discount on their quoted rates, which they, in fact, did vide communication dated 04.07.2013.
14. It is, however, stated that before the Contract Committee-I could again meet for finalizing the contract; the Development Commissioner (Power) received a communication No. PDD-VII/Plan/404/2012/II dated 10.07.2013 from Director, Planning, Power Development Department, enclosing therewith copy of a letter dated 04.07.2013 addressed to the Minister of State for Power, J&K, by one private individual, namely, Shri Dineshwar Singh Jamwal, President Universal Foundation, Shakti Nagar, Jammu, wherein it was stated that the petitioner firm had already been penalized. It is also stated that the Development Commissioner (Power) received one more letter issued by Engineer-in-Chief, PWD, Raipur, Chhattisgarh vide Memo No.468/G/2013 dated 22.03.2013 whereby M/s Feedback Infra had been debarred for a period of three years by PWDF Raipur, Chhattisgarh for their poor performance in PW of the State of Chhattisgarh (the source wherefrom the copy of the aforesaid memo was received by the respondents is not disclosed).
15. It is averred that taking cognizance of the above two communications, the Development Commissioner (Power) immediately summoned the petitioner, verbally informed them about the contents thereof and asked the petitioner to clear their position in this regard. It is, however, stated that the petitioner pleaded that no such memo had been issued by PWD, Raipur, Chhattisgarh, and that the Memo in question was not authentic. It is stated that the Development Commissioner (Power) asked the petitioner that if the memo was not authentic, it should get a clarification letter from PWD, Raipur, Chhattisgarh in this regard, but the petitioner is alleged to have evaded the issue and did not respond. It is further stated that the Development Commissioner (Power) at his own level telephonically requested the Engineer-in-Chief, PWD, Raipur, Chhattisgarh for confirmation of their memo, but he also did not respond.
16. The respondents in their reply have further stated that the department deputed one of its officers to the office of Chief Engineer, PWD (CG) for getting clear information. The said officer vide his communication dated 23.10.2013 requested the Chief Engineer, PWD (CG) to furnish latest status of the case pending before him regarding the controversy involved. In response thereto, the Chief Engineer, PWD, Raipur (CG) vide its memo No.889/904/001 dated 23.10.2013 confirmed the dispatch of debarring letter by registered post supported by postal receipt which indicated that the debarring letter had been dispatched to the petitioner on 03.04.2013, i.e., prior to the submission of tenders by the petitioner. The respondents, drawing an inference from above, have stated that the plea of the petitioner that at the time of submission of bid by the petitioner, it was not aware of the said debarring letter is belied.
17. On the allegation of poor performance of the petitioner, as contained in the complaint addressed by Shri Dineshwar Singh Jamwal, President Universal Foundation, Shakti Nagar, Jammu, in respect of the already allotted feasibility study contract of Jammu and Srinagar Cities, it is stated that the petitioner could not give any satisfactory reply. Therefore, the Chief Engineers of EM&RE Wings of Jammu / Srinagar vide letter No.DC/PD/TO-1/225/683-86 dated 16.07.2013 were requested to furnish the performance of the petitioner.
18. Thereafter, it is stated, the Development Commissioner (Power) convened a meeting of the Contract Committee-I on 31.07.2013 in which the two communications regarding performance of the petitioner in respect of feasibility study contract in J&K State and the debarring memo of the Chief Engineer, PWD, Raipur, Chhattisgarh were discussed. It is stated that the Chief Engineers of EM&RE Wings of Jammu / Srinagar, who also are members of the Contract Committee-I were not satisfied with the performance of the petitioner. The Committee is said to have shown its serious concern about the performance of the petitioner. The Committee is said to have again met on 01.08.2013 and decided to put the contract process on hold. It is also stated that the petitioner was again asked to clear its position on the aforesaid two issues and thus the petitioner was given sufficient time to respond and clear itself. In response, the petitioner is said to have highlighted its achievements and performance on the allotted feasibility study contract of Jammu and Srinagar Cities through power- point presentation. It is, however, said that the petitioner had to cut a sorry figure for not being upto the mark and not performing as desired.
19. It is also averred that the petitioner vide communication dated 08.08.2013 ultimately confirmed the issuance of the debarring memo by the Chief Engineer, PWD, Raipur, Chhattisgarh, which was circulated by the Director, Planning Power Development Department vide letter dated 13.08.2013, deducing that the plea, that at the time of submission of bid, the petitioner was not aware of the debarring order, is thus belied. It is averred that the Development Commissioner (Power) again convened a meeting of Contract Committee-I on 05.09.2013 to discuss the contract and developments in that regard. The Contract Committee was of unanimous opinion that the tender of the petitioner should be rejected for concealing the information, which they were supposed to disclose in Clause VII
(f) of the eligibility criteria of the RFP issued for the contract. It is further stated that the Contract Committee also decided that the contract should be re-tendered in e-tendering mode for speedy engagement of the Project Management Agency and implementation of the R-APDRP flagship programme in the best interests of the State. It is, however, stated that the petitioner has not been formally debarred for any period by JKPDD nor the EMD of the petitioner has been forfeited, but a show cause notice dated 25.09.2013 has been issued to the petitioner giving it a fair chance to defend itself against debarring and EMD forfeiting by JKPDD.
20. It may be mentioned here that the petitioner has also filed a Rejoinder to the reply affidavit filed on behalf of the respondents. In the Rejoinder the petitioner has stated that the respondents are seeking to supplant reasons and justify an ill conceived, wholly arbitrary and capricious decision to reject the lowest and technically qualified bid of the petitioner and order re-tendering of the Project. It is pleaded that no administrative authority can be allowed to supplant or improve upon the reasons for its decision and that an administrative decision ought to be tested on the reasons as they existed and are considered at the time the decision has been taken.
21. As to the plea of the respondents that vide their letter dated 23.10.2013 issued by the Public Works Department of Chhattisgarh, it had been furnished proof of dispatch of the debarment order dated 22.3.2013 to the petitioner by the Public Works Department of Chhattisgarh, whereby the respondents had deduced that the petitioners plea, that he was not aware of the debarment order as on the date of submission of bid, was belied, the petitioner has averred that the petitioner firm did not have the address as mentioned in the relevant document and, therefore, the said debarment order could not have reached to them. It is stated that post receipt of the objections / reply filed by the respondents, the petitioner vide letter dated 27.11.2013 made an enquiry from the Post Office, Malviya Nagar about the status of the Speed Post in question. The Post Office vide its letter no. MN/Complaint-Corr/13-14 dated 29.11.2013 confirmed that the Speed Post dated 03.04.2013, which is alleged to have contained the debarment order relied upon by the respondents, had been retrained to the sender and was not delivered to the petitioner. Petitioner has placed on record of the Rejoinder copies of its letter dated 27.11.2013 and the report dated 29.11.2013 so furnished to it by the Post Office concerned. In this regard, it is further stated that, admittedly, the so-called proof of alleged concealment was received by the respondents from PWD, Chhattisgarh, vide their letter dated 23.10.2013 i.e., more than two months after the impugned decisions had been taken on 05.09.2013 and almost a month after the filing of the present writ petition; therefore, demonstratively, neither at the time of the impugned decisions nor at the time of issuance of impugned Show Cause Notice dated 25.09.2013, the respondents had any material before them that could have formed the basis of arraigning at a conclusion that the petitioner had concealed the information regarding the debarment order dated 22.03.2013. In this regard, it is also submitted that the Chhattisgarh Public Works Department itself did not take such a stand before the High Court of Chhattisgarh in the writ petitions filed by the petitioner, that the petitioner had the knowledge of the debarment order at any stage.
22. Refuting the justification sought to be supplied by the respondents for the impugned decisions on the ground of alleged poor performance of the petitioner while performing other contracts in the State of J&K, it is stated that such a reason had never been verbalized in any oral or written communication to the petitioner, nor the impugned Show Cause Notice mentions any such allegation. In any case, it is stated that the fact that, notwithstanding the aforesaid allegations, the respondents had allowed the petitioner to participate in the bidding process, accepted its bid and entered into negotiations with it on the prices offered by the petitioner, defies the logic and reason sought to be pressed into force in support of the impugned decisions.
23. The petitioner has made further detailed assertions and submissions in the Rejoinder-affidavit which I think need not be narrated here.
24. Though this case was at the admission stage, on 18.07.2013, when the matter came up for consideration on admission, in view of the urgency involved in the matter, the learned counsel on both sides wanted the case to be heard for final disposal. Accordingly, with their consent, the learned counsels were heard after admitting the writ petition to hearing. I have perused the record and considered the matter.
25. Before I advert to the arguments of the learned counsel for the parties, I deem it imperative to quote hereunder the Show Cause Notice for Debarment dated 25.09.2013 issued by the respondents to the petitioner. The contents of this Show Cause Notice for Debarment self explain almost every legal and factual facet of case. It reads thus:
1. Whereas a tender was invited by this Department vide NIT No. DC/PD/RPF-2 of 2013 dated 26.03.2013 for Project Management services for Design, Engineering, Bid Process Management, Construction, Erection / Supervision, Inspection, Testing and Monitoring and overall Contract Administration of R-APDRP Part-B work including Handholding of the Project from concept to commissioning upto final execution and acceptance for (19) towns of the Kashmir Province, J&K;
2. Whereas your Firm / Agency by the name of Feedback Infra Ltd. submitted the tender dated May 2013 in which you were found the lowest bidder after opening of the tender on 21.06.2013 by the Contract Committee-1 of the department;
3. Whereas in the meantime this office received a letter issued by Engineer-in-Chief, PWD, Raipur, Chhattisgarh stating that your firm was already debarred for a period of 03 years for poor performance vide their Memo no. 468/G/2013 dated 22-03-2013. You were informed and asked to clear your position in this regard which you failed to do so. However at the later stage the issuance of the Memo has been accepted by you vide your communication dated 8th August 2013 which was also circulated by Director, Planning & Statistics, J&K PDD vide his letter no. PDD/VII/404/2013 dated 30th August 2013;
4. Whereas you have concealed the fact necessary to be mentioned in your bid document required under the clause (f) of the Eligibility Criteria of RFP. Your deliberate silence on the issue has resulted in abnormal delay in finalization of the contract and has badly affected the execution of work;
5. Whereas a meeting of the Contract Committee-1 was convened in the office of Development Commissioner POWER ON 5th September, 2013, wherein your tender was rejected on the same ground and it was also decided to re-tender the contract. Further, the Contract Committee decided to debar your firm for a period of two years and forfeit your EMD for concealing the information and violating the clause (f) of the Eligibility Criteria of the RFP, whereunder you were supposed to disclose such information at the time of submission of the tender;
6. In the light of the above facts this office seeks an explanation as to why your firm / Agency should not be debarred and why your EMD shall not be forfeited for concealing the information and violating the clause (f) of eligibility criteria. Your reply should reach this office within 07 days from the issuance of this notice, otherwise it shall be presumed that you have nothing to say in your defence. (Underlining supplied)
26. A bare perusal of the aforesaid notice makes two things manifest: first, that Contract Committee-1 of the respondents in its meeting held on 5th September, 2013 itself took the three vital decisions and, I must say, at the back of the petitioner, without giving him an opportunity of hearing, ignoring its plea of lack of knowledge of the debarment order dated 22.03.2013, whereby the Committee (i) rejected the petitioners tender; (ii) decided to re-tender the Project;
(iii) decided to debar the petitioners firm for a period of two years and forfeit its EMD; second, that all the aforesaid decisions were taken on the ground of the petitioner having concealed the information that it had been debarred by Engineer-in-Chief , PWD, Raipur, Chhattisgarh, for a period of 03 years for poor performance and had thus violated the clause VII (f) of the Eligibility Criteria of the RFP.
27. The above vital decisions having been taken on 05.09.2013 itself, as demonstrated by the contents of paragraph 5 of the Show Cause Notice for Debarment dated 25.09.2013 quoted hereinabove, the act of issuance of the Show Cause Notice tantamount to putting the cart before the horse and asking the corpse of a hanged person why it should not be sent to the gallows. This fact by itself goes to the very root of the matter and radiates glaring arbitrariness in the impugned decisions of the respondents rendering the show cause notice a mere lip service to mandatory requirements of equal clauses enshrined in the Constitution as also the doctrine of audi alteram partem. In fact, such an admitted factual scenario present in the case should supply enough reason and justification to allow the writ petition and quash the impugned decisions and the show cause notice; nonetheless it is imperative to advert to the arguments of the learned counsel of the parties.
28. Mr. Baigh, learned Senior Advocate, referring in detail to the relevant dates and the chain of events, raised several points during the course of his arguments. He first submitted that, admittedly, the Contract Committee-I took the impugned decisions on 05.09.2013 on the ground that the petitioner had concealed the fact that the Public Works Department of Chhattisgarh vide its order dated 22.03.2013 had debarred the petitioner for three years from participating in any bidding process and that the petitioner had thus violated clause VII(f) of the Eligibility Criteria of the NIT. He submitted that the petitioner did not have any knowledge about the debarment order dated 22.03.2013 on the relevant dates viz., on 06.05.2013, i.e., the date the petitioner submitted its bid papers, or, on 27.05.2013, i.e., the date the Technical Bids were ultimately opened, or even on 21.06.2013, i.e., the date Price Bids were opened. He submitted that the petitioner first came to know about the issuance of the order only on or around 31.07.2013 when he was verbally informed by respondents about the same. Thereafter, on 08.08.2013 the petitioner filed writ petition (Civil) no. 1221 of 2013, before the High Court of Chhattisgarh at Bilaspur challenging the said debarment dated 22.03.2013, specifically pleading therein that it had neither been supplied a copy of the order nor was it aware of the same until it was informed orally by the Evaluation Committee of respondent no.4. On the same day, i.e., on 08.08.2013 the petitioner in writing informed respondent no. 4 that the petitioner did not have any knowledge about the debarment order. On 14.08.2013, when the aforesaid writ petition was listed for consideration before the High Court of Chhattisgarh, on the oral direction of the Court, copy of the order dated 22.03.2013 was handed over to the counsel for the petitioner by the counsel for the State of Chhattisgarh. It is thus that the petitioner for the first time on 14.08.2013 got a copy of the debarment order which was set aside by the High Court of Chhattigarh by order dated 04.09.2013 passed in the second writ petition, (C) no.1275/2013 filed by the petitioner. On the same day, the petitioner, by its communication dated 04.09.2013, informed respondent no.4 about the factum of setting aside of the debarment order dated 22.03.2014 by the High Court of Chhattisgarh. Mr. Baigh submitted that in view of these facts, there was no reason or justification for the respondents to have taken the impugned decisions on 05.09.2013 and issue the impugned show cause notice, and that the decisions so taken by the respondents are rendered unfounded without any basis or material and, therefore, are arbitrary.
29. Mr. Baigh next submitted that the actions/decisions of the respondents to reject the petitioners tender after it had been declared to be the lowest bidder and, in fact, the respondents had entered into negotiations with the petitioner making it to reduce the prices offered by it, and the re-tendering of the Project are violative of the principles of natural justice and, therefore, arbitrary. He submitted that no notice was issued by the respondents and no opportunity was given to the petitioner against the proposed actions/decisions either before rejecting its tender on the ground of the petitioner having concealed the debarment order dated 22.03.2013 and this, despite the fact that the petitioner on 08.08.2013 in writing had informed respondent no. 4 that it did not, at any stage, have the knowledge of issuance of debarment order dated 22.03.2013 by the PWD, Chhattisgarh, and that the petitioner had taken steps to challenge the said order before the High Court of Chhattisgarh. Mr. Baigh submitted that the decisions to scrap the tender process and issuance of fresh tender notice by the respondents have serious civil consequences for the petitioner and, as such, it was obligatory on the part of the respondents to comply with the principles of natural justice. Since the respondents have failed to do so, the decisions and the actions of the respondents are rendered arbitrary and, therefore, liable to be quashed.
30. Mr. Baigh further submitted that even after 05.09.2013, the date the Contract Committee-I had unilaterally taken the impugned decisions on the assumption of concealment of debarment order dated 22.03.2013, the petitioner wrote letter dated 11.09.2013 to respondent no. 4 enclosing therewith copy of order dated 04.09.2013 passed by the High Court of Chhattisgarh, setting aside the debarment order dated 22.03.2013. Again, on 17.09.2013 the petitioner addressed another letter to respondent no. 4 bringing the relevant facts to his notice and requesting that the department should not be detained by any ill- informed and motivated propaganda. Even so, the respondents re-tendered the Project. Not only that, representative of the petitioner firm, Mr. Ravi Kathpal, Associate Director, Energy Division of the petitioner, met the Development Commissioner, J&K Power Development Department (PDD) on 20.09.2013. Thereafter, on 24.09.2013, Mr. Vinayak Chatterjee, Chairman; Mr. P. Ramesh, Director; and Mr. Ravi Kathpal, Associate Director, Energy Division, of the petitioner-firm met the Principal Secretary (Power) of respondent no.1 and brought to his attention that re-tendering was prejudicial to the petitioners interests. Mr. Baigh submitted that instead of seeing reason and resorting to the due process established by law, the respondents on the following date, i.e., on 25.09.2013 issued the impugned Show Cause Notice for Debarment to the petitioner. Learned Senior Counsel submitted that the whole process, and the impugned show cause notice, in particular, is nothing but constitutes malice in law.
31. Referring to the justification sought to be supplied by the respondents in support of the impugned decisions and the show cause notice in the objections / reply filed by the respondents, wherein it is stated that the Chief Engineers of EM&RE Wings of Jammu / Srinagar, who also are members of the Contract Committee-I, were not satisfied with the performance of the petitioner, Mr. Baigh argued that the validity of the impugned decisions and the show cause notice have to be judged by the reasons mentioned in the show cause notice and cannot be supplemented by fresh reasons in the shape of reply affidavit or otherwise.
32. The learned Senior counsel in support of his arguments cited and relied upon the following decisions of the Supreme Court:
i) V. K. Ashokan v. CCE, (2009) 14 SCC 85;
ii) Aslam Mohammad Merchant v. Competent Authority, (2008) 14
SCC 186;
iii) Bahadursingh Lakhubhai Gohil v. Jagdishbhai M. Kamalia, (2004)
2 SCC 65;
iv) Ratnagiri Gas & Power (P) Ltd. v. RDS Projects Ltd., (2013) 1 SCC
524;
v) Mohinder Singh Gill v. Chief Election Commr., (1978) 1 SCC 405;
vi) Shrilekha Vidyarthi v. State of UP, (1991) 1 SCC 212;
vii) Erusian Equipment & Chemicals Ltd. v. State of WB, (1975) 1 SCC
70;
viii) Joseph Vilangadan v. Executive Engineer, (1978) 3 SCC 36.
33. Mr. Chashoo, learned AAG, on the other hand, submitted that the petitioner by operation of the condition contained in clause VII(f) of the tender notice under the head eligibility criteria of the NIT has rendered himself ineligible for participation in the tendering process. Since the petitioner had concealed the information about its debarment by the PWD, Chhattisgarh, in its tender document and such information was received by the respondents only after the technical bids and price bids were opened, the petitioner cannot derive any advantage out of its wrongful act and that the respondents had no option, but to reject the tender of the petitioner, resort to re-tendering of the project and further to initiate action against the petitioner for concealment of such information for which the impugned show cause notice has been issued to the petitioner. Mr. Chashoo submitted that since no agreement had come into existence between the parties, the respondents were within their rights to cancel the tender process and issue a fresh tender notice which act of the respondents does not prejudice the interests of the petitioner in any manner. He further submitted that on receipt of the complaint and copy of order dated 22.03.2013 issued by the PWD, Chhattisgarh, the Development Commissioner (Power) immediately summoned the petitioner, verbally informed its representative about the contents of the complaints and asked the petitioner to clear the position, but the petitioner did not respond. That being the position, he submitted, petitioner cannot claim violation of principles of natural justice. Mr. Chashoo, submitted that writ petition against show cause notice is not maintainable, especially so when no decision to debar the petitioner or to forfeit its earnest money deposit has been taken. He further submitted that the respondents are competent to reject the tender to ensure qualitative work and that, if the petitioner has any grievance, the only remedy available to it is to seek damages. In support of his arguments, Mr. Chashoo cited and relied upon the decisions of the Supreme Court in State of U. P. v. Vijay Bahadur Singh, AIR 1982 SC 1234; Tata Cellular v. Union of India, AIR 1996 SC 11; The Executive Engineer Bihar State Housing Board v. Ramesh Kumar Singh, AIR 1996 SC 691; and Raunaq International Ltd. v. I.V.R. Construction Ltd., AIR 1999 SC 393. Apart from the above Supreme Court decisions, Mr. Chashoo also cited, State of Tripura v. M/s Bhowmik & Company, AIR 2004, Gauhati 19; Hubli Dharwad Municipal Corporation v. Chandrashekar M. Sheety, AIR 2009 Karnataka 41; and The Maharashtra Rajya Sahakari Kappos Utpadak Panan Mahasangha Ltd. v. Manga Bhaga Choudhary, AIR 2009 (NOC) Bombay 2321.
34. It is axiomatic from the contents of the impugned Show Cause Notice for Debarment issued by the respondents to the petitioner as well as the objections / reply filed by them that the impugned decisions to reject the petitioners tender, re-tender the Project, debar the petitioner for a period of two years and forfeit its EMD have been taken by the respondents on the ground that the petitioner had concealed the information about issuance of debarment order dated 22.03.2013 by the Public Works Department of the State of Chhattisgarh and violating the clause (f) of the Eligibility Criteria of the RFP. Concealment is an affirmative act intended or known to be likely to keep another from learning of a fact of which he would otherwise have learned. Such affirmative action is always equivalent to a misrepresentation and has any effect that a misrepresentation would have. (Blacks Law Dictionary, Ninth Edition p. 327). The word concealment presupposes the factum of having the knowledge.
35. In the instant case, it has been the repeated claim of the petitioner that it did not have knowledge about the debarment order dated 22.03.2013 at any stage until it was verbally informed about the same by none other than the respondents on or around 31.07.2013. On gaining such knowledge, the petitioner immediately took the legal course available to it against the said order by filing writ petition (Civil) 1221 of 2013 before the High Court of Chhattisgarh. A copy of that writ petition has been placed on record of this petition as annexure P/7. In paragraph 3 of that writ petition, under the head subject matter in brief, the petitioner had specifically pleaded as under:
What is more aggravating is that no copy of the impugned order was received by the petitioner from the respondent at any stage. The petitioner has on or around 31.07.2013 come to be in know of the impugned order when it was verbally informed that the Evaluation Committee assessing a bid submitted by the petitioner to the Department of Power, Government of Jammu and Kashmir On the very day of filing of the aforesaid writ petition, viz. 08.08.2013, the petitioner addressed a letter to respondent no.4 stating therein, among other things, as under:
[O]n 4th August, 2013, we were informed that our bid might get rejected on the ground that Government of Jammu & Kashmir has been delivered one letter dated 22nd March, 2013 [Impugned order] issued by the office of the Engineer-in-Chief, Public Works Department (PWD), Government of Chhattisgarh wherein we have been debarred for participation for a period of 3 years in any of the projects to be initiated by the PWD Department, Government of Chhattisgarh.
In this regard, we would like to inform you that we have not received the impugned order from the PWD Department and got to know about it for the first time through your office.
Further, we would like to inform that the Company has already challenged the impugned order and filed a writ petition with the Honble High Court of Chhattisgarh with prayer to the Honble Court to quash the impugned order dated 22.03.2013 issued by the Government of Chhattisgarh vide Writ Petition No. W.P. (c) 1221 of 2013 The petitioner in its aforesaid letter requested respondent no.4, inter alia, as under:
Under these circumstances, you are requested to kindly take cognizance of the appropriate legal remedy sought by the Company and also requested to kindly put on hold your final decision in respect of the captioned Bid till the order of the Honble Court in the Writ Petition No.W.P. (C) 1221 of 2013
36. Admittedly, thus, other than the copy of debarment order dated 22.03.2013, there was no material available to the respondents to conclude that the petitioner knew about the order and that it had concealed the information thereabout in his tender document. Obviously, when the petitioner pleaded ignorance about the order in question and took recourse to legal remedy within the knowledge of the respondents, respondents, as per their own showing, sought to telephonically verify the facts from the Engineer-in-Chief, PWD, Raipur, Chhattisgarh for confirmation of their memo, but, according to the respondents, he did not respond. Meaning thereby, there was again no material available to the respondents to suggest that the petitioner had the knowledge of the debarment order which could support their impugned decisions.
37. Curiously enough, the respondents have proceeded to draw adverse inference against the petitioner that its plea that it did not have the knowledge of the debarment order on the date of submission of tender documents was belied on two counts: first, that the petitioner itself, vide communication dated 08.08.2013, confirmed the issuance of the debarring memo; and second, that in response to communication dated 23.10.2013 by the representative officer of the respondents, the Chief Engineer, PWD, Raipur (CG), vide its memo No.889/904/001 dated 23.10.2013 confirmed the dispatch of debarring letter by registered post supported by postal receipt which indicated that the debarring letter had been dispatched to the petitioner on 03.04.2013, i.e., prior to the submission of tenders by the petitioner. The relevant paragraphs of the communication dated 08.08.2013 have already been quoted hereinabove. There is nothing coming forth from the said letter which would even remotely show that the petitioner had the knowledge about issuance of order dated 22.03.2013 at any stage prior to 31.07.2013. The communication dated 23.10.2013 from the Chief Engineer, PWD, Raipur (CG), apart from being a material having come into existence much after the impugned decisions were taken and the show cause notice was issued, does not, in any manner, suggest that the debarment order was served on the petitioner and that it had gained knowledge about it having been so debarred. The petitioner has brought on record a document issued by none other than the concerned postal authority that the envelope in question was returned to the sender on account of the fact that the addressee was not found. Therefore, the inferences drawn from these two factors that the plea of the petitioner was belied, is without any basis, unwarranted uncalled for and, therefore, rendered unreasonable and arbitrary.
38. It is also note worthy that it is the positive case of the respondents that the petitioner was informed about the receipt of the debarment order / complaint received against him, and was asked to clear its position in this regard which he failed to do so. There is overwhelming documentary evidence on record, including communication dated 08.08.2013 addressed by the petitioner to respondent no. 4, that the petitioner did respond to what was orally communicated to it, and requested respondent no.4 to await the decision in its writ petition by the High Court of Chhattisgarh. Not only that, on 04.09.2013 the petitioner informed the respondents that the debarment order had been set aside by the High Court of Chhattisgarh. The respondents do not deny or refute these factual assertions or the communications. Once the debarment order was quashed by the High Court of Chhattisgarh, in law, there was no reason, muchless plausible, for the respondents to have taken the impugned decisions on the very following day, i.e., on 05.09.2013 and proceed to implement such decisions by re-tendering the Project and issuing show cause notice to the petitioner.
39. Coming to the law cited at the Bar, in V. K. Ashokan v. CCE (supra), the appellants were successful bidders at the auction of vending toddy through retail shops. They were granted license to deal in the said commodity for one year. However, subsequently, on the allegation that chemical examination of the toddy samples collected from their shops by the Excise Inspectors contained diazepam varying from 1.8 mg to 2.2 mg per liter, apart from initiating criminal proceedings against the appellants, their licenses were cancelled in terms of the relevant provisions of the Kerala Abkari Shops (Disposal in Auction) Rules, 1974. Meanwhile, the Assistant Commissioner of Excise invited fresh bids, but nobody responded thereto. The Assistant Commissioner, thereafter, entered into negotiations with some of the parties on the basis whereof licenses were granted to the said parties for the remaining period. The matters were referred to the Commissioner of Excise for confirmation of sale. At that stage, the Board of Revenue purported to have come to the conclusion that in cases where licenses were cancelled in terms of Rule 6(3), R6(28) would also be automatically attracted and on the basis thereof, the decision of the Assistant Commissioner was upheld. The Assistant Commissioner of Excise issued another order forfeiting the amount of security deposit of the appellants. Consequent to the said order, the Circle Inspector of Excise issued a notice demanding a huge amount as also interest thereon at 18% per annum, stating that the Government of Kerala had suffered losses in holding re-auctions. Recovery proceedings, too, were initiated under Section 7 of the Kerala Revenue Recovery Act. The appellants approached the High Court, but they did not succeed. The matter finally landed in the Supreme Court. On the plea of violation of the principles of natural justice, the Supreme Court, in paragraphs 49, 50 and 51 of the judgment, inter alia, held as under:
49. ... The law provides for compliance with the principles of natural justice as a consequence flowing from an order of cancellation of licence has civil consequences and as such it was obligatory on the part of the Excise Commissioner to comply with the principles of natural justice. He has failed to do so. The submission of Mr. Iyer that in few of the matters the Assistant Commissioner of Excise had served notices before the recovery proceedings had been initiated cannot be accepted for more than one reason. Such a notice had been issued only pursuant to the order passed by the higher authority, namely, the Commissioner of Excise. As the higher authority had already made up his mind and confirmed forfeiture of the security as also cancellation of licence, administrative discipline would require that it is complied therewith. Issuance of such notices was, therefore, a mere formality.
50. In K. I. Shephard v. Union of India, this Court observed:
(SCC p. 449, para 16) 16. It is common experience that once a decision has been taken, there is a tendency to uphold it and a representation may not really yield any fruitful purpose. Secondly, because when an authority has already made up his mind, the formality of complying with the principles of natural justice may be held to be a nominal and sham one.
51. In Rajesh Kumar v. CIT this Court held: (SCC p. 193, para 26) 26. Effect of civil consequences arising out of determination of lis under a statute is stated in State of Orissa v. Dr. Binapani Dei. It is an authority for the proposition when by reason of an action on the part of a statutory authority, civil or evil consequences ensue, principles of natural justice are required to be followed. In such an event, although no express provision is laid down in this behalf, compliance with principles of natural justice would be implicit. In case of denial of principles of natural justice in a statute, the same may also be held ultra vires Article 14 of the Constitution.
40. In Aslam Mohammad Merchant v. Competent Authority (supra), Interpretation and application of Chapter V-A of the Narcotic Drugs and Psychotropic Substances Act, 1985 providing for forfeiture of property derived from or used in illicit traffic, was in question. Interpreting the provision, the Supreme Court held that a proper application of mind on the part of the competent authority is imperative before a show-cause notice is issued. The competent authority is required to apply his mind on the materials brought before him. The relevant paragraphs of the judgment are extracted hereunder:
32. Before, however, an order of forfeiture can be passed, the competent authority must not only comply with the principles of natural justice, he is also required to apply his mind on the materials brought before him. 38. It is, however, beyond any doubt or dispute that a proper application of mind on the part of the competent authority is imperative before a show cause notice is issued.
41. In Bahadursingh Lakhubhai Gohil v. Jagdishbhai M. Kamaliad (supra), the Supreme Court, relying on an earlier judgment on the point of mala fides, in paragraph 25 of the judgment said as under:
25. In S. P. Kapoor (Dr.) v. State of H. P. this Court held that when a thing is done in a post-haste manner, mala fide would be presumed, stating: (SCC p. 739, para 33) 33. The post-haste manner in which these things have been done on 3-11-1979 suggests that some higher-
up was interested in pushing through the matter hastily when the Regular Secretary, Health and Family Welfare was on leave.
42. It would also be advantageous to quote hereunder the observations of the Supreme Court made in Mohinder Singh Gill v. Chief Election Commr., (supra), in context of the limitations in application of principles of natural justice:
Paragraphs 47, 48 and 49 of the judgment are quoted hereunder:
47. It is fair to hold that subject to certain necessary limitations natural justice is now a brooding omnipresence although varying in its play.
48. Once we understand the soul of the rule as fairplay in action and it is so we must hold that it extend to both the fields. After all, administrative power in a democratic set up is not allergic to fairness in action and discretionary executive justice cannot degenerate into unilateral injustice. Nor is there ground to be frightened of delay, inconvenience and expense, if natural justice gains access. For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction. It is not a bull in a china shop, nor a bee in ones bonnet. Its essence is good conscience in a given situation; nothing more but nothing less. The exceptions to the rules of natural justice are a misnomer or rather are but a shorthand form of expressing the idea that in those exclusionary cases nothing unfair can be inferred by not affording an opportunity to present or meet a case. Text-book excerpts and ratios from rulings can be heaped, but they all converge to the same point that audi alteram partem is the justice of the law, without, of course, making law lifeless, absurd, stultifying, self-defeating or plainly contrary to the commonsense of the situation.
49. Let us look at the jurisprudential aspects of natural justice limited to the needs of the present case as the doctrine has developed in the Indo-Anglican systems. We may state that the question of nullity does not arise here because we are on the construction of a constitutional clause. Even otherwise, the rule of natural justice bears upon construction where a statute is silent save in that category where a legislation is charged with the vice of unreasonableness and consequential voidness.
43. In the instant case, the respondents, before taking the impugned decisions, have not issued any notice to the petitioner. Having orally asked the petitioner to explain its position, when the decision of the High Court of Chhattisgarh dated 04.09.2013, setting aside the debarment order, was brought to their notice, they, instead of applying their mind to these developments, axiomatically, hurried through the matter and took the impugned decisions on the very following day, i.e., on 05.09.2013. No reason, whatsoever, is gatherable from the records or the reply filed by the respondents which could lend any support, muchless legal, to the impugned decisions and actions of the respondents. The decision of the Supreme Court in V. K. Ashokan v. CCE; Aslam Mohammad Merchant v. Competent Authority; Bahadursingh Lakhubhai Gohil v. Jagdishbhai M. Kamalia; and Mohinder Singh Gill v. Chief Election Commr., (supra), as extracted hereinabove, squarely fit the bill, inasmuch, firstly, the respondents did not afford an opportunity of hearing, muchless a reasonable and effective hearing, to the petitioner; secondly, the Contract Committee-1 took all the decisions in its meeting held on 05.09.2013 without application of mind to the fact that the debarment order dated 22.03.2013 stood quashed by the High Court of Chhattisgarh on 04.09.2013 which fact, undeniably, was brought to the notice of respondent no.4 on the same day; thirdly, even after service of the copy of the judgment dated 04.09.2013 and holding of meetings by the petitioners representatives with the respondents bringing to their knowledge all the relevant facts, the respondents, in implementation of the decisions of the Contract Committee-1 dated 05.09.2013, re-tendered the Project; fourthly, and thereafter, issued the impugned show cause notice to the petitioner, again without application of mind. In light of these facts, I am convinced that, any representation that may be made by the petitioner in response to the impugned show cause notice would not really yield any fruitful purpose. The issuance of the impugned show cause notice, therefore, is a mere eye wash. Secondly, the decisions taken on 05.09.2013 and the show cause notice issued on 25.09.2013 are outcome of the sense of hastily rushing through the matter on the part of the respondents, that too, to mention it at the sake of repetition, without application of mind by the competent authority to the facts of the case.
44. Mr. Chashoo, learned AAG, in support of his submission that show cause notice cannot be challenged and that the petitioner has an alternative remedy to submit his representation in response to the show cause notice, relied upon the decision of the Supreme Court in Executive Engineer Bihar State Housing Board v. Ramesh Kumar Singh (supra). I have minutely gone through the judgment. It is true that in that case it was held that without showing cause against the notice, the respondent therein could not straightaway approach the High Court, but the facts of the two cases are wholly distinguishable. It is reiterated that in the instant case, the Contract Committee had already on 05.09.2013 taken the decision to debar the petitioner and forfeit its EMD.
45. The assertion made by the respondents that they have not so far blacklisted the petitioner or that its EMD had not been forfeited yet, is inconsequential as the decisions stand already taken.
46. Mr. Chashoo, learned AAG, submitted that the impugned decisions were not taken only on the count of the debarment order dated 22.03.2013 of PWD of the State of Chhattisgarh, but also on the complaint received about the poor performance of the petitioner consequent upon which the Development Commissioner (Power) convened a meeting of the Contract Committee-I on 31.07.2013 in which the two communications regarding performance of the petitioner in respect of feasibility study contract in J&K State and the debarring memo of the Chief Engineer, PWD, Raipur, Chhattisgarh were discussed. He further submitted that the Chief Engineers of EM&RE Wings of Jammu / Srinagar, who also are members of the Contract Committee-I, were not satisfied with the performance of the petitioner.
47. Insofar as the aforesaid contention of the learned counsel is concerned, the same has to be taken with a pinch of salt. Admittedly, the complaint was received much prior to 31.07.2013 and the two Chief Engineers of EM&RE Wings of Jammu / Srinagar, had allegedly expressed their dis-satisfaction about the working of the petitioner on or before 01.08.2013. The impugned show-cause notice was issued on 25.09.2013. This show-cause notice for debarment, as reproduced hereinabove, issued to the petitioner, does not contain any such assertion, allegation or statement. Therefore, the contention raised by the learned AAG is unsupported by the relevant record. Apart from the fact that the respondents have chosen to flout the principles of natural justice to the hilt, it is settled law that when a 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 affidavits or otherwise. Reference in this connection may be made to the decision of the Supreme Court in Mohinder Singh Gill v. Chief Election Commr., (supra) wherein the following has been laid down:
8. [W]hen 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 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 view of the above, the respondents cannot be allowed to justify its actions by the reasons and the explanation sought to be urged and brought in by way of reply affidavit. The validity of the impugned decisions and the consequent actions taken by the respondents has to be judged and scrutinized on the basis of the reasons and grounds mentioned in the impugned show cause notice.
48. Mr. Chashoo, learned AAG, submitted that this petition is not maintainable, for, the right to refuse the lowest or any other tender is always available to the Government to protect its finances. He further submitted that since no agreement had come into existence, the petitioner cannot claim violation of any of his rights, muchless the equality clauses of the Constitution. In support of his argument, apart from other judgments of different High Courts of the country in State of Tripura v. M/s Bhowmik & Company (Gauhati), Hubli Dharwad Municipal Corporation v. Chandrashekar M. Sheety (Karnataka), and The Maharashtra Rajya Sahakari Kappos Utpadak Panan Mahasangha Ltd. v. Manga Bhaga Choudhary (Bombay) mentioned hereinabove, Mr. Chashoo heavily relied on the judgments of the Supreme Court in State of U. P. v. Vijay Bahadur Singh, Tata Cellular v. Union of India and Raunaq International Ltd. v. I.V.R. Construction Ltd.
49. It is true that the Government has the discretion not to accept any tender and to re-tender any work without assigning any reason, but where it rejects the tender of a lowest tenderer on a certain set of allegations, it cannot claim that discretion or authority. In such a situation, the Government or its concerned functionaries have to take recourse to established norms, which include adherence to the principles of natural justice, and, as already said, the validity of the decision not to accept the tender and/or to re-tender the work has to be judged on the touchstone of the reasons so furnished.
50. Coming to the judgments cited by the learned AAG, in State of Tripura v. M/s Bhowmik & Company (Gauhati) (supra), the point in issue was whether the petitioner, i.e., the State of Tripura, had the right to retain or to forfeit the earnest money. The Court held that there being no agreement, there was no breach of contract committed by the respondent and also that since there was no breach of contract, the petitioner cannot retain or forfeit the earnest money deposited by the respondent by way of penalty. The judgment, therefore, is of no help to the respondents.
51. In Hubli Dharwad Municipal Corporation v. Chandrashekar M. Sheety (Karnataka) (supra), it was held that provisional acceptance of highest bid offer by itself does not bring about concluded contract. That is not the issue in the present case. It is nobodys case here that a concluded contract had come into existence.
52. In The Maharashtra Rajya Sahakari Kappos Utpadak Panan Mahasangha Ltd. v. Manga Bhaga Choudhary (Bombay) (supra), it has been held that the courts should refuse to read an implied term into a contract which is silent on the point or did not clearly indicate the nature of terms. This judgment is totally irrelevant to the facts of the present case.
53. In State of U. P. v. Vijay Bahadur Singh (supra), the conditions of auction of forest lots, inter alia, provided that the Government was under no obligation to accept the highest bid and that no rights accrued to the bidder merely because his bid happened to be the highest and that the acceptance of bid at the time of auction was entirely provision and was subject to ratification by the competent authority, it was held that the Governments power to refuse to accept the highest bid could not be confined to inadequacy of bid only. There may be variety of good and sufficient reasons, apart from inadequacy of bids which may impel the Government not to accept the highest bid. The Supreme Court in paragraph 3 of the judgment held as under:
3. Therefore, the Government had the right, for good and sufficient reason, we may say, not to accept the highest bid but even to prefer a tenderer other than the highest bidder. (emphasis supplied) In the instant case, the reason sought to be supplied did not subsist or exist on the date the impugned decisions were taken. This judgment rather goes against the respondents.
54. In Tata Cellular v. Union of India (supra), heavily relied upon by the learned AAG, at paragraph 85, the Supreme Court held as under:
85. It cannot be denied that the principles of judicial review would apply to the exercise of contractual powers by Government bodies in order to prevent arbitrariness or favourtism. However, it must be clearly stated that there are inherent imitations in exercise of that power of judicial review. Government is the guardian of the finances of the Stage. It is expected to protect the financial interest of the State. The right to refuse the lowest or any other tender is always available to the Government. But, the principles laid down in Article 14 of the Constitution have to be kept in view while accepting or refusing a tender. There can be no question of infringement of Article 14 if the Government tries to get the best person or the best quotation. The right to choose cannot be considered to be an arbitrary power. Of course, if the said power is exercised for any collateral purpose the exercise of the power will be struck down. (Underlining supplied) It is reiterated that the respondents in the instant case have sought to reject the tender of the petitioner on specific allegations which did not exist on the date the impugned decisions were taken and, in any case, the respondents had proceeded unilaterally without affording the petitioner an opportunity of being heard. Therefore, this judgment does not render any help to the respondents.
55. In Raunaq International Ltd. v. I.V.R. Construction Ltd (supra), the issue related to non-fulfillment of the qualifying criterion of having laid the pipeline for a distance of 3 Kms. That case is clearly distinguishable on facts and, therefore, not applicable in the instant case.
56. In this regard, I deem it advantageous to quote hereunder paragraph 48 of the decision of the Supreme Court in Shrilekha Vidyarthi v. State of UP (supra), cited by Mr. Baigh. It reads thus:
48. In our view, bringing the State activity in contractual matters also within the purview of judicial review is inevitable and is a logical corollary to the stage already reached in the decisions of this Court so far. Having fortunately reached this point, we should not now turn back or take a turn in a different direction or merely stop there. In our opinion, two recent decisions in Dwarkadas Marfatia and Sons and Mahabir Auto Stores also lead in the same direction without saying so in clear terms. This appears to be also the trend of the recent English decisions. It is in consonance with our commitment to openness which implies scrutiny of every State action to provide an effective check against arbitrariness and abuse of power. We would much rather be wrong in saying so rather than be wrong in not saying so. Non-arbitrariness, being a necessary concomitant of the rule of law, it is imperative that all actions of every public functionary, in whatever sphere, must be guided by reasons and not humour, whim, caprice or personal predilections of the persons entrusted with the task on behalf of the State and exercise of all power must be for public good instead of being an abuse of the power. In view of the law laid down in the aforesaid judgment, which fits in the facts attendant to the present case, the contention raised by the respondents as to the maintainability of this writ petition, must fail.
57. Before concluding the judgment, at the cost of repetition, it is reiterated that in its meeting held on 05.09.2013, the Contract Committee-1 admittedly, took the decision, inter alia, to debar the petitioner for a period of two years and forfeit its DMD. I have already recorded the finding that the show cause notice dated 25.09.2013 is a mere formality. In essence and in effect, the petitioner is sought to be blacklisted without any reason or justification.
58. The Supreme Court had the occasion to consider the executive power of the Government under Article 298 of the Constitution, which corresponds to Section 121 of the Constitution of Jammu and Kashmir, in Erusian Equipment & Chemicals Ltd. v. State of WB and Joseph Vilangadan v. Executive Engineer (supra) cited and relied upon by Mr. Baigh. It has been held therein that the executive power under Article 298 of the Constitution of the Union and the States to carry on any trade and to acquire, hold and dispose property and make contracts for any purpose is subject to Part III of the Constitution. Equality of opportunity applies to matters of public contracts. The Government cannot choose to exclude by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods in (sic, should read as and) discriminating against him in favour of other people. Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. 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. Fundamental of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the black list.
59. The respondents, in the instant case, have grossly violated the basic principles as enunciated in the aforesaid judgments. Therefore, their actions cannot be sustained.
60. For all what has been discussed above, I am convinced that the respondents, without any justification or lawful excuse, committed the wrongful acts in reckless disregard of the law and of the petitioners legal rights. As rightly put by Mr. Baigh, and supported by the judgment of the Supreme Court in Ratnagiri Gas & Power (P) Ltd. v. RDS Projects Ltd. (supra), the impugned decisions, the acts of re-tendering the project and issuance of the impugned show cause notice to the petitioner, all emanate from malice in law and, therefore, are rendered arbitrary, unconstitutional and, consequently, unsustainable. In the aforesaid judgment, the Supreme Court has held that in cases involving malice in law, the administrative action is unsupportable on the touchstone of an acknowledged or acceptable principle and can be inferred even when the decision maker may have had no real or actual malice at work in his mind.
61. This writ petition deserves and is, accordingly, allowed. The impugned decisions taken by the Contract Committee in its meeting held on 05.09.2013 are quashed. Consequently, the impugned notice re-tendering the project and the impugned show cause notice for debarment issued to the petitioner on 25.09.2013 in implementation of the impugned decisions dated 05.09.2013 are also quashed. The respondents are left free to proceed ahead with consideration of allotment of the contract / works in question from the stage the petitioner, pursuant to the negotiations held with him by the respondents on 04.07.2013, submitted its revised offer.
62. Given the public importance of the project and its supposed beneficial impact on the supply of electricity to the consumers, the respondents are expected to take a decision in the matter within the shortest possible time, preferably within a month from today.
63. This also disposes of the connected CMPs. Interim direction, subsisting, shall abide the decision in the main petition.
64. Parties to bear their own costs.
65. In view of the time limit fixed, Registry to furnish copy of the judgment to Mr. Chashoo, ld AAG today.
(Ali Mohammad Magrey) Judge Srinagar 11.08.2014 Syed Ayaz, Secretary