Jharkhand High Court
Tribhuvan Carrier Pvt. Ltd vs Bharat Coking Coal Limited on 19 February, 2020
Equivalent citations: AIRONLINE 2020 JHA 63, 2020 (2) AJR 133
Author: Rajesh Shankar
Bench: Rajesh Shankar
1
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No.4771 of 2019
With
W.P.(C) No.4217 of 2019 & I.A. No.7774 of 2019
With
W.P.(C) No.4218 of 2019 & I.A. No.7671 of 2019
With
W.P.(C) No.4270 of 2019 & I.A. No.7793 of 2019
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Tribhuvan Carrier Pvt. Ltd. .......... Petitioner.
[In W.P.(C) No.4771/2019] M/s. S G Projects Limited .......... Petitioner.
[In W.P.(C) No.4217/2019]
M/s. SGPL TCPL BP (JV) .......... Petitioner.
[In W.P.(C) No.4218/2019]
M/s. Balaji Projects .......... Petitioner.
[In W.P.(C) No.4270/2019]
-Versus-
1. Bharat Coking Coal Limited, through its Chairman-cum-Managing Director, having its office at Koyla Bhawan, Koyla Nagar, P.O. & P.S. Dhanbad, District Dhanbad.
2. General Manager, Contract Management Cell, Bharat Coking Coal Limited, having its office at Koyla Bhawan, Koyla Nagar, P.O. & P.S. Dhanbad, District Dhanbad.
.......... Respondents.
[In all cases]
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CORAM : HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioners : M/s Sumeet Gadodia, Advocate [In all cases] For the BCCL : Mr. Indrajit Sinha, Advocate [In all cases]
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Order No.11 Date: 19.02.2020
W.P.(C) No.4771 of 2019:
1. The present writ petition has been filed for quashing the order dated 31st July, 2019 passed by the General Manager, Contract Management Cell, Bharat Coking Coal Limited - respondent no.2, whereby the petitioner- Tribhuvan Carrier Private Limited (in short 'TCPL') has been debarred from participating in future bids in all tenders to be floated by the respondent-Bharat Coking Coal Limited in individual capacity or as joint venture for a period of five years from the date of issuance of the said order as well as the earnest money deposit (in short 'EMD') of Rs.50.00 lacs submitted by the petitioner towards bid security has been forfeited. Further prayer has been made for issuance of direction upon the respondent-Bharat Coking Coal Limited to immediately and 2 forthwith refund the EMD/Bid Security of Rs.50.00 lacs deposited by TCPL pursuant to e-Tender Notice no.H-HEMM-13 dated 6.1.2018, as the said tender has already been cancelled by the respondent-Bharat Coking Limited and TCPL is entitled to refund of the said EMD in terms with the Instructions to Bidders.
W.P.(C) No.4217 of 2019:
2. The present writ petition has been filed for quashing/setting aside the order dated 31st July, 2019 passed by the respondent no.2 to the extent the petitioner- S.G. Projects Limited (in short 'SGPL') has been debarred from participating in future bids in all the tenders to be floated by the respondent-Bharat Coking Coal Limited in its individual capacity or as joint venture for a period of five years from the date of issuance of the said order.
W.P.(C) No.4218 of 2019:
3. The present writ petition has been filed for quashing/setting aside the order dated 31st July, 2019 passed by the respondent no.2, whereby the petitioner- M/s. SGPL TCPL BP (hereinafter to be referred as 'JV') has been debarred from participating in future bids in all tenders to be floated by the respondent-Bharat Coking Coal Limited in individual capacity or as JV for a period of five years from the date of issuance of the said order as well as EMD of Rs.50.00 lacs deposited by JV towards bid security has been forfeited. Further prayer has been made for issuance of direction upon the respondent-Bharat Coking Coal Limited to immediately and forthwith refund the EMD/Bid Security of Rs.50.00 lacs deposited by JV pursuant to the said tender. W.P.(C) No.4270 of 2019:
4. The present writ petition has been filed for quashing/setting aside the order dated 31st July, 2019 passed by the respondent no.2 to the extent the petitioner- M/s. Balaji Projects (in short 'BP') has been debarred from participating in future bids in all tenders to be floated by the respondent-Bharat Coking Coal Limited in its individual capacity or as a joint venture for a period of five years from the date of issuance of the said order.
Factual background of the case:
5. The factual background of the case, as stated in the writ petitions, is that the respondent-BCCL published a e-Tender Notice no.H-HEMM-13 dated 6th January, 2018 inviting digitally signed and encrypted e-
3Tender primarily for the work of "Hiring of HEMM for removal of overburden, extraction and transportation of coal with fire fighting XVA, XV, XIV, XIII, XI/XII, XII, XI, XA, IX/X, X, IX VIIIA, VIII/VII(T), VIII, VII(T) & V/VI Seams of AKJ-SIMLA Patch of Amalgamated East Bhuggatdih-Simlabahal Colliery of Bastacolla Area (1) Insitu OB:1679.5 LCM, (2) Jhama + MP:83.76 LCM, (3) Coal:266.44 LMT, (4) Stripping Ratio: 1:6.62" (hereinafter to be referred as 'the said work'). TCPL, SGPL and BP entered into a Joint Venture Agreement and pursuant to the same, a joint venture entity in the name and style of "SGPL TCPL BP JV" was created. In the said joint venture, SGPL being the lead partner submitted its bid. Though the Joint Venture Agreement was duly executed, as per Clause 4.3 of the said agreement, the allocation of responsibilities as regards division of work to be executed between the partners of JV was not crystallized. Under the aforesaid circumstance, TCPL who was fulfilling all the eligibility criteria to participate in the bid in its individual capacity also prepared necessary documents and arranged funds for submission of EMD/Bid Security for the purpose of participation in the bid in the event the JV could not participate in the said bid for any unforeseen eventuality. Subsequently, the allocation of responsibilities of the partners of JV was finalized prior to the end date of submission of the bid and, accordingly, bid was submitted by the said JV online for participation in the aforesaid e-Tender. Since the bid of JV was to be submitted through SGPL which was having its office at Dhanbad, the said bid was submitted from the office of the SGPL on the online portal. However, due to mistake of some ministerial staff of the office of TCPL, the bid document prepared in the name of TCPL in its individual capacity was also submitted on the online portal of the respondent-BCCL pursuant to the aforesaid NIT dated 6th January, 2018. Since TCPL realized the said mistake, it did not participate in the Reverse Auction Process (in short 'RAP') in view of the fact that more than one bid was submitted by TCPL i.e. one in its individual capacity and another as a partner of JV. Even JV also did not participate in the RAP. However, from the comparative chart of e-auction uploaded on the website of BCCL, it was revealed that out of remaining five eligible bidders, four other bidders had also not participated in the RAP and only one bidder i.e. Deoprabha Construction Private Limited (JV) participated and quoted 4 its rate. The respondent-BCCL cancelled the tender in question and intimation in that regard was published by it, stating that the same was being cancelled on prima facie allegation of bid rigging and collusive bidding. TCPL and JV were though entitled to refund of their EMD/ Bid Security under Clauses 14.3 and 14.9 of the Instructions to Bidders, however, the respondent no.2 issued notice dated 30 th October, 2018, directing them to show cause as to why action should not be initiated against them under Clause 6 of the Integrity Pact of the tender document including debarment of JV and the members of joint venture entity from participating in future bids for a minimum period of five years. The primarily allegation levelled against the petitioners is that TCPL submitted more than one bid and both TCPL and JV quoted exactly the same price in their bids. TCPL and JV filed their respective reply to the show cause notices stating that they did not violate any of the clauses of the integrity pact. However, the said show cause notices were not recalled. TCPL and JV, both, filed writ petitions, being WPC No.6502 of 2018 and W.P.C. No.124 of 2019, respectively, praying inter alia for setting aside the show cause notices as well as for issuance of direction upon the respondent-BCCL to immediately refund the earnest money of TCPL and JV. However, the said writ petitions were dismissed by a common order dated 21 st January, 2019 solely on the ground that the writ court was not required to interfere at the stage of issuance of show cause notice when there were chances that enquiry initiated against the petitioners might have ended in their favour. Aggrieved thereby, TCPL preferred letters patent appeal, being L.P.A. No.104 of 2019. In the meantime, the petitioners were communicated the impugned orders dated 31st July, 2019 debarring them from participating in all future tenders to be floated by the respondent-BCCL in individual capacity or partner of joint venture entity for a period of five years from the date of issuance of the said order as well as forfeiting the EMD of Rs.50.00 lacs deposited by TCPL and JV as bid security. Subsequently, LPA No.104 of 2019 was also dismissed by a Division Bench of this Court with a liberty to TCPL and JV to challenge the final order dated 31st July, 2019 (impugned herein) before an appropriate forum. Hence the present writ petitions.
6. Learned counsel for the petitioners submits that the impugned order has been passed without considering the reply submitted by the 5 petitioners as well as in violation of the principles of natural justice. It is further submitted that apart from TCPL and JV of which the TCPL was one of the partners, there were five other bidders who also participated in the tender in question. Thus, filing of more than one bid by the petitioners had no bearing on the outcome of the tender process, as other five eligible bidder could have continued to participate in the RAP. It is not the case of the respondent-BCCL that due to the alleged submission of more than one bid by the petitioners, the respondent-BCCL has suffered any potential harm and/or ultimate result of the tender process has been affected due to the said fact. In absence of any harm and/or loss having been caused to the respondent-BCCL due to submission of more than one bid by the petitioners, the decision to debar the petitioners is wholly unwarranted and contrary to the guidelines laid down by the Hon'ble Supreme Court. There is no finding given in the impugned orders with regard to past conduct of the petitioners regarding involvement in the alleged activity of submitting more than one bid or in any manner affecting the tender process of the respondent-BCCL. In absence of such findings recorded in the impugned orders, the same are not sustainable in the eye of law and are liable to be quashed and set aside.
7. Learned counsel for the petitioners, while relying upon Clause 2 read with Clause 4 of the Instructions to Bidders, contends that though TCPL submitted more than one bid i.e. the bid in its individual capacity and also as one of the partners of JV, the situation at best could have led to rejection of the bid. Any of the tender conditions does not stipulate any further requirement of blacklisting a bidder merely because more than one bid has been submitted by one bidder. Learned counsel for the petitioners, while referring to Clause 3.6 of the Integrity Pact under Commitments of Bidders submits that the said clause would be applicable only if one bidder colludes with either party interested in the contract to affect transparency, fairness and progress of the bid process etc. The words "will not collude with either parties interested in the contract" have deliberately been used to mean that a bidder should not join hands with other parties interested in the contract to affect transparency, fairness and progress of the bid process. Since the bids submitted by TCPL and JV are treated to be by one and same bidder as per Clause 4 of the Instructions to Bidders, there cannot be 6 any question of applicability of Clause 3.6 of the Integrity Pact under Commitments of Bidders, as in the case of the petitioners there would not be "any other party interested in the contract". The impugned orders have been issued primarily on the ground that TCPL and JV quoted exactly the same price. In this context, it is submitted that the price quoted by one bidder or other at the time of participation of the bid is of no significance, as the price was to be decided on the basis of bidding to be conducted through RAP. It is also submitted that TCPL jointly determined the fair and reasonable bid price which would be feasible for JV for execution of the project in question. Since TCPL was also one of the participating partners in JV and was involved in the process of calculating fair and reasonable price, as a natural corollary of the said fact, at the time of submission of its individual bid, TCPL quoted the price which was arrived at through the said process of joint determination of fair and reasonable price.
8. Learned counsel for the petitioners further submits that any prudent businessman in the given facts and circumstances would have quoted the same price, which was determined jointly by it along with other JV partners in the even the said entity was required to participate in its individual capacity as well. In fact, if the price other than jointly determined price by the partner of JV had been quoted by TCPL, the same could have been a matter of concern. The price quoted by one or the other bidder was not of any significance , as the RAP was to be undertaken and the auction start price would have been the amount quoted by the lowest bidder. Even if presuming that TCPL would have been the lowest bidder along with the petitioners' joint venture entity, since both quoted the same price, the said price would have only been the auction start price which was subject matter of RAP and would have lost its significance thereafter. On perusal of the auction summary report it would be evident that out of other remaining five bidders, only one bidder participated in the RAP and the remaining four bidders had not participated in the same due to which the tender was cancelled by the respondent-BCCL on a prima facie case of bid rigging and collusive bidding.
9. Learned counsel for the petitioners also submits that the petitioners came to know that the EMD deposited by other four participating bidders, who had not participated in the RAP have been refunded by 7 the respondent-BCCL and even no action for blacklisting them has been initiated. The respondent-BCCL has filed a case before the Competition Commission of India being Case No.09 of 2019 under the Competition Act, 2002 (hereinafter to be referred as 'the Act, 2002'), wherein all the participating bidders including the petitioners have been impleaded as opposite parties. It has come to the knowledge of the petitioners that the said case has been filed by the respondent- BCCL against all the bidders alleging that there was a bid rigging and cartelization among the bidders which affected the tender process. On the one hand, the respondent-BCCL initiated proceeding before the Competition Commission of India under the Act, 2002 against all the participating bidders on the allegation of bid rigging and/or cartelization and, on the other hand, has passed the impugned order against the petitioners debarring them from participating in future bids of the respondent-BCCL for five years, primarily and solely on the ground that the petitioners were allegedly involved in the bid rigging and/or cartelization and colluded with other parties in violation of the Integrity Pact. No action has been initiated by the respondent-BCCL on the allegation of bid rigging and/or cartelization against five other participating bidders and even their EMD have been refunded with stipulation that if ultimately the allegation of bid rigging and cartelization is substantiated against them before the Competition Commission of India, the respondent-BCCL would initiate appropriate action in that regard. However, the respondent-BCCL in a most arbitrary manner has discriminated the petitioners and has passed the impugned order debarring them from participating in the future tenders to be floated by the respondent-BCCL for a period of five years either individually or as a joint venture and has even forfeited the EMD of TCPL and JV.
10. Learned counsel for the petitioners further submits that once the respondent-BCCL has treated the bid submitted by JV entity and a separate bid submitted by its partners as a bid submitted by same bidder as well as Clauses 2 and 4 of the Instructions to Bidders have been invoked, there is no question of applicability of Clause 3.6 of the Integrity Pact under Commitments of Bidders. The respondent- BCCL in its counter affidavit on the one hand has stated that more than one bid was submitted by the petitioners by treating the bid of constituent 8 partner of JV entity and the bid of JV entity by one bidder itself and, on the other hand, they have stated that JV and single entity are different identities as per the provision of law and, thus, both cannot be treated to be one and the same. Hence, on one hand, the allegation levelled against the petitioners in the show cause notice that they have submitted more than one bid in the tender process by treating the bid of JV entity and its partners as one and the same and, on the other hand, they have stated for the purpose of invoking Clause 3.6 of the Integrity Pact under Commitments of Bidders that the bids of JV entity and its partners cannot be treated to be one and the same. Merely due to the fact that JV entity and one of its partners submitted more than one bid, the same could not have any impact on the tender process specially because five eligible bidders were still there who have participated in the reverse auction. It would be evident from the decision of the tender committee dated 11th October, 2018 that the cancellation of tender was due to various reasons including the one that out of remaining five eligible bidders, only one bidder participated in the reverse auction. Though the tender was cancelled on the allegation of bid rigging and cartelization and the respondent-BCCL initiated proceeding before the Competition Commission of India under the Act, 2002 against all the participating bidders on the allegation of bid rigging and cartelization, yet the proceedings of blacklisting and forfeiture of EMD were initiated only against the petitioners.
11. Learned counsel for the petitioners in support of his submission has put reliance on a judgment of the Hon'ble Supreme Court rendered in the case of Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project, BCCL & Ors., reported in (2014)14 SCC 731.
12. Per contra, learned counsel for the respondent-BCCL submits that the joint venture and the single entity should have intimated the mistake committed by them to the respondents in advance. The tender has been cancelled due to the fault on the part of the petitioners and the EMD deposited by TCPL and JV have been forfeited in terms with Clause 14.3 of Instructions to Bidders and, therefore, there is no illegality in the impugned orders dated 31st July, 2019. It is further submitted that according to the terms and conditions of the NIT, there was no provision of giving any hearing to the parties and the action 9 taken by the respondents is completely based on the relevant clauses of the Instructions to Bidders.
13. Learned counsel for the respondent-BCCL further submits that the respondents have initiated a proceeding before the Competition Commission of India on 21st March, 2019 against remaining five bidders including the petitioners and the same is pending for adjudication. It is important to note that that due to such action on the part of the petitioners, the respondent-BCCL has suffered huge loss and the tender was also to be cancelled. As such the action taken against the petitioners by the respondent-BCCL is completely justified. The petitioners have violated the terms and conditions of the NIT specially the terms of Integrity Pact and due to their collusion, transparency and fairness of the bidding process were adversely affected. It is also submitted that joint venture and single entity are different as per the provisions of law and the contention of the petitioners that both entitles can be treated to be one and the same cannot be accepted. Hence the impugned orders do not require any interference by this Court.
14. Heard learned counsel for the parties and perused the materials available on record. The said tender was floated by the respondent- BCCL on 6th January, 2018. Altogether eight bidders, namely, VPR Mining Infrastructure Private Limited (VPR), BGR Mining and Infra Limited (BGR), Sical Logistics Limited (Sical), RAMK Projects (RAMK), Tribuvan Carrier Private Limited (TCPL), Deoprabha, SGPL TCPL BP JV and Ambey Mining Private Limited participated in the tender. Ambey Mining Private Limited was the highest bidder, which was eliminated by the system itself. In the RAP, only Deoprabha participated, which emerged as L-1 bidder with the final bid of Rs.24,15,40,05,110/-. The tender was finally cancelled on prima facie allegation of bid rigging and collusive bidding. Subsequently, show cause notice was issued to both TCPL and JV, seeking their reply as to why action should not be initiated against them under Clause 6 of the Integrity Pact under Commitments of Bidders of the tender document including debarment of the petitioners from participating in the future bids for a minimum period of five years. Finally, the impugned orders have been issued by the respondent no.2 against JV and all its members which are under challenge in the present writ petitions.
1015. Before coming to the merit of the case of the parties, it would appropriate to go through the judgments rendered by the Hon'ble Supreme Court as referred by the learned counsel for the respondent- BCCL, laying down the ratio with regard to entertaining the writ petition under Article 226 of the Constitution of India, particularly in contractual dispute. In the case of Silppi Constructions Contractors Vs. Union of India & Anr., reported in 2019 SCC Online SC 1133, the Hon'ble Supreme Court has held as under:
"19. This Court being the guardian of fundamental rights is duty bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The Courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints"
to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer."
In the case of Caretel Infotech Ltd. Vs. Hindustan Petroleum Corporation Ltd. & Ors., reported in 2019 SCC Online SC 494, the Hon'ble Supreme Court has held as under:
"39. In Afcons Infrastructure Limited v. Nagpur Metro Rail Corporation Limited, this Court has expounded further on this aspect, while observing that the decision making process in accepting or rejecting the bid should not be interfered with. Interference is permissible only if the decision making process is arbitrary or irrational to an extent that no responsible authority, acting reasonably and in accordance with law, could have reached such a decision. It has been cautioned that Constitutional Courts are expected to exercise restraint in interfering with the administrative decision and ought not to substitute their view for that of the administrative authority. Mere disagreement with the decision making process would not suffice."11
16. It would thus emerge from the aforesaid judgments that the High Court while exercising its writ jurisdiction is not expected to act as a court of appeal while examining an administrative decision and to record its finding whether any different decision could have been taken in the facts and circumstances of a particular case. The Writ Court while making judicial review of any decision should ordinarily refrain from examining the details of the terms of the contract entered by the State/its instrumentalities. However, it can certainly examine whether the decision making process is unreasonable, irrational, arbitrary and violative of Article 14 of the Constitution of India. Once the procedure adopted by the State/its instrumentalities in the matter of contract is held to be against the mandate of Article 14 of the Constitution of India, the Writ court cannot ignore such action on the pretext that the State authorities should have some latitude or liberty in contractual matters and any interference by the Writ Court would amount to encroachment on the exclusive right of the said authority to take such decision.
17. Since the respondent has also taken an action of blacklisting against the petitioners, it would be relevant to refer the judgment of the Hon'ble Supreme Court rendered in the case of Kulja Industries Limited (Supra). The relevant parts of the said judgment read as under:-
"17. That apart, the power to blacklist a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is in our opinion inherent in the party allotting the contract. There is no need for any such power being specifically conferred by statute or reserved by contractor. That is because "blacklisting" simply signifies a business decision by which the party affected by the breach decides not to enter into any contractual relationship with the party committing the breach. Between two private parties the right to take any such decision is absolute and untrammelled by any constraints whatsoever. The freedom to contract or not to contract is unqualified in the case of private parties. But any such decision is subject to judicial review when the same is taken by the State or any of its instrumentalities. This implies that any such decision will be open to scrutiny not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. A fair hearing to the party being blacklisted thus becomes an essential precondition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The order itself being reasonable, fair and proportionate to the gravity of the offence is similarly examinable by a writ court.12
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 W.B. 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: (SCC p. 75, para 20) "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."
Subsequent decisions of this Court in Southern Painters v. Fertilizers & Chemicals Travancore Ltd.; Patel Engg. Ltd. v. Union of India; B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd.; Joseph Vilangandan v. Executive Engineer (PWD) among others have followed the ratio of that decision and applied the principle of audi alteram partem to the process that may eventually culminate in the blacklisting of a contractor.
19. Even the second facet of the scrutiny which the blacklisting order must suffer is no longer res integra. The decisions of this Court in Radha Krishna Agarwal v. State of Bihar; E.P. Royappa v. State of T.N.; Maneka Gandhi v. Union of India; Ajay Hasia v. Khalid Mujib Sehravardi; Ramana Dayaram Shetty v. International Airport Authority of India and Dwarka Das Marfatia and Sons v. Port of Bombay have ruled against arbitrariness and discrimination in every matter that is subject to judicial review before a writ court exercising powers under Article 226 or Article 32 of the Constitution.
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 Mahabir Auto Stores v. Indian Oil Corpn.should, in our view, suffice:
(SCC pp. 760-61, para 12) "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 Radha Krishna Agarwal v. State of Bihar. ... In case any right conferred on the citizens which is sought to be interfered, such action is 13 subject to Article 14 of the Constitution, and must be 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."
Further in the case of Gorkha Security Services Vs. Government (NCT of Delhi) & Ors., reported in (2014)9 SCC 105, the Hon'ble Supreme Court has held as under:
"16. It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts.
17. Way back in the year 1975, this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B., highlighted the necessity of giving an opportunity to such a person by serving a show- cause notice thereby giving him opportunity to meet the allegations which were in the mind of the authority contemplating blacklisting of such a person. This is clear from the reading of paras 12 and 20 of the said judgment. Necessitating this requirement, the Court observed thus: (SCC pp. 74-75) "12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or 14 without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality.
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."
18. Again, in Raghunath Thakur v. State of Bihar the aforesaid principle was reiterated in the following manner: (SCC p. 230, para 4) "4. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In that view of the matter, the last portion of the order insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the blacklist in respect of future contracts under the Collector is set aside. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for blacklisting the appellant 15 if the Government is so entitled to do in accordance with law i.e. after giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefor. We, however, make it quite clear that we are not expressing any opinion on the correctness or otherwise of the allegations made against the appellant. The appeal is thus disposed of."
19. Recently, in Patel Engg. Ltd. v. Union of India speaking through one of us (Justice Chelameswar, J.) this Court emphatically reiterated the principle by explaining the same in the following manner: (SCC pp. 262-63, paras 13-15) "13. The concept of 'blacklisting' is explained by this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B. as under: (SCC p. 75, para 20) '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.'
14. The nature of the authority of the State to blacklist the persons was considered by this Court in the abovementioned case and took note of the constitutional provision (Article 298), which authorises both the Union of India and the States to make contracts for any purpose and to carry on any trade or business. It also authorises the acquisition, holding and disposal of property. This Court also took note of the fact that the right to make a contract includes the right not to make a contract. By definition, the said right is inherent in every person capable of entering into a contract. However, such a right either to enter or not to enter into a contract with any person is subject to a constitutional obligation to obey the command of Article 14. Though nobody has any right to compel the State to enter into a contract, everybody has a right to be treated equally when the State seeks to establish contractual relationships. The effect of excluding a person from entering into a contractual relationship with the State would be to deprive such person to be treated equally with those, who are also engaged in similar activity.
15. It follows from the above judgment in Erusian Equipment case that the decision of the State or its instrumentalities not to deal with certain persons or class of persons on account of the undesirability of entering into the 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 the State is to act fairly and rationally without in any way being arbitrary thereby 16 such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors."
18. In the aforesaid judgments, the Hon'ble Supreme Court has held that when in a situation where an order of blacklisting has been passed by the State or its instrumentalities, such order is within the realm of power of judicial review of the Writ Court and the same is to be tested on the touchstone of principle of natural justice, doctrine of proportionality, reasonableness and fairness. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government or its agencies for the purpose of gain. Thus, before taking such a harsh decision, the person concerned should be given an opportunity to represent its case before it is put on the blacklist. The show cause notice must not be a formality, rather the same should specifically mention the grounds according to which the department necessitates the action as also the proposed action so that the person aggrieved may explain the circumstances properly by way of his defence.
19. To appreciate the rival contentions of learned counsel for the parties, it would also be appropriate to go through the relevant provisions of the NIT. Clause 2 of Instructions to Bidders explains eligibility of bidders. The relevant part of Clause 2 is quoted hereunder:-
"2.1 The Invitation for Bid is open to all Bidders including an individual, proprietorship firm, partnership firm, company registered under Companies Act, or joint ventures. The bidders shall be eligible to participate only if they fulfil the qualifying/eligibility criteria specified in e-tender Notice and at Clause 3.
2.2 Joint Venture/Consortium: Two or three companies/contractors may jointly undertake contract/contracts. Each entity will be jointly and severally responsible for completing the task as per the contract."
Clause 4 of Instructions to Bidders explains about one bid per bidder, which reads as under:-
"4. One Bid Per Bidder 4.1 Each Bidder shall submit only one bid, either individually, or as a partner in a partnership firm or a partner in a Joint Venture/Consortium or a Public Ltd./Private Ltd. Company. A Bidder who submits or participates in more than one Bid (other than as a subcontractor or in cases of alternatives that have 17 been permitted or requested) will cause all the proposals with the Bidder's participation to be disqualified."
Clause 3 of the Integrity Pact explains about Commitments of Bidders. The relevant part of the said clause is quoted hereunder:-
"The Integrity Pact
3. Commitments of Bidders
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3.6 The Bidder will not collude with other parties interested in the contract to impair the transparency, fairness and progress of the bidding process, bid evaluation contracting and implementation of the contract."
Clause 6 of the Integrity Pact explains about sanctions for violations. The relevant part of the said clause is quoted herein under:-
"Sanctions for Violations 6.1 Any breach of the aforesaid provisions by the Bidder or any one employed by it or acting on its behalf (whether with or without the knowledge of the Bidder) shall entitle the Buyer to take all or any one of the following actions wherever required.
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(ii.) The Earnest Money Deposit (in pre-contract stage) and/or Security Deposit/ Performance Security (after the contract is signed) shall stand forfeited either fully or partially, as decided by the Buyer and the Buyer shall not be required to assign any reason therefore.
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(vii) To debar the Bidder from participating in future bidding processes of the Govt. of India for a minimum period of five years, which may be further extended at the discretion of the Buyer.
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6.3 The decision of the Buyer to the effect that a breach of the provisions of this Pact has been committed by the Bidder shall be final and conclusive on the Bidder. However, the Bidder can approach the independent Monitor(s) appointed for the purposes of this Pact."
20. In view of the aforesaid stipulations, it is evident that no bidder was permitted to participate in more than one bid either individually or as a partnership firm or as a partner in joint venture/consortium or a public limited or private limited company. On violation of the said condition, the bid of the bidder was liable to be disqualified. Admittedly, TCPL had violated Clause 4 of Instructions to Bidders by filing bids, both, in individual capacity as well as a member of jointer venture. The case of the petitioners is, however, that the said violation 18 has been done due to bona fide mistake and the respondent-BCCL at best could have rejected the bid of the petitioners. It is also the case of the petitioners that the said violation could not have been a ground for forfeiture of EMD as well as the debarment of the petitioners.
21. On the contrary, the case of the respondent-BCCL is that the petitioners have violated Clause 3.6 of the Integrity Pact under Commitments of Bidders and as such they were liable for suitable action to be taken under Clause 6 of the Integrity Pact, which includes forfeiture of EMD as well as debarment of the bidders for a minimum term of five years.
22. It is evident from Clause 6.3 of the Integrity Pact that the decision of the buyer to the effect that a breach of the provision of Integrity Pact has been committed by the bidder shall be final and conclusive and if the bidder feels aggrieved with the decision of the buyer, it may approach the independent monitor(s) appointed for the purpose of the said Pact. Thus, in view of Clause 6.3 of the Integrity Pact, the question is as to whether the breach of contract allegedly committed by the petitioners can be raised before this Court in view of specific exclusion of the same by the Integrity Pact agreed upon by the parties. However, in view of the judgments cited hereinabove, the decision of the respondents can be looked into as to whether the same suffers from vice of arbitrariness, unreasonableness or mala fide.
23. Learned counsel for the petitioners has vehemently argued that the respondent-BCCL has adopted double standard among the tenderers. It has been submitted that, on the one hand, the EMD of other tenderers, who had also not participated in the RAP, has been refunded, however, on the other hand, the EMD of the TCPL and JV has been forfeited. Apart from that, a complaint has already been instituted by the respondent-BCCL in the Competition Commission of India against the petitioners as well as other bidders/tenderers. It has also been argued that the order of debarment has been passed only against the petitioners and the rest of the bidders have been let free despite the fact that they were similarly situated to that of the petitioners.
24. To appreciate the contentions of the learned counsel for the petitioners, I have gone through the recommendation of the tender committee, a copy of which has been annexed as Annexure-1 to the 19 counter affidavit. The tender committee, while passing the impugned order of blacklisting/debarment of the petitioners, has observed as under:
"From above, it appears that the persons namely Mr. Lakshman Prasad Tikmani, Smt. Sweta Tikmani and Mr. Ashish Kumar Mangan are common to two different bidders, M/s Tribhuvan Carrier Private Limited and M/s SGPL TCPL BP JV eligible for reverse auction. This breaches the provision of One Bid Per Bidder under clause 4 of Instruction to Bidders of the Tender Document of the subject tender, which stipulates as under
(P/C/107)."
25. It has further been observed that the quoted price of the bidders, namely, TCPL and JV were exactly the same and were ranked as L3 and L4 only because of different time of bid submission. The tender committee noted the following breach committed by TCPL and JV:-
"1. Bidders have accepted all the terms and conditions as enumerated in the NIT/Tender Document.
2. Bidders have breached the provision as expressly mentioned under clause 4 of ITB in respect of "One bid per bidder".
3. Bidders have signed Integrity Pact in connection with the subject tender.
4. Bidders have indulged in the act of collusion and thus, are liable to be subject to actions as stipulated in the Tender Document.
5. Based on above, bidders are liable to be subject to actions in line with those enumerated in the NIT/Tender Document."
Thereafter, the tender committee recommended for the alleged action against the petitioners. So far as the issue of preferring a complaint by the respondent-BCCL before the Competition Commission of India against all the bidders is concerned, the tender committee in its recommendation has observed as under:
"Tender Committee also agreed with the point no.4 above. It is agreed that prima facie, there is a case of bid rigging, as pointed out in the legal opinion obtained as well as inquiry report of IEMs, but there is no mention of parties to act of bid rigging. Considering this no action can be taken at this moment in this regard. But keeping in mind the established case of bid rigging and collusive bidding, several complaints in connection with the said issues, besides others, and ongoing inquiry at vigilance department of BCCL, it would also be prudent for BCCL Management that it should reserve the right to take any actions as deemed fit, at any stage, based on any further development in the chain of events, in connection with the subject tender."
26. Thus, it is evident that the tender committee found only "prima facie"
evidence of bid rigging by all the tenderers and thought it proper to move before the Competition Commission of India under the Act, 2002 20 so as to prevent practices having adverse effect on competition to promote and sustain competition in market and to protect the interest of the consumers so as to ensure freedom of trade carried on by other participants in the Indian market and for connected and incidental matters thereto. The Competition Commission of India is, in fact, a fact finding body, which may enquire into the allegation of complaint and pass an appropriate order under the Act, 2002. At present, the complaint filed before the Competition Commission of India is pending for investigation of the role of the persons responsible for the conduct of the business of the tenderers. The Competition Commission of India vide its order dated 23rd May, 2019 has formed a prima facie opinion regarding the contravention of the provisions of Section 3 of the Act, 2002.
27. Since the tender committee found that the Directors of TCPL were also the Directors of JV and the price quoted by TCPL and JV were also exactly the same, it had strong reason to believe that the petitioners in collusion with each other tried to impair the progress of the bidding process and implementation of the contract. However, so far as the allegation of bid rigging by all the bidders including the petitioners is concerned, the tender committee had no concrete evidence to take action against all of them and, thus, the respondent-BCCL chose to file suitable complaint before the Competition Commission of India in that regard. Thus, I do not find substance in the argument of the learned counsel for the petitioners that the respondent-BCCL has adopted pick and choose method while passing the impugned orders, rather I am of the view that it had sufficient reasons to distinguish the case of the petitioners vis-à-vis the case of all other bidders.
28. Learned counsel for the petitioners has put reliance on the judgment of the Hon'ble Supreme Court rendered in the case of Kulja Industries Ltd. (Supra) and has submitted that the impugned order has been passed in gross violation of the guidelines laid down in the said case. In support of the said contention, learned counsel for the petitioners has put specific reliance on paragraph no.22 of the said judgment. For better appreciation of the case, the guidelines laid down by the Hon'ble Supreme Court in the said case are contained in paragraph nos.21 and 22 and as such it would be appropriate to refer both the paragraphs, which are quoted herein below:
21"21. The legal position governing blacklisting of suppliers in USA and UK is no different. In USA instead of using the expression "blacklisting" the term "debarring" is used by the statutes and the courts. The Federal Government considers "suspension and debarment" as a powerful tool for protecting taxpayer resources and maintaining integrity of the processes for federal acquisitions. Comprehensive guidelines are, therefore, issued by the Government for protecting public interest from those contractors and recipients who are non- responsible, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily. These guidelines prescribe the following among other grounds for debarment:
(a) Conviction of or civil judgment for.--
(1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction;
(2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging;
(3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; or (4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility;
(b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as.--
(1) A wilful failure to perform in accordance with the terms of one or more public agreements or transactions;
(2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or (3) A wilful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction;
(c)***
(d) Any other cause of so serious or compelling a nature that it affects your present responsibility.
22. The guidelines also stipulate the factors that may influence the debarring official's decision which include the following:
(a) The actual or potential harm or impact that results or may result from the wrongdoing.
(b) The frequency of incidents and/or duration of the wrongdoing.
(c) Whether there is a pattern or prior history of wrongdoing.
(d) Whether the contractor has been excluded or disqualified by an agency of the Federal Government or has not been allowed to participate in State or local contracts or assistance agreements on the basis of conduct similar to one or more of the causes for debarment specified in this part.22
(e) Whether and to what extent did the contractor plan, initiate or carry out the wrongdoing.
(f) Whether the contractor has accepted responsibility for the wrongdoing and recognized the seriousness of the misconduct.
(g) Whether the contractor has paid or agreed to pay all criminal, civil and administrative liabilities for the improper activity, including any investigative or administrative costs incurred by the Government, and has made or agreed to make full restitution.
(h) Whether the contractor has cooperated fully with the government agencies during the investigation and any court or administrative action.
(i) Whether the wrongdoing was pervasive within the contractor's organization.
(j) The kind of positions held by the individuals involved in the wrongdoing.
(k) Whether the contractor has taken appropriate corrective action or remedial measures, such as establishing ethics training and implementing programs to prevent recurrence.
(l) Whether the contractor fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official."
29. On careful perusal of both the aforesaid paragraphs of the judgment of the Hon'ble Supreme Court rendered in the case of Kulja Industries Ltd. (Supra), it may be construed that their Lordships while deciding the aforesaid case have made reference to the guidelines issued by the Federal Government of USA, which provided the ground for debarment and also the factors that may influence the debarring official's decisions. Paragraph no.21 of the judgment speaks of the grounds for debarment and paragraph no.22 provides for the factors which may influence the decision of the debarring authority. Paragraph no.21 specifically provides that if wilful violation of public agreement is made by any entity, the same may be a ground for debarment. In the present case also, the case of the respondent-BCCL is that despite the fact that there was a specific condition in the NIT that each bidder shall submit one bid either individually or as a partner in the JV, the petitioners violated the said condition though they had agreed for strict compliance thereof. Moreover, in view of the words "the following among other grounds" mentioned in paragraph no.21 of the said judgment of the Hon'ble Supreme Court, the grounds mentioned in paragraph no.21 are not exhaustive. Hence, I do not find any substance in the argument advanced by the learned counsel for the petitioners that on the alleged violation of the said condition by the 23 petitioners, the respondent-BCCL has not suffered any loss. Since the tender in question was ultimately cancelled by the respondent-BCCL, the same is required to be invited afresh, which will certainly incur additional cost to the said Company. Hence, it cannot be said that the respondent-BCCL has not suffered any loss by the conduct of the petitioners. It has also been contended by the learned counsel for the petitioners that the respondent-BCCL treated TCPL and JV as one bidder and as such taking recourse of Clause 3.6 of the Integrity Pact under Commitments of Bidders will not be attracted, since it cannot be said that a particular bidder had colluded with other parties interested in implementation of the contract.
30. I am of the considered view that in the present case, TCPL and JV were two different bidders, since both submitted two different bids. Learned counsel for the petitioners has failed to show any specific condition in the NIT in support of his aforesaid argument. Clause 4 of Instructions to Bidders, which has specifically been relied upon by the petitioners, does not provide that in case of two bids by a bidder, the same will be treated as one. If such argument of the learned counsel for the petitioners is accepted, the same will certainly make the relevant provisions of the NIT to be redundant. For example, if two bids of a bidder are treated as one, then the provision of Clause 4 of Instructions to Bidders, which stipulates that all bids will be treated as disqualified, would be frustrated. Moreover, it is a settled law that any terms and conditions of the bid/NIT cannot be interpreted otherwise than what has specifically been provided therein.
31. So far as the process adopted by the respondent-BCCL, while passing the order of blacklisting of the petitioners, is concerned, it is evident that the respondent-BCCL, after having come to know that TCPL had submitted the bid individually and also as a partner of JV and both had quoted the same price, issued show cause notices to TCPL and JV, both. Thereafter, the said show cause notices were challenged by TCPL and JV along with other partners by filing writ petitions, being W.P.(C) No.6502 of 2018 and W.P.(C) No.124 of 2019. The said writ petitions were dismissed on the ground that a Writ Court is not supposed to interfere at the stage of issuance of show cause notice, where there could be a chance that enquiry initiated against TCPL and JV may even end in their favour. The letters patent appeal, being L.P.A. No.104 of 24 2019 filed by TCPL before the learned Division Bench of this Court has also been dismissed vide order dated 26th August, 2019. Moreover, TCPL and JV also submitted their respective reply to the show cause notices and only thereafter the respondent no.2 passed the impugned order dated 31st July, 2019.
32. It is appropriate to quote the relevant part of the judgment passed by the learned Division Bench of this Court in L.P.A. no.104 of 2019, which reads as under:
"12. Having heard learned counsels for both the sides and upon going through the record, we find that the appellant had challenged the show cause notice, issued to it on 30.10.2018. Though the appellant had challenged the show cause notice in the writ application also, but it had submitted its reply to the respondent BCCL as well on 19.11.2018, and after consideration of their reply, the final order has again been passed on 31.7.2019 by the respondent BCCL, debarring the appellant Company from participating in future bids in all tenders of BCCL for a period of five years and its EMD of Rs. 50 lakhs have also been forfeited. This order is not L.P.A. No. 104 of 2019 challenged in the present LPA and it could not have been, as it has been passed after the impugned order, passed by the Writ Court. The ground taken by the learned senior counsel for the appellant, challenging the show cause notice is only that after the expiry of the validity period of 120 days, or after cancelling the tender process, there was no question of forfeiture of EMD, or of blacklisting the Company, debarring it from participating in future bids in all tenders of BCCL for a period of five years. As such, the impugned notice, could not have been issued against the appellant Company. It is also the case of the appellant that by the action of the appellant Company in submitting the two bids, it cannot be ipso facto presumed that there was any wrongful act on part of the appellant, causing any wrongful gain to the appellant and wrongful loss to the respondent, and in any case, after the tender process itself was cancelled, there was no question of issuing the show cause notice. All these submissions of learned senior counsel for the appellant are fully answered in the decisions of the Hon'ble Apex Court in Patel Engineering Limited's case and Kulja Industries Limited's case (supra), relied upon by the learned counsel for the respondent BCCL, wherein it is specifically held that the power to blacklist a contractor is inherent in the party, allotting the contract, and is not subject to any bid document. When such action is taken by the State or any of its instrumentalities, it should pass the test of the principles of natural justice and the doctrine of proportionality. A fair hearing to the party being blacklisted, is thus an essential precondition for a proper exercise of the power, and such decisions are subject to judicial review by the Courts. In the present case, since the respondent BCCL was contemplating to take the action against the appellant Company, the requirements of the principles of natural justice have been fulfilled by issuance of the show cause notice to the appellant. In view of the admitted fact that the appellant Company had submitted two bids, one in their individual capacity and one in the capacity of partner in joint venture of M/s SGPL TCPL BP (JV), as also in view of the fact that it was found that in both the bids exactly the same price, i.e., Rs.2425,84,10,745.80 (rupees two thousand four hundred 25 twenty five crores, eighty four lakhs, ten L.P.A. No. 104 of 2019 thousand seven hundred forty five and eighty paisa only) was quoted, we are not in a position to accept the contention of learned senior counsel for the appellant that these actions were only bona fide mistakes on part of the appellant, without there being any element of mens rea or intention to defraud. The fact remains that the entire tender process had to be cancelled due to bid rigging and collusive bidding, on 16.10.2018.
13. In the facts of the present case, we find that the show cause notice was issued to the appellant in order to follow the principles of natural justice and in that view of the matter, the Writ Court was perfectly justified in not interfering with the issuance of show cause notice, relying upon the decisions of the Hon'ble Apex Court, as mentioned hereinabove."
33. It would, thus, be evident that the learned Division Bench of this Court while hearing the LPA declined to accept the contention of TCPL that the action of double filing of tender was a bona fide mistake and without there being any element of mens rea or intention to defraud. Learned counsel for the petitioners also tried to persuade this court to appreciate that the petitioners have not been benefited by the alleged violation of the tender conditions committed by TCPL and JV and the same was bona fide mistake. However, in view of clear finding of the learned Division Bench of the Court, the said contention of the petitioner-TCPL cannot be accepted. Moreover, the learned Division Bench did not interfere with the show cause notice issued by the respondent-BCCL by holding that the same was issued in compliance of the principles of natural justice.
34. In view of the aforesaid facts and circumstances, this Court finds that the respondent-BCCL has not violated the established procedure to be followed while passing the impugned order of blacklisting specially with respect to the petitioners- TCPL and JV.
However, so far as the petitioners- SGPL and BP are concerned, it has specifically been contended by the learned counsel for the petitioners that no show cause notice was issued to them. The said factual averment made in the writ petitions has not been controverted by the respondent-BCCL. It, thus, appears that the order of blacklisting of the petitioners-SGPL and BP has been passed against them merely being the members of JV.
35. As already discussed hereinabove, the State/its instrumentalities before passing the order of blacklisting against the persons concerned should provide an opportunity to represent their case. While issuing 26 show cause notice, it must be provided with the grounds of action as well as the proposed action. Admittedly, in the case of the petitioners- SGPL and BP, the respondent-BCCL has violated the settled principle of law as laid down in the case of Kulja Industries Limited (Supra) and Gorkha Security Services (Supra). Thus, the impugned order dated 31st July, 2019 passed against the petitioners- SGPL and BP is liable to be quashed/set aside.
36. In view of the aforesaid facts and circumstances of the case, the present batch of writ petitions are decided as follows:-
(i) The writ petitions being W.P.(C) No.4771 of 2019 filed by M/s.
Tribhuvan Carrier Pvt. Ltd. and W.P.(C) No.4218 of 2019 filed by M/s. SGPL TCPL BP (JV) are hereby dismissed being devoid of any merit. I.A. No.7671 of 2019 in W.P.(C) No.4218 of 2019 is also dismissed.
(ii) W.P.(C) No.4217 of 2019 filed by S.G. Projects Limited and W.P.(C) No.4270 of 2019 filed by M/s. Balaji Projects are allowed. The impugned orders dated 31st July, 2019 having been passed by the respondent no.2 in violation of the principle of natural justice are hereby quashed. I.A. No.7774 of 2019 in W.P.(C) No.4217 of 2019 and I.A. No.7793 of 2019 in W.P.(C) No.4270 of 2019 are disposed of.
(iii) It, however, goes without saying that the respondent-BCCL is at liberty to issue show cause notice(s) to the petitioners- SGPL and BP for taking appropriate action against them and to pass reasoned order(s) in accordance with law.
(Rajesh Shankar, J.) Sanjay/AFR