Gujarat High Court
M/S Aquafil Polymers Co. Pvt. Ltd vs Gujarat Urban Development Company ... on 10 June, 2022
Author: N.V.Anjaria
Bench: N.V.Anjaria, Samir J. Dave
C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 11731 of 2018
With
CIVIL APPLICATION (FOR VACATING STAY) NO. 1 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 11731 of 2018
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 2 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 11731 of 2018
With
R/SPECIAL CIVIL APPLICATION NO. 10606 of 2017
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2019
In R/SPECIAL CIVIL APPLICATION NO. 10606 of 2017
With
CIVIL APPLICATION (FOR JOINING PARTY) NO. 2 of 2020
In R/SPECIAL CIVIL APPLICATION NO. 10606 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE N.V.ANJARIA
and
HONOURABLE MR. JUSTICE SAMIR J. DAVE
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1 Whether Reporters of Local Papers may be allowed to see the Yes
judgment ?
2 To be referred to the Reporter or not ? Yes
3 Whether their Lordships wish to see the fair copy of the No
judgment ?
4 Whether this case involves a substantial question of law as to No
the interpretation of the Constitution of India or any order made
thereunder ?
==========================================================
M/S AQUAFIL POLYMERS CO. PVT. LTD
Versus
GUJARAT URBAN DEVELOPMENT COMPANY LIMITED
==========================================================
Appearance:
MR MITUL SHELET with MR RUTUL P DESAI(6498) for the Petitioner(s) No.
1
Page 1 of 21
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C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022
MR DG CHAUHAN(218) for the Respondent(s) No. 1
RONAK D CHAUHAN(7709) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA
and
HONOURABLE MR. JUSTICE SAMIR J. DAVE
Date :10/06/2022
CAV JUDGMENT
(PER : HONOURABLE MR. JUSTICE N.V.ANJARIA) Heard learned advocate Mr.Mitul Shelat assisted by learned advocate Mr.Rutul Desai for the petitioner and learned advocate Mr.D.G.Chauhan for the respondent, in both the Special Civil Applications, at length.
1.1 The two petitions are interconnected in terms of the facts and controversy. The first captioned petition is based on subsequent developments. Both the petitions were notified were heard together, and are treated by this common judgment.
2. What is prayed in Special Civil Application No.11731 of 2018 is to set aside order dated 25.6.2018 passed by the respondent Gujarat Urban Development Company. By the said order the petitioner came to be debarred for three years from bidding the tenders of the respondent. It was also prayed to set aside show cause notice dated 2.4.2018. Next prayed was to direct the respondent to return the amount of earnest money deposit with interest.
2.1 The prayer in other Special Civil Application No.10606 of 2017, filed previous to the aforementioned petition was for quashing of the e-tender notice dated 25.4.2017 in respect of the work of design construction and commission of sewage Page 2 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 treatment plant at Veraval, which tender notice was in nature of reinvitation. The petitioner prayed to cancel the bids received by the respondent company pursuant to the said tender process. The petitioner wanted the respondent to issue the letter of award in its capacity of L-1 in the tender process.
3. The respondent Gujarat Urban Development Company, which is a Government of Gujarat undertaking and an instrumentality of 'state', wanted to install sewage treatment plant at different places, under the Amrut Yojna. A common e- tender notice was issued for the work of design, supply, construction, testing of commissioning of plants at Anand, Deesa, Valsad, Bharuch and Veraval. The sewage treatment plant to be installed at Veraval was of 33.90 mld. The petitioner became the lowest bidder for Veraval, however was not given the letter of award even after passage of long time. The petitioner stated that though the petitioner was not disqualified, without assigning any reasons, respondent straightway issued e- tender notice dated 24.5.2017 which later became subject matter of challenge in Special Civil Application No.10606 of 2017.
3.1 The reinvited e-tender process came to be challenged by the petitioner by filing different Special Civil Applications of which Special Civil Application No.10606 of 2017 pertained to the tender for Veraval. This court issued notice on 2.6.2017 making it returnable on 5.6.2017. As per the say of the petitioner, the notice was served on it on 2.6.2017. In the meantime a show cause notice dated 16.5.2017 was served upon the petitioner. While the allegation of the petitioner is that the said notice was backdated, therein the petitioner was called upon by the respondent to show cause as to why it should not be Page 3 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 blacklisted on the ground that in submitting the bid, the petitioner had suppressed material information in respect of the order dated 6.11.2015. The said order dated 6.11.2015 was passed by the Rajasthan Urban Infrastructural Development Project, whereby the petitioner was debarred for three years. It appears that the petitioner company with its collaborating company was awarded the work in Rajasthan project as joint venture. The Rajasthan project had blacklisted the said bidder. The order dated 6.11.2015 came to be set aside by the Rajasthan High Court, allowing the Civil Writ Petition No.6375 of 2017.
3.2 The petitioner replied to the show cause notice dated 16.5.2017 on 10.6.2017, contending that the order of the Rajasthan project was not known to it and that the same was set aside by the Rajasthan High Court. The allegations in the show cause notice about suppression of facts were denied by the petitioner. It was further stated that the petitioner company had also filed arbitration proceedings No.131 of 2014 against the Rajasthan project for recovery of Rs.24,79,49,817/- which finally culminated into the arbitral award in its favour.
3.3 Not satisfied with the reply of the petitioner to the show cause notice taking context of the debarment order by the Rajasthan project,, the respondent passed order dated 11.8.2017 blacklisting the petitioners for three years for bidding tenders on the ground of suppression of material facts. This order dated 11.8.2017 came to be challenged by Special Civil Application No.15878 of 2017 in which this court passed order dated 29.11.2017 setting aside the show cause notice dated 16.5.2017 as well as the blacklisting dated 11.8.2017. The respondent Gujarat Urban Development Company (GUDC) was given liberty to issue fresh show cause notice.
Page 4 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 3.4 Against the said order of the High Court, the petitioner approached the Supreme Court by filing Special Leave Petition No.3721 of 2017. The Apex Court by order dated 23.3.2018 allowed the Special Leave Petition to the extents that the findings recorded in para 17 of the order of the High Court were set aside. It was stated by the Supreme Court that on one hand the High Court had set aside the show cause notice as well as the blacklisting order on the ground of breach of natural justice and at the same time, made certain observations in para 17 of the order touching the aspect of merit. The Supreme Court observed that though the petitioner had succeeded and had the benefit of the order of the High Court in so far as the challenge to the show cause notice is concerned, the petitioner however should not be prejudicially affected by the observations in the event second show cause notice is issued.
3.5 The paragraph in the judgment of the High Court obliterated by the Supreme Court contained the following observations.
"17. We are of the considered view that the learned counsel for the respondent is not wholly incorrect in contending at the bar that the petitioner could not have pleaded ignorance about his own conduct and he cannot take shelter by holding out that the Rajasthan party was a joint venture party in which the petitioner was merely a partner nor the petitioner expected to say that he had no knowledge of the litigation in the form of arbitration takenup in the year 2014. Similarly, the counsel for the respondent is also correct in submitting that the petitioner cannot go scot-free on account of his deliberate and smart omission in evaluating in the tender form. The tender form disclosed the standards to be adhered to by the tenderer and any breach thereof runs the tender not only Page 5 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 disqualified but liable to receive an order of debarment and forfeiture of EMD. The moot question in the instant petition being in respect of challenge to the order dated 11th August 2017, which has been subject matter of scrutiny in this proceedings and therefore, we have to appreciate whether the principle of natural justice followed in the entire process and in order to appreciate this contention, we have to essentially perused and understand the show cause notice and its imputation. In the instant case, the show cause notice dated 16th May 2017 does imply an allegation against the conduct of the petitioner, but the learned counsel for the petitioner also justified in submitting that the same is falling short of indicating the correct imputation, which have now been shield out by the learned counsel during the course of hearing and therefore, we to that extent are of the opinion that the show cause notice is not a show cause notice for which the order impugned could have been passed. The order impugned also does not clearly indicate those omissions, which have been said to be made out by the learned counsel for the respondent to support the order of debarment therefore, we have no hesitation in holding that the show cause notice unfortunately lacked in articulately narrating the incidents on which the petitioner has rendered money to the authority and liable to receive the penal action of debarment and forfeiture of EMD. Hence, the same is required to be quashed and set aside and as a result thereof, the impugned order is also required to be quashed and set aside."
3.6 The work orders came to be issued in meantime in respect of the tenders for Anand, Deesa and Bharuch. All the petitions challenging those e-tender notice, except Special Civil Application No.10606 of 2017 in respect of Veraval, came to be withdrawn. For Veraval, the respondent did not issue work Page 6 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 order for the petitioner. Instead, the impugned show cause notice 2.4.2014 came to be issued to the petitioner as to why the petitioner came to be debarred.
3.7 In the show cause notice which was the second show cause notice post the order of the Supreme Court referred to above, after narrating the past events, on the basis of the Clause No.41.1 of the tender it was alleged that the petitioner bidder had made misleading and false representation and the requisite information was not furnished. By adverting to Clause No.29.2 of the tender document, it was alleged that the petitioner concealed the record of its poor performance such as abandoning the work or not properly completing the contract. Clause 41 of the tender document defined 'corrupt practices' and 'fraudulent practice'. It was alleged that the tender document was procured by the petitioner on the basis of the corrupt and fraudulent practices. Form No.9 was part of the bid document requiring the 'bidder' to mention about the history of litigation, blacklisting etc. in the last five years for currently under execution.
3.8 The aforementioned tender conditions on the basis of breach of which the impugned order was passed are referred to in the succeeding paragraphs. According to show cause notice the petitioner had failed to disclose the following information which was mentioned again in para 8 of the impugned order.
"(i) That under Contract Agreement dated 21.09.2011 your Company had undertaken Waste Water Management Project, Bundi and Karauli under Rajasthan Urban Sector Development Investment Program (RUSDIP), State of Raiasthan.Page 7 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022
C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022
(ii) Your Company had abandoned the project work of RUSDIP (Rajasthan), (ili) Your Company had left the project work incomplete of Rajasthan Government in March, 2012.
(iv) The work executed by your company of Rajasthan Project was very poor.
(v) Your contract of Waste Water Management Project, Bundi and Karauli under Rajasthan Urban Sector Development Investment Program (RUSDIP) was terminated on 23.10.2013 by the Rajasthan Government.
(vi) Your Company had filed Arbitration Proceeding No. 131 of 2014 against Rajasthan Urban Infrastructure Project at Rajasthan claiming Rs.24,79,49,817/- with 18% interest and the same was pending before Hon"ble Justice V. S.Dave, Arbitrator, Jaipur, Rajasthan for adjudication on the date of submission of tender on 04.08.2016.
(vii) Your Company was debarred by the Rajasthan Government for a period of three years from future participation in bidding process in Local Self Government Department, Jaipur Government of Rajasthan vide order dated 06.11.2015 for the reasons stated in the said order."
3.8.1 It was further the ground that in form No.9 of the bid document, the bidder was bound to declare the information with regard to litigation and about blacklisting in the last five years, still however it was stated in the relevant column was not pending though the arbitration proceeding as above was pending. It was further the ground that in undertaking form No.H false and misleading statements were made that the bidder was not declared ineligible or corrupt or fraudulent practices, it was even though mentioned that SLTC had declared the Page 8 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 petitioner company ineligible for Veraval project on account of fraudulent practices on part of the petitioner.
3.9 The total allegations against the petitioner were thus about the breach of conditions of the tender in the nature of misrepresentative of facts and/ or not revealing the true facts pertaining to the petitioner's participation in Rajasthan Infrastructure Project work and the events and the order of blacklisting by the said authority ensued for the petitioner. It was sought to be alleged that thereby the petitioner had indulge into corrupt practice and fraudulent practices. The earnest money deposit were already forfeited on 4.9.2017 pursuant to the earlier order dated 11.8.2017.
4. It was submitted by learned advocate for the petitioner at the outset that order of blacklisting was passed initially on 11.8.2017 which operated till date, therefore even otherwise the petitioner has already suffered the punishment. It was next submitted that the show cause notice was a predetermined action in which final and factual assertions were made which were in the nature of findings. It was further submitted that in the second show cause notice, improvement to earlier notice dated 16.5.2017 were made and new ground were added. It was submitted that even the earnest money deposit was straightway forfeited. It was submitted that the entire exercise right from the stage of first show cause notice was with a predetermined and biased approach.
4.1 Learned advocate for the petitioner relied on the decision of the Supreme Court in case of State of W.B. Vs. Shivananda Pathak [(1998) 5 SCC 513]. In paragraph No.25 of the said decision, the Apex Court observed, "Bias may be defined as a Page 9 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 preconceived opinion or a predisposition or predetermination to decide a case or an issue in a particular manner, so much so that such predisposition does not leave the mind open to conviction. It is, in fact, a condition of mind, which sways judgments and renders the Judge unable to exercise impartially in a particular case."
4.1.1 Next relied on by learned advocate for the petitioner were the following observations in Oryx Fisheries Private Limited v. Union of India [(2010) 13 SCC 437], the Supreme Court made following observations in paragraph No.27.
"It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the charge- sheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show cause notice gets vitiated by unfairness and bias and the subsequent proceeding become an idle ceremony."
(Para 27) 4.1.2 Learned advocate further submitted that in different clauses of the tender document, the word 'bidder' was used and it meant individual bidder distinguished from any other person. Learned advocate for the petitioner referred to Clause Nos.1.1, 29.2 and 41.1 from the tender document to submit that in every clause the word 'bidder' was mentioned and that the condition or stipulation concerned was to be abide by the bidder only distinguished from another person. It was also the contention rose that the tender document did not require disclosure information about any joint venture. The bidder was petitioner Page 10 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 and not the joint venture, it was emphasized. It was further submitted that in any view, joint venture - M/s. Jil Aqua was a distinct entity and legal person by itself. It was sought to be substantiated by showing documents in the nature of separate PAN Card, separate bank accounts and the separate guarantee which was submitted by the joint venture in the contract with the Rajasthan government, details/documents of which were on record.
4.2 The petition came to be contested by the respondent reiterating the grounds mentioned in the show cause notice, and inter alia that the petitioner was involved in corrupt and fraudulent practice that the petitioner had undertaken the Waste Water and Management Project, Bundi and Kariuli under the Rajasthan Sector Urban Development Investment Program under agreement dated 21.9.2011 and that the petitioner abandoned the project leaving the work incomplete in March, 2012. It was contended that the work executed by the petitioner company in the said Rajasthan Government was poor and therefore the project was terminated by the Rajasthan Government on 23.10.2013. It was stated that the arbitration proceedings between the petitioner and the Rajasthan Company were initiated. It was contended that on account of fraudulent act of the petitioner, tenders were needed to be reinvited and additional expenditure was required to be completion of project. The respondent submitted that wrong information was supplied in the requisite forms of the tender document and there was deliberate material suppression of information in the bid document due to which the petitioner was not entitled to be given the tender work form of the Veraval Project.
Page 11 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 4.3 Learned advocate Mr.D.G. Chauhan for the respondent company extensively relied on the terms of the tender agreement to contend that the offer was to remain valid for 180 days from the date of submission of the bid as per condition No.6 and that right was reserved for the respondent Company to cancel the offer. Referring to the conditions required to be observed by the bidder as per condition No.1.1(xiii), it was contended that the bidder was liable to be disqualified if he made misleading or false representation or on a record of poor performance such as abandoning of work, not properly completing the contract etc. It was submitted that as per the conditions, if the bidder had been blacklisted by the government or private agencies, then also it was liable to be disqualified.
4.3.1 Condition No.29.2 regarding evaluation of tender was referred to, to submit that even though the bidder had met the qualification criteria, it was liable to be disqualified on various considerations stated in the said condition. It was submitted that in blacklisting the petitioner, condition No.29.2 was invoked. Learned advocate thereafter referred to Form No.9 and submitted with reference to it that additional information about litigation, debarment or blacklisting was required to be supplied by the applicant, and that the petitioner did not disclose the required information in that form. It was submitted that the applicant was fully aware of all the aforesaid terms and conditions. He submitted that respondent company was not aware about the order of the Rajasthan High Court.
4.3.2 Learned advocate for the respondent relied on various contentions raised in the affidavit-in-reply to contend that show-cause notice dated 25th June, 2018 and the previous show-cause notice dated 02nd April, 2018 were legal. It was Page 12 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 submitted that since the petitioner in his bid submitted for Veraval project, concealed material details about abandoning the project at Rajasthan, he was required to be blacklisted, which resulted into hike in the cost of project. It was contended that non-disclosure on part of the petitioner-bidder was a 'fraudulent practice' rendering him to be disqualified and blacklisted. It was further submitted that Director of the petitioner company had filed false undertaking, declaration and affidavit in Form 'H' that they were not declared ineligible for corrupt and fraudulent practice by the Central or State Government.
4.3.3 Learned advocate for the respondent vehemently submitted that the petitioner was guilty of suppression of material facts and when the material particulars were not disclosed, he could not be said to have come before the Court with clean hands. Decision of the Supreme Court in case of Bhaskar Laxman Jadhav Vs. Karmaveer Kakasaheb Wagh Education Society [(2013) 11 SCC 531] was relied on for highlighting the requirement of disclosing the material fact. It was, therefore, submitted that this Court may not exercise powers under Article 226 of the Constitution and that there was suppresio veri on part of the petitioner. By placing reliance on Bakshi Security and Personnel Services Vs. Devkishan Computed Private Limited [(2016) 8 SCC 446] it was sought to be submitted that essential conditions in the tender were required to be complied with and that essential conditions cannot be relaxed. For proposition that since the decisions relating to tender is in the realm of contract, the scope of judicial review would be limited, decisions of the Apex Court in Siemens Public Communication Networks Private Limited Vs. Union of India [(2008) 16 SCC 215] and Municipal Page 13 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 Corporation, Ujjain Vs. BVG India Limited [(2018) 5 SCC 462] were pressed into service.
5. The relevant conditions in the bid document on the footing of which the show cause notice was issued to the petitioner and the ground of breach of which the impugned order of debarment came to be passed may be looked at, in order to better understand the rival submissions. The main allegation against the petitioner was about misrepresentation of facts inter alia that the petitioner as bidder was debarred by Rajasthan Infrastructural Project for poor work. The tender of the Rajasthan Project was submitted and the work was awarded was to joint venture- M/s. Jil Aqua in which the petitioner was one of the constituent.
5.1 Clause No.1.1 (xiii)provided for disqualifying the bidders to specify in what circumstances the bidder shall be disqualified, reads as under, "(xiii) The bidder shall be disqualified if:
a. The bidder had made misleading or false representation in the forms, statements and attachment submitted in proof of qualification requirements and/or b. A record of poor performance such as abandoning the work, not properly completing the contract, inordinate delays in completion, litigation history or financial failures etc. c. The Bidder has been blacklisted by any Government Non Government / Private agencies/ Organizations/ Institutions/Government Undertakings and funding Agencies in the last 05 years.
The bidder should provide accurate information Page 14 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 on litigation and/ or arbitration resulting from contract completed or under execution by him over the last five years. A consistent history of arbitration awards/ judgments against the applicant or any partner of a joint venture may result in disqualification for proposed work. If the details of litigation history is hidden by the applicant and later on it comes to knowledge of the employer the bidder shall be disqualified for the proposed work and other appropriate actions shall be taken against the bidder."
5.1.1 Similar criteria for disqualification were mentioned in Clause 29.2 of the tender document. Clause 37 stated that it was employer's right to accept any bid or reject any or all bids.
Clause 41.1 inter alia defined corrupt practises and fraudulent practises. The entire clause is reproduced.
"41.1 The GUDC requires that bidders/suppliers/contractors have followed the highest standard of ethics during the procurement and execution of such contracts. In pursuance of this policy:
(a) Defines for the purposes of this provision, the terms set forth below as follows:
(i) "Corrupt practices" means behaviour on the part of officials in the public or private sectors by which they improperly and unlawfully enrich themselves and/or those close to them, or induce others to do so, by misusing the position in which they are placed, and it includes the offering, giving, receiving, or soliciting of anything of value to influence the action of any such official in the procurement process or in contract execution; and
(ii) "Fraudulent practice" means a misreprésentation of facts in order to influence a procurement process or the execution of a contract to the determination of the Borrower, and includes collusive Page 15 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 practice among bidders (prior to or after bid submission) designed to establish bid prices at artificial non competitive levels and to deprive the borrower of the benefits of free and open competition;
(b) Will reject a proposal for award if it determines that the bidder recommended for award has engaged in corrupt or fraudulent practices in competing for the contract in question;
(c) Will declare a firm ineligible, either indefinitely or for a stated period of time, to be awarded an contract if it at any time determines that the firm has engaged in corrupt and fraudulent practices in competing for, or in executing, an contract.
If at any stage it is found that bidder had hidden material information or had submitted information which is false and fraudulent shall be debarred form bidding in GUDC tender for three years and MD shall be forfeited. The matter shall also be brought to notice to the registration authority of the contractor."
5.2 It was correct proposition canvassed on behalf of the petitioner that the conditions in the tender document which could be said to be penal in nature has to be construed and applied strictly. The Supreme Court in Caretel Infotech Limited Vs. Hindustan Petroleum Corporation Limited [(2019) 14 SCC 81] as well as the decision of the Division Bench of this Court in M/s.Baroda Surgical (India) Pvt. Ltd. through its Chairman and Managing Director Vs. State of Gujarat being Special Civil Application No.23050 of 2019 decided on 10th February, 2020, principle was stated that when tender bid contains an eligibility criteria, the corresponding obligation to satisfy the criteria arises, however where the tender document does not provide specifically about certain Page 16 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 disclosure, the authorities cannot scrutinize the tender document by what is not provided for.
5.3 The word 'bidder' in relation to and as applied to in the instant tender document would mean the individual petitioner itself as tenderer. Strictly speaking the petitioner was not tenderer in the Rajasthan Project. It could be said that it was not the petitioner- entity who was debarred and blacklisted there. When the information in the instant tender was to be furnished about the bidder, the non mention on part of the petitioner about the joint venture bidder in Rajasthan having been treated as debarred could not be said to be a fatal for the petitioner to get its bid considered, nor it could be said to be a suppression to prejudicially affect the petitioner.
5.4 In Gammon India Limited Vs. Commissioner of Customs, Mumbai [(2011) 12 SCC 499], the Supreme Court highlighted the concept of joint venture. It was stated that a joint venture is a legal entity in the nature of partnership of the constituent companies. It was held that appellant before the Court M/s.Gammon-Atlanta JV, a joint venture, could be treated as legal entity with the characteristic of a partnership in which Gammon India Limited was one of the constituents. It was held by the Supreme Court that it was inevitable conclusion that import of "concrete batching plant 56 cum/hr" by Gammon India Limited cannot be considered to be the import by M/s.Gammon- Atlanta JV, which was a separate person.
5.5 Thus, the position of law is that joint venture is a legal entity in the nature of partnership of constituent companies and has its own distinct character and existence in eye of law. In yet another decision in New Horizons Ltd. Vs. Union of India Page 17 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 [(1995) 1 SCC 478], the Supreme Court explained the expression 'joint venture' and the concept thereof. In other words, the joint venture was separate legal entity. It was that entity, separate and distinct from the petitioner herein, which was debarred in respect of Rajasthan Project. The present petitioner bided for tender in question in its own capacity, which was its individual capacity and the qualification.
5.6 The ground that there was suppression of pending litigation was also without substance. There was arbitration proceedings between the joint venture which was awarded contract and the Rajasthan Infrastructure Project which culminated into arbitral award in favor of the said bidder. Even otherwise the aspect about alleged non disclosure of those details by themselves could not be said to be violation of any essential condition of the tender document.
5.7 In the facts of the case it was not possible to conclude that in filing up the format of the relevant forms in the tender document, the details were filled in by the petitioner so as to amount to misrepresentation or suppression. The petitioner bidder was not required to fill up the details about the project work awarded and undertaken in capacity as joint venture as Rajasthan. What was required was bidder's credentials- the petitioner itself for the purpose of instant tenders. The non disclosure did not become 'corrupt practice' or 'fraudulent practice' as alleged. These terms, for the purpose of tender in question were defined for connotation. There ingredients were not full filled and they are not attracted to become applicable in the case of the petitioner.
5.8 The terms and conditions of the tender document and Page 18 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 the question of violation thereof has to be strictly construed. Once the tender document did not require about disclosure of joint venture details, the respondents could not have implanted such aspect in the show-cause notice to raise a ground that particulars about that was not disclosed.
5.9 The Supreme Court in Municipal Corporation, Ujjain Vs. BVG India Limited [(2018) 5 SCC 462] highlighted what was not part of the tender requirement could not have been considered, observing as under, "It is necessary to note that in Annexure 1 to the NIT at serial no. 11, the bidder was required to set out details of any other company/firm involved as a consortium member to which respondent no.1 - BVG India Limited replied in the negative, which means no other company/firm was involved as a consortium member with BVG India Limited in the process in question. In other words, BVG India Limited submitted the bid on its own unaccompanied by any of the consortium member. Despite the same, BVG India Limited (respondent no.1) furnished the experience certificate of BVG Kshitij Waste Management Services Private Limited. No information whatsoever was given of the relationship/linkage of BVG Kshitij and respondent no.1 - BVG India Limited. Therefore, reliance placed by the respondent no.1 on the purported experience certificate issued in the name of BVG Kshitij Waste Management Services Pvt. Limited would not come to the help of the respondent no.1 to show its work experience. The Pimpri Chinchwad Municipal Corporation (PCMC) Certificate dated 24.10.2013 is in Marathi and the same discloses that the work order was issued on 2.3.2012. The PCMC Certificate thus neither shows three years' experience of BVG India Limited nor that BVG India Limited was carrying out garbage/waste collection of more than 300 MT per day. Since respondent no.1 has categorically mentioned in its bid under the column "basic information about tenderer" that no other company (either joint venture or consortium) is Page 19 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022 C/SCA/11731/2018 CAV JUDGMENT DATED: 10/06/2022 involved with BVG India Limited, respondent no.1 - BVG India Limited could not have relied upon the purported experience certificate issued in the name of BVG Kshitij Waste Management Services Pvt. Ltd. Other certificates submitted by the respondent no.1 also did not satisfy the eligibility requirement."
(Para 51)
6. In any view, the blacklisting in respect of the Rajasthan Project, which was projected as reason for debarring the petitioner for Veraval bid did not hold the field. Writ petition No.6375 of 2017 was filed before the Rajasthan High Court and by order dated 25.5.2017, the Rajasthan High Court set aside the order of blacklisting the petitioner (joint venture). Therefore the entire basis for passing the impugned order for debarment of the petitioner stood wiped out. The facts which were in substratum of the impugned action no more exist now.
7. In the totality of the facts and circumstances, attendant to the impugned penal action, it becomes clear that the issuance of show cause notice and passing of order of blacklisting against the petitioner were based on half-baked facts. The impugned action was taken, if not in predetermined manner, by haste and taking a rushing decision without considering the substance.
8. The facet of the controversy is also that the first order of blacklisting the petitioner was passed on 11.8.2017. Thereafter the second show cause notice was issued and the same was set aside by the Supreme Court in the proceedings noted as above. The impugned order came to be passed, however in the process five years passed by. The petitioner stood debarred for all these reasons. The order of penalty of blacklisting thus worked out for itself to the prejudice of the petitioner.
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9. As a result of all the discussion and reasons above, the order dated 25.6.2018 impugned in Special Civil Application No.11731 of 2018 passed by the Managing Director, Gujarat Urban Development Company Limited, Gandhinagar - respondent herein debarring the petitioner for a period of three years from bidding tenders of the respondent Company and the reasons recorded therefore, is set aside. Consequentially, show- cause notice dated 2.4.2018 also stands set aside.
9.1 The earnest money deposit with interest which was forfeited by the respondent company pursuant to the impugned order which is now set aside, shall be refunded to the petitioner with interest accrued thereon, within twelve weeks from today.
10. In the facts and circumstances of the case, prayers in other Special Civil Application No.10606 of 2017 will not survive. The said petition is disposed of as requiring no orders. Notice is discharged therein. It is however clarified that the respondent company is not precluded from issuing the tender afresh.
11. Special Civil Application No.11731 of 2018 is allowed and Special Civil Application No.16060 of 2017 is disposed of as not surviving as above. This petition is accordingly disposed of.
(N.V.ANJARIA, J) (SAMIR J. DAVE,J) Manshi Page 21 of 21 Downloaded on : Sat Dec 24 18:33:10 IST 2022