M/S Raj Construction v. The State Of Bihar

For the Petitioner/s : Mr. Mrigank Mauli Mr. Samir kumar For the State : Mr. Maruth Nath Roy, AC to SC-25. ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER 2 29-01-2013 Heard learned counsel for the petitioner and learned counsel for the State. The petitioner had filed the writ application for quashing the letter dated 31.3.2012 issued by the Executive Engineer, Road Construction Department, Road Division, 2 Patna High Court CWJC No.22780 of 2012 (2) dt.29-01-2013 Vaishali, Hajipur by which he has debarred the petitioner from taking part in any future tender and also terminated the agreement dated 7.9.2011. During the course of submission learned counsel for the petitioner submits that he would be confining the present writ application only to the extent of debarment from participating in any future tender and so far as the termination of contract is concerned, the petitioner may be granted liberty to take recourse to appropriate proceedings, as may be advised. The permission is granted. The short facts necessary for the decision of the present matter is that the petitioner was awarded a contract by work order dated 7.9.2011 for the construction of Cross Drainage Work at Bagmali which was to be completed within two months of the work order. It is the claim of the petitioner that the agreement itself was undated and had been back dated to

7.9.2011. In addition to that the Junior Engineer had been directed by the respondent No. 2 Executive Engineer to hand over the estimate and design of the Cross Drainage Work and the map of the site which was never made available although the petitioner wrote to the respondent no. 2 in that regard on

22.9.2011 and sent reminder on 24.9.2011. Thereafter the impugned letter dated 31.3.2012 was issued by which the petitioner was debarred from participating in any tender of the Government in future. Further the contract was cancelled by the same order. Learned counsel for the petitioner submits that the order of debarment along with cancellation of the work has the effect of blacklisting the petitioner for all times which power 3 Patna High Court CWJC No.22780 of 2012 (2) dt.29-01-2013 is not vested in the Executive Engineer under any rules or orders of the State Government. It is also the contention of learned counsel that the allegations made by the respondents are not accepted by the petitioner and it is not the petitioner who was responsible for the delay in completion of the work rather due to the fault of the Junior Engineer and other officials of the respondent State map of the site was not supplied to the petitioner and in the said circumstances it was not open to the Executive Engineer to have unilaterally decided the issue and debar the petitioner. In support of the aforesaid stand learned counsel relies upon a decision dated 10.1.2013 of this Court in the case of M/s. NCC Ltd. Vs. The State of Bihar and others and analogous case (CWJC No. 19809/2011) in which it was held as follows:- “The said proposition laid down by the Apex Court applies squarely in the present situation the petitioners have been declared defaulters by alleging breach of contractual terms on their part and as being liable and at fault on account of the slow progress of the work as compared to what was required under the contract. This should be specially so since the petitioners not only do not admit such allegation of liability and fault on their part as made by the respondents but have on the contrary raised the plea of liability and fault on the part of the State authorities in the matter on various grounds. It is evident 4 Patna High Court CWJC No.22780 of 2012 (2) dt.29-01-2013 authorities of the State cannot be permitted to decide such matter which involves liability on the part of the State officials also. Thus, even if it is accepted that the authorities of the State have the power to debar a contractor from participating in future contract after they are declared defaulter on account of not making the targeted progress to the extent of 80% in the work, still the finding regarding the default cannot be made by the State authorities and that must come from a proper adjudicatory forum, whether a court or arbitral tribunal. Only after such finding it can be open to the authorities of the State to declare a contractor as a defaulter and debar it from participating in future tenders. It is evident that the effect of such declaration as defaulter and debarment would have serious civil consequence on the party concerned and cannot be left to be decided by the party which has made allegation against whom also there is counter allegation by the contractor concerned.” Learned counsel for the State although tried to justify the action of the authorities by referring to the facts mentioned in the writ application but ultimately admitted that the action of respondent-Executive Engineer in effect tantamounts to blacklisting the petitioner as by the debarment order the contract has also been cancelled. Clearly the debarment under Clauses 3.3 and 5 Patna High Court CWJC No.22780 of 2012 (2) dt.29-01-2013

4.8 of the SBD is only until the completion of the work whereas the debarment coupled with the cancellation of the agreement in effect amounts to a permanent debarment and blacklisting of the petitioner, which power admittedly is vested under the Bihar Contractors Registration Rules,2007 only in the Engineer-in-Chief. In the aforesaid view of the matter and considering the decision of this Court in NCC Ltd. Case (supra) it is evident that it was not open to the Executive Engineer to have passed the order holding the petitioner in default and the consequential debarment order when the State itself is party to the said contract and he cannot be permitted to do so in the matter of the petitioner. The writ application is, accordingly, partly allowed and the order dated 31.3.2012 in so far as it debars the petitioner from taking part in the future tender is quashed. So far as the cancellation of contract is concerned, this Court has not expressed any view on the same and it will be open to the petitioner to take recourse to appropriate proceedings, as may be advised. S.Pandey/- (Ramesh Kumar Datta, J)