N.C. Nahar v. State of Chhattisgarh & others

&IVISION BENCH: HON.MR. bHIRENORA MISHRA. & HON. MR. R.N. CHANDftAKAR.JJ Writ Petition (c) No.4659 of 2008 (Petition under Article 226 of the Constitutionof India) Petitidner Respondents N.C. Nahar, Aged about 72 Yrs, S/o Late Chunnilal Nahar, Proprietor AA/s N.C. NaHar, J.K. Villa, Malviya Nagar, Durg (C6) Versus

1. State of Chhattisgarh Through the Secretary, bepartmentof Panchayat and Rural Bhawan, AAantralaya, Raipur (C.6.) Development, D.K.S

2. The Chief Executive Officer, C.6. Rural Road Develppment Agencies Civil Lines, Raipur(C.(^.)

3. The Chief Engineer, C.6. Rural Road Developtnent Agencies Civil Lines, Raipur (G.6.) Present: Mr. Mateen Siddique, Advocate for the petitioner. Mr. U.N.S. Deo, Government Advocate for the respondents. O R b E R (Passedon&5.2009) Per&hirendrg Mishra, J;

1. The petitioner by the instant petitidn has prayed for quashing of the order dated 14.8.2008 (Annexure P-1) passed by respondent No.3 and further prayed for direction to the respondents to allow the petitioner to take part in the terider process issued by the respondent authorities including in the notice inviting tender dated 13.8.2008.

2.^" Briefly stated, facts of the case are that in response to the notice inviting tender dated 20.11.2007 for construction and maintenance of the rurdl roads the petitioner submitted his offeF. The tenders were opened as per schedule and the petitioner stood as L-l, as his offer was lowest. However; insteadof finalizing the contract in his favour, he was served with a notice, dated 14.2.2008 (Annexure P-3) byrespondent No.3 stating therein that he has-submitted false or incomplete information for calculation of his bid capacity ancThas also concealed sonie works, agreements, which are still in ?1 i progress. In the said notice details of infopmation.whichjwerenot furnished, have been given. The petitionerwas directed tb show cause as to why the bid submitted by him benot freated as non-responsiveand dction be taken against him as per Clause 34 of the Instructions to Bidders (for short T.T.B.'). The petitioner in his reply dated 29.2.2008 (Annexure P-4) admitted that the information regarding work-ih-hand under Pdckage No.G612-24 of work order No.3/IPU t>indori was not incor'pordted in the list due to oversight & clerical error dnd prayed for condoning the said error. With respect to non-submission of information of the work in hand amounting to Rs.301.80 Lac issued by the E.E., PWb, Durg /Kawardha detailing in Pdrd-3, it was replied that 907o work against the above work order has been completed. With respect to other uvorkof Krishi Upaj Mandi Samiti, t>urg, it was stcited that work of Rs.1.55 Lac has already been completed. After receiving the reply of the petitioner, respondent No.3 vide his memo dated

28.3.2008 (AnnexureP-6) yirected the petitioner to extend validity period of offer till 30.4.2008. By yet another letter dated 29.3.2008, petitioner was again asked to extend validity offerupto 31.5.2008. However, the petitioner wasserved with another show cause notice ddted

04.06.2008 alleging therein that on examination of technical documents submitted by the petitioner in response to the notice inviting teriders No.124 <& 125 it was found that the petitioner did not show his contract works under PW& Durg <& Kawardha, Krishi Upaj Mandi, burg and M.P. Pradhan Mantri Grahmin Sadak Yozna in works-in-hand furnished by the petitioner. Complaint in this regard was found to be ti"ue and therefore, declaring bid of the petitioner as non-responsive, tender for group of wdrk waS cdncelled treating the petitioner as ineligible. '• ' ' -ff' . •• • • ' ' . • • . . • ' ' ' • • '. "•'•" The petitioner was again called upon to show causeas to why his name should not be included in the blacklist and he be diSqualified from participating in the tenders for Pradhan Mantri 6rdhmin Sadak yozna fcir d period of one year for concealing the works already done by him from the information under the work-in-hand and thereby attempting to obtain contract by misleading the department. The petitioner in response to the said notice admitted the lapse, however, he has Stated that the same occurred due to oversight and negli9ence of the office staff dealing with the tenders. The petitioner also begged for pardon. Respondent No.3 by the impugned order communicated the petitioner in response to notice inviting tenders No.124 & 125/2007, petitioner submitted incorrect information in the department in his technical Bid and thereby he tried to mislead the departnient, hence the government has decided to debar him from participating in the tender process under the C.G. Rural Road Development Agency, Raipur in the exercise of Condition Nos.4.4B (a) (ii) & 4.7 (i) of the ITB.

3. Learned counsel for the petitioner submits that the petitioner has been blacklisted without affording r'easonable opportunity to represent his case. Theorder passed under the relevant clauses of the agreement were hot applicable in the case of the petitioner, the respondents also did not consider that the oi'nission in submitting information was as a result of inadvertence committed by his staff in the tender document and the same was not intentional. Relianceis placedon the judgment of the Hon'ble Supreme Gourt in the matter of B.S.N. Joshi <& Sons Ltd. Versus Nair Coal Services Ltd. and others & Ripleyand Company Limited Vs. Ceritral Coalfields Limited andothers .

4. The respondents in their counteraffidavit as well in the oral arguments havesubmitted that the petitioner has not denied that he concealed information while submitting his tender. Concealment was deliberdte and the same was done with a view to bring himself within the eligibility criteria. Condition No.4.4B(a)(iii) of the tender document clearly stipulates that every bidderAiUSt demonstrateavailability of construction work either ^owned or on lease, or on hireQlong with the ITB, however, the petitioner concealed The works already in hand while submittinghis technical bid which came to the flooronly oifter information was collected in this regar'd. A brdder comes in the category of eligible bidder according to his bidonly wheri his bid capacity, which is technically termed as dSsessed available bid capacity and calculated according to the formula given in Condition No.4.6. • (2006) 11 SCC 548 22007 (4) JCR 415 (Jharkhand) Condition No.4.7 empowers the department to disqualify any bidder on any of the conditions enumer'ated in Conditiori No.4.7 even if the bidder meets the qualifying criteria as per Condition No.4.6.Since the petitioner deliberately suppressed various incomplete works available with him in the relevant period, his bid was treated as non-responsive and tender process for group of work was cancelled; After issuing show cause notice and in view of the reply submitted by the petitioner, he has been disqualified from participdting in tender process for a period of oneye.ar from the dateof issuanceof order of Annexure P-1.

5. We have heard learned counsel for the parties. We have also perused the pleadings as well as documents relied upon by the respective par'ties.

6. Undisputed facts in the petition are that in response to the notice ihviting tender dated 20.11.2007 the petitioner submitted his offer.As per Condition No.4 of the ITB, the participants were required to furnish their financial capacity of per'formance including the cyrrent contractudl worksin hand. In reply to the notice dated 14.2.2008 the petitioner accepted that necessary information, as per instructions of the notice invitihg tender, were not furhished by him due to oversight and clerical error. It was also admitted that the details of works in hand mentioned in the said notice were also not furnished as the petitioner considered the same to be completed work. The petitioner was again served with a notice of Annexure P-7 dated 04.06.2008 wherein he was called upon to show cause within a period of fifteen days as to why his name should not be included in the blacklist and he be debarred for a period of one year from participating in' tenders under Pradhan Mdntri Srahmin Sadak Yozna for attempting to obtain contract under the said scheme by concealing current work in hand and thereby misleading the department. In reply to the said notice also the petitioner referring to his earlier reply dated 29.02.2008 submitted that he has already accepted the omission of certain packages whichoccurred through oversight due tonegligence of their office staff'dealing with the tenders. However, er'ror was un-intentionaland they have alreadyaccepted their mistake. After receiving the aforesaid reply the petitioner was debarred frotn participating in the tender process for a periocf of |one yeat'. ^ l^. 1 :iii .luj.ttiitriuudtj iit;.—.—

7. In the matter of B.S.N. Joshi tender document was not furnished to the appellant by the M.P. State Electr'icity Board on the premise that he is defaulter. In a writ petition filed by the appellant, learned Single Judgeof AA.P. 1-ligh Court alsorecorded finding that he is defaultsr. Appeat wds atso dismissed by the Division Bench with an observation that the appellant being apparentty defautter, it cannot be said that the Bodrd has committed any ittegality in out standing the appettant from the tender pro&ess. The Hon'ble Supreme Court in the aforesaid judgment has referred The judgment of the Cateutta l-figh Court in the matter of Erusian Equipment & Ghemicals Ltd. Vs. State of W.B. and its judgment in the matter of Raghunath Thakur Vs. State of Bihar wherein it has been held that blacklisting hds the effect of preventing a person from entering into tawful relationship with the Sover'nment for the purposesof gains, therefore, before he is puton d blacklist, he should be given an opportunity to represent his case. In the judgment of 1-lon'ble Supreme Court also it has been held that it isan implied principle of law that any order having civil consequence should be passed only after following the principles of naturol justice. Blacklisting has conveyance for the future business of the person concerned, therefore, even if the rule do not express so, it is an elementary principle of natural justice thatparties affected by any order should have right of being heard and making rapres&ntations against the order.

8. In Riptey and Company Limited the petitioner was denied consideration for allotment of wor'k by the respondent-Central Coalfields Limited Company owned by the Government of India. The 1-figh Court of Jharkhand while observing that in the exercise of jurisdiction under Article 226 in the contractuat matters, The Court cannot examine the decision and power of judicial review has to be exercised with utmost restraint and under the situations enumerated inTata Cellular Vs. Unionof India. However, the Court can examine the decision making process and award of contract. Further considerin9 that thepetitionerwas found qualified and had fulfilled all conditions of NIT, to deny to right of participation to a tender in future 3AIR1963Cal.470 4(1975)lSeC70 5_{1994)6SCC651 contracts on account of one orother breach in an earlier contract not ohly cdst a stigma and black-mark on it but the same amounts to blacklisting. Wherea person is blacklisted without observing the principles of natural justice, the same cannot besustained.

9. In the matter of Grosons Pharmaceuticals (P) Ltd. Aanother Versus State of U.P. and others the appellant was an approved and registerey contractor for supply of drugs to the government departments. On accourit of certain irregularities in purchase of medicines, a vigilqnce enquiry wds set-upand his records <&products were seized and criminal prosecution was also launched against him. Under such circumstances the State Sovernmerit Served a notice on the appellant to show cause as to why he should not be blacklisted in its dealing with the Government. The petitioner submitted its reply to the said notice, however, after expiry of the period of reply an ordei" of blacklisting the appellant was passed. The Mon'ble Supreme Court dismissing the appeal 6f the appellant held thus:- "An order blacklisting an approved contractbr results in civil consequences and in such a situation in the dbsence of statutory rules, the only requirement of the law while passing such an Order was toobserve the principle of audi alteram partem which is bne bf the facefs of the principlesof natural justice. Thecontention that it was incumbent upon the respondent to have supplied the material on the basis of which the charges against the appellant were bdsed, was not therequirement of principle of audi alteram partem. It wds sufficient requirement of law that an opportunity to show cause was given to the appellant before it was blacklisted. In the present -« case, the appellant was given an opportunity to show cduse and it did reply to the show-cause which was duly consideredby the State Government. Therefore, the procedure adopted by the respondeht while blacklisting theappellant was in conformity with the principles of natural justice.

10. If we examine the factsof the present case in the light of the principlesof law laid down in the aforesaid judgments, we observe that thepetitioner t.1 participated in the tender process and submitted his technical bid. As per Instruction No.4.2 of the ITB, the bidders were instructed to furnish experience in worksof similar nature and size for each of the Idst five years and details of the works in progress or contractuatly committed with certificates from the concerned officer of the rankof Executive Engineer or equivalent. The petitioner admittedly did not furnish detailsof number' of works which he had in his hand at the time of submitting his technicdl offer. In reply to theshow cause notice, the petitioner has admitted the tapses. He was again served with the show cause notice clearly mentioning therein that if his reply is not found satisfactory, he may be barred from A participating in the tender process as per conditions of the ITB and in reply to thatnotice also the petitioner accepted his mistake. In these circumstances that particular tender process was cancelled and the petitioner was debarred from participating in the tender process under the C.6.Rural Road Devetopment Agency, Raipur.

11. Thus, from the above facts it is evident that respondents have passed the impugned order, after affording sufficient opportunity of hearing to the petitioner, on the baSis of his admission that he did not furnish requisite information as per conditions of the ITB. Information was deliberately concealed by the petitioner to bring himself within the eligibility criteria for participating in the tender process by misleading the departmerit.

12.In the result, the instant petition has no substance, the same deserves to be dismissed and the same is accordingly dismissed. Noorders as to costs. Sd/- Dhu-endra Mishra Judge .f- Sd/- R.N. Chandrakar Judge