High Court · 2009

I have heard Mr. K. N. Choudhury, learned Senior Counsel, appearing on b 3. ehalf of the petitioner, and Mr. P.C. Deka, learned Senior counsel, appearing on behalf of respondents.

4. tion, are: The principal questions, which fall for determination, in this writ peti (i) What was, or were, the reason(s) for the NRL’s decision not to open the price bids on 06.05.2008 and abandoning altogether the entire process of selecti on pursuant to their NIT, dated 23.02.2008 ? (ii) , is sustainable in law ? and (iii) stances of the present case ? Whether the decision to retender is sustainable in the facts and circum Whether the decision of the NRL not to open the price bids, in question

5. In their affidavit-in-opposition, the respondents have assigned the reas ons, which had led them to take the decision of not opening the price bids and t o go for fresh tender. The relevant paragraphs of the affidavit-in-opposition, filed by the respondents, read as under: (cid:28)8. That the answering respondents beg to give a brief factual history of the ca se, which culminated in the aforesaid note of the CVO dated 9.6.06. In the year 2005, a similar contract for hiring of cranes viz. ’Hiring of Cranes during RTA - OS’ was floated. The petitioner was the only bidder and had quoted a very high price. The competent authorities at NRL negotiated with the petitioner and asked them to justify the price quoted. Accordingly, the petitioner vide letter dated 17.3.05 informed NRL that the high price was because of the fact that a p articular type of crane viz. \40 Te Tyre Mounted Hydraulic Crane\ was not availa ble in Assam and the same shall have to be procured from Mumbai, for which an ad ditional cost of Rs. 9,50,0001›(Rupees Nine Lakhs Fifty Thousand) only would hav e to be incurred. Accordingly work order dated 30.3.05 was issued to the petitio ner. 9. That the answering respondents state that the petitioner informed NRL th at they had arranged for 2 cranes from Ms. Mallesh & Co., Mumbai and one such cr ane had reached NRL. But the petitioner thereafter informed NRL that the trailer of the 2nd crane had met with an accident near Bongaigaon on 27.3.2005 and when the aforesaid accident took place the said M/s. Mallesh & Co., Mumbai had asked the petitioner to contact M/s. Dewanchand Ramsaran, Sivasagar, who agreed to he lp the petitioner by providing a 40 Te Crane and accordingly the petitioner had paid a sum of Rs. 3.25 lakhs to M/s. Dewanchand Ramsaran, Sivasagar for the 2nd crane. The petitioner further contented that the 1st being crane no. AP09 AN 588 6 was being transported by M/s. Transport Corporation of India in trailer no. HR 38 J 3977 and the 2nd crane no. MH 04 B 8573 was being transported by M/s. Kali ka Transport in trailer no. HR 38 D 0404. The 1st crane reach~d NRL and it was c ontended by the petitioner that the 2nd crane had met with an accident on 27.3.2 005. To substantiate his claim, the petitioner submitted the challan I consignme nt note of M/s. Kalika Transport. 10. That the answering respondents state that on scrutiny by the Vigilance Cel l of NRL, of the challan of M/s. Kalika Transport, which was submitted by the pe titioner, it was found that the consignment note no. 101 was dated 25.2.2005 i.e . prior to the date of Award of the Contract to the petitioner which was on 30.3 .2005. The challan also showed that the trailer had crossed Dalkhola Check post, Barovisha Check Post (West Bengal) on 22.3.05 and the Srirampur Check Post, Ass am. The discrepancy in the dates raised some doubt in the mind of the authoritie s and accordingly the officers of the vigilance cell NRL visited the aforesaid c heck posts on 7.6.06 and 8.6.06 That the answering respondents state that the challan of M/s. Kalika Tra 11. nsport (consignment note no. 101) dated 25.2.2005 bearing the signature of one S hri Debasis Bagchi, Assistant Commercial Tax Officer, Barovisha Check Post dated 22.3.2005 was shown to the officials in the office of the Sales Tax Officer Bar ovisha check post, West Bengal for verifiCation. After detailed verification, Sh ri Alok Kumar Sen and Shri Gopinath Shaw, both Sales Tax officers confirmed that no such’vehicle bearing registration no. HR 38 D 0404 had passed throu.9h the B arovisha check post towards Assam on 22.3.2005. They also confirmed that Shri De basis Bagchi, Assistant Commercial Tax Officer, Barovisha who had allegedly sign ed the challan as per the seal mark, was not posted at that time in their office . They also showed copy of movement order dated 3.11.2004 in respect of Shri Deb asis Bagchi. Thereafter, Shri Alok Kumar Sen, Sales Tax Officer, Barovisha check post vide letter dated 7.6.06 gave a written confirmation to this effect enclos ing an attested copy of the movement order of Shri Debasis Bagchi dated 3.11.04. A copy of the letter dated 7.6.06 along with the order dated 3.11.04 is annexed hereto and marked as Annexure I. 12. That the answering respondents state that thereafter an enquiry was made with the Srirampur check post, Assam and Shri T Saikia, Superintendent of Taxes , Damra check post, Srirampur after verification of records informed that no veh icle bearing registration no. HR 38 D 0404 had crossed their gate towards Assam from 22.3.2005 to 28.3.2005. The said officer also gave a written confirmation t o this effect. A copy of the letter dated 7.6.06 is annexed hereto and marked as Annexure II. 13. That the answering respondents state that thereafter the vigilance cell enquired into the contention of the petitioners that the vehicle I trailer in wh ich the crane was being brought had met with an accident near Bongaigaon on 27.3 .2005. The records of the Bongaigaon Police Station were verified and the Sub-In spector (SI) Shri T Rahman, Bongaigaon Police Station informed that there was no record of any accident case on 27.3.2005 reported at their Police Station. The said Shri T Rahman, SI, Bongaigaon Police Station also gave a written confirmati on to that effect. A copy of the communication dated 8.6.06 is annexed hereto and marked as Annexur e III. 14. That the answering respondents state that thereafter the vigilance cell, NRL, on,Q:6..2006, made a phone call to the number (098921 - 57668) as printed on the challan of M/s. Kalika Transport. The phone was answered by one Shri Asho k Salvi of Mumbai who informed that this was his mobile number and he does not k now anything about M/s. Kalika Transport and is not assodated with them. Attempt was also made to contact M/s. Mallesh & Co. through the phone numbers printed o n their quotation submitted by petitioners in support of their higher rates but no one could be contacted. 15. That the answering respondents state that a report of investigation was submitted by the Senior Manager (Vigilance), NRL and all the aforesaid facts app ear from the said report of the Senior Manager (Vigilance), NRL. Based on that r eport, the CVO, NRL vide note dated 9.6.06 to the Managing Director, M/s. Numali garh Refinery Ltd. recommended initiation of criminal proceedings against the pe titioner and also for recovery of the excess amount, fraudulently appropriated b y the petitioner. 16. That the answering respondents state that from a narration of the facts as above it is crystal clear that the petitioner, in their earlier contract with the answering respondent no. 1 quoted a very high price and to justify the same , contended that 30 I 40 Te cranes were not available in Assam and were to be br ought from Mumbai at an additional transportation cost of Rs. 9,50,0001- (Rupees Nine Lakhs Fifty Thousand) only per crane. Accordingly, the petitioner brought one such crane (No. AP 09 AN 5886) from Mumbai from one M/s. Mallesh & Co. and b rought the other crane from M/s. Dewanchand Ramcharan in Sivasagar but claimed t he same price for the 2nd crane also. Further, the petitioner contended that in fact the 2nd crane was being brought from Mumbai but the trailer met with an acc ident near Bongaigaon. But, on verification of the documents submitted by the pe titioner to show that the 2nd crane was also being brought from Mumbai, it was f ound that no such trailer had come to Assam and no accident had occurred at Bong aigaon. Thus, no second crane was brought or ever intended to be brought by the petitioner from Mumbai and yet by submitting false and fabricated documents, the petitioner had tried to M/sappropriate a huge sum of money from NRL.

17. That the answering respondents state that on the recommendation of the CVO, NRL, the competent authorities of NRL withheld a sum of Rs. 9,50,0001- (Rupees N ine Lakhs Fifty Thousand) only from the bills of the petitioner. The petitioner thereafter raised an arbitration and the sole arbitrator vide Award dated 16.7.0 8 has decided against the petitioner and has awarded a sum of Rs. 9,50,0001- (Ru pees Nine Lakhs Fifty Thousand) only in favour of NRL, along with cost of the pr oceedings. 18. That the answering respondents state that the evo is not an officer of M /s. Numaligarh Refinery Ltd. and is an officer of the rank of Inspector General of Police of the Assam Police Service, who is on deputation to NRL. Without the clearance of the Vigilance Department, no tender can be proceeded with. Thus, wh en the evo, NRL insisted on whether action had been taken against the petitioner or not, the competent authorities of NRL decided not to open the bid of the pet itioner and reject the same, accordingly, in Group I of the tender, only one bid der viz. M/s Nishan Enterprise was left and in Group II, 2 bidders viz. M/s Nish an Enterprise and M/s B K Traders were left in the fray. Under such circumstance s, the management of NRL decided to retender the job and relax certain qualifyin g criteria, with a view to introduce better competition. While retendering, the management of NRL also took note of the fact that a large number of bids were di squalified in the technical evaluation due to some stringent pre›qualification c riteria in the NIT, which were introduced in the present NIT only and were not t here in earlier NITs for similar work. Therefore, it was decided to retender the work and relax certain pre-qualifying criteria and bring the tender in line wit h the tender for similar works in earlier years. The decision to retender the wo rk in question was taken in the aforesaid factual background of the case as the management could not proceed any further with the NIT dated 23.2.08 in view of t he report from the evo, NRL. Under these circumstances the letter dated 13.5.08 of the petitioner could not be replied to. It may further be stated that the man datory conditions, which have been introduced in the present tender is not only for this tender but for all works in NRL. (cid:29)

6. From the above explanation, given by the respondents in order to justify their decision of not opening the price bids, what clearly transpires is that t he NRL decided not to open the price bids on the ground that the petitioner’s te nder could not have been proceeded with by the respondents without clearance fro m the Vigilance Department of the NRL. Hence, it was on account of the question s, raised by the Chief Vigilance Officer, NRL, that the respondents decided not to open the price bids. Thus, the reason for not opening the price bids was tha t the petitioner’s past conduct did not make him suitable for consideration for allotment of the contract works, in question. In effect, thus, the decision, no t to open the price bids, was tantamount to blacklisting the petitioner, for, if this decision remains on record, the petitioner would not only be disqualified from being considered in respect of the NIT, dated 23.02.2008, but his disqualif ication would continue also in respect of the NIT, dated 27.06.2008, too, which, now, stands impugned in this writ petition. When the petitioner’s past conduct was found to be not conducive for allotment of work, there is no question of th e petitioner becoming suitable for consideration for selection in the subsequent tender processes, which may be initiated by the respondents. Thus, the decisi on not to open the price bids amounts to permanently restraining the petitioner from participating in any tender process under the respondents. However, such a momentous decision has, admittedly, not preceded by any notice of show cause to the petitioner.

7. In the circumstances as indicated above, the reference made by Mr. K. N. Choudhury, learned Senior counsel, to the decision of the Apex Court, in M/s Er usian Equipment & Chemicals Ltd. Vs. State of West Bengal and another, reported in (1975) 1 SCC 70, is not misplaced inasmuch as the Apex Court, in M/s Erusian Equipment & Chemicals Ltd. (supra), has clearly laid down that blacklisting has the effect of preventing a person from the advantage of entering into any lawful relationship with the Government for the purpose of gains and, since blacklisti ng creates disability, fair play demands that the person, who is sought to be bl acklisted, is given an opportunity to represent his case before he is blackliste d. The relevant portion of the observations made by the Apex Court in the case aforementioned read as under: (cid:28)20. Blacklisting has the effect of preventing a person from the privilege and a dvantage of entering into lawful relationship with the Government for purposes o f gains. The fact that a disability is created by the order of blacklisting ind icates that the relevant authority is to have an objective satisfaction. Fundam entals of fair play require that the person concerned should be given an opportu nity to represent his case before he is put on the blacklist. (cid:29)

8. What logically follows from the above discussion is that the petitioner stands virtually blacklisted and disqualified from participating not only in the tender process, which was initiated with the publication of the NIT, dated 23.0 2.2008, and also the subsequent NIT, dated 27.06.2008. It further follows from the above discussion that the petitioner has been permanently condemned without being heard. It is trite that in contractual matters, particularly, when the co ntract is of commercial nature, a High Court, in exercise of its powers, will no t interfere with the decision taken by the State or its instrumentality as regar ds the allotment of contract; but the judicial review of the decision-making pro cess cannot be out of the purview of the High Court’s power under Article 226. The decision, reached by the NRL, treating the petitioner as disqualified or uns uitable for allotment of contract works may, in course of time, be found to be c orrect; but, at this stage, it is clear that the price bids were not opened at a ll, because the petitioner was held to be unsuitable for being considered for se lection for allotment of the works, in question, though no opportunity, as alrea dy indicated above, was ever provided to the petitioner to have its say in the m atter. Thus, the decision, taken by the NRL, not to open the price bids, which were scheduled to be opened on 06.05.2008, cannot be sustained.

9. Turning to the question as to whether the decision to re-tender was corr ect, it needs to be pointed out that according to the affidavit filed by the res pondents, they found that if the petitioner’s tender was rejected, as they ought to have had, then, it would leave, in the fray, a lone tenderer, namely, M/s Ni shant Enterprises, in respect of the Group I works, and two bidders, other than the petitioner, in respect of the Group II works. The respondents also submit t hat having floated the tender, on 23.02.2008, they realized, in course of time, that the pre-qualification criteria, in their NIT, which led to rejection of the technical bids of many tenderers, were stringent and needed to be relaxed so th at more and more persons could participate in the process of selection, which th e NRL decided to resort to. The reasons, assigned by the respondents, for issui ng the subsequent NIT, dated 27.06.2008, may be laudable; but, in the face of th e fact that the NRL’s decision, not to open the price bids, which were scheduled to be opened on 06.05.2008, has been held by this Court to be not sustainable, the question of allowing the subsequent tender, dated 27.06.2008, to survive, do es not arise at all. This apart, since the petitioner was treated as not qualif ied due to the respondents’ Vigilance Department’s reaction in the matter, the s ame situation will prevail so far as the second NIT, dated 27.06.2008, is concer ned. In such circumstances, the petitioner may not be allowed by the respondent s to participate in the subsequent tender process, which has been initiated by p ublication of the NIT, dated 27.06.2008, and, even if the petitioner is, now, al lowed to submit tender pursuant to the NIT, dated 27.06.2008, the NRL would not be able to hold the petitioner suitable for allotment of contract works so long as their decision, not to open the price bids, in question, due to the petitione r’s alleged past misconduct, remains on record. Viewed from this angle also, th e second NIT, dated 27.06.2008, cannot be sustained. Because of what have been discussed and pointed out above, the impugned 10. NIT, dated 27.06.2008, is hereby set aside and quashed. The respondents are, ho wever, left at liberty to take a decision afresh on the question of opening of t he price bids, which had been received by the respondents pursuant to their NIT, dated 23.02.2008.

11. However, before parting with this writ petition, it needs to be pointed out that this Court has consciously refrained from expressing any opinion on the allegations made by the petitioner against respondent No. 6 and/or the other re spondents. This decision must, therefore, be treated to have been rendered with out expressing any opinion with regard to the veracity or correctness of the acc usations, made by the petitioner against the respondent No. 6 as well as other r espondents, nor does this Court express any opinion with regard to the veracity or the truthfulness of the allegations, which the respondents have made against the petitioner.

12. nd disposed of. With the above observations and directions, this writ petition shall sta

13. No order as to cost.