Gauhati High Court
Case Details
WP(C) 4622/2007 BEFORE HON’BLE MRS. JUSTICE ANIMA HAZARIKA JUDGMENT & ORDER Heard Mr. KN Choudhury, learned Senior counsel assisted by Mr. J Patowar y, Advocate, appearing for the petitioner. Also heard Mr. GN Sahewalla, learned Senior counsel assisted by Mr. N Anix Singh, Advocate appearing for the responde nts, Oil and Natural Gas Corporation Limited (’ONGC’ for short). 2. This is virtually the third round of litigation between the parties conc erning the validity of the action of the Respondents in banning the Petitioner a s well as its associate firms from entering into any business dealing with the r espondent, ONGC on permanent basis. The process for banning the Petitioner was i nitiated by a show cause notice dated 15.11.2005 issued by the GM-HES of the res pondent ONGC, contents whereof is quoted for ready reference hereinbelow: (cid:28)OIL AND NATURAL GAS CORPORATION LIMITED (cid:29) ASSAM ASSET, EASTERN REGION, NAZIRA: 785 685 TEL(03772) 241645, 241612, FAX: (03772) 252365, 252367 NO.MAT/SC/2005-06/NAZIRA/01 DATED: 15.11.2005 SHOW CAUSE NOTICE WHEREAS ONGC, EASTERN REGION HAD INVITED A TENDER NO.ER/NZR/OBG/ IMP/SCON/WSS/5/57/94-95 FOR (cid:28)OPERATION AND MAINTENANCE OF ONGC OWNED COIL TUBING UNIT AND ACID PUMPER (cid:29) WHEREIN YOU HAD ALSO SUBMITTED YOUR BID. HOWEVER AS PER T HE DECISION OF THE COMPETENT AUTHORITY THE TENDER WAS RE-INVITED BY ONGC. FURTHER ON WRIT PETITION FILED BY YOU, THE HON’BLE GAUHATI HIGH COURT ISSUED AN INTERIM INJUNCTION RESTRAINING ONGC FROM PROCEEDING FURTHER IN T HE TENDER. AFTER THE COURT ORDERS, YOUR REPRESENTATIVE MET THE ONGC OFFICER S AND REQUESTED TO REPROCESS THE SHORT CLOSED TENDER, WHICH WAS AGREED TO BY ONG C OFFICIALS SUBJECT TO YOUR WITHDRAWAL OF THE COURT CASE, SUBSEQUENTLY THE PRICE BIDS AGAINST EARLIER TENDER WERE OPENED AFTER EVALUATION OF BIDS YOUR OFFER BEI NG LOWEST THE CONTRACT AT A TOTAL COST OF RS.5,04,86,829/- WAS AWARDED TO YOU. FURTHER DURING THE EXECUTION OF THE CONTRACT YOU HAD SUCCEEDED I N GETTING THE APPROVAL OF ONGC ON THE BASIS OF FALSE CERTIFICATE FOR ACID PUMPIN G UNIT OPERATOR. FURTHER, IN AN INVESTIGATION BY CBI, IT HAS REVEALED THAT M/S JB ES HAS MANIPULATED THE TENDER BY SUBMITTING THE QUOTATION IN THREE NAMES BY MAKI NG THEIR RATES AS L-I AND ALSO COERCED ONGC MANAGEMENT AGAINST RE-TENDERING BY T AKING THE INTERIM INJUNCTION FROM COURT. WHEREAS, FROM THE ABOVE IT IS ESTABLISHED THAT YOU HAD USED UNFA IR MEANS TO OBTAIN THE CONTRACT AND ALSO SUBMITTED THE FALSE CERTIFICATE IN RESP ECT OF ACID PUMPING UNIT OPERATOR, FOR OBTAINING THE APPROVAL OF ONGC.
Legal Reasoning
YOU ARE HEREBY CALLED UPON TO SHOW CAUSE AS TO WHY BUSINESS DEAL INGS WITH YOU, YOUR FIRM AND ASSOCIATED FIRM MAY NOT BE SEVERED ON PERMANENT BAS IS FOR SUBMITTING THE FALSE CERTIFICATE AND MANIPULATING THE TENDER AND COERCING THE ONGC OFFICIALS BY TAKING THE INTERIM INJUNCTION AND BENEFITING IN GETTING T HE CONTRACT IN AN UNFAIR MANNER. THE REPLY TO THIS SHOW CAUSE NOTICE SHOULD REACH TO THE UNDERSIG NED WITHIN 30 DAYS FROM THE DATE OF ISSUE OF THIS NOTICE FAILING WHICH IT WILL B E PRESUMED THAT YOU HAVE NOTHING TO SAY IN THE MATTER AND EX-PARTE DECISION WILL BE TAKEN AS DEEMED FIT IN THE MATTER. (J.T.MAHAVAR) GM-HES FOR GGM-AM-AA REGISTERED POST ACKNOWLEDGEMENT DUE TO, M/S. JAYBEE ENERGY SERVICES, JAY BEE HOUSE, SUNDARPUR, OPP.CHANAKYA INN. RG BARUAH ROAD, GUWAHATI: 781 005. (cid:29) The aforesaid show cause notice dated 15.11.2005 was challenged by the w 3. rit petitioner vide W.P. (C) 8578/2005. It is pertinent to state here that till the time of filing of the said writ petition the notice dated 15.11.2005 remaine d unanswered by the writ petitioner on the plea that the respondent ONGC had not responded to its letter dated 21.11.2005 requiring it to inform the specific pr ovisions of law under which the said show cause notice was issued. The show caus e notice thereafter culminated in the order dated 23.05.2006 passed by the Execu tive Director, ONGC by which, subject to the result of the W.P(C) No. 8578/2005, the Petitioner was banned from any business dealing with ONGC on permanent basi s. This order dated 23.05.2006, which was challenged by the Writ Petitioner in W .P.(C) No.2938 of 2006 is quoted below for ready reference : (cid:28)OIL AND NATURAL GAS CORPORATION LIMITED (cid:29) ASSAM ASSET, EASTERN REGION, NAZIRA: 785 685 FAX: (03772) 252365 NO.MAT/SC/2005-06/NAZIRA/01 DATED: 23.05.2006 BY FAX & REGISTERED POST ACKNOWLEDGEMENT DUE TO M/S JAYBEE ENERGY SERVICES SUNDARPUR, OPP.CHANAKYA INN. T.G. BARUAH ROAD, GUWAHATI: 781 005. FAX NO.0361-2204097 DEAR SIR, REFERENCE IS INVITED TO THE SHOW CAUSE NOTICE DATED 15.11.2005 C ALLING UPON YOU TO EXPLAIN THAT AS TO WHY BUSINESS DEALINGS WITH YOU, YOUR FIRMS AND ASSOCIATED FIRMS MAY NOT BE SEVERED ON PERMANENT BASIS FOR SUBMITTING THE F ALSE CERTIFICATE, MANIPULATING THE TENDER AND COERCING THE ONGC OFFICIALS TO ENT ER INTO THE CONTRACT WITH YOU IN AN UNFAIR MANNER. YOU WERE TO REPLY TO THIS SHOW CAUSE NOTICE WITHIN 30 DAYS FROM THE DATE OF ISSUE OF THE NOTICE i.e., BY 14.12.2005. IT WAS ALSO CLEARLY INTIMAT ED IN THE SHOW CAUSE NOTICE THAT FAILING TO REPLY THE SHOW CAUSE NOTICE IT WILL BE PRESUMED THAT YOU HAVE NOTHING TO SAY IN THE MATTER AND EX-PARTE DECISION WIL L BE TAKEN AS DEEMED FIT IN THE MATTER. YOU HAVE FAILED TO RESPOND TO THE SHOW CAUSE NOTICE ISSUED BY ON GC TILL DATE AND INSTEAD YOU FILED A WRIT PETITION NO.8578/2005 IN THE HON’BLE G AUHATI HIGH COURT CHALLENGING THE SHOW CAUSE NOTICE. THE HON’BLE GAUHATI HIGH CO URT VIDE ITS ORDER DATED 16.12.2005 IS PLEASED TO PASS AN INTERIM ORDER THAT ANY ACTION TAKEN BY ONGC SHALL BE SUBJECT TO THE RESULT OF THE SAID WRIT PETITION. AFTER HAVING GIVEN AN IMPARTIAL, PRUDENT AND CAREFUL CONSIDERATI ON TO THE FACTS OF THE CASE IT IS DECIDED TO BAN BUSINESS DEALING WITH YOU, YOUR FIRM AS WELL AS ASSOCIATED FIRMS ON PERMANENT BASIS FROM THE DATE OF ISSUE OF T HIS LETTER. NO.8578/2005 PENDING IN THE HON’BLE GAUHATI HIGH COURT.
Decision
HOWEVER, THIS WILL BE SUBJECT TO THE RESULT OF THE WRIT PETITION EXECUTIVE DIRECTOR ASSET MANAGER - ASSAM ASSET (BM SINGH) (cid:29) 4. While the first writ petition i.e. WP(C) 8578/2005 remained pending, the second writ petition i.e. WP(C) No. 2938/2006 was disposed of at the motion sta ge vide order dated 16.06.2006 requiring the writ petitioner to file detailed re presentation to the ONGC authorities for recalling the order dated 23.05.2006 al so directing the ONGC authorities to dispose of the said representation of the w rit petitioner within 30 days of the receipt thereof. Further, ONGC was directed not to give effect to the order dated 23.05.2006 till the disposal of the repre sentation. The order of restraint passed by the learned Single Judge on ONGC in res 5. This order dated 16.06.2006 passed in WP(C) 2938 of 2006 lead to filing of Writ Appeal No. 223/2006 by the ONGC. Both the Writ Appeal and W.P.(C) No. 85 78/2005 were disposed of by the common judgment and order dated 04.05.2007 by a Division Bench of this Court inter alia holding as follows : (i) pect of the order of Black Listing dated 23.05.2006 was not called for. (ii) In view of the fact that the writ petitioner had by then filed its reply to the show cause notice dated 15.11.2005, the ONGC authorities were directed t o pass fresh reasoned order after hearing the Writ Petitioner within a period of one month. It was also clarified that in the interregnum the Black Listing orde r dated 23.05.2006 would hold the field. However, the writ petitioner was grante d liberty to file additional reply/representations, if so desired, within 7 days from the date of passing of the order dated 04.05.2007, in which event ONGC was directed to pass final order within 30 days thereafter. 6. Subsequent thereto, an additional reply was submitted by the Writ Petiti oner to the Group General Manager HES of ONGC on 10.05.2007 praying for recallin g the Black Listing order dated 23.05.2006. Thereafter, on consideration of the first reply dated 28.06.2006 as well as the additional reply dated 10.05.2007 fi led by the Writ Petitioner and also after affording personal hearing to its Mana ger on 26.06.2007, the order dated 01.08.2007 was passed by the Executive Direct or- Asset Manager of ONGC reiterating its earlier order dated 23.05.2006 whereby business dealing with the Writ Petitioner and its associates have been banned o n permanent basis. This lead to the present writ petition wherein the Petitioner had prayed for quashing the show cause notice dated 15.11.2005 as well as the B lack Listing order dated 23.05.2006 and the order dated 01.08.2007. 7. Mr. KN Choudhury, learned Senior counsel appearing on behalf of the peti tioner has urged that the orders passed by the respondent authorities black list ing the petitioner company had been actuated by high degree of malice due to the petitioner company approaching the High Court. The petitioner had also alleged arbitrariness and complete non-application of mind on the part of the authoritie s while passing the impugned orders. The learned Senior counsel further asserts that the allegation of it having submitted 3 (three) tenders to become L1 in a p articular tender process, that too on the basis of false certificate for Acid Pu mping Unit Operator are totally false and baseless and does not have any relevan ce bearing in issuing the orders of Black Listing. The Petitioner states that th e authorities in this context acted illegally by relying on the adverse observat ions contained in the Investigation Report of the Central Bureau of Investigatio n (CBI for short) dated 25.05.2004, inasmuch as, the said CBI report had culmina ted in closure of the case by the Special Judge. In support of his submissions, learned Senior counsel has placed relianc 8. e on the following decisions;- i) AIR 1955 SC 271, ii) (1974) 4 SCC 3, E.P. Royappa Vs. State of Tamil Nadu and Another, Dhirajlal Girdharilal Vs. Commissioner of Income Tax, iii) (1975) 1 SCC 70 iv) v) vi) M/S. Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal, (1979) 2 SCC 491, Smt. S.R. Venkataraman Vs. Union of India and another, (1994) 6 SCC 651 Tata Cellular Vs. Union of India, and (1997) 6 SCC 171, Vijender Vs. State of Delhi. 9. Per contra, Mr. Sahewalla, learned Senior counsel appearing for the resp ondent ONGC submitted that the action of the ONGC is based on examination of rel evant materials on record and the decision has been arrived at by the appropriat e authority in public interest after affording due opportunity to the Petitioner Company. It is strenuously urged by Mr. Sahewalla that relevant records would r eveal as to how the Petitioner Company had resorted to illegalities in misinform ing the ONGC authorities for ulterior gains. 10. In support of his submissions, Mr. Sahewalla, learned Senior counsel has placed reliance on the following decisions;- i) ii)