Joginder Singh vs State of Punjab and Others

Mahesh Grover, J.

C.M. No. 8896 of 2013

C.M. is declined.

C.W.P. No. 9619 of 2013

In this writ petition the petitioner questions the process adopted by the respondents in revoking his contract and blacklisting him. The facts would reveal that respondent-PUNGRAIN had floated tenders for transportation of foodgrain. The petitioner as also few other persons participated in the process and the petitioner''s bid being lowest (62% ASOR) was declared successful. The process was finalised on 5.4.2013 when the list of participants was displayed.

The controversy has arisen, as according to the respondents, till 19.4.2013 the petitioner failed to abide by the terms of the contract which was to be awarded in his favour subsequent to the opening of the tender bid. He did not deposit the security as envisaged and neither did he execute the documents which would confer the right to execute the contract in his favour. Instead of submitting to the procedure of finalisation of the contract the petitioner had allegedly furnished an undertaking that he is unable to carry out the contract on account of constraints of transport.

This is strenuously denied by the petitioner who contends that no notice was given to him before cancelling the contract in his favour, Similarly he was blacklisted by virtue of the orders of the respondents without hearing him resulting in violation of the principles of natural justice and apart from this, it has been stated that the process of giving the contract in favour of 5th individual in the list of bidders is totally contrary to the policy which envisages that in the eventuality of failure of the successful bidder to execute the contract the bid would travel to the next bidder i.e. L-2 or L-3, but it is the specific case of the petitioner that the policy does not contemplate exploration of any other bidder beyond the limit prescribed in the policy. It is further the case of the petitioner that the entire process of giving the contract in favour of L-5 (respondent No. 5) was in contravention of the policy and was completely tainted, which is evident from the fact that the entire exercise was conducted on 19.4.2013 i.e. the cancellation of the contract of the petitioner and the awarding of contract in favour of respondent No. 5 to the exclusion of L-2, L-3 and L-4. It is also contended by the learned counsel for the petitioner that the rate at which the contract was awarded to respondent No. 5 is much higher resulting in substantial loss to the Corporation.

All these facts have been denied by respondent No. 5 as also the Corporation in the reply submitted, and rather it has been stated that the exploratory exercise to give the contract in favour of other bidders arose on account of the fault of the petitioner who failed to deposit the security amount and also failed to sign any document with the respondents which is a pre-requisite of executing the contract it is also stated by the respondents that the petitioner furnished the undertaking expressing his inability to execute the contract and when the exercise to give contract to other bidders arose three persons above respondent No. 5 expressed their inability for various reasons which was noticed and as a result of which respondent No. 5 by virtue of the exclusion of other bidders came to occupy the position of L-2 and thus the contract was given to him without causing any loss to the Corporation since the respondent No. 5 has agreed and is carrying out the work at the same rate as the one offered by the petitioner.

After hearing the learned counsel for the petitioner and perusing the material on record as also the record, we are of the considered opinion that the controversy can be answered by segregating two aspects of the matter. One, which involved the blacklisting of the petitioner and second, the subsequent exercise conducted by the respondents to award the contract in favour of respondent No. 5 and the justifiability thereof.

If the first aspect is to be taken into consideration regarding blacklisting of the petitioner, then it becomes evident that an order adverse to the petitioner had been passed without complying with the essentials of the principles of natural justice which envisage mat a notice is a pre-requisite to the passing of any order adverse to a person. This being the settled proposition of law and the facts overwhelmingly suggesting that no such procedure was followed, we have no hesitation to hold that the order by which the petitioner has been blacklisted is unsustainable in the eyes of law. We are also conscious of the fact that such an order is likely to affect the right of the petitioner in so far as the award, the sustainability and execution of other works is concerned Therefore, we set aside the impugned order to this limited extent and direct the respondents to reconsider the decision pertaining to the blacklisting of the petitioner.

In so far as the protection of the order granting the contract in favour of respondent No. 5 subsequent to the petitioner''s default is concerned, we are of the opinion that two facts would certainly discredit the petitioner. One, that he did not deposit the security amount as envisaged, and secondly, he did not execute the documents which is prerequisite to carry out the contract. We do not wish to comment upon the affidavit submitted by the petitioner as it would be difficult for this Court to do so in the exercise of its jurisdiction under Article 226 of the Constitution of India in the wake of a denial by the respondents. Suffice it to say that there is material to suggest the default on the part of the petitioner prompting the respondents to enter into an exploratory exercise to grant the contract in favour of some other desirous persons given the limited nature of the contract

The respondents have stated in their reply which is by way of an affidavit that the contract was awarded to respondent No. 5 due to the difficulties expressed by the persons placed at Sr. No. 2, 3 and 4 and at a rate which the petitioner himself had agreed to offer i.e. 62% ASOR which implies mat no loss to the Corporation has been caused as they had accepted the bid in the first place. That apart respondent No. 5 had since entered the work and therefore it would be unfair to unsettle this arrangement at this stage. For the aforesaid reasons, we direct that the arrangement created in favour of respondent No. 5 to carry out the work for the contract regarding the period it envisages would be protected till the conclusion of the said period without conferring any additional right on him. In so far as blacklisting of the petitioner is concerned, as observed earlier, the respondents would be required to carry out the process afresh by issuing notice to the petitioner which shall be finalised within a period of four weeks from today.

With the aforesaid observations, the petition stands disposed of.