Mata Construction vs The State of Jharkhand and Others

R.K. Merathia, J.—Heard the parties finally.

Mr. P.K. Prasad, learned senior counsel appearing for the Petitioner, submitted that during the contracted period, a letter dated 3.8.2010 (Annexure-3) has been issued debarring the Petitioner from taking part in any other work of the Respondents, which amounts to blacklisting without giving any opportunity of hearing to the Petitioner. He further submitted that slow progress of the work was not due to any fault on the part of the Petitioner, rather Respondents themselves are responsible for the slow progress of work. He relied on M/s. Southern Painters Vs. Fertilizers and Chemicals Travancore Ltd. and another, and Joseph Vilangandan Vs. The Executive Engineer, (Pwd), Ernakulam and Others, He further submitted that in spite of repeated requests, forest clearance has not been obtained by the Respondents, which was one of the reasons apart from naxal activities etc. for not completing the work as per the schedule.

On the other hand, learned Counsel for the Respondents, referring to the counter-affidavit, submitted that the progress of the work has been very slow since the beginning which would be clear from the monthly progress report. He further submitted that the impugned order was passed during the monthly appraisal of the progress, saying that till the pending work is completed by about 89 contractors including the Petitioner, they will be debarred from taking part in the tender issued by the Respondents and only after completion of the work, the name of the contractor will be removed from the list of contractors attached with the impugned order. He further submitted that the purported explanations are no grounds for challenging the impugned order. He further submitted that in the circumstances, it cannot be claimed that opportunity of hearing was required to be given to the Petitioner before passing the impugned order.

It appears that the progress and completion of the work under the scheme i.e. the Pradhanmantri Gram Sadak Yozna is required to be done as per the schedule, though there is provision for extension of time. It further appears that during the monthly appraisal of the progress of work, it was found that the work under several scheme entrusted to about 89 contractors including the Petitioner was not progressing satisfactorily and therefore, the impugned decision was taken that-till the work is completed, the contractors named in the list will be debarred from taking part in any other tender issued by the Respondents. It is also said in the said letter that after the work is completed, the name of the contractor from the said list will be removed. In other words, the order of debarring 89 contractors including the Petitioner, from participating in tenders issued under the Respondents is subject to completion of work.

In the writ petition, it was generally stated that the Petitioner is not at fault for not completing the work in time, but in the rejoinder filed today, the Petitioner has tried to develop its case by saying that in spite of repeated requests, the department has not obtained forest clearance and therefore, there is delay in completion of work. It may be noted here that no document in support of such statement has been annexed with the rejoinder. In any event, it is a case where according to the Respondents, the work''s progress of 89 contractors, including the Petitioner is very slow and not in terms of the contract, whereas according to the Petitioner, he is not at fault for slow progress of the work, rather the department is responsible for the same. Thus, there is allegation and counter allegation between the parties with regard to the progress of the work.

The judgments relied by Mr. Prasad is of no help to the Petitioner. In the case of Southern Painters (Supra), it was interalia held that deletion of name of the contractor, amounted to blacklisting, and therefore, the contractor was entitled to opportunity of hearing. In the case of Joseph Vilangandan (Supra), it was interalia held that the notice was not clear, that action to debar the contractor, from taking part in future tender of the department, was in contemplation, and thus there was a necessity of giving opportunity of hearing, if such action was contemplated. But here in this case, the debarring is till the Petitioner and the other 88 contractors complete the work. It appears that the progress of large number of work is unsatisfactory including the work in question. The Petitioner has entered into contract with eyes open. This Court can not and should not examine the allegations, explanations and counter allegations in non statutory contractual matters, in which the scope of judicial review is very limited. In the case reported in Jagdish Mandal v. State of Orissa and Ors. (2007) 14 SCC 517 it was observed as follows:

Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succor to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

OR

Whether the process adopted or decision made is so arbitrary and irrational that the court can say:

the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached ;

(ii) Whether public interest is affected. If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition or penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealership and franchises) stand on a different footing as they may require a higher degree of fairness in action.

There is no arbitrariness or malafide on the part of the Respondents. The Respondents are justified in saying to the contractors, that till they complete the work, they will not be entitled to take further work from the Respondents. Moreover, in my opinion, the impugned order has been passed in public interest and it does not call for interference by this Court in writ jurisdiction. Accordingly, this writ petition is dismissed. However, no costs.