N.C. Nahar vs State of C.G. and Others

Dhirendra Mishra, J.—The Petitioner by the instant petition 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 tender process issued by the Respondent authorities including in the notice inviting tender dated 13.8.2008.

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 rural roads the Petitioner submitted his offer. The tenders were opened as per schedule and the Petitioner stood as L-1, as his offer was lowest. However, instead of finalizing the contract in his favour, he was served with a notice dated 14.2.2008 (Annexure P-3) by Respondent No. 3 stating therein that he has submitted false or incomplete information for calculation of his bid capacity and has also concealed some works, agreements, which are still in progress. In the said notice details of information, which were not furnished, have been given. The Petitioner was directed to show cause as to why the bid submitted by him be not treated as non-responsive and action be taken against him as per Clause 34 of the Instructions to Bidders (for short ''I.T.B.'').

The Petitioner in his reply dated 29.2.2008 (Annexure P-4) admitted that the information regarding work-in-hand under Package No. CG 12-24 of work order No. 3/IPU Dindori was not incorporated in the list due to oversight and clerical error and 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., PWD, Durg/Kawardha detailing in Para-3, it was replied that 90% work against the above work order has been completed. With respect to other work of Krishi Upaj Mandi Samiti, Durg, it was stated 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 (Annexure P-6) directed the Petitioner to extend validity period of offer till 30.4.2008. By yet another letter dated 29.3.2008, the Petitioner was again asked to extend validity offer up to 31.5.2008. However, the Petitioner was served with another show cause notice dated 04.06.2008 alleging therein that on examination of technical documents submitted by the Petitioner in response to the notice inviting tenders No. 124 and 125 it was found that the Petitioner did not show his contract works under PWD Durg and Kawardha, Krishi Upaj Mandi, Durg and M.P. Pradhan Mantri Grahmin Sadak Yozna in works-in-hand furnished by the Petitioner. Complaint in this regard was found to be true and therefore, declaring bid of the Petitioner as non-responsive, tender for group of work was cancelled treating the Petitioner as ineligible.

The Petitioner was again called upon to show cause as to why his name should not be included in the blacklist and he be disqualified from participating in the tenders for Pradhan Mantri Grahmin Sadak Yozna for a 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 negligence of the office staff dealing with the tenders. The Petitioner also begged for pardon.

Respondent No. 3 by the impugned order communicated the Petitioner that in response to notice inviting tenders No. 124 and 125/2007, the Petitioner submitted incorrect information in the department in his technical bid and thereby he tried to mislead the department, 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) and 4.7(i) of the ITB.

Learned Counsel for the Petitioner submits that the Petitioner has been blacklisted without affording reasonable opportunity to represent his case. The order passed under the relevant clauses of the agreement were not applicable in the case of the Petitioner, the Respondents also did not consider that the omission in submitting information was as a result of inadvertence committed by his staff in the tender document and the same was not intentional. Reliance is placed on the judgment of the Hon''ble Supreme Court in the matter of B.S.N. Joshi and Sons Ltd. Vs. Nair Coal Services Ltd. and Others, and Ripley and Company Limited v. Central Coalfields Limited and Ors. 2007(4) JCR 415 (Jharkhand).

The Respondents in their counter affidavit as well in the oral arguments have submitted that the Petitioner has not denied that he concealed information while submitting his tender. Concealment was deliberate 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 bidder must demonstrate availability of construction work either owned or on lease, or on hire along with the ITB, however, the Petitioner concealed the works already in hand while submitting his technical bid which came to the floor only after information was collected in this regard. A bidder comes in the category of eligible bidder according to his bid only when his bid capacity, which is technically termed as assessed available bid capacity and calculated according to the formula given in Condition No. 4.6. Condition No. 4.7 empowers the department to disqualify any bidder on any of the conditions enumerated in Condition 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 participating in tender process for a period of one year from the date of issuance of order of Annexure P-1.

We have heard learned Counsel for the parties. We have also perused the pleadings as well as documents relied upon by the respective parties.

Undisputed facts in the petition are that in response to the notice inviting 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 performance including the current contractual works in hand. In reply to the notice dated 14.2.2008 the Petitioner accepted that necessary information, as per instructions of the notice inviting tender, were not furnished 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 Mantri Grahmin 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 which occurred through oversight due to negligence of their office staff dealing with the tenders. However, error was un-intentional and they have already accepted their mistake. After receiving the aforesaid reply the Petitioner was debarred from participating in the tender process for a period of one year.

In the matter of B.S.N. Joshi tender document was not furnished to the Appellant by the M.P. State Electricity Board on the premise that he is defaulter. In a writ petition filed by the Appellant, learned Single Judge of M.P. High Court also recorded finding that he is defaulter. Appeal was also dismissed by the Division Bench with an observation that the Appellant being apparently defaulter, it cannot be said that the Board has committed any illegality in outstanding the Appellant from the tender process. The Hon''ble Supreme Court in the aforesaid judgment has referred the judgment of the Calcutta High Court in the matter of Prativa Pal alias Sm. Prativa Rani Pal Vs. Janhabi Charan Chatterjee alias J.C. Chatterjee, and its judgment in the matter of Raghunath Thakur v. State of Bihar (1975) 1 SCC 70 wherein it has been held that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for the purposes of gains, therefore, before he is put on a blacklist, he should be given an opportunity to represent his case. In the judgment of Hon''ble Supreme Court also it has been held that it is an implied principle of law that any order having civil consequence should be passed only after following the principles of natural 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 that parties affected by any order should have right of being heard and making representations against the order.

In Ripley and Company Limited the Petitioner was denied consideration for allotment of work by the Respondent-Central Coalfields Limited Company owned by the Government of India. The High Court of Jharkhand while observing that in the exercise of jurisdiction under Article 226 in the contractual matters, the Court cannot examine the decision and power of judicial review has to be exercised with utmost restraint and under the situations enumerated in Tata Cellular Vs. Union of India, . However, the Court can examine the decision making process and award of contract. Further considering that the Petitioner was found qualified and had fulfilled all conditions of NIT, to deny to right of participation to a tender in future contracts on account of one or other breach in an earlier contract not only cast a stigma and black-mark on it but the same amounts to blacklisting. Where a person is blacklisted without observing the principles of natural justice, the same cannot be sustained.

In the matter of Grosons Pharmaceuticals (P) Ltd. and Another Vs. The State of Uttar Pradesh and Others, the Appellant was an approved and registered contractor for supply of drugs to the government departments. On account of certain irregularities in purchase of medicines, a vigilance enquiry was set-up and his records and products were seized and criminal prosecution was also launched against him. Under such circumstances the State Government 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 order of blacklisting the Appellant was passed. The Hon''ble Supreme Court dismissing the appeal of the Appellant held thus:

An order blacklisting an approved contractor results in civil consequences and in such a situation in the absence of statutory rules, the only requirement of the law while passing such an order was to observe the principle of audi alteram partem which is one of the facets of the principles of natural justice. The contention that it was incumbent upon the Respondent to have supplied the material on the basis of which the charges against the Appellant were based, was not the requirement of principle of audi alteram partem. It was 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 cause and it did reply to the show-cause which was duly considered by the State Government. Therefore, the procedure adopted by the Respondent while blacklisting the Appellant was in conformity with the principles of natural justice.

If we examine the facts of the present case in the light of the principles of law laid down in the aforesaid judgments, we observe that the Petitioner 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 works of similar nature and size for each of the last five years and details of the works in progress or contractually committed with certificates from the concerned officer of the rank of Executive Engineer or equivalent. The Petitioner admittedly did not furnish details of number of works which he had in his hand at the time of submitting his technical offer. In reply to the show cause notice, the Petitioner has admitted the lapses. 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 participating in the tender process as per conditions of the ITB and in reply to that notice 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.G. Rural Road Development Agency, Raipur.

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 department.

In the result, the instant petition has no substance, the same deserves to be dismissed and the same is accordingly dismissed. No orders as to costs.