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2017 Supreme(AP) 230
IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
A. Ramalingeswara Rao, J.
Balaji Rail Road Systems (P) Ltd. - Appellant
Vs.
Rail Vikas The Nigam Ltd. and Ors. - Respondents
W.P. No. 748 of 2017
Decided On : 20-02-2017
For the Appellant : K. Vivek Reddy
For the Respondents: G. Venkata Reddy
Headnote:
Constitution of India - Article 226 and 226(2) - European Convention of Human Rights - Article 6 - Arbitration and Conciliation Act - Section 9 - Telegraph Act - Section 7 - Petitioner and learned Counsel for the respondents - Writ petition was filed challenging the order passed by the second respondent confirming the order of the first respondent - Petitioner is a Company offering consultancy services primarily to the Government and Public Sector Organizations running the Railways - Petitioner Company executed several projects - They also executed projects for clients located outside India they have executed over projects from its inception - Based on the performance of the petitioner, the petitioner was selected to execute projects for the first responden - Respondent floated seven distinct tenders for appointment of consultant from project consultancy services for bankability studies - Successful bidder was required to evaluate the commercial viability and engineering feasibility of the new rail projects - In response to the said tender notice the petitioner along with others submitted its bid and the petitioner became a successful bidder - Petitioner to show-cause as to why it should not be declared as a poor performer - Petitioner submitted its response explaining the reasons and attributing some of the reasons to the first respondent - After complying with the procedure relating to the declaration as poor performer the petitioner was declared to be a poor performer by the first respondent by proceedings dated there was a provision for appeal petitioner appealed to the second respondent and he confirmed the same by order – Held, Statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise – Otherwise an order bad in the beginning may, by the time it comes to Court on account of a challeng, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose in Commissioner of Police - Statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant of what was in his mind or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to effect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself - Would have remanded the case to the second respondent for giving reasons in support of the order. As stated above, I noticed that right from the stage of issuing show-cause notice - Petition is allowed.
A. Ramalingeswara Rao, J.
1. Heard learned Counsel for the petitioner and learned Counsel for the respondents 1 and 2. This writ petition was filed challenging the order passed by the second respondent dated 17.8.2016 confirming the order of the first respondent dated 17.5.2016 declaring the petitioner as a 'poor performer' for a period of three years.
2. The undisputed facts in the present case are that the petitioner is a Company offering consultancy services primarily to the Government and Public Sector Organizations running the Railways. The petitioner Company executed several projects. They also executed projects for clients located outside India. In respect of Indian Railways, they have executed over 150 projects from its inception in 1988. Based on the performance of the petitioner, the petitioner was selected to execute projects for the first respondent. On 30.9.2013 the first respondent floated seven distinct tenders (Request for Proposal) for appointment of consultant from project consultancy services for bankability studies. The successful bidder was required to evaluate the commercial viability and engineering feasibility of the new rail projects. In response to the said tender notice, the petitioner along with others submitted its bid and the petitioner became a successful bidder. A letter of award was issued on 28.1.2014, 31.1.2014, 6.2.2014 and 7.2.2014 for seven projects. The seven projects are located in various parts of India including doubling of Guntur-Tenali Railway Line and its electrification in the State of Andhra Pradesh. Separate agreements were entered on various dates on 3.4.2014, 4.4.2014, 9.4.2014 and 26.4.2014 in respect of seven projects. The contracts were executed in Secunderabad. The petitioner states that all the seven projects were executed by the petitioner. However, there was delay in execution of the contract and since the delay resulted in financial loss to the first respondent, a show-cause notice was issued on 14.8.2015 asking the petitioner to show-cause as to why it should not be declared as a 'poor performer'. The petitioner submitted its response on 1.9.2015 explaining the reasons and attributing some of the reasons to the first respondent. After complying with the procedure relating to the declaration as poor performer, the petitioner was declared to be a 'poor performer' by the first respondent by proceedings dated 17.5.2016. Since there was a provision for appeal, the petitioner appealed to the second respondent and he confirmed the same by order dated 22.6.2016.
3. The petitioner addressed a letter on 22.6.2016 requesting for appointment of an Arbitrator and maintaining status quo till the decision of the Arbitrator in respect of declaration as a 'poor performer' and the first respondent, vide letter dated 11.8.2016, stated that the declaration as a poor performer is an administrative order which was issued under a separate laid down procedure and the contract agreement does not mandate Arbitrators to arbitrate on the issue of poor performance, as such declaration can be made on various issues even beyond the contract/contracts. It appears that the first respondent also imposed penalty for delayed performance by making reduction from the payments due to the petitioner and the petitioner invoked the arbitration clause and challenged the same before the High Court of Delhi. The impugned orders were initially challenged before the Delhi High Court in OMP (I) (COMM.) 445 of 2016 and the same was withdrawn on 21.12.2016 with liberty to file a writ petition to challenge the impugned orders.
4. Thereafter, the petitioner filed Arbitration Petition No. 710 of 2016 before the High Court of Delhi and the High Court of Delhi disposed of the said petition by order dated 21.12.2016 appointing Mr. S.K. Sarvaria, a former Additional District Judge, Delhi, as a sole Arbitrator to adjudicate the disputes between the parties including their claims and counter-claim (other than the issue of p
