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2021 Supreme(AP) 274

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
U. DURGA PRASAD RAO, J.
VTC Transport Pvt. Ltd. – Appellant
Versus
Union of India and Others – Respondents
Writ Petition No. 19561 of 2020
Decided On : 18-01-2021

Advocates:
Advocate Appeared:
For the Appellant : Gorantla Sriranga Pujitha.
For the Respondent: Harinath N.

Point of law: debarment’ is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the Regulations under which such contracts were allotted. What is notable is that the 'debarment' is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor.”

Headnote:
Companies Act, 1956 Section 31(1) - Seeking blacklisting and debarment order - Permit them to submit bid - Whether contract be for supply of material or equipment or for execution of any other work whatsoever is in our opinion inherent in party allotting contract - Whether respondent-BSNL could have blacklisted appellant for allotment of future contracts for all times to come - Whether blacklisting and debarment imposed on predecessor of petitioner shall operate in perpetuity and affect petitioner - Broadly, Where fraud is intended to be prevented, or trading with enemy is sought to be defeated, veil of corporation is lifted by judicial decisions and shareholders are held to be 'persons who actually work for corporation - Whether blacklisting can be applied perpetually under Law - Whether blacklisting order inflicted against M/s. VTC Transport Public Limited Company predecessor in interest of petitioner will apply to petitioner company also in respect of subject tenders –
Finding of the court : Court has no doubt cut short agony of a delinquent employee in exceptional circumstances to prevent delay and further litigation by modifying quantum of punishment but such considerations do not apply to a company engaged in a lucrative business like supply of optical fibre /HDPE pipes to BSNL Petitioner along with technical bid papers submitted representation seeking to set aside blacklisting and debarment order and permit them to submit bid - However, as rightly submitted by counsel for respondents, all those papers would land in hands of only bid committee and not before authorities at helm of affairs who have power to re-consider blacklisting order - Considering that blacklisting was made infinitely which was co-terminus with lifetime of criminal case and even charges have not been framed against accused in criminal case and already debarment proceedings were issued more than four years and three months ago, Apex Court quashed Government's debarment order - Court does not find any compelling circumstances to take upon itself authority to decide length of blacklisting and debarment - On other hand, by following ratio in Kulja Industries Limited case, it is considered apposite to leave decision to respondent authorities –
Result :Writ Petition is dismissed,

ORDER :

1. The petitioner prays for a writ of mandamus:

(i) to declare the action of respondent Nos. 2 and 3 in rejecting the technical bid/technical RFx offer dated 16.09.2020 (uploaded on 25.09.2020) pursuant to the Notice Inviting Tender (for short ‘NIT’) vide VSP/MKTG/CDY/2020-21 RFX No. 2400000654 dated 14.08.2020 issued by respondent Nos. 2 and 3 on the alleged ground of blacklisting/debarment vide letter Ref. No. MKTG/SY/35/01/170-172 dated 21.02.2005, as illegal, arbitrary, unconstitutional and against the principles of natural justice, and consequently to set aside the impugned e-mails dated 16.10.2020 and 17.10.2020 issued by respondent Nos. 2 and 3.

(ii) to direct respondent Nos. 2 and 3 to consider the technical bid/technical RFx dated 16.09.2020 submitted by the petitioner as technically qualified/eligible as per the terms of the NIT vide VSP/MKTG/CDY/2020-21 RFX No. 2400000654 dated 14.08.2020.

(iii) to declare the alleged blacklisting/debarment vide letter Ref. No. MKTG/SY/35/01/170-172 dated 21.02.2005 issued by respondent Nos. 2 and 3, as illegal, unconstitutional and against the terms of the NIT, and consequently to set aside the same qua the petitioner.

(iv) consequently, to direct respondent Nos. 2 and 3 to consider the bid of the petitioner as technically qualified and permit the petitioner to participate in reverse e-auction and open the price bid of the petitioner and award the impugned NIT (as mentioned supra) dated 14.08.2020 to the petitioner in case its rate quoted in reverse e-auction is considered as the lowest/L-1.

(v) alternatively, to direct respondent Nos. 2 and 3 to consider the bid of the petitioner as technically qualified and conduct a fresh reference e-auction and open the price bid of the petitioner and award the impugned NIT (as stated supra) dated 14.08.2020 in case its rate quoted in the fresh reverse e-auction is considered as the lowest/L-1.

(vi) alternatively, without prejudice to the above, to direct respondent Nos. 2 and 3 to undertake re-bidding/re-tendering with reference to the scope of work involved in the impugned NIT (as stated supra) dated 14.08.2020 and thereby permit the petitioner to participate and submit its offer/bid in the re-bidding/re-tendering.

2. The case of the petitioner is succinctly thus:

(i) M/s. Varma Transport Company was a partnership firm whose liabilities and assets were taken over by M/s. VTC Transport Private Limited which was a public limited company incorporated in the year 1997. The said company was later converted into a private limited company in the year 2008. As a result of the said metamorphosis, the Directors and management of the petitioner company were changed. The petitioner company is engaged in providing highly skilled and specialized services for handling, carrying and forwarding iron and steel and it enjoys untarnished reputation in the area of transportation of heavy and lengthy material concerning iron and steel and it has been the consignment agent of various Public Sector Undertakings (PSUs), State Corporations, such as, Steel Authority of India, Bharat Heavy Electricals, Indian Oil Corporation, etc.

(ii) While so, respondent No. 3 on behalf of respondent No. 2, issued two tenders vide NIT VSP/MKTG/CDY/2020-21 RFx No. 2400000653 dated 14.08.2020 and VSP/MKTG/CDY/2020-21 RFx No. 2400000654 dated 14.08.2020 for the purpose of handling of steel materials at its Central Dispatch Yard. As per the tender conditions, the bidder can bid for both contract No. 1 and contract No. 2. The bidding process is in two parts, the technical bid and financial bid. If a bidder is found to be L-1 tenderer of contract No. 1, his bid for contract No. 2 shall not be processed further.

(iii) Apropos to the above notification, the petitioner submitted its bid for Contract Nos. 1 and 2. It has submitted its offer vide letter dated 16.09.2020 (technical bid) and uploaded financial bid on 25.09.2020 by duly enclosing the necessary documents. The petitioner received severa

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2021 Supreme(AP) 274

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATIU. DURGA PRASAD RAO, J.VTC Transport Pvt. Ltd. – AppellantVersusUnion of India and Others – RespondentsWrit Petition No. 19561 of 2020Decided On : 18-01-2021

Cases Referred (3)

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
U. DURGA PRASAD RAO, J.
VTC Transport Pvt. Ltd. – Appellant
Versus
Union of India and Others – Respondents
Writ Petition No. 19561 of 2020
Decided On : 18-01-2021