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IN THE HIGH COURT OF JUDICATURE AT PATNA
Anil Kumar Sinha, J.
Espan Infrastructure(i) Limited Earlier Known As Espan Infrastructure Ltd. - Appellant
Versus
The State Of Bihar Department Of Road Construction & Ors. - Respondent
Civil Writ Jurisdiction Case No. 7782 of 2021
Decided On : 23-09-2021
Bihar Contractor Registration Rules, 2007 – Clause 11 (ka) – Black-listing for ten years – Alleged submission of forged challans to claim payment of bill – Before passing order of blacklisting which entails severe civil consequences, person concerned against whom action is proposed is required to be given reasonable opportunity to defend himself – Notice/show cause must contain particular penalty/action which is proposed to be taken, specifically and unambiguously – Action of blacklisting was neither proposed nor could have been inferred from language implied by respondents in show cause inasmuch as various other punishments and action is prescribed in 2007 Rules – Since blacklisting has effect of denying a person opportunity of entering into Government contracts and also has civil consequences, as such, respondents are obliged under law to serve an unambiguous show cause, clearly expressing proposed intention of blacklisting – Show cause does not talk about any allegation against petitioner company that work executed by it was sub-standard or quality was very bad, but impugned order has travelled beyond show cause and same is based on the ground at variance from ground mentioned in show cause – Impugned order reflects complete non-application of mind to facts and relevant law on the point – Manner in which impugned order has been passed is not what is expected to be done by a senior officer, in present case, Principal Secretary, Road Construction Department, Government of Bihar – Ground taken in impugned order passed by appellate authority is at variance from one mentioned in show cause and, as such, same is impermissible in law and is violative of principle of natural justice – Order impugned is also not sustainable on the ground that same is cryptic, non-speaking and is not a reasoned order – Impugned orders passed by appellate authority, blacklisting petitioner company for ten years, are unsustainable in law and same hereby quashed. (Paras 24, 26, 30, 31 and 32)
JUDGMENT
1. The petitioner has filed the present writ application for quashing the order, dated 06.01.2021, as contained in Annexure 25 to the writ application, passed by the Principal Secretary, Road Construction Department, Government of Bihar, whereby the appeal filed by the petitioner, challenging the order, dated 21.12.2018, passed by the Engineer-in-Chief, Road Construction Department, as contained in Annexure 10 to the writ application, has been dismissed and the decision of the Engineer-in-Chief, dated 21.12.2018, has been affirmed, by which the petitioner company has been blacklisted for ten years.
2. The petitioner has challenged the original order of blacklisting, dated 21.12.2018, passed by the Engineer-in-Chief, Road Construction Department, by way of interlocutory application, being I. A. No. 01 of 2021.
3. The brief facts, giving rise to the present writ application, is that the petitioner company is registered by the Road Construction Department, Government of Bihar, as a Class-I contractor and pursuant to the Notice Inviting Tender (NIT), dated 22.08.2016, issued by the Executive Engineer, Chapra, for periodical repair work in KM 45.00 to KM 65.00 of NH 101 for the year 2016-17 for the estimated cost of Rs. 541.61 lacs, the petitioner company was awarded the aforesaid contract work with condition to complete the same within a period of five months from the date of execution of the agreement. The agreement between the parties was executed on 28.02.2017, in which the date for starting the contract work was fixed with effect from 16.01.2017.
4. As per Clause 17 (b) of the Special Condition of Contract, the bitumen for the contract work was to be procured only from the Government of India undertaking oil company and since the Barauni Refinery of the Indian Oil Company Limited was having scarcity of bitumen and the contract work was to be completed within a period of five months, therefore, the petitioner requested the Executive Engineer, NH Division, Chapra, vide its letter, dated 21.01.2017, for procurement of bitumen from Mathura Refinery of the Indian Oil Company Limited, stating therein that the petitioner would bear the additional cost of transportation of the bitumen from the Mathura Refinery.
5. Further case of the petitioner is that the work awarded to the petitioner company was completed within the time specified under the agreement and soon thereafter, there was heavy rainfall in the area, due to which the road constructed by the petitioner company got submerged in the flood up to 20 KM. As a result of the same, at some patch of the road, pot holes had developed, for which the respondents issued letter to the petitioner company and in compliance of the same, the petitioner company repaired the entire pot holes and also informed the Executive Engineer, NH Division, Chapra, vide letter, dated 16.10.2017, that the pot holes were filled up and the damaged portion of the road was also repaired. The Assistant Engineer, State Highway Division, Chapra, vide letter, dated 24.10.2017, informed the Executive Engineer, NH Division, Chapra, that the damaged road, including the pot holes, due to the flood, between KM 45 to KM 65, was repaired by the petitioner company and the same was inspected on 24.10.2017 itself, in presence of the Junior Engineer.
6. It has further been stated that as per Clause 17 (h) of the Special Condition of Contract, in case of any dispute, in either procurement or specification of the bitumen, the decision of the concerned Superintending Engineer shall be final and binding and the Superintending Engineer or the Engineer-in-Charge never raised any dispute with regard to procurement of bitumen from Mathura Refinery or about its specification and in order to deny the payment of the running bill/final bill of the petitioner company, a show cause was issued by the Executive Engineer, NH Division, Chapra, vide letter no. 85, dated 05.02.2018, stating therein that several reminders were issued to the pe
The impugned actions of issuing the show cause notice and blacklisting the petitioner were arbitrary, unconstitutional, and violated principles of natural justice. The court emphasized the requiremen....
The judgment emphasizes the importance of fair play, natural justice, non-discrimination, equality, reasonableness, and proportionality in the process of blacklisting, and the need for a valid, parti....
The main legal point established in the judgment is the requirement for a fair hearing, specific show cause notices, and proportionate punishment before imposing blacklisting in government contracts.
The main legal point established in the judgment is the requirement for a clear mention of the proposed blacklisting action in the show cause notice, as well as the need to adhere to principles of na....
The requirement for a fair hearing and a specific show cause notice before imposing the severe civil consequence of blacklisting, and the need for the authority to determine the period of punishment ....
The necessity of a specific show cause notice for blacklisting and the requirement to state the proposed action.
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