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IN THE HIGH COURT OF JUDICATURE AT PATNA
Chakradhari Sharan Singh, J.
M/s Ems Infracon Pvt. Ltd. - Appellant
Versus
State Of Bihar - Respondent
Civil Writ Jurisdiction Case No. 9597 of 2021
Decided On : 19-07-2021
Constitution of India – Article 226 – Bihar Contractor Registration Rules, 2007 – Rule 11(d) – Black-listing of Contractor – Availability of alternative remedy does not put a bar on High Court's jurisdiction to exercise power of judicial review under Article 226 – It is only self-imposed restriction which Courts exercise while exercising such inherent extraordinary jurisdiction of judicial review, when an expeditious effective alternative remedy is available to party aggrieved. (Para 11)
Bihar Contractor Registration Rules, 2007 – Rule 11(d) – Black-listing of Contractor – Sustainability – Black-listing order involves serious civil consequences – It casts a slur and creates a barrier between persons black-listed and Government in the matter of transactions – There must be strict adherence to principles of natural justice and fair play before taking such drastic action against a contractor – In present case, many significant points taken by petitioner in his show cause reply have not at all been dealt with in impugned order – It was obligatory on part of respondents to have recorded a clear finding as to why points taken by petitioner in its reply to show cause notice were not acceptable – Respondent BUIDCo has acted irresponsibly in passing impugned order in casual and cavalier manner which has serious adverse consequence not only in respect of petitioner's eligibility to participate in bid with others in Government contracts, but has also adversely affected progress of project in question – Impugned order of black-listing set aside – However, respondents shall be at liberty to act in accordance with law. (Paras 7, 15, 21, 33, 55, 56, 57, 58, 59, 62, 63 and 64)
Government Contract – Black-listing of Contractor – If any agency, which is 'State' within meaning of Article 12 of Constitution of India intends to black-list a contractor, it should lay down comprehensive and clear provisions in form of an enactment or subordinate legislation or even executive instructions, for achieving objectivity, certainty and consistency in decision making process – Black-listing of a contractor can have more serious consequence than dismissal of an employee under State – If State of Bihar or any of its Undertakings intend to have or adopt any document in form of Act, Rules, Regulations, Notifications or Guidelines for the purpose of blacklisting a contractor, same must be clear and structured in its form as half-baked arrangement of casually adopting an executive instruction issued by Road Construction Department for all works and projects under State Government or its Undertakings, in Court's opinion, does not go well, keeping in mind steep rise in infrastructure development projects under State Government – Court exercising power of judicial review cannot direct State respondents to frame Rules – However, respondents shall consider Court's observations in correct perspective and proceed in a manner which suits public interest most. (Para 68)
(1975) 1 SCC 70 ; (1989) 9 SCC 29 ; (2014) 9 SCC 105 ; 2019 SCC OnLine SC 1607; 2020 SCC OnLine SC 934 – Relied.
(2010) 13 SCC 427; (1994) 6 SCC 651; (1999) 1 SCC 492; (2016) 14 SCC 172; (2016) 16 SCC 818 – Referred.
JUDGMENT
Chakradhari Sharan Singh, J. - Heard Mr. S.D. Sanjay, learned Senior Counsel for the petitioner, Mr. Lalit Kishore, learned Advocate General representing the State of Bihar and Bihar Urban Infrastructure Development Corporation Limited (BUIDCo for short), Mr. K.N. Singh, learned Additional Solicitor General of India on behalf of the Union of India and Respondents No. 8 to 11 and Mr. P. K. Shahi, learned Senior Counsel representing private Respondent No. 12 through on-line video mode, because of COVID-19 pandemic restrictions.
2. The petitioner is a joint venture (hereinafter referred to as M/s EMS for short) of two private limited companies and the Directors and Shareholders of both the constituents of the joint venture, namely, M/s EMS Infracon Pvt. Ltd. and M/s Technocraft Construction Pvt. Ltd. carry on their commercial activities within the territorial jurisdiction of this Court, as stated in the application,
3. In its original form, the petitioner had sought, inter alia, for a declaration that Bihar Contractor Registration Rules, 2007 (Public Works Department) was ultra vires and not enforceable to the extent the same was repugnant to the provisions of Bihar Financial Rules, 1950. However, the said relief has been given up, as recorded in a Division Bench order of this Court dated 06.07.2021 passed in this case, which reads as under :-
"Shri S.D. Sanjay, learned senior counsel, under instructions, states that the petitioner gives up Prayer Clause(i).
In this view of the matter, matter needs to be listed before the learned Single Judge, as per the current roster.
At this stage, Shri S.D. Sanjay, learned senior counsel states that similar petition filed by the very same petitioner i.e. C.W.J.C. No. 8786 of 2020, titled as M/s. EMS Infracon Pvt. Ltd. Vs. The State of Bihar, is listed on 8th of July, 2021 before the learned Single Judge (Hon'ble Mr. Justice Chakradhari Sharan Singh)."
4. In the light of the aforesaid, the matter has been placed before this Bench under the orders of Hon'ble the Chief Justice.
5. On close reading of the reliefs which the petitioner has sought, as indicated in paragraph 1 of the writ application, it can be noticed that the petitioner is mainly aggrieved by an order of blacklisting dated 04.03.2021, passed by BUIDCo in exercise of powers stipulated in the Bihar Contractor Registration Rules, 2007 (the Rules for short). The immediate consequence of the said order of blacklisting is that the petitioner stands disqualified for award of any contract by BUIDCo for a term of one year, including work which is subject-matter of dispute in the present case, namely, (i) "Design and Building Sewage Treatment Plant of capacity 30MLD including MPS (45 MLD) and all pertaining structures and allied works (ii) Survey, review the designs, redesign where necessary and build new underground sewerage network of 167.3 KM length including trenchless and survey design, construction of five No. pumping stations and all appurtenant structures and allied works and (iii) Operation and maintenance of the complete works of sewerage treatment plant, sewerage network and pumping stations at Munger, State of Bihar, India".
6. In the aforesaid background, the petitioner is also seeking a declaration that the provisions of the said Rules are not applicable to the externally aided projects i.e. the projects funded by the World Bank, the Asian Development Bank, etc..
7. It is noted that the order of blacklisting has been passed on the allegation that the petitioner has falsely and fraudulently mentioned certain wrong facts in Forms 2 and 3B of the Standard/ Model Bid Documents (SBD), submitted in response to an invitation for bid for the work in question. It is the petitioner's contention that the BUIDCo does not have any jurisdiction to take any final decision on the consequence of any purported incorrect or misleading facts in the tender documents, which is purely within the domain of the World Bank and, therefore, the BUIDCo ill
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 Building Construction Department had the authority to take actions against the petitioner under the Bihar Contractors Registration Rules, 2007, and had rightly blacklisted the petitioner for subm....
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