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IN THE HIGH COURT OF JUDICATURE AT PATNA
MOHIT KUMAR SHAH, J.
(30.9.2022)
CWJC No.16313 of 2021
REC-Power Development and
Consultancy Ltd. : Petitioner
Vs.
North Bihar Power Distribution Co.
Ltd. Patna & Anr. : Respondents
Government Contract–Tender–Disqualification on the ground of black-listing–By virtue of an interim Order passed by High Court of Judicature at Allahabad, Lucknow Bench, in case of petitioner, though order of blacklisting has been stayed but same still exits till it is set aside by High Court and challenge raised by petitioner before High Court with regard to same may or may not come to be answered in favour of petitioner–Process of work execution and financial dealing and high financial stakes involved in proper execution of project coupled with timeline are aspects attached to Award of Contract and High Court is handicapped to countenance any Award of Public Contract, subject to result of finality of adjudication of case filed by petitioner before High Court–An interim order cannot be sought to be implemented as if it is a final verdict–Writ Petition dismissed. (Paras 24, 25, 31 and 32)
Government Contract–Terms of NIT cannot be open to judicial scrutiny, as the same is in realm of contract–Fair play in joints is a necessary concomitant for an administrative body, functioning in an administrative sphere or quasi-administrative sphere–Power of judicial review is exercised to rein in unbridled executive functioning–Power of judicial review in contractual matter concerning State is very limited–Concern of Court in exercising such powers would be to prevent any arbitrariness, discrimination, malafides in tender process, so as to ensure adherence of fairness in State action–In exercising such powers, superior Courts are concerned with reviewing not merits of decision but decision making process itself–It is not function of Court to act as a super board or with zeal of a pedantic school master substituting its judgment for that of administration–Duty of Court is to confine itself to question of legality of tender process on touchstone of Article 14 of Constitution–Its concern should be whether a decision-making authority has exceeded its powers in arriving at an arbitrary decision or had committed a serious error of law or has acted in breach of the rules of natural justice or has reached a decision which no reasonable body of persons could have reached or has acted in complete abuse of its powers–It is not for Court to determine whether a particular policy or particular decision taken in fulfillment of that policy is fair–It is only concerned with manner in which such decisions have been taken–Grounds upon which an administrative action is subject to control by judicial review is classified on three counts firstly Illegality, secondly Irrationality and thirdly Procedural impropriety–Court does not sit as an appellate authority over tendering authority, but merely reviews manner in which decision was made–Court does not have expertise to correct an administrative decision and if a review of the administrative decision is permitted it would be substituting its own decision without necessary expertise with Court which itself may be fallible. (Para 25)
Consolidated Coffee Ltd. Vs. Agricultural Income Tax Officer Madikeri, (2001) 1 SCC 278; Reliance Energy Ltd. Vs. Maharashtra State Road Development Corporation, (2007) 8 SCC 1; Vidya Charan Shukla Vs. Tamil Nadu Olympic Association, AIR 1991 Madras 323–Distinguished.
Tata Cellular Vs. Union of India, (1994) 6 SCC 651; Asian Resurfacing of Road Agency (P) Ltd. Vs. CBI, (2018) 16 SCC 299; Devendra Kumar Vs. State of Utranchal, (2013) 9 SCC 363; State of AP Vs. Chinam, (2005) 2 SCC 746; Empire Jute Company Ltd. Vs. Jute Corporation of India, (2007) 14 SCC 680; Master Marine Services (P) Ltd. Vs. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138; Kalabharati Advertising Vs. Hemant Vimalnath Narichania, (2010) 9 SCC 437; Abhimanyoo Ram Vs. State of Uttar Pradesh, (2008) 17 SCC 73; United India Insurance Co. Ltd. Vs. Harchand Rai Chandan Lal, (2004) 8 SCC 644–Referred.
Tata Cellular Vs. Union of India, (1994) 6 SCC 651; Afcon Infrastructures Ltd. Vs. Nagpur Metro Rail Corporation Ltd., (2016) 16 SCC 818; Consortium of Titagarh Firema Adler S.P.A.-Titagarh Wagons Ltd., (2017) 7 SCC 486; Silppi Constructions Contractors, (2020) 16 SCC 489, Bharat Coking Coal Ltd., (2020) 16 SCC 759; Vidarbha Irrigation Development Corporation, 2019 SCC Online SC 89; Siemens Public Communication Networks (P) Ltd., (2008) 16 SCC 215; N.G. Projects Ltd. Vs. Vinod Kumar Jain, 2022 SCC Online SC 336; K.D. Sharma Vs. Steel Authority of India Ltd., (2008) 12 SCC 481–Relied.
MOHIT KUMAR SHAH, J.:–The present writ petition has been filed for quashing the order of disqualification of the petitioner dated 02.9.2021, issued by the Chief Engineer (Project-I/ Rural), North Bihar Power Distribution Co. Ltd., Patna, i.e the Respondent no. 2, vide an email, on the ground that the petitioner company has been blacklisted by Namami Gange and Grameen Jalapurti Vibhag, Uttar Pradesh vide letter dated 11.12.2020 and the interim order of the Court against a blacklisting order does not create eligibility for the firm as also in absence of final adjudication upon the blacklisting of the firm, the bid cannot be considered. Thus, the bid of the petitioner company has been found to be non-responsive as per Clause 1.1.3 (e) of Section 1 of the Request For Proposal document (hereinafter to be referred to as the “RFP”). The petitioner has further prayed for directing the respondents to consider the bid submitted by the petitioner vide RFP NIT No. 01/ PR/ NBPDCL/ 2021 for appointment as Project Management Agency.
2. The brief facts of the case, according to the petitioner, are that the petitioner company, i.e REC-Power Development & Consultancy Limited (hereinafter referred to as the "REC-PDCL"), a subsidiary of REC Ltd., is a Government of India controlled ‘Navratna’ PSU, which is engaged in the business of developing power sector infrastructure and carries out the works related to power distribution as also is engaged in consultancy work for other agencies and Government Departments. At the moment, the petitioner is stated to be rendering value added consultancy services & project execution to 41 power distribution companies across India in 28 States, involving project cost of more than Rs. 85,000/- Crores. The petitioner company is also engaged in undertaking various types of electrical infrastructure projects of power utilities, across the country.
3. The Respondent No. 1 had issued RFP NIT No. 01/PR/NBPDCL/2021, inviting online tender/ bid for appointment of Project Management Agency (“PMA”) to provide services for implementation of construction of 11 KV dedicated feeders and extension of 11 KV line from existing/ upcoming dedicated feeders, installation of Distribution Transformer, erection of LT line with AB cable with new agriculture connection and R & M of LT line in all nine circles of North Bihar Power Distribution Co. Ltd. (hereinafter referred to as the "NBPDCL"), under the ‘Mukhyamantri Krishi Vidyut Sambhad Yojana’. The bids were to be submitted in two parts i.e. Technical Bid, and Financial Bid. As per the provisions of RFP, the Financial Bids of only those bidders were to be opened who stand qualified upon opening of the Technical Bids. The petitioner had submitted its e-Bid/online bid, in the prescribed format and as per the procedure provided for in the RFP, on 06.04.2021. The technical bid was subsequently opened by the Respondent no. 1 on 08.04.2021.
4. The Ld. Sr. Counsel for the petitioner has submitted by referring to sub-clause (e) of Clause 1.1.3, under Section-1 of the RFP, which provides for submission of an affidavit by the bidder regarding it having not been blacklisted/ debarred as on the date of bid opening, that the petitioner had complied with the aforesaid pre-requisite by submitting an affidavit dated 01.04.2021, along with the bid certifying that the petitioner has not been blacklisted/ debarred by any Government department/ organization or any public limited company or any bilateral/ multilateral funding agency as on date of bid opening. However, the Respondent No. 2, vide letter dated 24.08.2021, while intimating the petitioner that it had received an email regarding the petitioner being blacklisted by Namami Gange and Rural Water supply Department, Government of Uttar Pradesh by an order dated 11.12.2020, had sought further clarification from the petitioner regarding the same. The petitioner had then vide letter dated 25.08.2021, submitted a detailed response to the clarification sough
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 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....
Judicial non-interference in tenders upheld absent mala fides or arbitrariness; non-disclosure of challenged blacklisting justifies disqualification if no timely rollback proof provided.
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 requirement of giving reasons, adherence to principles of natural justice, and fairness in administrative actions, especially in cases of blacklisting or imposing penalties, is essential for a va....
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