The legal requirement of clarity and opportunity for representation in the notice for blacklisting, and the authority of the Department to terminate contracts and blacklist entities.

JUDGMENT :

ASHUTOSH KUMAR, J.

1. Heard Mr. Kumar Amit, the learned counsel for the petitioner and Mr. Vikash Kumar, for the State.

2. The petitioner/Datacon Technology Private Ltd. has challenged the order dated 04.05.2022 issued by the Deputy Commissioner-cum-Nodal Officer, Prohibition Excise and Registration Department of Government of Bihar, blacklisting the firm initially for a period of one month and thereafter by order dated 03.06.2022 by which the petitioner has been blacklisted for three years.

3. The main grievance of the petitioner is that no show-cause notice was served upon the petitioner/company before taking the decision.

4. The petitioner/Datacon Technology Private Ltd. was empanelled by Karnataka State Electronic Development Corporation Ltd. (herein after called KEONICS) a Government of Karnataka enterprise, to undertake the implementation of the Integrated Excise Management System (herein after referred to as ‘IEMS’) and call center projects of the State of Bihar.

5. The Department of Prohibition, Excise and Registration, Government of Bihar had issued tender for selection of an agency for Design, Supply, Installation, Commissioning, Operations and maintenance of IEMS for the Department. In the said tender, KEONICS was selected as the Total Solution and Service Provider to undertake the project of development and implementation of the solution, its roll-outs and state operations. A Master Service Agreement (hereinafter referred to as “MSA”) was entered into between KEONICS and Bihar State Beverage Corporation Ltd. (hereinafter referred to as BSBCL). Under the aforesaid agreement, the petitioner was empanelled to undertake the entire implementation work as noted above.

6. It is the case of the petitioner that under the MSA which contained detailed provisions for dispute resolution including that of escalation, conciliation, mediation and arbitration, which could have been invoked in cases of complaint but the respondent has chosen to black-list the petitioner/company with which there was no direct agreement. The petitioner had been working under the MSA which was concluded between KEONICS and the concerned Department of the Government of Bihar. For their part, the petitioner has informed this Court that the obstacles in the way of completion of the project were made known to the Department through the vendor namely, KEONICS. There were issues of non-availability of infrastructure, non-functional internet facilities at check-posts and delayed payment of services rendered, but no heed was paid to such complaints.

7. The further grievance of the petitioner/company is that the Department chose to change its requirements which was conveyed to the petitioner but those changes were not part of the MSA. Because of all these bottlenecks, there was some delay in execution of the project. Notwithstanding the petitioner having moved the entire hardware items to Patna in August, 2017, the implementation work could not start untill 2019 for want of decision of location/site for carrying out the work.

8. The major grievance of the petitioner, as noted above, is that by the Office Memorandum dated 04.05.2022, the vendor/KEONICS and the petitioner were informed that the Department was of the view that the delay in making the project “go live” was because of non-implementation of various modules of IEMS software and its poor management. By the afore-noted notice, it was declared by the Department that the vendor would be obligated to take up the issues of poor management of IEMS and call centers with its empanelled agency i.e. petitioner and resolve those to the satisfaction of the Department within 30 days. The vendor was given the liberty to consider changing the empanelled agency if it was not able to address the grievance of the Department. It was also cautioned that in case the empanelled agency was changed/substituted by another, the transition ought to be smooth, without disrupting either the IEMS or the call center operations. Al