IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M.Singh, J.
Theme Engineering Services Pvt. Ltd. & Anr. - Appellants
Versus
National Highways Authority Of India & Ors. - Respondents
W.P. (C) No. 1173 of 2021; C.M. Appl No. 3305 of 2021
Decided On : 01-02-2021
Debarment - National Highway Authority of India - Section 2 of Contract - 3.7 (ix) (b) - 10.2.23 - The court discussed the debarment order dated 12th January, 2021, arising out of the show-cause notice dated 23rd March, 2020, issued by the Respondent No.1 - National Highway Authority of India. The debarment was based on the alleged mistake in the CVs of two managerial personnel, in respect of their incorrect experience which was mentioned on the CVs. The court considered the relevant clauses of the contract and the NHAI policy guidelines to determine the validity of the debarment order and stayed the debarment order prospectively until the next date of hearing.
Fact of the Case:
The case challenges the debarment order dated 12th January, 2021, arising out of the show-cause notice dated 23rd March, 2020, issued by the National Highway Authority of India (NHAI). The debarment was based on alleged deficiencies in the services rendered by the Petitioner and the incorrect information in the CVs of two managerial personnel.
Finding of the Court:
The court stayed the debarment order prospectively until the next date of hearing and allowed the Respondent to proceed in accordance with the terms of the Contract for other alleged contractual breaches.
Issues: Validity of debarment order based on alleged deficiencies in services and incorrect information in the CVs of two managerial personnel.
Ratio Decidendi: The court considered the relevant clauses of the contract and the NHAI policy guidelines to determine the validity of the debarment order and stayed the debarment order prospectively until the next date of hearing.
Final Decision: The debarment order dated 12th January, 2021, was stayed prospectively until the next date of hearing, and the Respondent was allowed to proceed in accordance with the terms of the Contract for other alleged contractual breaches.
JUDGMENT
Prathiba M. Singh, J. - This hearing has been done through hybrid mode (physical and virtual hearing).
CM APPL. 3306/2021 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of.
W.P.(C) 1173/2021 & CM APPL. 3305/2021 (for interim stay)
3. The present petition challenges the debarment order dated 12th January, 2021, arising out of the show-cause notice dated 23rd March, 2020, issued by the Respondent No.1 - National Highway Authority of India (hereinafter, NHAI ), vide which the earlier debarment issued on 17th December 2020, for a period of two years, has been reduced to a period of six months.
4. The brief background is that on 30th April 2019, tenders were invited by the Respondent- NHAI, for Supervision Consultancy Services for Authority's Engineer for Construction supervision of Balance work of 4 laning of Ranchi-Rargaon- Mahulia section from 114.00 to km 277.568 of NH-33 in the State of Jharkhand. In response to the same, the Petitioner herein, submitted its bids on 20th June, 2019. It identified and submitted Curriculum Vitae s (hereinafter, CV s ) of ten shortlisted professionals, as its key managerial personnel, who would work as consultants in the above project. The Respondent- NHAI issued a letter of award of successful bidder to the Petitioner on 23rd August 2019. Subsequently, on 24th September, 2019, the Respondent No. 1- NHAI and the Petitioner entered into a contract with respect to the said project.
5. According to Mr. Amit Sibal, ld. Senior Counsel appearing for the Petitioner, the said CVs were identified and shortlisted by the Petitioner on the basis of what was uploaded by the said consultants on Respondent no.3 s portal, as is required by NHAI. It was subsequently revealed that out of the ten CVs which were uploaded, two CVs, in respect of two of the personnel who were shortlisted, had incorrect information to the extent that a period of one and a half years which was shown as experience by the said personnel with two separate entities, was incorrect. The said entities had informed the Petitioner, after the bid was awarded, that these two individuals never worked with them. Accordingly, this fact was brought to the notice of Respondent- NHAI by the Petitioner itself, vide letter dated 16th October, 2019. This led to the issuance of a letter dated 18th December 2019 vide which, NHAI accepted the request for replacement of the said two personnel. It is stated that at that stage, there was no communication by the NHAI with respect to the debarment of the Petitioner.
6. Thereafter, on 23rd March 2020, a show-cause notice letter was issued by NHAI, listing various alleged breaches by the Petitioner, and seeking a response as to why action, amounting to debarment of the Petitioner for a period of two years, ought not to be taken. The said show- cause notice was preliminarily replied to by the Petitioner vide letter dated 24th March 2020, where the Petitioner requested for an opportunity to meet in person and make a detailed explanation before NHAI. However, the order of debarment, dated 17th December, 2020, was passed debarring the Petitioner for a period of two years from participating in tenders issued by NHAI. The said debarment order was under challenge in WP(C) No. 11167/2020, titled Theme Engineering Services Private Ltd. v. National Highway Authority of India, in which an interim order, dated 24th December 2020, was passed by the ld. Single judge of this court. The operative portion of the said order reads as under:-
1. One of the grievance of the petitioner is that the impugned Show Cause Notice was issued just at the outset of the lockdown declared by the Central Government. In the reply dated 24.03.2020 submitted by the petitioner to the Show Cause Notice, the petitioner had highlighted its handicap in submitting a proper reply to the respondent on the Show Cause Notice. The Impugned Order has, however, been passed without granting any further opportunity to the petit
The main legal point established in the judgment is the requirement for specific reasoning for debarment, the principles of debarment under GFR, 2017 Rule 151, and the balance of interests between th....
A debarment order must consider all grounds presented, and judicial review in such cases requires a thorough evaluation of the facts rather than summary judgments.
Order of debarment - False CVs - Order visits the respondent herein with civil and evil consequences, it would be desirable if the writ petition is completely heard by the learned Single Judge and di....
The judgment establishes the principle that the NHAI's penalty actions, including debarment, should be proportional and in line with the NHAI's policy on penalty actions.
The court upheld the debarment of the petitioner for failing to submit a performance guarantee on time, affirming the procedural fairness and adherence to the RFP guidelines.
The gravity of the offence and its impact on the organization's operations and reputation are relevant factors in determining the duration of debarment.
The Court held that the impugned order of blacklisting was unsustainable on the following grounds:
1. The order was based on allegations that were not included in the SCN issued to the petitio....
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