IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, J.
M/S. Mkc Infrastructure Limited - Petitioner
Versus
Union of India & Anr. - Respondents
W.P.(C) 730 of 2023 and CM APPL. 2797, 2798, 2799 of 2023
Decided On : 20-01-2023
Indian Penal Code, 1860 - Section 120-B – Prevention of Corruption Act 1988 - Section 7, 7A, 8 - Company - Debarment order - Challenges impugned debarment order by which Petitioner Company has been debarred for a period of three months – Held, OM clarifies that there should be no delay in taking action against bidders whose integrity has been questioned as inaction may lead to defaulting bidders getting new projects with Government - Integrity of companies executing such major infrastructure projects is of utmost importance - A breach of integrity that too as is seen in facts of present case wherein a high official of petitioner is alleged to have been involved in bribing a NHAI official, in collusion with officials of other bidders, cannot be ignored by this Court - Submission that official has been suspended would not be sufficient for Company to escape responsibility - In this view of matter, prima facie, this Court is of opinion that debarment order does not deserve to be suspended – Ordered accordingly.
JUDGMENT :
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. The Petitioner challenges the impugned debarment order dated 5th January, 2023 by which the Petitioner Company- MKC Infrastructure Limited has been debarred for a period of three months under Rule 151 of General Financial Rules, 2017. The debarment order reads:
2. The report indicated that prima facie M/s MKC Infrastructure Ltd. had violated Article 2 of the Integrity Pact of the contract agreement signed between NHAI and M/s MKC Infrastructure Ltd for the Construction of Four lane expressway from start of DSIR zone of Ahmedabad district to Adhelai village of Bhavnagar district (ch.71.00 to ch.109.019) section of Ahmedabad- Dholera Greenfield alignment (NH-751) on EPC mode-under Bharatmala Pariyojana in the State of Gujarat (Package-IV).
3. The matter has been examined in the Ministry by the Competent Authority nominated to decide such matters vide O.M. No. NH-35014/20/2020-H-Part (2), dated 18.08.2022. M/s MKC Infrastructure Ltd. was also given an opportunity vide this Ministry's letter dated 14th December, 2022 to explain their case before the competent authority in this Ministry.
4. After careful examination of all records made available by NHAI vide File No. NHAI/Guj/Ahmedabad-Dholera/pkg-IV /2018/11, clarification submitted by M/s MKC Infrastructure Ltd. and taking into account Rule 151 of GFR 2017 read with the Debarment Guidelines of Ministry of Finance, dated 02/11/2021, it has been concluded beyond material doubt by the Competent Authority that M/s MKC Infrastructure Ltd. has violated Article 2 of the Integrity Pact entered into by them with NHAI.
5. Therefore, in accordance with O.M. NH-3501412012020-H-Part (2), dated 18.08.2022, the Competent Authority has deemed it fit to impose the penalty of debarment upon M/s MKC Infrastructure Ltd.
In deciding the quantum of penalty in terms of the duration of debarment, the Competent Authority has taken into account the guidance available in Rule 151 of GFR 2017, the Debarment Guidelines of Ministry of Finance, dated 02111 /2021 and the views of the executing agency and other relevant material available on the file.
6. In view of the need to ensure action against the violation of the Integrity Pact which is 'beyond material doubt' and the imperative of maintaining continuity of construction work with pace and quality in the national highways sector, the Competent Authority has deemed it fit that M/s MKC Infrastructure Ltd. be debarred under Rule 151 of GFR 2017 for a period of 03 months from the date of issue of this order of debarment.
7. This issues with the approval of the Competent Authority as nominated vide O.M. NH- 35014/20/2020-H-Part (2), dated 18.08.2022.”
3. In the present petition, the Petitioner also seeks the quashing of the Office Memorandum dated 18th August, 2022 issued by Respondent No. 1- Ministry of Road Transport & Highways (MorRTH) on the subject of Integrity in Public Procurement (hereinafter ‘subject OM’). In the alternative, the Petitioner is seeking an order prohibiting MoRTH from enforcing the subject OM qua the Petitioner.
4. The submission of ld. Senior Counsel is that the Petitioner is not to be blamed for the conduct of one of its officials who has also been suspended and has been charge-sheeted
The central legal point established in the judgment is that MoRTH is the 'Principal' as per the Integrity Pact and under Rule 151 GFR, debarment can be resorted to, provided that the Petitioners are ....
The main legal point established in the judgment is the requirement of 'enough material' to proceed with debarment, emphasizing integrity and transparency in public procurement.
Debarment orders must be communicated and reasoned to uphold principles of natural justice; lack of such communication invalidates the debarment.
An administrative authority may initiate debarment proceedings based on a formal chargesheet under the Prevention of Corruption Act, as such actions are preventative, not punitive, and do not require....
Point of Law : It is a settled and well established principle of law that in contractual matters, unless there exists public element, patent perversity or mala fides, invocation of jurisdiction of th....
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 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....
The court emphasized the importance of considering the petitioner's detailed reply before passing a debarment order, in line with judicial pronouncements.
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