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IN THE HIGH COURT OF DELHI
Prathiba M. Singh, J.
Theme Engineering Services Pvt. Ltd. - Appellant
Versus
National Highways Authority of India - Respondent
W.P.(C) 1173 of 2021 & CM Appl. 3305 of 2021
Decided On : 01-02-2021




The contractor is not wholly liable for personnel misrepresentations in CVs when discrepancies are disclosed voluntarily, necessitating fair treatment in debarment actions.

Headnote:(A) Debarment of contractor - Jurisdiction and procedure - Following the policies set forth by National Highways Authority of India (NHAI) regarding information discrepancies in CVs of personnel, a contractor faced debarment for two years, later reduced to six months, due to incorrect information allegedly provided by its employees without the contractor's knowledge (Paras 4 - 16).

(B) Legal principles regarding accountability of a contractor for false information on CVs - The court highlighted that a contractor cannot be wholly liable for inaccuracies in employee submissions, especially when such inaccuracies were voluntarily disclosed (Para 15).

(C) The court emphasized the necessity for just and equitable treatment of contractors when evaluating breaches of contract and moral wrongs by individual employees (Para 15).

Facts of the case:
The petition challenged a debarment order issued by NHAI based on alleged inaccuracies in the CVs of the contractor's personnel. The contractor voluntarily communicated the errors to NHAI, which later accepted a replacement of the personnel (Paras 3 - 5).

Findings of Court:
The court opined that the drastic measure of debarment was disproportionate, considering the contractor had voluntarily disclosed inconsistencies and had received permission to replace the personnel involved (Para 15).

Issues: The court addressed whether a contractor should be held liable for misinformation provided by its employees and whether the reduction of the debarment period was justified (Paras 15 - 17).

Ratio Decidendi: The court found that the policy should not overly penalize the contractor for its employees' misrepresentation and held that the circumstances of the case warranted a reduced debarment period (Paras 15 - 17).

Result: The order of debarment was stayed pending further proceedings.

JUDGMENT

Prathiba M. Singh, J. (Oral)--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 opportu




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