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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B. PARDIWALA, VAIBHAVI D. NANAVATI, JJ.
M/s Global S.S. Construction Pvt. Ltd. – Petitioner
Versus
Chief General Manager, (Mechanical-I/C SEM.) – Respondent
Special Civil Application Nos. 11391, 13888 of 2020, 276 of 2021, Civil Application (for Direction) No. 1 of 2020
Decided On : 30-07-2021
Constitution of India,1950 - Article 226 - Arbitration and Conciliation Act, 1996- Section 11 - Special Conditions of Contract- Enquiry - Special Civil Application writ-applicant seeks to challenge action of respondents in forfeiting security deposit and also issue of show cause notice calling upon writ-applicant to show cause why he should not put on holiday-mode- writ-applicant has also prayed to restrain respondents from encasing bank guarantee - Special Civil Application writ-applicant seeks to challenge order banning him for a period of two years consequent to show cause notice referred to above and challenged in connected writ-application
Finding of the Court: Courts have maintained distinction between statutory contracts on one hand and non-statutory ones on other- While judicial review was be permissible both as regards award and cancellation of contracts of former category same was confined to certain aspects in latter category- If termination of contract is on ground that a party thereto had violated conditions therefore such party is invariably required to work out his remedies as provided for under relevant contracts arbitration or civil suit as case may be- However where an element of administrative exercise is undertaken and executive power is exercised considerations and parameters are somewhat different court fail to understand why Corporation is reluctant to go for arbitration- On one hand writ-applicant has been banned from all further operations for a period of two years and on other Corporation does not even want to go for arbitration- However it shall be open for writ applicant to pursue his Section application pending before this Court- If ultimately application is allowed and arbitrator is appointed then all disputes between parties shall be resolved through mode of arbitration court do not find any palpable or material infirmity going to root of matter warranting immediate interference by this Court- Even otherwise it is difficult for this Court in exercise of its writ jurisdiction to go into questions whether Corporation was justified in terminating contract and banning writ-applicant having regard to materials on record
Result: Order accordingly
JUDGMENT :
J.B. PARDIWALA, J.
1. Since the issues in all the captioned writ-applications are inter-related and the parties are also the same, those were taken up for hearing analogously and are being disposed of by this common judgment and order.
2. In the Special Civil Application No. 11391 of 2020 the writ-applicant seeks to challenge the action of the respondents in forfeiting the security deposit and also the issue of show cause notice calling upon the writ-applicant to show cause why he should not be put on holiday-mode. The writ-applicant has also prayed to restrain the respondents from encashing the bank guarantee.
3. In the Special Civil Application No. 276 of 2021 the writ-applicant seeks to challenge the order banning him for a period of two years consequent to the show cause notice referred to above and challenged in the connected writ-application.
4. In the Special Civil Application No. 13888 of 2020 the subject matter of challenge is the illegal exclusion of the writ-applicant from a tender process, wherein although the writ-applicant was adjudged to be technically competent, yet was not permitted to participate in view of the order putting the writ-applicant on a holiday-mode.
5. We first take up the Special Civil Application No. 276 of 2021. By this writ-application under Article 226 of the Constitution of India the writ-applicant has prayed for the following reliefs:-
(B) The Hon'ble Court be pleased to issue writ of certiorari calling for records and proceedings in reference to banning the petitioner from having business dealings with the respondent relying upon the report of the enquiry conducted by the respondents in respect to its decision dated 16.12.2020 having Reference No. MHN/MM/ST/CONTRACT/270/ 2015-16 and after perusing such records and proceedings, be pleased to quash and set aside the impugned decision at Annexure-A taken by the respondent of banning the petitioner for two years from having business dealings with the respondent.
(C) The Hon'ble Court be pleased to stay the impugned decision dated 16.12.2020 having reference No. MHN/MM/ST/CONTRACT/270/2015-16 pending admission, hearing and final disposal of the Special Civil Application.
(D) The Hon'ble Court be pleased to pass any other just and proper order as deemed fit in favor of the applicant.”
6. It appears from the materials on record that the respondent-ONGC issued a tender notice dated 9.8.2016 for hiring of services for operation and maintenance of South Santhal ETP, ONGC, Mehsana Asset. The bid offered by the writ-applicant came to be accepted and he was awarded contract to run and manage the ETP for a period of five years.
7. It further appears that although the writ-applicant succeeded in getting the contract awarded in his favour, yet problems cropped up between the parties from day one. The ONGC issued a show cause notice dated 31.8.2020 to the writ-applicant (Annexure-G Page-68) calling upon the writ-applicant to show cause why the writ-applicant should not be put on holiday or in other words should not be blacklisted. The show cause notice reads thus:
M/s. Global S.S. Construction Pvt. Ltd.
12, Nishant Shopping Center, Seven Bungalows,
Andheri Mumbai-400053
Tel: 022-26341398/022-26341624
FAX: 022-26343381
Sub: Notice for banning your firm for unsatisfactory performance/failure of services, leading to termination of contract no. MHN/MM/ST/Contract/270/2015-16/9030007471 for “Hiring of services for Operation and maintenance of South Santhal ETP for a period of five years.”
With reference to above contract followings are the findings:
1. M/s. Global S.S. Construction Pvt. Ltd. Mumbai was awarded the contract for Hiring of services for Operation and maintenance of South Santhal ETP for a period of five years. The contract period was from 14.08.2016 to 13.08.2021.
2. The contract was to Operate and Maintain the 4000m3/Day Effluent Treatment Plant of South Santhal ET in
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