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2022 Supreme(Guj) 1314

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Aravind Kumar, Ashutosh J. Shastri, JJ.
M/S Om Irritech Ltd. – Petitioner
Versus
Chief Engineer, Material Cell (C), Gujarat Water Supply And Sewerage Board – Respondent
R/Special Civil Application No. 11918 of 2022
Decided On : 07-11-2022

Advocates Appeared:
For the Petitioner: Paras K. Sukhwani.
For the Respondent: Mr. Rituraj M. Meena.

The central legal point established in the judgment is the requirement for the authority to consider lab testing results, provide natural justice, and offer proper opportunity and reasons in its decision-making process.

Headnote:

ISO 9001-2015 - Challenge to Debarment Order - Circular dated 18.2.2022, Circular dated 5.10.2020, Vendor Selection Procedure - [ISO 9001-2015] - [Challenge to Debarment Order] - [Circular dated 18.2.2022, Circular dated 5.10.2020, Vendor Selection Procedure]

Fact of the Case:

Petitioner, an ISO 9001-2015 certified company, challenged the order debarring it from participating in tender processes issued by the respondent authority. The petitioner contended that it had successfully completed several projects without complaints and had obtained positive lab re-testing results for the disputed pipes. The respondent authority, however, debarred the petitioner based on the failed samples and the petitioner's explanation was not considered adequately.

Finding of the Court:

The Court found that the joint inspection report indicated no negative test results for the disputed pipes and that the authorized testing agencies did not find any issues with the petitioner's supplied pipes. The Court also noted that the respondent authority had considered additional circumstances not previously notified to the petitioner, leading to a lack of natural justice. As a result, the Court quashed the impugned order and directed the authority to reconsider the decision, providing the petitioner with a proper opportunity and passing a fresh order with reasons.

Issues: The issues revolved around the validity of the debarment order, the consideration of lab testing results, and the principles of natural justice.

Ratio Decidendi: The Court's decision was influenced by the lack of negative test results in the joint inspection report, the failure of the respondent authority to adequately consider the petitioner's explanation, and the absence of natural justice in considering additional circumstances. The Court emphasized the need for proper opportunity and reasons in the authority's reconsideration.

Final Decision: The impugned order was quashed and set aside, and the matter was remanded to the authority for fresh consideration with proper opportunity and reasons. The Court did not express any opinion on the merits of the issues raised.

ORDER :

(Aravind Kumar, J.)

1. By way of this petition under Article 226 of the Constitution of India, petitioner has challenged the legality and validity of the order passed by the respondent authority dated 18.6.2022.

2. Brief facts leading to filing of present petition are that petitioner is a ISO 9001-2015, certified company and is represented by its authorized representative in the present proceedings and it has been contended that petitioner company has successfully completed several projects in the State of Gujarat without any complaints and it is a reputed company and an approved Vendor of Gujarat Water Supply and Sewerage Board (hereinafter referred to as ‘GWSSB’) having registration from 27.4.2021, validity whereof is upto 25.4.2024.

Petitioner was issued with various purchase orders from EPC Contractors for supply of various diameter of pipes. Petitioner was intimated by respondent the some of the samples failed as per report of CIPET. New samples from field were sent by GR Field Officer for lab re-testing and result of same disclosed positive or no failure vide report dated 16.3.2022 (Annexure-E).

3. According to petitioner, in view of the circular dated 18.2.2022, a joint inspection report is required to be obtained whenever there appears to be a dispute with regard to supply of pipes. Resultantly, such joint inspection report was prepared on 16.3.2022, signed by Research Assistants, GIRDA, Senior Scientific Officer, GIRDA, officer from EPC Contractor, M/s. Aman Construction and Mr. Arunkumar Rokad of the petitioner. It is the case of petitioner that on or after 29.3.2022, pipes have been supplied in various districts of State of Gujarat by petitioner through EPC Contractor for WASMO and no complaint was received of any nature with regard to its quality from any of the districts. For the purpose of indicating such supply, petitioner has attached certain copies at Annexure-F, consisting of order issued by respondent to EPC Contractor, einvoices and way bills. It has been contended that except for Kutchh district, there was no issue with any batch of pipes and so far as Kutchh district is concerned, said lot, i.e. batch of pipes, has also been retested and found positive (no failure). So, in respect of Kutchh area also, according to petitioner, there was no issue with regard to inferior quality. Pursuant to notice having been issued, petitioner submitted its detailed reply on 29.3.2022. But despite same having been explained at length, vide order dated 18.6.2022, name of petitioner came to be removed from the list of approved vendors of GWSSB and petitioner has been debarred from participating in any tender process to be invited either by GWSSB or by GWIL or WASMO for a period of one year from date of issuance of impugned order dated 18.6.2022. Petitioner has questioned this decision by raising multiple grounds in the present petition and based upon such facts, being pointed out, at initial stage, Court issued notice to respondent on 30.6.2022, who has appeared and a reply affidavit has been filed. Since pleadings are complete, upon request of both the learned advocates appearing for the respective sides, matter is taken up for final hearing.

4. Learned advocate Mr. Paras K. Sukhwani appearing on behalf of petitioner has vehemently contended that as per the requirement, a joint inspection report was also got prepared and same has been found positive and there is no indication with regard to quality compromise in respect of pipes and still ignoring such material as well as explanation offered by the petitioner, respondent authority has passed the order impugned in the petition. It has been pointed out that a joint inspection report reflecting at Annexure-E clearly indicates that all test results are positive; no indication of any negative result can be seen from the said inspection report dated 16.3.2022 and said inspection report having been prepared by the authorized agency of respondent authority, there is hardly an

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