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2020 Supreme(Gau) 575

GAUHATI HIGH COURT
Achintya Malla Bujor Barua, J.
M/s. Oriental Engineers - Appellant
Versus
State Of Assam - Respondent
Writ Petition (Civil) No. 3094 of 2020
Decided On : 19-08-2020

Advocates Appeared:
I. Choudhury, Advocate

The main legal point established in the judgment is that blacklisting or debarring a contractor requires giving the contractor an opportunity to present their case before the order is issued, as highlighted by the Supreme Court's decision in M/S Erusian Equipment & Chemicals Ltd. v. State of West Bengal.

Headnote:

Blacklisting - Debarment of Contractor - PWRD - [PWRD] - [CE/ADT(II)/130/2016/12-A] - The court examined the debarring of the petitioner and referred to the Supreme Court's decision in M/S Erusian Equipment & Chemicals Ltd. v. State of West Bengal, highlighting the requirement of giving an opportunity to the contractor to present their case before blacklisting. The court found that no show-cause notice or opportunity was given to the petitioner before the debarring order was issued, leading to the order being set aside. The respondent authorities were granted liberty to proceed against the petitioner following due procedure of law.

Fact of the Case:

The petitioner, a registered class-1A contractor under the PWRD, was allotted a work which was later found to have issues. The petitioner proposed rectification but faced difficulties due to the COVID-19 pandemic. Subsequently, the petitioner was debarred from performing any work for a period of three months by the Chief Engineer, PWRD.

Finding of the Court:

The court found that the debarring order was not sustainable in law as the petitioner was not given an opportunity to present their case before the order was issued. The order debarring the petitioner for three months was set aside, but the respondent authorities were granted liberty to proceed against the petitioner following due procedure of law.

Issues: The main issue was whether the act of debarring the petitioner was done by following the due procedure of law.

Ratio Decidendi: The court referred to the Supreme Court's decision in M/S Erusian Equipment & Chemicals Ltd. v. State of West Bengal, emphasizing the requirement of giving an opportunity to the contractor to present their case before blacklisting. It was found that no show-cause notice or opportunity was given to the petitioner before the debarring order was issued, leading to the order being set aside.

Final Decision: The writ petition was allowed, and the order debarring the petitioner for a period of three months was set aside. The respondent authorities were granted liberty to proceed against the petitioner following due procedure of law.

JUDGMENT

Achintya Malla Bujor Barua, J. - Heard Mr. I. Choudhury, learned senior counsel for the petitioner. Also heard Mr. D. Nath, learned Additional Senior Government Advocate appearing for the authorities under the PWRD.

2. The petitioner who is a registered class-1A contractor under the PWRD, was, amongst others, allotted a work as per the letter of acceptance No. CE/CW/32/2018-19/13 dated 13.02.2019. Although the original period for completion of the work was 3 (three) months, but as because of certain intervening factors, the time for completion of the work was extended up to 31.08.2019. Ultimately, according to the petitioner, the work was completed prior to the extended period of 31.08.2019. Later on, there was a complaint from the Commissioner & Secretary to the Governor of Assam that the approach road to the Raj Bhawan was damaged and some small pot holes had developed on the road. There was some kind of enquiry on the said complaint and it is stated that the Chief Engineer, PWD had submitted a report on 30.04.2020 that some loose materials were present in the bituminous mixture which was due to inadvertence.

3. On 05.05.2020, the Executive Engineer, PWRD, East Guwahati Territorial Roads Division informed the petitioner about the inspection being conducted by the Chief Engineer and the report submitted thereon. On being so informed, the petitioner proposed before the department that necessary rectification would be done at the cost of the petitioner. The rectification work although allowed, could not be completed by the petitioner because of some difficulties due to the covid-19 pandemic situation. Accordingly, by a letter dated 19.05.2020, the petitioner prayed for some further time for completion of the repair work. Accordingly, the Executive Engineer, PWRD, East Guwahati Territorial Roads Division, vide letter no. 387 dated 05.06.2020 informed the Commissioner & Secretary to the Governor of Assam that the remaining rectification work would be carried out upon favourable weather conditions and availability of labour.

4. On 12.06.2020, the Deputy Secretary & the Special Officer to the Governor of Assam informed the Chief Engineer, PWRD that there was a direction for completion of the work within a period of 1(one) week. On 15.06.2020, due to incessant rains, some landslide had occurred in the hill slope near Raj Bhawan which again damaged the road to some extent and landslide had weakened the layer underneath the road thereby jeopardizing its stability. The said development was also informed to the Chief Engineer, PWRD, by the Executive Engineer, PWRD, East Guwahati Territorial Roads Division on 18.06.2020.

5. In the aforesaid circumstance, the Chief Engineer, PWRD, Assam had issued the order no. CE/ADT(II)/130/2016/12-A dated 22.07.2020 by which the petitioner was debarred for a period of 3(three) months with immediate effect from performing any work.

6. Without going into any other aspect, as regards the order dated 22.07.2020 by which the petitioner was debarred for a period of 3(three) months, we examine the question as to whether the said act of debarring the petitioner was done by following the due procedure of law. Debarring a contractor to perform any work, in other words, may be for a given period of time, would tantamount to blacklisting the contractor for the said period. The law as regards the blacklisting of a contractor had been settled by the Supreme Court in M/S Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal & anr., (1975) 1 SCC 70 wherein in paragraph 20, it has been provided that blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purpose of gains and therefore, the fundamentals of fair play would require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.

7. The relevant proposition laid down by the Supreme Court in M/S Erusian Equi

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