Point of Law: Contract Tender - Municipal Corporation - “debarment” is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission.

JUDGMENT :

Shaji P. Chaly, J.

Respondents in W. P. (C) No. 17593 of 2021 have preferred the appeal challenging the judgment of the learned Single Judge dated 05.01.2022 whereby the writ petition was allowed and Ext. P1 decision taken by the appellants to put the writ petitioner / 1st respondent, a contractor, in holiday list for a period of one year starting from 17.08.2021 is quashed.

2. Brief material facts for the disposal of the appeal are as follows:-

3. The appellant Oil Corporation had invited tenders for replacement of non-LED lights with LED lights on canopy & Yard Lights and allied works at retail outlets under various Divisional Offices of Kerala State, including Kozhikode, Trivandrum and Kochi. The tender conditions were specifically laid down and the tender notification also stipulates the conditions for holiday listing of entities, if any adverse situations are arising out of the contract, consequent to the default or negligence on the part of the contractor.

4. Ext. P2 is the relevant pages of the tender notice. Petitioner participated in the tender process, and being successful, entered into a contract for the replacement of non-LED lights with LED lights on canopy & Yard Lights and allied works at retail outlets under Trivandrum and Kozhikode Divisional Office within the State of Kerala on 16.06.2018 and 15.10.2018 respectively, evident from Exts. P3 and P4 contracts.

5. According to the writ petitioner, pursuant to Exts. P3 and P4 contracts, respondent Corporation issued work orders for 61 retail outlets (ROs) under Trivandrum Divisional Office for an amount of Rs. 2,11,50,778/- and under Kozhikode Divisional Office for Rs. 2,70,98,473.27/-, evident from Exts. P5 and P6 work orders. According to the petitioner, work awarded with the petitioner under the Kochi Divisional Office was successfully completed by the petitioner.

6 Admittedly, there was delay in execution of the work, which according to the petitioner was due to reasons beyond its control and it has taken all earnest and best efforts to carry on with the work. In fact, in regard to the delay in non-execution of the work, several correspondences were exchanged by and between the parties through e-mail and petitioner has also submitted Ext. P11 letter dated 06.11.2019. But fact remains the work awarded to the petitioner was terminated as per Ext. P17 letter dated 08.02.2021, after providing show cause notice and receiving reply from the petitioner, so far as concerning the Trivandrum Division; however without causing prejudice to the rights of the oil corporation under the contract or anywhere else. Later, the same procedure was adopted and Ext. P19 letter dated 13.04.2021 was issued terminating the contract awarded to the petitioner under the Kozhikode Divisional Office.

7. It is the case of the petitioner that even though petitioner made earnest efforts to conciliate the matter and settle the same through arbitration proceedings, the efforts made by the petitioner did not fructify. While so, Ext. P22 show cause notice was issued by the appellant Corporation to the petitioner to show cause as to why the petitioner shall not be holiday listed (blacklisted) in terms of clause 42.7 of Ext. P2, special terms and conditions of contract.

8. Admittedly, petitioner has given Ext. P23 detailed reply refuting the allegations made and also requesting to withdraw the proceedings initiated against it for holiday listing. Anyhow after considering the reply submitted by the petitioner, the appellant Corporation has issued Ext. P1 order by which the petitioner was put on holiday list for a period of one year as is provided in Ext. P1. In the writ petition, petitioner has challenged only Ext. P1 order of holiday listing, however the termination orders issued by the appellant Corporation as per Exts. P17 and P19 communications dated 12.02.2021 and 13.04.2021 were not challenged.

9. The learned Single Judge, after considering the factual and legal circumstances projected by the p