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2023 Supreme(Ker) 38

IN THE HIGH COURT OF KERALA AT ERNAKULAM
SHAJI P.CHALY, J.
M/s. Roy Construction Co. - Appellant
Versus
Union of India - Respondent
WP(C) No. 9216 of 2021
Decided on : 23-01-2023

Advocates:
Advocate Appeared:
For the Appellant : K.L.VARGHESE (SR.), SMT.SANTHA VARGHESE, SRI.RAHUL VARGHESE, SRI.RANJITH VARGHESE
For the Respondent: SRI.M.N.MANMADAN, CGC

Point of Law: Article 16 of Constitution further guarantees that there shall be equal opportunities for all citizens.

Headnote:

Constitution of India, 1950 - Article 226, 14, 16 – Offence of equitable in nature - Offence of work under arbitration - State shall not deny to any person equality before the law or the equal - Whether impugned order merits interference or not – In matter of blacklisting, it is evident that petitioner is not liable to be prevented from participating in contracts without issuing a show cause notice. (Para 17)

Finding of the Court: Court of view that action initiated against petitioner by issuing workload reports on ground that work under arbitration cannot be sustained under law, since it is a clear inroad and interference with rights and liberty provided under Part III of Constitution of India - If respondents have a case that work under Exhibit P1 contract was not completed by petitioner, they are at liberty to issue notice to petitioner and conduct a joint measurement of work done by petitioner - Anyhow, respondents have no case that such a course of action was undertaken by respondents so as to prevent petitioner from participating in tenders invited by respondents.

Result: Ordered Accordingly.

JUDGMENT :

This writ petition is filed by a contractor engaged in civil contracts seeking to quash Exhibits P15 and P15(a) workload reports dated 05.10.2021 and 21.01.2021 respectively, whereby the list of working contractors of Southern Naval Command considered not capable of handling more load, is provided by including the petitioner firm also, showing that ‘the work under arbitration’, and to permit the petitioner to participate in tender proceedings of the respondent Military Engineering Services Department.

2. A further writ of mandamus was also sought for directing the respondents to take all necessary steps to permit the petitioner to participate in the tender for works with Military Engineering Services Department and award the work unimpaired by Exhibits P15 and P15(a) workload reports, if the petitioner is otherwise qualified.

3. Shorn of unnecessary details, the basic facts required for the disposal of the writ petition are as follows:

The petitioner firm was awarded work under Exhibit P1 work order dated 13.07.2011 with respect to the repairs of Southern Naval Command Officers’ mess at Naval Base, Kochi and to provide all materials and labour for the full and entire completion of works. According to the petitioner, the work was prolonged solely due to the inability of the respondents to fulfil their obligations under the contract, such as handing over of the site, which was considerably delayed for a period of three years dividing the site into 30 stretches; the delay in issuing of approvals/decisions; gross short certification of payments; non-recording of proper measurements and so on, which are evident from Exhibit P6 internal correspondence dated 08.10.2014 issued by the third respondent. Resultantly, the petitioner raised claims on account of the cost of work done, unlawfully withheld amounts and escalation during the prolonged period and consequent to which a retired Judge of this Court was appointed as Arbitrator, who, in turn, appointed a technical expert for taking stock of actual work done.

4. In fact, some of the claims raised by the petitioner were allowed. Even though counter claims were raised by the Chief Engineer, Southern Command, they were declined. Anyhow, the challenge made by both the parties against the award passed by the Arbitrator is pending consideration in appeal. Now, the grievance highlighted by the petitioner is that merely because claims were raised by the petitioner against the respondents and arbitration proceedings were initiated, as a counter blast, the petitioner was not permitted to participate in the contracts invited by the respondents assigning the reason that “work under arbitration’.

5. The paramount contention raised by the petitioner is that the action of the respondents amounts to blacklisting of the petitioner without issuing any notice. It is the further case of the petitioner that the Manual of the respondents, relevant portion of which is produced as Exhibit P12, provides the manner in which a contractor is to be dealt with in the event of any latches or delay emerging from the contractor’s site. The learned counsel has invited my attention to Section 33.2(vii) dealing with show cause notices, which specifies that ‘show cause notices for proposed adverse remarks in workload returns shall be served by the Accepting Officer of Contracts latest by 10th of the last month of the quarter and copy of the same along with reply of Contractors shall be enclosed with WLR by GE/CWE, while forwarding report to CE Zone, and by CE Zone to CE Command’.

6. Therefore, it is contended that the entire action of the respondents are illegal and arbitrary liable to be interfered with and the petitioner may be permitted to participate in the contracts invited by the respondents. It is also the case of the petitioner that he participated in the subsequent contracts and carried out two works for the respondents, which were completed in January, 2016 and December, 2017 without any fine. However, at a

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