Back
IN THE HIGH COURT OF JHARKHAND AT RANCHI
Mr. Rajesh Shankar, J.
Vayam Technologies Limited - Appellant
Versus
State Of Jharkhand - Respondent
W.P.(C) No. 1036 of 2018
Decided On : 28-06-2018
The court quashed the order of termination of contract and blacklisting of the petitioner for five years, holding that the decision-making process of the respondents was arbitrary and unreasonable. The court found that the respondents failed to provide the petitioner with a cure period notice before terminating the contract, as required by the agreement, and that the respondents failed to consider the petitioner's reply to the show cause notice, in which the petitioner explained the alleged irregularities.
Fact of the Case:
The petitioner, a software development company, was awarded a contract by the Urban Development and Housing Department (UD&HD) of the Government of Jharkhand to implement a state-level software solution for e-governance in municipalities. During the execution of the work, the petitioner was debarred from participating in any tender or consulting assignment of the UD&HD for five years, alleging that it failed to furnish a performance bank guarantee (PBG) of a nationalized bank, which was a mandatory requirement as per the contract agreement. The petitioner challenged the order of debarment and the subsequent order of termination of the contract and blacklisting for five years.
Finding of the Court:
The court found that the requirement to furnish a PBG of a nationalized bank was not a mandatory requirement and that the respondents had treated it as such in a casual and arbitrary manner. The court also found that the respondents failed to provide the petitioner with a cure period notice before terminating the contract, as required by the agreement, and that the respondents failed to consider the petitioner's reply to the show cause notice, in which the petitioner explained the alleged irregularities.
Issues: 1. Whether the requirement to furnish a PBG of a nationalized bank was a mandatory requirement? 2. Whether the respondents provided the petitioner with a cure period notice before terminating the contract? 3. Whether the respondents considered the petitioner's reply to the show cause notice?
Ratio Decidendi: 1. The requirement to furnish a PBG of a nationalized bank was not a mandatory requirement, as the respondents had treated it as such in a casual and arbitrary manner. 2. The respondents failed to provide the petitioner with a cure period notice before terminating the contract, as required by the agreement. 3. The respondents failed to consider the petitioner's reply to the show cause notice, in which the petitioner explained the alleged irregularities.
Final Decision: The court quashed the order of termination of contract and blacklisting of the petitioner for five years.
JUDGMENT
Rajesh Shankar, J. - The present writ petition has been filed for quashing the order contained in memo no. 5/UD/Vividh (e-Municipality)/31/2016-05 dated 16.02.2018 (Annexure-38 to the writ petition) issued under the signature of the Director, State Urban Development Agency (SUDA) - the respondent no. 2 under the Department of Urban Development & Housing, Government of Jharkhand, Ranchi by reasons of which the contract of the petitioner dated 14.03.2016 has been terminated, the Performance Bank Guarantee (hereinafter referred to as "PBG") has been forfeited and the petitioner has been blacklisted/debarred for a period of five years from doing business with the Urban Development & Housing Department. Further prayer has been made for quashing the order contained in memo no. 5/N.V/Vividh (e-Municipality)- 31/2016/977(I) dated 15.07.2017 (Annexure-23 to the writ petition) issued under the signature of the respondent no. 2, whereby the petitioner has been debarred from participating in any tender or consulting assignment of Urban Development & Housing Department, Government of Jharkhand for five years and the same has also been made as one of the grounds for termination of the contract vide order dated 16.02.2018.
2. The factual background of the case as stated in the writ petition is that the Urban Development and Housing Department (UD & HD), Government of Jharkhand under the signature of the respondent no. 3 -the Director, Municipal Administration issued notice inviting tender being NIT No. JH/UDD/SW-URBAN/RE/2015-16/3137 dated 26.08.2015 for the selection of software development agency for "Implementing State Level Software Solution at Jharkhand under e-governance in Municipalities projects" as a part of National Mission Mode Project under JnNURM including the Hardware, Software, Networking and post implementation services for Jharkhand. The specified tender fee was Rs. 25,000/-and earnest money deposit was Rs. 40,000,00/-. The bid of the petitioner in consortium with M/s E-Businessware (India) Pvt. Ltd. was found to be technically and financially compliant under the tender and its proposal for being engaged as System Integrator was accepted and on 18.12.2015 followed by issuance of Letter of Acceptance (LoA) in its favour. The petitioner entered the contract with the Governor of Jharkhand on 14.03.2016 and at the time entering the contract, a revised financial proposal (RPF) was made by the petitioner at the same negotiated price of Rs. 18,88,55,866/- and a revised Bill of Material was submitted. The petitioner submitted PBG to the UD & HD for an amount equivalent to 10% of the total contract value i.e., Rs. 1,88,85,586/- vide BG No. 2016/94 dated 10.03.2016 drawn on a nationalized bank namely, Corporation Bank, Sarita Vihar, New Delhi Branch which was valid upto 08.03.2021. Thereafter, the petitioner started the work. It wrote to the Municipal Commissioner, Dhanbad Municipal Corporation (DMC) to provide the address, contact information and operating space till successful completion of the projects to operate GIS survey and for digitalization of old records. On 14.06.2016, the petitioner requested the Municipal Commissioner, DMC to provide copy of the existing survey data of both residential and commercial properties that has been collected directly by the DMC or through its vendor for the purpose of property/holding tax. On 23.06.2016, the petitioner wrote to the Managing Director, Mineral Area Development Authority (MADA) requesting allocation of operating space for installation of hardware and approval to start the site preparation work for the purpose of setting up the state service centers for the residents of Dhanbad. On 24.06.2016, the petitioner wrote to the Municipal Commissioner, DMC highlighting that the project is getting delayed due to the pending approvals from DMC. On 11.07.2016, the petitioner again wrote to the Municipal Commissioner, DMC informing that DMC, Dhanbad had requested for the delivery of DG
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
