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IN THE HIGH COURT OF JHARKHAND AT RANCHI
RAJESH SHANKAR, J.
Anil Kumar Sahu - Petitioner
Versus
The Jharkhand State Food & Civil Supplies Corporation Limited, Kadru, Ranchi. - Respondents.
W.P. (C) No.3010 of 2020
Decided On : 06-04-2021
Blacklisting - Transportation & Handling Contractors - Clause 31, Clause 43.4 - The court discussed the provisions of Clause 31 and Clause 43.4 of the RFP, which empower the authority to blacklist a tenderer for three years if the tender is withdrawn and to cease the EMD without any hearing if the bidder fails to submit security deposit or execute the contract. The court highlighted the petitioner's repeated explanations for non-compliance due to being in home quarantine for COVID-19, and the lack of fairness in applying the blacklisting provision in this context.
Fact of the Case:
The petitioner, a successful tenderer for transportation and handling contracts, was blacklisted for three years and had the earnest money deposit forfeited by the respondent for failing to execute the agreement and deposit the security money, citing being in home quarantine due to COVID-19 as the reason for non-compliance.
Finding of the Court:
The court found that the application of the blacklisting provision was unfair and unreasonable given the petitioner's circumstances of being in home quarantine for COVID-19, and quashed the order of blacklisting the petitioner for three years.
Issues: The issues involved the application of Clause 31 and Clause 43.4 of the RFP, the fairness of blacklisting the petitioner for non-compliance due to being in home quarantine for COVID-19, and the lack of a show cause notice prior to blacklisting.
Ratio Decidendi: The court held that the power to blacklist a contractor is subject to judicial review and must be tested on the principles of natural justice, doctrine of proportionality, reasonableness, and fairness, especially when exercised by the State or its instrumentalities. The court emphasized the need for a fair hearing and proportionate action before blacklisting a contractor.
Final Decision: The court partly allowed the writ petition and quashed the order of blacklisting the petitioner for three years, debarring him from participating in any tender of the respondents.
ORDER :
1. This case is taken up through video conferencing.
2. The present writ petition has been filed for quashing the office order contained in letter no.1536 dated 25.08.2020 (Annexure-10 to the writ petition) passed by the Managing Director, Jharkhand State Food & Civil Supplies Corporation Limited (hereinafter to be referred as ‘the Corporation’)-respondent no.2, whereby the petitioner has been blacklisted for a period of three years (till August, 2023) from participating in any tender for appointment of Transportation-cum-Handling contractors as well as other tenders to be invited by the respondent no.1 during the said period and the earnest money deposited by the petitioner has been forfeited.
3. During the course of argument, the learned counsel for the petitioner confines his prayer only to the extent of quashing the order of blacklisting dated 25.08.2020.
4. The factual background of the case as stated in the writ petition is that the respondents floated a tender on 16.04.2020 for appointment of Transportation & Handling Contractors by the Corporation in 24 districts of Jharkhand through the respondent no.2 for Transportation & Handling of Food grains/Paddy/Sugar/Pulses/Oilseeds/Edible Oil/Empty Jute Bags/Bales etc. for the period 2020-22. The petitioner submitted his tender for being appointed as transporter/handling agent for the district of Palamau besides other districts and he was declared a successful tenderer being L-1 for the revenue district of Palamau and to that effect letter no.1267 dated 20.07.2020 was issued to him with a direction to deposit the security amount as well as to execute the agreement. Thereafter, vide letter no.1293 dated 20.07.2020, the petitioner was directed to appear for signing the agreement with original copies as well as photostat copies of the technical documents submitted with the tender documents, however, during the said period the petitioner was under home quarantine on medical advice, as he was suspected to have tested COVID-19 infection. As such, the petitioner made an application before the respondent no.2 on 27.07.2020, intimating that he had been confined in home quarantine on medical advice and could appear to execute the agreement only after being tested negative of Covid-19 infection and thus requested to extend the period for execution of agreement. Subsequently, the respondent no.2 issued letter no.1393 dated 29.07.2020, informing the petitioner that the date for executing the agreement expired on 27.07.2020, however, the petitioner neither deposited security amount nor ensured the execution of agreement. Further, the petitioner was called upon to ensure signing of the agreement within next 24 hours failing which the earnest money deposit would stand forfeited and appropriate action would be taken against him in accordance with law. On receipt of the said letter, the petitioner again made a representation before the Managing Director on 30.07.2020, intimating him that his office staff and collegues were tested positive for COVID-19 on 25.07.2020 and he was in home quarantined for 14 days. The respondents were requested through the said representation to extend the period of execution of agreement by 30 days. The respondent no.2 vide his letter no.1466 dated 13.08.2020 acknowledged the representation of the petitioner and granted him time till 14.08.2020 for depositing the security amount and execution of the agreement. On receipt of the letter dated 13.08.2020, the petitioner made a representation dated 17.08.2020 before the respondent no.2 intimating that he was tested positive for COVID-19 on 10.08.2020. Hence, his period of home quarantine was extended by 21 days and his premises were sealed in terms of the guidelines issued by the Department of Health & Family Welfare, Government of Jharkhand. Accordingly, the petitioner requested the respondents to extend the date of execution of the agreement till his recovery from COVID-19 infection. Thereafter, the respondent no
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