Back
IN THE HIGH COURT OF JHARKHAND AT RANCHI
RAJESH SHANKAR, J.
M/s. Trinix Impex Private Limited – Petitioner
Versus
Jharkhand Renewable Energy Development Agency – Respondent
W.P. (C) No. 4408 of 2021
Decided On : 28-07-2022
Blacklisting - Tender Process - JREDA - [Clause 18 of General Terms and Conditions] - The court discussed the legal provisions related to blacklisting and the requirement for a show cause notice before passing an order of blacklisting. It highlighted the severe civil consequences of blacklisting and the need for a fair hearing before imposing such a penalty. The court quashed the impugned order of blacklisting due to the absence of a specific show cause notice and failure to determine the period of punishment.
Fact of the Case:
The petitioner was blacklisted and debarred for 2 years from participating in any tender process invited by JREDA due to non-compliance with the terms of the work order. The petitioner had requested for reduction of security deposit and waiver of additional performance security deposit citing the Covid-19 pandemic, but the respondent terminated the work order and blacklisted the petitioner without issuing a specific show cause notice.
Finding of the Court:
The court found that the impugned order of blacklisting was passed without serving any show cause notice to the petitioner specifying the allegation and the proposed punishment, violating the principles of natural justice. The court also noted that the period of blacklisting was not mentioned in the tender document or the work order, and the respondent failed to determine the period of punishment. The court quashed the impugned order of blacklisting and declined to entertain the petitioner's claim for refund of earnest money.
Issues: Violation of principles of natural justice in passing the order of blacklisting, absence of specific show cause notice, failure to determine the period of punishment for blacklisting, and the petitioner's claim for refund of earnest money.
Ratio Decidendi: The court emphasized the requirement for a fair hearing and a specific show cause notice before imposing the severe civil consequence of blacklisting. It highlighted the need for the respondent to determine the period of punishment and provide a reasonable opportunity for the petitioner to represent its case before being blacklisted.
Final Decision: The court quashed the impugned order of blacklisting due to the absence of a specific show cause notice and failure to determine the period of punishment. The petitioner's claim for refund of earnest money was not entertained, but the petitioner was granted the liberty to raise the claim before the Director, JREDA.
ORDER :
1. The present writ petition has been filed for quashing the order as contained in letter no. 1732/2021 dated 21.09.2021 (Annexure-10 to the writ petition) issued by the Director, Jharkhand Renewable Energy Development Agency (JREDA) whereby the petitioner has been blacklisted and debarred for 2 years with immediate effect from participating in any tender process invited by JREDA. Further prayer has been made for quashing the order as contained in letter no. 1196/2021 dated 23.07.2021 (Annexure-9 to the writ petition) passed by the Director, JREDA whereby Work Order No. 43 dated 26.04.2021 awarded to the petitioner has been terminated and earnest money of Rs. 7,76,000/- deposited by it has been forfeited.
2. Learned senior counsel for the petitioner submits that the respondent published e-procurement Notice dated 25.11.2020 relating to a tender being Tender Reference No. 10/JREDA/LED/SSLS/20-21 inviting online bids for supply, installation, testing and commissioning including 5 years’ Comprehensive Maintenance Contract (CMC) of Solar Street Lighting Systems (SSLS) with 12w LED light, 75 WP Module and Lithium Ferro Phosphate Battery under Solar Photovoltaic Programme on Turnkey basis across the State of Jharkhand. Pursuant to the said tender, the petitioner submitted its bid and being the L-1 bidder, it was issued Work Order No. 43/2021-22 dated 26.04.2021 for supply, installation, testing and commissioning including 5 years’ Comprehensive Maintenance Contract (CMC) for 2000 nos. of 12W white LED based Solar Street Lighting Systems (SSLS) with Lithium Ferro Phosphate Battery under Solar Photovoltaic Programme on Turnkey basis across the State of Jharkhand. Thereafter, the petitioner was asked to submit security deposit @ 10% of the allotted work order value in the form of Demand Draft/ Bank Guarantee valid for one year and performance guarantee @ 5% of the allotted work order value in the form of Demand Draft/Bank Guarantee valid for five years. Subsequently, an ‘Addendum’ was incorporated on 27.04.2021 by the respondent in the said work order demanding from the petitioner an Additional Performance Security deposit of Rs. 23,91,000/- in the form of demand draft/bank guarantee valid for one year on or before 15 days from the date of issuing work order. It is further submitted that due to difficult situation arising out of Covid-19 pandemic, the petitioner requested the respondent to reduce security deposit to 3% of the allotted work order value instead of 10%. The petitioner also requested for waiving off the additional performance security deposit and vide email dated 13.05.2021, also invoked Force Majeure Condition as mentioned in clause no. 13 of the Work Order due to Covid-19 pandemic. However, the respondent compelled the petitioner to fulfill the terms of deposit with respect to the said work order till 31.05.2021 by granting 20 additional days from the last date to deposit the security deposit, performance guarantee and additional performance security. The petitioner, vide reference no. TIPL/2021-22/JREDA/06-30 dated 30.06.2021, requested the Director, JREDA, for time extension by 30-60 days as well as for waiving off the additional performance security and reducing the security deposit to 3% of the allotted work order value so as to complete the process of agreement considering the gravity of situation owing to Covid-19 pandemic, however instead of considering the petitioner’s request, the respondent, vide letter No. 1196/2021 dated 23.07.2021, arbitrarily terminated the work order issued to it due to non-payment of security deposit @ 10% of the allotted work order value and additional performance security deposit of Rs. 23,91,000/-. Further, the respondent, vide letter no. 1732/2021 dated 21.09.2021, debarred and blacklisted the petitioner for two years from participating in any tender process invited by JREDA with immediate effect due to non-compliance of Clause-3 and Clause-4 of the work order as also forfeited
The requirement for a fair hearing and a specific show cause notice before imposing the severe civil consequence of blacklisting, and the need for the authority to determine the period of punishment ....
The main legal point established in the judgment is the requirement for a fair hearing, specific show cause notices, and proportionate punishment before imposing blacklisting in government contracts.
The impugned actions of issuing the show cause notice and blacklisting the petitioner were arbitrary, unconstitutional, and violated principles of natural justice. The court emphasized the requiremen....
The power to blacklist a contractor is subject to judicial review and must be exercised in accordance with the principles of natural justice, proportionality, reasonableness, and fairness, especially....
The Petitioner's suppression of a material fact and approach to the Court with unclean hands led to the dismissal of the Petition.
A party cannot be blacklisted without a clear and adequate show cause notice, violating principles of natural justice, leading to severe consequences.
The judgment emphasizes the importance of fair play, natural justice, non-discrimination, equality, reasonableness, and proportionality in the process of blacklisting, and the need for a valid, parti....
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
