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IN THE HIGH COURT OF ORISSA AT CUTTACK
B.R. SARANGI, S.K. MISHRA, JJ.
M/s Lallooji and Sons and Another – Petitioners
Versus
State of Odisha and Others – Respondents
W.P. (C) No. 11524 of 2022
Decided On : 13-07-2022
Blacklisting - Government Contracts - Rule 151 of the General Financial Rules, 2017 - The court quashed the blacklisting order dated 28.04.2022 as it was found to be legally untenable. The court found that the petitioner firm was never blacklisted or debarred by any Central or State Government department. The court also noted that the petitioner firm had entered into a compromise agreement with another party and had been declared eligible for future contracts, which was not considered by the authority. The court held that the blacklisting order was violative of Article 20 of the Constitution of India as it penalized the petitioner firm twice for the same cause of action.
Fact of the Case:
The petitioner firm, a Partnership Firm, participated in two Request for Proposals (RFPs) issued by the Department of Tourism, Odisha. The firm's bid for the RFP dated 31.03.2021 was not communicated to them, and their bid for the RFP dated 21.09.2021 was declared non-responsive and ineligible. The firm filed a representation against the decision, stating that it was not blacklisted by any authority. The representation was rejected, and the firm approached the court by filing a Writ Petition. While the matter was sub-judice, the firm was issued a Show Cause Notice for blacklisting, and subsequently, the firm was blacklisted for a period of two years.
Finding of the Court:
The court found that the blacklisting order was legally untenable as the petitioner firm was never blacklisted or debarred by any Central or State Government department. The court also noted that the petitioner firm had entered into a compromise agreement with another party and had been declared eligible for future contracts, which was not considered by the authority. The court held that the blacklisting order was violative of Article 20 of the Constitution of India as it penalized the petitioner firm twice for the same cause of action.
Issues: The issues before the court included the legality of the blacklisting order dated 28.04.2022 and whether the petitioner firm had been rightfully blacklisted.
Ratio Decidendi: The court held that the blacklisting order was not sustainable in the eye of law as the petitioner firm was never blacklisted or debarred by any Central or State Government department. The court also noted that the petitioner firm had entered into a compromise agreement with another party and had been declared eligible for future contracts, which was not considered by the authority. The court further held that the blacklisting order was violative of Article 20 of the Constitution of India as it penalized the petitioner firm twice for the same cause of action.
Final Decision: The court quashed the blacklisting order dated 28.04.2022 under Annexure-23 and allowed the Writ Petition. No costs were awarded.
JUDGMENT :
B.R. SARANGI, J.
1. By means of this Writ Petition, the Notice to Show Cause dated 05.01.2022 under Annexure-14 for blacklisting/declaring the Petitioner Firm as ineligible from participating in procurement process by Department of Tourism, Government of Odisha and consequential Order dated 28.04.2022 under Annexure-23 blacklisting the Petitioner Firm for a period of two years, are sought to be quashed as the same are violative of terms of Requests for Proposal (RFP) dated 31.03.2021 and 21.09.2021.
2. The factual matrix of the case, in brief, is that Petitioner No. 1 is a Partnership Firm registered under the Partnership Act, 1932 consisting of ten (10) Partners, and having its Branch Office, At-A-2, Shivalik Business Centre, Off. S.G. Highway, B/h, Rajpath Club, Ahmedabad-380054, Gujarat, India. Petitioner No. 2 is the Managing Partner of the Petitioner No. 1 Firm and is authorized to file this Writ Petition.
2.1 Petitioner No. 1, being a Partnership Firm, is engaged in the business of providing Temporary Event Infrastructure, Decorative Items and General Supply of various kinds of articles and items, such as, Tents of various descriptions, Pandals and other Structures, Barricades and Furniture for temporary use on various occasions like fairs, exhibitions and other congregations etc. for Government Departments, Public and Private Organizations.
2.2 Opposite Party No. 1 invited a Request for Proposal (RFP), vide Tender Call Notice No. 3929/TSM dated 31.03.2021, for Leasing-cum-Development Upgradation, Operation and Management of tourism properties of Department of Tourism, Odisha, for seven different properties for a period of 30 years. In response to the same, the Petitioner-Firm submitted its bid in July, 2021. The very same Opposite Party No. 1, further invited a RFP, vide Tender Call Notice No. 7703/TSM dated 21.09.2021, for selection of Agencies for Set-up, Operation and Management of Eco Retreats at multiple locations in Odisha for a period of 5 years from 2021 to 2026. The due date of submission of the said bid was 21.10.2021 upto 5.00 P.M. and the Petitioner-Firm submitted its bid in October, 2021.
2.3 The Petitioner-Firm participated in both the RFPs. However, after opening of the Financial Bid in respect of the RFP dated 31.03.2021, no communication was received by the Petitioner-Firm with regard to the same till issuance of the Show Cause Notice dated 05.01.2022. So far the bid submitted with regard to RFP dated 21.09.2021, the same was declared as non-responsive and ineligible for further stages of the RFP, vide letter dated 29.10.2021, by Opposite Party No. 1. The Petitioner-Firm filed representation against the letter dated 29.10.2021, declaring its bid to be non-responsive and ineligible, stating that it was not blacklisted by any State or Central Government Department or any Agency. The Petitioner-Firm had also referred to Rule 151 of the General Financial Rules, 2017, by which the debarment of Firm would entail that the name of the Firm be displayed on the website of the Department/Authority blacklisting the Firm and that the said debarment would be prospective from the date of listing on the Central Public Procurement Portal of Government of India and such list of Firms will be maintained by the Department of Commerce. Since no such action was taken in case of the Petitioner-Firm, it is proved that Petitioner-Firm was never blacklisted/debarred by any Authority. The representation filed by the Petitioner was rejected by the Authority, vide letter dated 05.11.2021, confirming the decision dated 29.10.2021. Aggrieved by such decision of Opposite Party No. 1 dated 29.10.2021, which was communicated vide letter dated 05.11.2021, the Petitioner-Firm approached this Court by filing W.P. (C) No. 35042 of 2021, in which the following order was passed on 17.11.2021:
2. The Petitioner aggrieved of the order dated 29th October 2021 (Annexure-4 at page 153), whereby t
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