PUNJAB AND HARYANA HIGH COURT AT CHANDIGARH
Sureshwar Thakur and Vikas Suri, JJ.
M/s Floral Electrical Pvt. Ltd. – Appellant
Versus
Haryana vidyut prasaran nigam ltd. And another – Respondent
CWP-13379-2024
Decided on : 01-04-2025
JUDGMENT :
Sureshwar Thakur, J.
Through the instant writ petition, the petitioner herein - M/s Floral Electrical Private Limited, prays for the quashing of the letter dated 24.05.2024 (Annexure P-20), wherebys, the petitioner-Company is blacklisted/debarred from doing any business with respondent No. 1-HVPNL for one year, individually or with any other entity in partnership. The relevant contents of Annexure P-20 becomes extracted hereinafter.

2. The contractual date of completion was 30.08.2022 (after interim time extension). However, till date, major electrical and civil activities are still pending including commissioning of 2 Nos 16/20MVA 132/llkV T/F (supplied by HVPNL) and 1 Nos 20/25MVA 132/33 kV T/F (supplied by HVPNL). As such, it is clear that the work is lagging far behind the schedule and your firm would not be able to complete the work of ibid substations, at such snail pace.
3. The approach of your firm was lethargic since beginning, owing to the various issues of your firm. Your firm was continuously persuaded by field as well as head office officers for completion of work at the earliest. However, even after lapse of contractual period, the progress of work at site was not satisfactory and there had been a lack of dedication of firm in executing the project.
4. In view of above and also as per clause 44.1 of GCC, a notice was served upon your firm on 07.11.2023 to make good the deficiency in the progress of work within 15 days from the date of receipt of the notice.
5. Instead of giving response to the notice dated 07.11.2023 or showing progress in execution or completion of work, your firm vide memo dated 17.11 2023 requested to allow time of one week to present the case before HVPNL. A meeting was scheduled by HVPNL on 22.11.2023 granting opportunity to your firm to clarify its position. It was requested by your firm during the meeting on 22.11.2023 to allow you 10 more days to reassess your financial position and arrange the funds for completion of work. HVPNL considered the request and granted your firm 10 days vide letter dated 24 11.2023 to reassess your financial position and taking steps for execution of work.
6. Instead of submitting the action plan for completion of work, your firm vide letter dated 01.12.2023 again requested to provide one more hearing. The hearing was again granted by Nigam and a meeting was held on 04.12.2023 to deliberate the action plan for completion of balance work. However, no such plan was submitted by your firm during the meeting, even after granting so many opportunities.
7. Thereafter, a notice of 15 days under clause 44.2 of GCC served upon your firm on 08.12.2023, to show cause as to why actions ie termination of contract, forfeiture of bank guarantees, carrying out balance work at risk & cost of your firm, blacklisting/debarring of your firm for one year etc may not be taken against your firm by HVPNL as per terms & conditions of the contract.
8. The matter regarding additional claim of price variation of tower & equipment structures on account of IEEMA had been raised by your firm on various occasions among other issues. The decision of Empowered Officer in this regard, had already been intimated to your firm on 12.05.2023 whereby it was held that the demand for higher price variation of firm is unjustified. Now the case for additional claim of price variation of tower & equipment structures is pending before sole Ld. Arbitrator.
9. On the application of your firm Ld. Sole Arbitrator, vide order dated 11.12. 2023 had granted stay on termination notice dated 08.12.2023 issued by HVPNL. Ld. Sole Arbitrator vacated the stay vide order dated 07.03.2024
10. Earlier, your firm vide letter dated 11.02.2024 represented that work of construction of 132 KV substation Hansi was delayed due to many reasons mainly Covid Pandemic, price Inflation, closure of mining by NGT & State Govt, of India, delay in material verification, terror of locals at Hansi site, delay in full payment of price vari


(1) Debarment as a remedy is to be invoked in cases where there is harm or potential harm for public interest particularly in cases where person’s conduct has demonstrated that debarment as a penalty....
Blacklisting in public contracts requires compelling evidence of misconduct; mere disputes over contract terms do not justify severe penalties.
The Petitioner's suppression of a material fact and approach to the Court with unclean hands led to the dismissal of the Petition.
Blacklisting a contractor without a fair hearing violates principles of natural justice, rendering such actions invalid, while the termination of the contract for non-compliance with security require....
Blacklisting or debarment cannot be permanent and must be preceded by a specific show cause notice, complying with the principles of natural justice.
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