Back
2019 Supreme(All) 2265
IN THE HIGH COURT OF ALLAHABAD
Ramesh Sinha, Samit Gopal, JJ.
M/s Trident Engineers - Petitioner
Vs.
Dakshinanachal Vidyut Vitran Nigam Limited And Another - Respondent
Writ - C No. 41082 of 2019
Decided On : 13-12-2019
For the Petitioner: Tarun Agrawal, Mohit Kumar Shukla
For the Respondent: Baleshwar Chaturvedi
The central legal point established in the judgment is the requirement of specific notice and opportunity of hearing before blacklisting, emphasizing the adverse civil consequences of such action.
Headnote:
Blacklisting - Contract Dispute - Clause 5, Clause 7 - The court discussed the violation of principles of natural justice in the blacklisting of the petitioner due to alleged irregularities in a construction project. The court highlighted the requirement of specific notice and opportunity of hearing before blacklisting, emphasizing the adverse civil consequences of such action. The impugned order was quashed, and the petitioner was directed to submit a fresh reply for reconsideration.
Fact of the Case:
The petitioner filed a writ petition to challenge the order blacklisting their firm for three years, following the withholding of a security deposit of Rs. 34 lakhs by the respondent. The dispute arose from a construction project for a 33KV single circuit solar power plant line, where the petitioner emerged as the lowest bidder and completed the work by the specified date.
Finding of the Court:
The court found that the impugned order of blacklisting was passed without considering the detailed reply of the petitioner and in violation of principles of natural justice. It emphasized the necessity of specific notice and opportunity of hearing before blacklisting, as it has adverse civil consequences.
Issues: The issues revolved around the withholding of the security deposit, the alleged deficiencies in the constructed line, and the arbitrary blacklisting of the petitioner without due consideration of their reply and without affording them an opportunity of hearing.
Ratio Decidendi: The court held that before blacklisting a party, specific notice and opportunity of hearing must be provided, as blacklisting has adverse civil consequences. The impugned order was quashed due to the violation of principles of natural justice.
Final Decision: The writ petition succeeded, and the impugned order of blacklisting was quashed. The petitioner was directed to submit a fresh reply, and the respondent was instructed to reconsider the matter with a reasoned and speaking order in accordance with the law.
JUDGMENT :
Samit Gopal, J. for the Bench
1. Heard Sri Tarun Agrawal, learned counsel for the petitioner and Sri Baleshwar Chaturvedi, learned counsel for the Respondent-Corporation.
2. The matter was taken up on 12.12.2019 and instructions were supplied by learned counsel for the respondent (Corporation) which were taken on record. Today with the consent of both the counsels the matter is being finally heard and decided.
3. The petitioner has filed the present writ petition for issuance of writ, order or direction in the nature of Certiorari quashing the order dated 12.09.2019 passed by the respondent No. 2 by which the petitioner has been put on holiday list for three years. The said order is Annexure 10 to the writ petition. The facts of the present case relate to tender No. 45-EWCA/2016-17 floated by the respondent No. 2 for the supply and erection of material for construction of 33KV single circuit solar power plant line from 220KV s/s, Gokul, Mathura to proposed Solar Power plant of 5MW in District Mathura on semi turnkey basis. The petitioner emerged as the lowest bidder for the said work and was thus issued a letter of intent dated 22.03.2017 by the respondent No. 2. A copy of the same has been annexed as Annexure No. 1 to the writ petition. Subsequently, a formal contract was executed between the respondent No. 1 and the petitioner on 03.04.2017. As per the contract the work was to be completed by 22.07.2017 but the contract also envisaged extension of time in the event of unforeseen circumstances. The total value of the contract was provided in Clause 5 of the same. As per Clause 5.1 of the contract 60% of the material cost was to be paid after successful inspection and delivery of material at site, further Clause 5.2 provided 30% payment of the material cost upon erection of the material, Clause 5.3 provided that the balance payment of 10% against supplies will be done after satisfactory commission and handing over of the project. The petitioner was further required to deposit permanent security deposit equivalent to 10% of the contract value as per Clause 7 of contract. The said amount worked out to Rs. 34 lakhs.
4. Learned counsel for the petitioner argued that the present writ petition is confined to the fact that the claim of the petitioner of the security amount of Rs. 34 lakhs which has been withheld by the respondents even after the expiry of 18 months from the date of completion of the project and just in order to defeat the legitimate claim of the petitioner the impugned order of blacklisting the petitioner's firm has been passed so as to defeat the legitimate refund of the security deposit. It has further been argued that the work of the project was completed on 29.12.2017 and thereafter letter dated 29.12.2017 was sent to the Executive Engineer in the office of the respondent No. 1 informing him about the completion of the project and requesting him to take over the said line and it has further been argued that an inspection was conducted by the Deputy Director, Electrical Safety, Government of U.P., Aligarh Region, Aliagarh and after the said inspection he gave permission of the line by energizing it. It has further been pointed out that a letter dated 17.01.2018 was issued by the said Deputy Director in which he has categorically recorded that the solar link line erected by the petitioner be completed with all the relevant rules and regulations. The said argument is based on Annexures 5 and 6 of the writ petition. It has further been argued that the testing and commissioning of the line was thereafter completed and the petitioner requested the respondent No. 2 to take over the plant vide various letters dated 20.02.2018, 12.03.2018, 31.07.2018, 12.09.2018 and 12.11.2018 but for the reasons best known to them the said plant was not formally taken over by the respondents. It has further been pointed out that in spite of the same the respondents were satisfied by the performance of the plant and thereby they rel
