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IN THE HIGH COURT OF MADHYA PRADESH (INDORE BENCH)
SUJOY PAUL, SHAILENDRA SHUKLA, JJ.
Health Care Medical Devices Pvt. Ltd. - Appellant
Versus
MP Public Health Services Corp. Ltd. and Ors. - Respondents
WP No. 2281 of 2021
Decided On : 16-03-2021
Blacklisting - Tender Process - Conditions of Tender - Clause-12(d), Clause-12(k), Clause-10 - The court discussed the relevant provisions of the NIT, including Clause-12(d), Clause-12(k), and Clause-10, and their implications on the decision to blacklist the petitioner. The court also referred to the principles of natural justice and the requirement of due process in blacklisting actions, as established by previous judgments. The court found that the show cause notice adequately communicated the intended action and that the decision to blacklist the petitioner was justified based on the non-supply of gloves during the pandemic era.
Fact of the Case:
The petitioner participated in a tender process to supply gloves for Covid-19 pandemic. Due to reasons including plant breakdown and night curfew, the petitioner could not fulfill the entire order. The respondents issued a show cause notice and subsequently blacklisted the petitioner for non-supply of gloves.
Finding of the Court:
The court found that the show cause notice adequately communicated the intended action and that the decision to blacklist the petitioner was justified based on the non-supply of gloves during the pandemic era.
Issues: Non-supply of gloves, adequacy of show cause notice, applicability of relevant tender clauses, and procedural impropriety.
Ratio Decidendi: The court held that the show cause notice adequately communicated the intended action and that the decision to blacklist the petitioner was justified based on the non-supply of gloves during the pandemic era. The court also discussed the applicability of relevant tender clauses and found no serious procedural impropriety in the decision-making process.
Final Decision: The petition was dismissed, and no costs were awarded.
ORDER :
Sujoy Paul, J.
1. In this petition filed under Article 226 of the Constitution, the challenge is mounted to the order dated 22/01/2021 (Annexure P/14) whereby the respondents have blacklisted the petitioner and further debarred him to participate in any tender process initiated by respondent-corporation for further period of two years.
2. Briefly stated, the relevant facts, are that a notice inviting tender (NIT) was issued by respondent No. 1 on 05/09/2020 for supply of various types of gloves to deal with Covid-19 pandemic. The gloves were required to be supplied to various government hospitals in the State of Madhya Pradesh. The petitioner submitted his bid along with manufacturer's authorization in prescribed form (Annexure P/4) in September 2020. On 01/10/2020, a Notification of award was issued in favour of petitioner requiring him to supply 5,70,000 pairs of gloves of 5.5 inch and 6,20,000 pairs of gloves of 7 inches. On 15/10/2020, petitioner submitted bank guarantee for performance security of Rs. 96,26,800/- (Annexure P/7).
3. Shri Vijay Assudani, learned counsel for the petitioner submits that between 31/10/2020 to 20/01/2021, petitioner supplied 65% of said goods against the said order. The petitioner made various correspondences with respondent No. 2 (manufacturer) requesting him to supply the gloves in order to enable the petitioner to supply the same to the respondent/corporation. In turn, respondent No. 2 informed the petitioner that he could not supply the goods in time because of plant break down and night curfew imposed in his area due to second wave of Covid-19 pandemic in the State of Gujarat. By another communication dated 22/01/2021 (Annexure P/11), the respondent No. 2 reiterated his stand and assigned same reason of inability to supply goods.
4. The show cause notice dated 08/12/2020 is served upon the petitioner relying upon Clause-10 of the 'procedure for blacklisting' which in the opinion of Shri Assudani categorically provided that if recovery could not be affected from the security deposit then only petitioner can be blacklisted.
5. Furthermore, it is urged that show-cause notice was issued in a casual and cavalier manner, without due application of mind. The show-cause notice was issued based upon Clause-10, whereas final order dated 22/01/2021 was passed for yet another reason which was not subject matter of show cause notice.
6. To elaborate, Shri Assudani submits that show cause notice cannot be an empty formality. The notice must specifically disclose as to what are the specific allegations which are required to be met by the petitioner. In addition, there must be clear indication regarding proposed action to be taken by the Department. The impugned show cause notice is a bald notice submits Shri Assudani which shows that Department was inclined to take disciplinary action without specifying as to which action was intended to be taken namely action regarding (i) levy of liquidated damages, (ii) purchase of goods at the risk and cost of petitioner, or (iii) blacklisting. The show cause notice is based on Clause-10 of the procedure whereas final order is passed relying upon Clause-12 of the procedure.
7. The order dated 22/01/2021 does not contain reasons and on this ground alone, the said order may be axed. These contentions are founded upon the judgment of the Supreme Court reported in 2010 (9) SCC 496 - Kranti Associates Private Ltd. & Anr. vs. Masood Ahmed Khan & Ors, 2014(9) SCC 105 - Gorkha Security Services vs. Government (NCT of Delhi) & Ors. and a Division Bench judgment of this Court in the case of Aicon Engineering Pvt. Ltd. vs. State of M.P., decided on 05/11/2019.
8. The broad parameters laid down by the Supreme Court in 2014(14) SCC 731 - Kulja Industries Ltd. vs. Chief General manager, Western Telecom Project Bharat Sanchar Nigam Ltd. & Ors. were also referred to submit that impugned order does not reflect that any such relevant parameter was taken into account while passing a dra
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Administrative authorities must strictly adhere to principles of natural justice when taking punitive actions such as blacklisting. This requires issuing a prior show cause notice with specific alleg....
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