M/S Bhagwati Builders, Gondia ... vs Maharashtra State Warehousing ...
2022 Latest Caselaw 5542 Bom

Judgment                          1                W.P.No.3639.2021.odt




           IN THE HIGH COURT OF JUDICATURE AT BOMBAY,
                     NAGPUR BENCH, NAGPUR.

                  WRIT PETITION NO. 3639 OF 2021


      M/s Bhagwati Builders,
      through its proprietor,
      Vijay S/o Vishnuprasad Agrawal,
      Aged about 54 years, having its
      offict at 02, Kamla Complex,
      Gurunanak Ward, Gondia.
                                                   .... PETITIONER


                             // VERSUS //


1)    Maharashtra State Warehousing
      Corporation, Pune, Having its
      office at Gull Tekdi, Market yard
      Pune 411037.

2)    Bajaj Steel Industries Limited,
      having its office at C-108,
      Hingna Road, MIDC
      Industrial Area, Hingna,
      Nagpur - 440028.
                                             .... RESPONDENTS
______________________________________________________________
     Mr. Kaustubh Deogade, Advocate for the Petitioner.
     Mr. N.R. Saboo, Advocate for Respondent No.1.
______________________________________________________________


                  CORAM : SUNIL B. SHUKRE AND
                          SMT. M.S. JAWALKAR, JJ.

JUDGMENT RESERVED ON : 28.04.2022 JUDGMENT PRONOUNCED ON : 17.06.2022

ORAL JUDGMENT : (Per Sunil B. Shukre, J.) Judgment 2 W.P.No.3639.2021.odt

1. Heard. Rule. Rule made returnable forthwith. Heard finally

by consent of the learned counsel appearing for the parties.

2. Respondent No.1 by tender notice No.18 had invited bids

of eligible contractors for execution of the work of construction of

1/3000 Mt Cap. Pre Engineered Wh Bldg with Ancillary Works at

Amgaon, District Gondia. Various bidders including the Petitioner had

submitted their bids in response to the tender notice No.18 and upon

due evaluation of the bids, submitted by the bidders, bid of the

Petitioner was found to be lowest and it was decided to award the

contract to the Petitioner. The petitioner was informed accordingly and

was called upon to deposit Rs.70,91,948/- as a security performance

amount before 05.03.2021, by letter dated 26.02.2021 issued to it by

the Respondent No.1. The Petitioner was informed that upon it's failure

to deposit the said amount within the time given, the work shall be

awarded to second lowest bidder. The Petitioner was also requested to

give it's explanation as well as rate analysis showing the ability of the

Petitioner to perform the awarded work at the rate submitted by it,

which was 24.28% below estimated cost, by maintaining the quality.

3. In response to the said letter dated 26.02.2021, the

Petitioner deposited the security performance amount by a Demand

Draft on 05.03.2021 and gave it's explanation by it's letter dated Judgment 3 W.P.No.3639.2021.odt

05.03.2021 that since it had already purchased requisite material,

quality of work will not be affected, despite it's lower quote. The

Petitioner did not however, submit any rate analysis along with letter

dated 05.03.2021. The Petitioner submitted it's rate-analysis with

further explanation by it's letter dated 22.03.2021 and assured that in-

spite of huge deficit in the estimated rate and the rate quoted by the

Petitioner, the Petitioner would not compromise on quality and would

complete his work as per the guidance of Respondent No.1. By this

letter, the Petitioner also requested Respondent No.1 to execute the

work agreement and issue work order in it's favour.

4. By a letter dated 16.04.2021, the Petitioner was informed

by Respondent No.1 that the explanation given by the Petitioner and

the rate analysis submitted by it were vague and unsatisfactory and,

therefore, the Petitioner was again requested to submit proper rate

analysis justifying the huge below quote of the Petitioner. By that time

second wave of Covid-19 Pandemic had hit the region and the market

was closed and therefore, by letter dated 23.04.2021, the Petitioner

expressed it's inability to submit the explanation and the rate analysis

as required and requested for grant of further time of one months for

submitting it's rate analysis. On 09.07.2021, the Petitioner informed

the Respondent No.1 that as Respondent No.1 did not execute the work

agreement in spite of the rate analysis submitted by it and as there Judgment 4 W.P.No.3639.2021.odt

was escalation in rates of commodities such as steel, cement and so on,

it was not possible for it to execute the work at the rate quoted by it,

which was below 24.28% of the estimated cost. The Petitioner also

requested the Respondent No.1 to allow it to execute the work at the

escalated price and to execute the agreement at higher rate.

5. The Petitioner submits that it did not receive any reply to

it's letter dated 09.07.2021 and suddenly, on 09.08.2021, the Petitioner

came across another e-tender notice-18 and it was a IInd call notice for

short period. The Petitioner without making any enquiry about the

IInd call tender notice for the same work, submitted it's fresh bid and

was surprised to receive an e-mail dated 02.05.2021, informing it that

it's fresh bid was rejected during technical evaluation for the reason

that it was blacklisted and debarred. Thereafter, the Petitioner received

another e-mail on 07.09.2021 informing it that as the Petitioner

expressed it's inability to execute the work at the rate quoted by it, the

Petitioner was blacklisted for a period of one year and it's earnest

money deposit of Rs.1.50 Lacks was forfeited. The mail which was

received by the Petitioner on 07.09.2021, had the date of 30.07.2021

but, it was uploaded on 07.09.2021. This action of Respondent No.1

has been questioned by the Petitioner as being arbitrary.

Judgment 5 W.P.No.3639.2021.odt

6. Mr. Deogade, learned counsel for the Petitioner submits

that blacklisting of the Petitioner by Respondent No.1 is arbitrary,

unfair and is in violation of principles of natural justice. He submits

that the Petitioner was not issued any show cause notice nor was given

any opportunity of hearing before being blacklisted. He further

submits that adherence to the principles of natural justice is a sine qua

non for prohibiting a contractor like the Petitioner from participating in

the future tender works of Corporation which is a State within the

meaning of Article 12 of the Constitution of India as it has civil

consequences and is a virtual 'civil death' for the contractor.

He relies upon the cases of Gorkha Security Services Vs. Government

(NCT of Delhi) & Others, (2014) 9 SCC 105 and Vetindia

Pharmaceuticals Limited Vs. State of Uttar Pradesh & Another, (2021)

1 SCC 804.

7. Mr. Saboo, learned counsel for Respondent No.1 submits

that the Petitioner itself was responsible for inviting the order of

blacklisting. He points out that by a letter dated 15.06.2021, the

Petitioner had expressed it's inability to execute the work awarded to it

at the rate quoted by it on account of price escalation and therefore,

the Petitioner made a request for refund of earnest money and also

security performance amount deposited by it. He further submits that

the letter dated 15.06.2021 has been suppressed from the Court by the Judgment 6 W.P.No.3639.2021.odt

Petitioner and this letter, reflecting upon the conduct of the Petitioner,

has a material bearing upon the facts of the present case and therefore,

on this very ground, the ground of suppression of a material fact, this

Petition deserves to be dismissed.

8. Mr. Saboo, learned counsel for Respondent No.1 further

submits that as per the Condition No. xviii of Clause 'A' of the tender

document, the Petitioner already knew that upon it's failure to execute

the agreement, the Petitioner would be blacklisted and debarred from

participating in the future works of Respondent No.1 for one year. He

further submits that when consequence of certain act or particular

conduct of a contractor is stated in clear terms in the tender document

and because of the act committed or conduct exhibited by the

contractor, the consequence visits the contractor, it cannot be said that

any principles of natural justice are violated.

9. According to learned counsel for Respondent No.1, this is a

case wherein the Petitioner was already aware of what was going to

happen upon it's failure to withdraw itself from the awarded contract

and therefore, neither any show cause notice nor any opportunity of

hearing was necessary. Thus, Mr. Saboo, learned counsel for

Respondent No.1 submits that there is no merit in the Petition and the

Petition deserves to be dismissed with costs.

Judgment 7 W.P.No.3639.2021.odt

10. The rival contentions of the parties raise before us

following questions :-

(1) Whether the Petitioner has suppressed a material fact from this Court and is, therefore, guilty of not approaching this Court with clean hands ?

(2) Blacklisting of the Petitioner being only a consequence of breach of condition of the tender document, whether any show cause notice and opportunity of hearing to the Petitioner before its blacklisting was necessary ?

11. As to question No.1 :-

A few relevant facts are necessary to consider to answer

this question. Respondent No.1 informed the Petitioner by it's letter

dated 26.02.2021 about the Petitioner having been selected for

awarding the work, the Petitioner being lowest bidder. The Petitioner

was, therefore, called upon to deposit security performance amount

and justify it's quoted rate by giving proper rate analysis, so that

quality of the work to be executed by the Petitioner was not affected.

The Petitioner deposited the security performance amount on

03.03.2021, well before the deadline of 05.03.2021, stated in the letter

dated 26.02.2021. While the Petitioner by it's letter dated 05.03.2021,

gave it's explanation as to how quality would not be affected, it did not

offer any rate analysis. By it's subsequent letter dated 22.03.2021, the

Petitioner, however, gave a detailed rate analysis and again assured Judgment 8 W.P.No.3639.2021.odt

that quality would not be compromised. The Respondent No.1 issued

another letter on 16.04.2021 informing the Petitioner that the

explanation and the rate analysis submitted by the Petitioner were

vague and the Petitioner was requested to submit a proper rate analysis

in order to justify the huge below quote submitted by the Petitioner.

The Respondent No.1, it appears, did not consider the explanation and

the rate analysis given by the Petitioner vide it's letter dated

22.03.2021 and simply referred to the letter dated 05.03.2021 sent by

the Petitioner to the Respondent No.1, whereby the Petitioner had

informed the Respondent No.1 about depositing the security

performance amount and asserting that at the rate quoted by the

Petitioner, it would be able to execute the work without letting the

quality of the work affected. Probably that was the reason why the

Respondent No.1 wrote to the Petitioner in the manner stated earlier. It

is not known as to why the Respondent No.1 did not take into account

the explanation and the rate analysis submitted by the Petitioner. But,

such non consideration of the explanation and the rate analysis of the

Petitioner, by the Respondent No.1 did not affect much the position of

the Petitioner as can be seen from the events that took place later on.

12. The later events disclose that the Petitioner had accepted

the opinion of the Respondent No.1 about inadequacy of the

explanation and rate analysis submitted by it and, therefore, by it's Judgment 9 W.P.No.3639.2021.odt

letter dated 23.04.2021, the Petitioner sought for further time of one

month's for submitting the rate analysis. The Petitioner had informed

the Respondent No.1 that due to rise in Covid-19 cases and closure of

the market since 15.04.2021, it had become impossible for it to obtain

rate of each of the commodities. It appears that after receipt of the

letter dated 23.04.2021 by the Respondent No.1, no action whatsoever

was taken by the Respondent No.1 against the Petitioner. After the

letter dated 23.04.2021, the Petitioner, by it's letter dated 15.06.2021,

suddenly informed the Respondent No.1 that the Respondent No.1

delayed execution of the security agreement and just kept on asking for

justification with rate analysis for the quality of the work awarded to

the Petitioner at the rate which was below 24.28% of the estimated

cost. The Petitioner further informed the Respondent No.1 that since

there was great escalation in the prices of several commodities, it was

not possible for it to execute the work at the rate quoted by it and

accepted by Respondent No.1 and, therefore, the Petitioner also made a

request for refund of earnest money and security performance amount

deposited by it.

13. It appears that even after receipt of this letter dated

15.06.2021, the Respondent No.1 did not take any action although it

could have taken the action of blacklisting the Petitioner in view of

Condition No. xviii of Clause 'A' of the tender document.

Judgment 10 W.P.No.3639.2021.odt

14. After expressing inability to execute the work, the

Petitioner again informed the Respondent No.1 by it's letter dated

09.07.2021 that it was not possible for it to execute the work at the

rate quoted by it and accepted by the Respondent No.1 and the

Petitioner also made a request for allowing escalated prices to be

incorporated in the work agreement to be executed with the Petitioner.

In this letter, the Petitioner did not make any request that the earnest

money and security performance amount be refunded to it.

15. In the month of August 2021, another important event

took place. The Respondent No.1 issued a IInd call tender notice for the

same work and it was for a short period and the Petitioner, without

making any effort to know the reason for issuance of IInd call notice,

submitted it's fresh tender. It was then that the Petitioner was

informed that it's fresh bid was rejected during technical evaluation

round on the ground that it was blacklisted and debarred. The

Petitioner received a proper mail on 07.09.2021 informing it that in

terms of the relevant clause of the tender document, the Petitioner had

been blacklisted for a period of one year on account of inability shown

by the Petitioner to execute the work at the rate quoted by it and

accepted by the Respondent No.1. From out of the afore-stated events,

the Petitioner's informing the Respondent No.1 of it's inability to

execute the work awarded to it is most important. This event took Judgment 11 W.P.No.3639.2021.odt

place for the first time on 15.06.2021 when the Petitioner suddenly

informed the Respondent No.1 that it could not execute the work at the

rate quoted by it and accepted by the Respondent No.1 on account of

rise in prices of the materials required for execution of the contract.

The Petitioner, by the letter dated 15.06.2021, did not make any

request for execution of the work agreement at higher price on account

of cost escalation. The request for execution of the work agreement at

higher price came from the Petitioner much later; it was on

09.07.2021. But, even in the letter dated 09.07.2021, the Petitioner

stuck to it's stand that it would not complete the contract at the rate

quoted by it and accepted by the Respondent No.1, on account of high

rise in prices of materials. This conduct of the Petitioner ultimately led

to it's blacklisting for a period of one year by the Respondent No.1.

16. Now, if one carefully considers the above referred events,

one would find that among all those happenings, the letter dated

15.06.2021 was most important. After all, by this letter, the Petitioner

had unilaterally withdrawn it's bid and simply asked for refund of

earnest money and security performance amount. We may add here

that this letter is not disputed by the Petitioner. Therefore, it was

necessary for the Petitioner to make an averment in respect of this

letter in the Petition and also include it in the annexures that were filed

by the Petitioner. The Petitioner perhaps could have given some Judgment 12 W.P.No.3639.2021.odt

explanation about this letter dated 15.06.2021 as well. This letter had

a material bearing upon the fate of the work agreement that was to be

executed between the parties. Condition No.xviii of Clause 'A' of the

tender document was very clear in this regard. According to it, if the

lowest agency fails to execute agreement and deposit security amount,

it will be blacklisted and debarred from participation in future works of

the Respondent No.1 for one year. By this letter dated 15.06.2021, the

Petitioner had unilaterally withdrawn it's bid and therefore, the failure

on the part of the Petitioner to perform it's part of the contract i.e.

failure to execute the agreement was writ large. But, the Petitioner

suppressed this letter dated 15.06.2021 containing an important fact

having a material bearing upon the fate of the Petitioner in the present

contract and thus it can be said that the Petitioner has approached this

Court not with any clean hands. By suppressing this material fact from

the Court, the Petitioner also succeeded in obtaining interim relief from

this Court which was in the nature of interim stay to the order of

blacklisting.

17. Suppression of relevant material facts before a writ Court,

like the present, which is also a Court of equity, may result in dismissal

of the Petition. Referring to several cases such as Prestige Lights Ltd.

Vs. State Bank of India, (2007) 8 SCC 449, Udyami Evam Khadi

Gramodyog Welfare Sanstha & another Vs. State of Uttar Pradesh & Judgment 13 W.P.No.3639.2021.odt

Others, 2008(1) SCC 560, K.D. Sharma Vs. Steel Authority of India

Ltd. & Others, (2008) 12 SCC 481 and R. v. Kensington Income Tax

Commrs. - (1917) 1 KB 486, the Supreme Court in the case of Shri K.

Jairam & Others Vs. Bangalore Development Authority & Others, Civil

Appeal Nos.7550-7553 of 2021, decided on 08.12.2021, held that

jurisdiction exercised by the High Court under Article 226 of the

Constitution of India being extraordinary, equitable and discretionary, it

is necessary that a Petitioner approaching a writ Court must come with

clean hands and must disclose all the relevant facts. The Supreme

Court held that approaching a writ Court with 'soiled hands' would

result in dismissal of the Petition and the Petitioner would not be

entitled for the extraordinary, equitable and discretionary relief. The

relevant observations of the Apex Court appear in paragraph Nos.12

and 17, and they are reproduced as under :-

"12. It is well-settled that the jurisdiction exercised by the High Court under Article 226 of the Constitution of India is extraordinary, equitable and discretionary and it is imperative that the petitioner approaching the writ court must come with clean hands and put forward all facts before the Court without concealing or suppressing anything. A litigant is bound to state all facts which are relevant to the litigation. If he withholds some vital or relevant material in order to gain advantage over the other side then he would be guilty of playing fraud with the court as well as with the opposite parties which cannot be countenanced.

Judgment 14 W.P.No.3639.2021.odt

17. In the instant case, since the Appellants have not disclosed the filing of the suit and its dismissal and also the dismissal of the appeal against the judgment of the civil court, the Appellants have to be non-suited on the ground of suppression of material facts. They have not come to the court with clean hands and they have also abused the process of law. Therefore, they are not entitled for the extraordinary, equitable and discretionary relief."

18. As stated earlier, the Petitioner has suppressed one of the

most relevant facts pertaining to this case and in our view, such

suppression from a writ Court like the present is not mere

inadvertence, not just impertinence but plain perfidy. It is an attempt

to seek sympathy and obtain an equitable relief by beguiling the Court,

and in fact, the Petitioner did succeed in doing so in a limited way on

22.09.2021, when this Petition came up before us for the first time and

this Court granted interim relief to the Petitioner. We are of the view

that the Petitioner, which has suppressed from this Court the relevant

fact having a material bearing upon the position of the Petitioner in the

contractual relationship, has approached this Court with begrimed

hands and as such is not entitled for any equitable and discretionary

relief from this Court. This ground alone is, therefore, sufficient to

dismiss the Petition.

19. The question No.1 is answered accordingly.

 Judgment                             15                  W.P.No.3639.2021.odt




20.         As to question No.2 :-

Since the learned counsel for the Petitioner, relying upon

the law laid down by the Apex Court in the case of Gorkha Security

Services (supra) and Vetindia Pharmaceuticals Limited (supra), has

asserted about the importance and necessity of the show cause notice

and an opportunity of hearing being given in all cases to a contractor

before he or it is blacklisted, we deem it necessary to consider the

second question.

21. Law on the point of blacklisting of a contractor by the State

or its instrumentality is now well settled. A deeper consideration of the

law on this subject, should help us in resolving the issue. Let us,

therefore, make an attempt to understand what the law is.

22. In the case of M/s. Erusian Equipment & Chemicals

Limited Vs. State of West Bengal & Another, (1975) 1 SCC 70, the Apex

Court, considering the nature and extent of the executive power of the

Union and the State under Article 298 of the Constitution of India

which extends to carrying on of any trade and to the acquisition,

holding and disposal of property and making of contracts for any

purpose, held that the State can carry on it's executive function by

making a law or without making a law. It further held that the exercise

of such powers and functions in trade by the State is subject to Part-III Judgment 16 W.P.No.3639.2021.odt

of the Constitution of India. It further held that in such matters, the

State has a duty to observe equality and it cannot choose to

discriminate between two individuals. It further held that the order of

blacklisting has the effect of depriving a person of equality of

opportunity in the matter of a public contract and, therefore, the

person who is sought to be blacklisted must be given an opportunity to

represent his case before he is put in the blacklist.

23. The principle of law enunciated in the case of Erusian

Equipment & Chemicals Limited (supra) has been reiterated by the

Supreme Court in several other cases such as Raghunath Thakur Vs.

State of Bihar & Others, (1989) 1 SCC 229, Patel Engineering Limited

Vs. Union of India & Another, (2012) 11 SCC 257 , Gorkha Security

Services Vs. Government (NCT of Delhi) & Others, (2014) 9 SCC 105

and Vetindia Pharmaceuticals Limited Vs. State of Uttar Pradesh &

Another, (2021) 1 SCC 804.

24. In the case of Gorkha Security Services (supra) the

Supreme Court found that there is a rationale behind the necessity of

compliance with the principles of natural justice by giving an

opportunity to the person against whom action of blacklisting is sought

to be taken. The Supreme Court termed blacklisting of a person as

"civil death" for him, because such an order is stigmatic in nature and Judgment 17 W.P.No.3639.2021.odt

debars such a person from participating in Government tenders leading

to his disability to get any Government contract. The Supreme Court

also held that fundamental purpose behind the serving of Show Cause

Notice is to make the noticee understand the precise case set up against

him which he has to meet and this would require the statement of

imputations giving details of the alleged breaches and defaults he has

committed and the action proposed to be taken for the breaches. In

other words, the Apex Court has found that before a person is

blacklisted, he must be served with a show cause notice giving the list

of the alleged breaches and stating the proposed penalty of

blacklisting.

25. In the case of Patel Engineering Limited (supra) laying

down the same principles of law, the Supreme Court held that the

authority of State to blacklist a person is a necessary concomitant to

the executive power of the State to carry on the trade or the business

and making of contracts for any purpose and that there is no need for

any statutory grant of such a power. The Apex Court further held that

the only legal limitation upon the exercise of such an authority is that

the State must act fairly and rationally without in any way being

arbitrary and it must take a decision for some legitimate purpose. The

Supreme Court further held that what could be the legitimate purpose Judgment 18 W.P.No.3639.2021.odt

that is sought to be achieved by the State while blacklisting a person in

a given case can vary depending upon various factors.

26. The law on the subject discussed thus would indicate

unequivocally that the State or its instrumentality is under a duty to

follow the principles of equality and fair play before a person is

blacklisted. It also makes it clear that blacklisting leads to virtual "civil

death" of a person as it deprives the person from getting any award of

Government contracts. Therefore, it is necessary that principles of

natural justice are followed before a person is subjected to such a

severe penalty. That means, such a person must be issued a show cause

notice giving the details of the alleged breaches committed by him and

the penalty proposed against him, which may be either imposition of

fine or blacklisting or both, so that such person gets an opportunity to

submit his explanation to the State or the authority and in some cases,

it may happen that the explanation given by such a person is found to

be satisfactory and the action of blacklisting such a person avoided.

Such being the purpose of show cause notice, the bidding of law is that

the show cause notice must be given to the person concerned to enable

him to resist, to refute and to explain the adversity and possibly tide

over it. But, there could be a few cases as well where the person

concerned is already put on notice that if he did certain act, a

particular consequence would follow unavoidably. In such cases, doing Judgment 19 W.P.No.3639.2021.odt

of a particular thing itself would invite a particular consequence and

the authority concerned is not given any discretion to avoid the

consequence upon acceptance of the explanation given by the doer of

that thing. In such cases, there would be some or the other clause

either in the tender document or in the work agreement listing the

prohibited acts and consequences that would perforce follow if any of

the prohibited acts is committed. Whenever such a clause is

incorporated, it is implicit in the nature of contract between the parties

that the parties are already put on notice about the prohibited acts and

are warned to stay away from those acts, lest the consequence as of

necessity would follow. In our opinion, this case is one of such rare

cases. In this case, there is a clause in tender document which

enumerates various do's and don'ts by a tenderer. Condition No.xviii of

Clause 'A' of the tender document is relevant here. It spells out the

things which should be done and which should not be done by the

contractor. It also prescribes the consequences which will follow upon

the contractor or the agency doing certain things. For the sake of

clarity, Condition No.xviii is quoted as follows :-

"xviii) The amount of earnest money will be forfeited in case successful contractor does not pay the amount of initial security deposit within the time specified as stipulated by the General Manager (Engg) and complete the contract documents. In all other cases earnest money will be refundable.

Further it may be noted that lowest Agency who fail to execute agreement and to deposit S.D. will be Judgment 20 W.P.No.3639.2021.odt

black listed and debarred from participation in MSWC for future works for 1 years."

27. It would be clear from the above referred condition that if

the lowest bidder fails to execute the agreement, it or he would be

blacklisted and debarred from participating in future works of

Respondent No.1 for one year. In the present case, by the letter dated

15.06.2021, which has been discussed above by us earlier, the

Petitioner has simply expressed it's inability to complete the contract at

the rate quoted by it on the ground that there was price escalation and,

therefore, it requested for refund of earnest money and security

performance amount. In this letter, the Petitioner has also put the

blame upon the Respondent No.1 for causing delay in execution of the

work agreement. But, the correspondence that was exchanged

between the parties and which has been discussed earlier, would show

that primarily the Petitioner was responsible for the delay. It may be

recalled here that by the letter dated 26.02.2021 sent by Respondent

No.1 to the Petitioner, the Petitioner was informed that as the rate

quoted by it (which was 24.28% below the estimated price) being

hugely underrated, it was necessary for it to submit the rate analysis

and give an assurance that with such enormous underrated quote, it

would be able to complete the work without compromising with the

quality. The Petitioner was supposed to submit it's rate analysis at the

earliest. It had also sent a letter on 05.03.2021 to Respondent No.1 Judgment 21 W.P.No.3639.2021.odt

informing that since the Petitioner was already having necessary

equipments, machinery and manpower and also the purchase of

cement and steel was going to be as per the R.C., the quality of the

work would not suffer in any way despite the fact that it's quote was

greatly underrated. Along with this letter, the Petitioner did not submit

the rate analysis and it submitted the rate analysis on 22.03.2021. It

appears that the letter dated 22.03.2021 was missed by Respondent

No.1 and this fact is also impliedly acknowledged by the Petitioner

when it sought further one month's time to submit rate analysis as per

the letter dated 23.04.2021 written to the Respondent No.1. It is an

admitted fact that thereafter the Petitioner did not submit any rate

analysis and straightaway sent a letter of it's withdrawal from the

contract on 15.06.2021, which letter has been suppressed by the

Petitioner. Thereafter, the Petitioner sent an another letter dated

09.07.2021 demanding execution of work agreement with price

escalation, which was not possible for the Respondent No.1.

Ultimately, the blacklisting and debarring of the Petitioner from future

contracts of Respondent No.1 for a period of one year followed.

28. The afore-stated events would show that the Petitioner

indulged itself in a prohibited act about which there was already a

warning given in Condition No.xviii of Clause 'A' of the tender

document. The warning put the lowest bidder on notice that if the Judgment 22 W.P.No.3639.2021.odt

lowest bidder committed the prohibited act, it or he would face its or

his blacklisting for a period of one year. The Petitioner in spite of this

warning committed the prohibited act and was inevitably visited with

the consequence of blacklisting. Breach of this condition by the

Petitioner was the fact well within it's knowledge. Upon the Petitioner

withdrawing it's bid, the Respondent No.1 had issued a II nd call tender

notice in response to which the Petitioner submitted it's fresh bid. This

step indicates acceptance by the Petitioner of termination of

contractual relationship with necessary consequences following suit, as

per Condition No.xviii. The Condition No.xviii, being clear and the

Petitioner having it's knowledge, it can be said that the Petitioner was

already put on notice of the prohibited act and already had the

opportunity of knowing the case which would be set up against it.

Besides, even if any show cause notice had been sent to the Petitioner

in such a case, which in any case would have been nothing but

repetition of warning and consequence stated in Condition No.xviii,

and the Petitioner had submitted it's explanation, still the Respondent

No.1 would not have been in a position to avoid the consequence of

blacklisting, for, the consequence was the direct result of commission of

the prohibited act and the Respondent No.1 had no discretion to ignore

the breach or grant pardon to the sin of the Petitioner. In other words,

we find that this is one of the rare cases wherein the principle of 'fair

play' is already incorporated in the tender document given the nature Judgment 23 W.P.No.3639.2021.odt

of Condition No.xviii of Clause 'A' and this condition fulfills

substantially the requirements of principles of natural justice. It would

then follow that there was no need for Respondent No.1 to have issued

any show cause notice and given the opportunity of hearing to the

Petitioner. The second question is answered accordingly.

29 In the result, we find that there is no merit in the Petition

and it deserves to be dismissed.

30. The Petition stands dismissed. No costs.

                                    (SMT. M.S. JAWALKAR, J.)              (SUNIL B. SHUKRE, J.)




                         Kirtak




Digitally Signed By:KIRTAK
BHIMRAO JANARDHAN
Signing Date:17.06.2022
15:06