Kamladityya Construction ... vs The Central Public Works ...
2023 Latest Caselaw 7209 Cal

                     In the High Court at Calcutta
                    Constitutional Writ Jurisdiction
                             Appellate Side

The Hon'ble Justice Sabyasachi Bhattacharyya

                           W.P.A.NO. 21702 of 2023

        Kamladityya Construction Private Limited and Another
                                Vs.
          The Central Public Works Department and others

     For the petitioners            :     Mr. Abhrajit Mitra,
                                          Mr. Sakya Sen,
                                          Mr. Satadeep Bhattacharya,
                                          Ms. Sonia Sharma

     For the Union of India         :     Mr. Indrajeet Dasgupta,
                                          Mr. Subit Majumdar

     Hearing concluded on           :     10.10.2023

     Judgment on                    :     17.10.2023



     Sabyasachi Bhattacharyya, J:-

1.   The Central Public Works Department (CPWD), respondent no.1, held

a tender for construction of a new campus of the Indian Institute of

Information Technology (IIIT) at Kalyani.

2. The petitioner no.1 participated and came out the successful bidder.

The work was entrusted to the petitioner no.1.

3. Subsequently, the petitioners could not complete the work within the

stipulated time. A termination notice was issued to the petitioners.

Challenging the same, the petitioners filed an application under

Article 226 of the Constitution, giving rise to WPA No. 16962 of 2022.

The petitioners were continued to be protected by an undertaking

given by the CPWD on July 29, 2022 that no steps would be taken

against the petitioners. Ultimately the writ petition was disposed of on

December 22, 2022. The court observed that the petitioners should

be directed to complete the remaining part of the project. It was

recorded that the admitted position was that the petitioners had

completed about seventy per cent of the project and only thirty per

cent remained to be completed. The apparent financial distress of the

petitioners, it was observed, may be addressed by a direction on the

CPWD to process the bill of Rs. 5 Cr., which was submitted by the

petitioners. It was also observed that the petitioners shall make every

effort to complete the remaining part of the work within a reasonable

time without further delay. The parties were directed to cooperate

with each other regarding the completion of the rest of the work.

4. Thereafter, on September 30, 2022, a Show-Cause Notice was issued

as to why the petitioners should not be debarred under Rule 13.6 of

the Rules of Enlistment of Contractors in CPWD, 2022.

5. The petitioners gave a written reply on October 14, 2022. Ultimately,

by the impugned Office Order dated August 28, 2023, the petitioner

no.1 was debarred for a period of two years from participating in

CPWD works.

6. The present challenge has been preferred against such debarment

order.

7. Learned senior counsel for the petitioners argues that in view of the

order of the coordinate Bench to continue the unfinished work and in

view of the extensions granted to that effect by the respondent-

Authorities, it is to be deemed that the grounds of proposed

termination were absolved.

8. It is argued that after having extended the time and conceded to the

order of the coordinate Bench and the termination having itself been

obliterated, the underlying breach which was the trigger for the

blacklisting/debarment lost force. The termination itself having been

effaced, the debarment based on the allegations for termination has to

go.

9. Placing reliance on Rule 13.6 of the Rules for Enlistment, it is argued

that the grounds for debarment of contractor invoked by the

respondents is that the petitioners failed to execute the contract or

violated any condition of the contract.

10. Under Clause 13.1 of the Rules, where the contractor has made

himself liable for disciplinary action, the enlisting authority shall have

the right to debar the defaulting contractor. Clause 13.2 says that the

enlisting authority shall initiate disciplinary case against an enlisted

contractor. Clause 13.4 provides that the disciplinary action against

an enlisted contractor may lead to penalties mentioned in Rule 13.6

and 13.7. Clause 13.7 speaks about debarment of contractor upon

service of a suitable show-cause notice. Clause 13.6 stipulates the

grounds for debarment.

11. In terms of Clause 13.4, it is argued that a disciplinary action had to

precede the debarment. The same having not been done, the

debarment itself is vitiated, being de hors the Rules which are binding

on the respondents.

12. Learned counsel for the respondents argues that the termination had

no nexus with the debarment and the two are independent processes.

By placing reliance on the last paragraph of the impugned debarment

order, it is pointed out that sub-clause (iii) stipulates that running

contracts would remain unaffected by the debarment.

13. Thus, even if extension of time was granted for completion of the

contract pursuant to the order of the coordinate Bench, the said

proceeding entirely related to the termination of the existing contract,

which was waived. However, the same does not have any bearing on

the debarment of the petitioners to participate in future contracts for

two years.

14. Learned counsel argues that the petitioner no.1 was repeatedly given

opportunities and extensions to complete the work. However, the

petitioners long exceeded the time and despite several extensions

could not complete the work in time which necessitated the

debarment order.

15. It is argued that the original work commenced from March 23, 2019

and was to be completed by February 22, 2021. The planning period

was five months and the next eighteen months were for execution of

the work. However, even recently, the petitioners could not complete

the work. The nature of the work was a public project relating to

education and the project got hampered severely due to the

incompetence of the petitioners, for which the debarment order had to

be made.

16. Heard learned counsel for the parties.

17. A salient feature of the present case is that the Show-Cause Notice

dated September 30, 2022 which preceded the impugned debarment

was based on Clause 13.6 of the Rules. The said Clause provides that

the contractor may be debarred if he fails to execute the contract or

executes it unsatisfactorily or violates any conditions of the contract.

The pre-condition is that the said grounds have to be established by

enquiry.

18. However, there is nothing in the Rules to read into such provision any

prior right of hearing before enquiry. The allegedly errant contractor

already has an opportunity of replying to the show cause before

debarment. There is no reason to read into the provisions of the

contract a further right of hearing/reply even for the purpose of

enquiry preceding a show cause. The enquiry is only for the purpose

of the authorities forming a preliminary opinion to decide whether a

show cause should be issued and the contractor cannot have a say

even at that stage, since ample opportunity of reply/show cause is

given after the show cause notice.

19. A show-cause is mandatorily to precede a debarment in terms of

Clause 13.7. Clause 13.7 of the Rules provides that whenever any

type of complaint listed in serial no. (a) to (t) under Clause 13.6, is

received from any officer of CPWD not below the rank of Executive

Engineer against an enlisted contractor and is considered serious by

the enlisting authority, he shall be served with suitable show-cause

notice by the enlisting authority and thereafter action for debarment

of contractor may be taken by the enlisting authority as deemed fit.

20. Thus, the only requirement is to give a show-cause notice to the

concerned contractor. In the present case, a show-cause notice was

issued and a reply thereto was given by the petitioners, which was

considered while passing the final order.

21. The argument of the petitioners that there was no preceding enquiry is

neither here nor there, since the petitioners assert that only upon

such enquiry was the step of issuing a show cause taken.

22. Insofar as the enquiry is concerned, no notice of hearing is

contemplated on the accused contractor. If such a provision were to

be incorporated into the Rules, the same would create unnecessary

paraphernalia which would paralyse the functioning of the authorities

themselves. The enquiry is internal. The requirement of Clause 13.7

is only for the CPWD to consider the complaint to be "serious".

23. Although Clause 13.4 stipulates that the disciplinary action against

an enlisted contractor may lead to penalties mentioned in Rules 13.6

and 13.7, it does not necessarily mean that the debarment under

Clause 13.7 must necessarily await the competition of a disciplinary

proceeding. A disciplinary action as comprised in the Rules is under

Clause 13.0 of the Rules. Clause 13.1 provides that where the

contractor "has made himself liable for disciplinary action" the

enlisting authority shall have the right to debar him.

24. Clause 13.2 provides that the enlisting authority shall initiate

disciplinary case against an enlisting contractor either suo-moto or on

the receipt of a written request from an officer not below the rank of

Executive Engineer and forward it to the Empowered Committee for

consideration.

25. The Empowered Committee shall consider the disciplinary case on the

basis of the documents, facts and circumstances and shall issue a

show-cause notice to the contractor and allow him personal hearing if

necessary and forward its recommendations to the enlisting authority.

The enlisting authority shall take a decision on the basis of the

recommendations of the Empowered Committee which shall be final

and binding on the contractor. Thus, in terms of the language of

Clause 13.2, a personal hearing will be afforded to the contractor "if

necessary". The same is not a mandate in terms of the Rules.

26. Section 114 of the Evidence Act raises a presumption of official works

having been duly done. Thus, in the absence of rebuttal by the

petitioners, there is nothing to show that the respondents failed to

comply with the prior enquiry as contemplated in Clause 13.2 of the

Rules.

27. In fact, the show-cause notice issued to the petitioners dated

September 30, 2022 specifically cites the grounds of debarment of the

petitioners.

28. Numerous letters written by the authorities to the petitioners for

completion of the work were cited. The grounds as mentioned in sub-

clauses (a) and (b) of 13.6 of the Rules were specifically mentioned and

the exact violation of conditions of contract even after repeated notice

of the engineer-in-charge were cited in the show-cause notice.

29. In the last sentence of the show-cause notice, it was categorically

mentioned that the notice was issued with the approval of the

Empowered Committee constituted as per Rule 13 of the Enlistment

Rules, 2022.

30. Thus, there was sufficient compliance of the provisions of Rule 13 and

its sub-rules.

31. Hence, there was no error on the part of the respondents in duly

complying with the provisions of the Rules, which have statutory

force, in issuing the show-cause notice and passing the order of

debarment.

32. Sufficient opportunity of representation was given to the petitioners,

which was availed by the petitioners and the representations of the

respondents were considered by the petitioners. Since personal

hearing was not mandatory, not giving the same does not vitiate the

order of debarment.

33. The impugned order of debarment, in fact, is well-reasoned and cites

the relevant provisions of the Rules. The exact flaws and breaches of

the petitioners were enumerated in detail in the order of debarment.

The petitioners, despite repeated opportunities, failed to complete the

work even after expiry of double the period than the period originally

contemplated for the work.

34. Insofar as the previous order of the coordinate Bench in WPA

No.16962 of 2022 is concerned, the same categorically pertained to

the competition of the current work by the petitioners.

35. The court categorically observed that since the petitioners had

admittedly completed about seventy per cent of the project and

keeping in view the apparent financial distress of the petitioners, the

coordinate Bench directed the work to be completed expeditiously.

However, the said directions or the extensions given to the petitioners

pursuant to such order do not, in any manner, exonerate the

petitioners for the inordinate delay already committed by the

petitioners over a prolonged period of time.

36. The respondent, thus, cannot be compelled to permit the petitioners to

participate, even after such gross incompetence, in the future

contracts to be floated by the respondents.

37. In any event, the debarment order is only for a period of two years and

is not a permanent impediment or slur on the petitioners.

38. Thus, there is no ground for interference with the impugned

debarment order.

39. Accordingly, WPA No. 21702 of 2023 is dismissed on contest without,

however, no order as to costs.

40. Urgent certified server copies, if applied for, be issued to the parties

upon compliance of due formalities.

( Sabyasachi Bhattacharyya, J. )