Everest Enterprises vs Ntpc And Ors.
2002 Latest Caselaw 1400 Del

JUDGMENT

Mukul Mudgal, J.

1. This writ petition challenges the Limited Tender, issued on the 17th June, 2002, by respondent No.1 for Annual Maintenance Contract (hereinafter referred to as 'AMC') for specialized upkeep and maintenance of the Noida Township of National Thermal Power Corporation which admittedly is amendable to the writ jurisdiction of this Court as covered within the meaning of the Art icle 12 being wholly owned Government undertaking and 100% shares being held by the President of India.

2. The writ petition avers as under:

The petitioner is aggrieved by the action of the respondent No. 1 in calling for AMC without issuing any letter or bid documents to the petitioner, who is the existing contractor and has been registered contractor with the respondent No.1 for the last 8 years. On 1st May, 1994. the petitioner was appointed as a contractor by the respondent No. 1 for house-keeping and sanitation continuously working with respondent No.1 On 11th August, 2000 the petitioner was awarded contract for specialized upkeep and maintenance of C&D Type Quarter in NTPC Township at Noida for a period of one year and this contract as extended on 1st August, 2001. This maintenance contract for C&D Type quarters in NCPC Township NOIDA is the subject matter of the present dispute. Significantly, the contract was for a period of one year extendadable at the sole discretion of NTPC by another one year. It is not in dispute that the contract of the petitioner was extended on 1st of August, 2001. The petitioner has contract that it has been kept out of the tender process for the future tenders issued on 17th June, 2002 without any notice or cause and thus has been discriminated against. On coming to know that the petitioner was wrongly excluded from the tender process, a representation was made by the petitioner to the respondent No.1 by a letter dated 25th July, 2002 which demonstrated the malice and the hostile and arbitrary treatment to the petitioner by some senior officers.

3. By way of illustration of the bias of the respondent the petitioner submitted that tenders were earlier invited on 19th July, 2001 for the maintenance contract for PMI sector 16 A NOIDA and the petitioner was fond to be the lowest bidder but even then the petitioner's bid did not find favor with the respondent. This bid was therefore not finalized and again a limited tender was invited on 1st of March, 2002 and the petitioner bid for PMI was still the lowest and yet again the bid was cancelled and the contract was awarded to Sulab International which had not even submitted its bid. The Sulabh International was granted the contract at a price of Rs. 55,024/- per month as against the petitioner's quotation of Rs. 25,997/- per month which was not found acceptable. It was further submitted that the petitioners' work had been satisfactory and no adverse comment had been made by respondent against it nor any show cause notice has been issued by the respondent No. 1 Corporation against the petitioner. Consequently the petitioner who is the existing contractor, figuring on the approved tenders list, could not have been excluded from the Limited Tender dated 17th June, 2002. The petitioner's case is that he tenders were invited from approved vendors and the petitioner was working as an approved vendor and thus respondent No.1 wrongly denied the bid documents to the petitioner. The representation of the petition dated 25th July 202 which complained against the unfair treatment awarded to it, not having been replied to and the petitioner having coming to know of the awarding of the contract on 1st August, 2002 it approached this court by serving an advance copy on the respondent on 30th July, 2002. Notice in the writ petition was issued on 6th August, 2002 and order of status quo was passed. The writ petition was heard on 8th August, 2002 and judgment was reserved.

4. The respondent No.1 it counter affidavit, however, does not dispute the plea of the petitioner that it is an approved vendor and working contractor. It merely states that the letter for invitation were only issued on 17th June, 2002 to the approved vendors. However, it is pleaded that the petitioner being a working contractor was aware of the contracting process and it has been submitted that the plea of the petitioner on coming to know of the limited tender dated 17th June, around 25th July 2002 is not correct as being a working contractor, the petitioner would have known of 17th June, 2002 tender and the representation made by it on 25th July, 2002 is an afterthought. However, it has not been stated in the counter affidavit as to whether any reply was sent to the petitioner's representation date 25th July, 2002. It has also been averred that the petitioners' name does not figure in the list of approved vendors became of its bad performance and low quality work.

5. It has been averred that the letter of award has already been issued to the M/s Walia & Sons on 2nd August, 2002. However, it has not been explained as to why this has been done in spite of the service of the copy of the petitioner on the respondent No.1 on 30th July, 2002. The counter itself states that the petitioner's work as not satisfactory and the petitioners was sent letter to this effect time and again. Thus in the counter respondent No. 1 admits that the petitioner has been excluded on the ground of inefficient and unsatisfactory work. However, it is interesting to not that the respondent No. 1 has not denied the plea that the petitioners name did figure in the letter dated 6th June, 2001 by which Limited Tender enquiry was issued for the last year to the petitioner and thus it was an approved vendor at least till 6th June 2001. The letter dated 1st March 2002 of NTPC also shows that the petitioner is on the approved list as the petitioner was issued bid for providing specialize cleaning, maintaining services at PMI, Sector 16A, Noida.

6. The course of conduct of respondent No.1 does demonstrate that the petitioner is fully justified on the grievance that it has been wrongfully denied the tender documents. The respondent No. 1 had not denied that the representation of the petitioner dated 25th July, 2002 was not replied to and the explanation now sought to be given that it was not done as the representation was "an after though, merit less and of no consequences." In so far as laches is concerned, the respondent No. 1 contended that the petitioner was aware about the tender exercise but has not demonstrated how the petitioner was aware or had been made aware of the issuance of the tenders' impugned. Secondly the lack of response to the petitioner's representation lends substance to the petitioner's plea that it was being subjected to hostile discrimination and thus the plea of laches cannot be held against the petitioner.

7. It is not in dispute that the petitioner is a working and an approved vendor as the averment of the petitioner in the writ petition to this effect was not denied by the respondent No. 1 specifically in its counter affidavit. The respondent No. 1 has sought to justify the denial of the tender to the petitioner on the ground that its procurement and work policy justifies a list of approved vendors. It is further submitted has the list of approved vendors is reviewed and necessary changes mad eon the basis of performance at the time of issuance of notice inviting tenders.

8. It is stated that the previous performance was reviewed and necessary changes were made on the basis of vendor performance on 12th June, 2002. It is averred that the name of the petitioner did not figure on the approved vendors' list on account of unsatisfactory performance and for this purpose., reliance has been place don 2 letters dated 4th April 2002 and 2nd May, 2002 sent in respect of PMI contract to the petitioner. The petitioner in reply has however relied upon the following certification for PMI contract given by the respondent No. 1's Supervisor (Administration) 5th April, 2002 and 3rd May, 2002:-

"Work has been carried out satisfactory as per LOA

All the terms and conditions of the contract/LOA has been fulfillled.

All the statutory obligation has been completed by the Agency.

The petitioner's counsel has contended that the certification on 5th April, 2002 and 3rd May, 2002 by the respondent No. 1' own Supervisor belies the plea of the respondent that the petitioner's services were not satisfactory. He states hat obviously the letters dated 4th April and 2nd May 2002 complaining unsatisfactory services in respect of PMI tender could not have been sent and are motivated even if they were sent, as these fly in the face of the certification of satisfactory work given by the respondents' own supervisor.

9. The PMI contract's performance cannot have a direct bearing in the present writ petition which is in respect of C&D quarters in NTPC. Even i the performance in PMI is considered relevant then the certification of the supervisor (Administration) dated 5th April and 3rd May 2002 is in favor of the petitioners demonstrates eloquently that the letters dated 4th April and 2nd May 2002 appeared to have been issued regardless of the certificates, lending substance to the petitioners plea that there is a hostile discrimination against it and clear non application of mind.

10. The real issue which arises in the present writ petition is the petitioners' removal from the approved vendors list on 12th June 2002 and it has been contended by the respondent that this was done after reviewing the petitioner's performance. No other document except two letters dated 4th April and 2nd May 2002 that too in respect of another contract at PMI were brought before the court to demonstrate the unsatisfactory performance of the petitioner or any communication to the petitioner that his work was not satisfactory. Significantly the letter dated 12th June 2002 which is relied upon by the respondent to exclude the petitioner is in fact also the proposal for tender for the AMC involved in the present case. The petitioner's exclusion is based on the following note in the said letter dated 12th June, 2002.

"M/s Everest Enterprises was awarded the House keeping Job at Township and PMI two years back for the period of one year extendable for another one year. Their performance at PMI was not found satisfactory. Copy of note duly approved from ED (PMI) is enclosed for reference. Keeping in view of the same name of M/s Everest Enterprises has not been proposed for insurance of LTE against the case."

The petitioner has thus been excluded on the alleged unsatisfactory performance in PMI. The respondent has defended this exclusion on the ground that is pen to the respondent to prepare a limited vendors list and in support of this reliance has been placed on a judgment of the Division Bench of this Court N.J. Contractors & Engineers and Anr. v. MTNL and Ors. 1995 (2) Arbitration Law Reports 495 where the process of limited tenders was approved. The reliance on the said judgment is misplaced as the petitioner has not challenged the approved limited list of vendors but has challenged his exclusion from the said vendors list for no fault of his. The petitioner has relied upon the judgment of the Hon'ble Supreme Court in Southern Painters v. Fertilizers and Chemicals Travancore Ltd. . The relevant portion of the said judgment relied upon by the petitioner reads as follows:

"9. The deletion of the appellant's name from the list of approved contractors on the ground that there were some vigilance report against it, could only be done consistent with and after the compliance of the principles of natural justice. That not having been done, it requires tobe held that withholding of the tender form from the appellant was not justified. In our opinion, the High Court, was not justified in dismissing the writ petition."

The principle laid down in the aforesaid judgment squarely applies to the facts of the present case. The petitioners' name having been excluded on the ground of unsatisfactory services could not have been done by the respondent when no opportunity or notice had been given to the petitioner before excluding it same from the vendors' list. the only two documents shown to this Court i.e. the letters dated 4th April and 2nd May 2002 have been found to be wholly untenable in view of the certificates of the petitioner given by the supervisor on 5th April & 3rd May, 2002 about the satisfactory performance of the petitioner. In fact these documents pertain to another contract of PMI, Sector 16A, NOIDA and not the contract in the present case i.e. the contract for maintenance of C&D Quarter in NTPC Township NOIDA. However, we are proceedings on the assumption that since both the petitioner and respondent are common, the nature of the services provided by the petitioner even in another contract can be considered. Thus we find that the petition name has been wrongly excluded from the approved vendors list by the respondent in clear violation of he principles of natural justice without any notice whatsoever to it. Accordingly the writ petition is liable to be allowed. The decision of the limited tender issued on 17th June 2002 by the respondent is quashed and set aside on the ground of illegal exclusion of the petitioner from the approved list. It is open to the respondent to float tenders afresh and the petitioner is permitted to participate in the said tender Along with other approved vendors and will be issued the appropriate tender and other documents for this purpose. This interim order of this court dated 6th August 2002 to continue until the contract is awarded to the successful tenderer pursuant to the fresh tendering as directed by this judgment.

9. With the above direction the writ petition is allowed and stands disposed of in the terms of the directions given in this judgment.