Delhi High Court

Narender H.Chandwani vs M.C.D. & Anr. on 4 July, 2008

Author: Vipin Sanghi

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+                            W.P.(C) 4684/2008

%                            Dated: 04.07.2008



       NARENDER H.CHANDWANI                       ..... Petitioner
                     Through:           Mr. Fiayaz Khan & Mr. Honey
                                        Tanaji, Advocates

                    versus


       M.C.D. & ANR.                               ..... Respondent
                          Through:      Mr. Amit Paul, Advocate


CORAM:
HON'BLE MR. JUSTICE VIPIN SANGHI

1. Whether the Reporters of local papers may
   be allowed to see the judgment?

2. To be referred to Reporter or not?              Yes

3. Whether the judgment should be reported         Yes
   in the Digest?



VIPIN SANGHI, J.

1. By this writ petition under Article 226 of the Constitution of

India, the petitioner seeks a writ of certiorari to quash the decision of

the MCD contained in its circular dated 19.05.2008, which reads as

under: -

"The Commissioner, MCD vide orders dated 06.05.2008 has removed M/s Sona Consultant & Contractors, Prop. Sh. Narender H Chandwani, R/o H.No. O-55, Lajpat Nagar-II, New Delhi-24 from the approved panel of the contractors of MCD on account of none execution of work awarded against work orders No.453/EE (Br.)-I/TC/CS/06-07 dated 25.01.2007.

This is notified & circulated to all concerned for information and necessary action."

2. The admitted position is that the petitioner was an enlisted

contractor with the respondent-MCD. He is the sole proprietor of his

firm M/s Sona Consultants & Contractors. He was also empanelled for

execution of work in South and Central zones under the unit rate

system for one year vide communication dated 27.06.2007, issued by

the MCD. The petitioner was issued a work order dated 25.01.007

under the unit rate system for carrying out the work of "Development

work in unauthorized colony Hari Nagar Extension JKLM Block

(253/1071) 7th Phase C/Z, Sub Head Providing RCC slab over crossing in

J & K Block, Ward No.65 CZ." The estimated cost of the work involved

was stated to Rs.1,98,598/-. The time of completion stipulated under

the work order was four months. As per the work order the time was

to be reckoned from the 10th day after the date of issue of the work

order. The petitioner was directed to commence the work

immediately. Another work order of even date was issued to carry out

the work: "Development work in unauthorized colony Hari Nagar, I-

Block (256/1071) 7th Phase CZ, Sub-Head: Providing RCC slab over

crossing in Ward 65/CZ." The estimated cost of this work was

Rs.1,98,598/- and this work was also required to be completed within

four months. This work order also contained an identical clause saying

that the time shall be reckoned from the 10th day of the issue of the

work order, and the petitioner was similarly required to start the work

immediately.

3. It appears that the petitioner took no steps whatsoever to

carry out the two works aforesaid. Accordingly, he was issued

communication dated 19.02.2007 pointing out that the date of start

and date of completion of the works was 04.02.2007 and 03.06.2007

respectively. He was called upon to take steps to execute the works.

This communication has not been filed by the petitioner on record.

However, I have perused the same from the record as produced by the

respondent. The same also finds mention in notice issued to the

petitioner on 11.09.2007 which has been filed by the petitioner on

record. It appears that despite the aforesaid notice dated 19.02.2007

the petitioner took no interest in executing the work. He was,

accordingly, issued a show cause notice vide letter dated 26.03.2007,

which too has not been filed by the petitioner on record, though it is

mentioned in the notice dated 11.09.2007. This notice, which is found

on the original record of the MCD, alleged that by failing to execute the

works the petitioner has violated the conditions of NIT/URM as well as

enlistment rules. The petitioner was required to show cause as to why

action against him be not taken as per Rule No.22 of the enlistment

rules. It appears that despite the said notice neither the petitioner

took any steps to execute the works nor responded to this notice.

4. On 11.09.2007 the respondent issued yet another notice

making reference to the earlier notice dated 19.02.2007 and the show

cause notice of 26.03.2007. It was further stated that no reply had

been received from the petitioner to the earlier show cause notice.

The petitioner was required to be present before the Superintending

Engineer concerned on 14.09.2007. He was also informed that this is

the final opportunity granted to him. Only after the issuance of this

communication the petitioner for the first time woke up and issued a

communication dated 13.09.2007 stating that the existing RCC slab is

in damaged condition and there is no item in the work order requiring

the petitioner to demolish the RCC work and the brick work. He

demanded the respondent to give a clear site immediately for early

completion of the work. However, it appears that the petitioner did not

avail of the opportunity of personal hearing given to him by the

respondent. On 04.04.2008 the respondent sent another notice to the

petitioner giving him yet another opportunity to appear before the

Superintendent Engineer concerned on 17.04.2008. The petitioner

sent another communication dated 15.04.2008 reiterating his earlier

position. The petitioner, however, did not appear before the

Superintending Engineer on 17.04.2008. It appears that thereafter the

case was processed and the impugned communication dated

19.05.2008 was issued by the respondent.

5. The submission of the petitioner is that the work of

demolition of the RCC slab and the brick work was not included in the

specific items under the contracts/work order. The petitioner was

entitled to demand a clear work site for being able to execute the

works and since the respondent had failed to provide a clear work site,

there was no question of there being any default on the part of the

petitioner in not executing the works. He further submits that the

impugned order has been issued without compliance of the principles

of natural justice and the said order is vague and harsh, inasmuch as,

the petitioner has been removed from the approved panel of

contractors of MCD for an indefinite period.

6. On the other hand, learned counsel for the respondent,

who has appeared on advance notice and produced the records, has

justified the action of the MCD. He submits that the petitioner has

acted highly negligently and irresponsibly. The work orders were

issued on 25.01.2007. The work was required to be taken up

immediately and was required to be completed within four months.

The time was to be reckoned from the expiry of 10 days from the date

of issue of the work order. However, the petitioner slept over the

matter and it appears that he did not even visit the work sites for

months. Despite the notice dated 19.02.2007 he did not mobilize his

work force, tools and tackles to execute the work and did not even

respond to the show cause notice dated 26.03.2007 issued under Rule

22 of the enlistment Rules. He relied on the enlistment Rules and

particularly upon Clause 22.3 thereof. Relevant extracts of Rule 22.3

of the enlistment Rules read as follows:-

"The name of the contractor may be removed from the approved list of contractors, by the enlisting authority, if he;

(a) has, on more than one occasion, failed to execute a contract or has executed it unsatisfactorily, or ....................."

7. He also submits that the grievance of the petitioner that

the work item relating to demolition of the RCC slab and brick work

was not covered by the work order also appears to be incorrect,

inasmuch as, the work orders contemplate situations where extra

items of work or substituted items of work are required to be executed

in the course of execution of the contracted works and provide the

procedure to be followed, if such situations arise. He submits that the

petitioner claims to be an experienced and old contractor working in

the MCD and he should have been aware of the procedure to be

adopted in such situations. The work order itself provides that when

the orders are given for execution for any extra/substituted item, prior

order from the competent authority is to be obtained before executing

the same to avoid any further complication. Had the petitioner the

intention to carry out the works within the stipulated period, he would

have immediately visited the site upon the award of the works and

brought it to the notice of the respondent that there were extra or

substituted items of work involved. He would not have sat over the

matter despite repeated notices and woken up after nearly 8 months

of the issuance of the work order.

8. Having heard learned counsel for the parties, I am satisfied

that the petitioner has been highly negligent in undertaking the works

under the contracts. Assuming that there is some merit in the

submission of the petitioner that the work orders did not take into

account the work items related to demolition of RCC slab and brick

work, firstly the petitioner took no steps to bring to the notice of the

respondent the existence of the said extra items of work. Had the

petitioner any intentions of executing the work in right earnest, the

petitioner would have immediately, upon the issuance of the work

order, inspected the site and reported the matter to the MCD. He

would have taken steps to get the approval/orders of the competent

Authority to do the extra items of work. However, he took no steps

despite being issued the notice dated 19.02.2007 and even chose to

ignore the show cause notice dated 26.03.2007 issued under Rule 22

of the enlistment Rules. This conduct of the petitioner clearly shows

his lack of commitment to execute the works under the contract. It

was only when he was issued the notice dated 11.09.2007 that he, for

the first time, raised the aspect of extra items of work, as aforesaid.

Even thereafter he did not follow up the matter with the respondent,

and again went into hibernation, only to wake up in April 2008. I also

find merit in the submission of learned counsel for the respondent that

merely because of the existence of the said extra items of work, the

petitioner could not have avoided to execute the contracted works.

The petitioner ought to have brought to the notice of the respondent

the extra items of the work soon after the issuance of the work orders,

and to obtain the prior permission/order from the competent authority

to be able to complete the extra items of work as well. Had the

petitioner taken these steps, the same would have demonstrated his

seriousness to execute the works in question, and would have thrown

the ball in the respondents court.

9. I find no merit in the petitioner's submission that the

impugned order has been issued without complying with the principles

of natural justice. As aforesaid, he was given a show cause notice on

26.03.2007 which he has failed to file on record. He did not respond to

this notice. He was given further opportunities vide notices dated

11.09.2007 and 10.04.2008 to appear before the concerned

Superintending Engineer. But he did not even avail of these

opportunities. He kept on harping that the extra items of work, as

aforesaid, are not covered under the work orders. Even at that stage

he did not take up the contracted works.

10. Reliance placed by the petitioner on the decision of this

Court in M/s V.K. Dewan & Company v. Municipal Corporation of

Delhi & Ors. 1994 (29) DRJ 522 appears to be misplaced. That was a

case where the contractor had been blacklisted for a period of 3 years.

The Court quashed the blacklisting order on the ground that no

authority under the Rules or contract existed, permitting the

contractors blacklisting. That is the material difference in the present

case. A perusal of Rule 22.3 shows that the name of the contractor

can be removed from the approved list of contractors by the enlisting

authorities if he has, on more than one occasion failed to execute a

contractor or has executed it unsatisfactorily. In the present case,

there were two contracts covered under the two work orders, as

aforesaid, both of which were not executed by the petitioner.

Consequently, the respondent was authorized and justified in issuing

the impugned order.

11. The submission of the petitioner that the impugned circular

is vague and bars him for all times to come also does not appear to be

correct, particularly on a perusal of the records produced by the

respondent and the enlistment Rules. From the record produced by

the respondent it is seen that on account of failure of the petitioner to

perform the contracted works, the proposal was, inter alia, to suspend

business with the petitioner for a period of two years. This proposal

was, however, not accepted by the competent authority. Since the

case falls under Clause 22.3(a), the name of the petitioner has been

removed from the approved list of contractors by the enlisting

authority.

12. The instructions for enlistment of contractors in MCD are

found on the record of the MCD. The enlistment procedure is

contained in Clause 5 of these instructions which requires the applicant

to submit the application form to seek enlistment. The application

forms are issued only from 01st January to 15th January and from 01st

July to 15th July every year which can be obtained for a charge. The

enlistment period is stated to be for five years under clause 6. The

eligibility criteria for enlistment is contained in Clause 10, which reads

as follows:-

"10. Eligibility Criteria The contractors shall have to satisfy the minimum eligibly criteria specified in Table-1, before they can be

considered for enlistment.

10.1 The criteria for experience shall be completion of three or two works, as the case may be, of prescribed nature and magnitude executed on contract basis, during the last five years. The works should have been executed in the same name & style in which the enlistment is sought. 10.2 The financial soundness shall be judged on the basis of the solvency certificate or the working capital certificate, as the case may be, issued by the Bankers of the contractor on the format prescribed in Annexure-V. Such certificate shall be issued by a scheduled bank and shall be submitted, in original, in a bank sealed cover, addressed to the enlistment authority. 10.3 The criteria for the experience and financial soundness existing on the date of receipt of application by the enlistment authority shall be the governing criteria for the applicant. Table-1 indicates the criteria as at present."

13. The purpose of enlistment is only to entitle the contractor

to be considered for issue of tender papers subject to the conditions

laid down in each notice inviting tender. It does not confer any right

on the contractor to be necessarily issued the tender papers or for

award of work. Enlistment is done for various categories which are

mentioned in table 1 of these instructions. The tendering limits upto

which an enlisted contractor is entitled to tender is also contained in

table 1. So are the competent authorities empowered to enlist the

tenderers specified in table 1.

14. The consequence of issuance of the impugned circular is

that the petitioner has been removed from the approved panel of

contractors of MCD and his current enlistment is, therefore, no longer