D.D. Bhalla vs Airports Authority Of India & Ors.
2010 Latest Caselaw 3450 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI


                W.P.(C) 9451/2009 & CM APPL Nos. 7309-12/2009

                                              Reserved on: July 8, 2010
                                              Decision on : July 23, 2010

        D.D.BHALLA                                         ..... Petitioner
                                  Through Mr. Vinay Mohan Sharma with
                                  Mr. Ravinder Yadav, Mr. Joydeep
                                  Bhattacharya, Ms. Neha Sharma,
                                  Ms. Shalini Agnihotri and
                                  Mr. Anil Jain, Advocates

                         versus

        AIRPORTS AUTHORITY OF INDIA
        & ORS                                ..... Respondents
                     Through Ms. Anjana Gosain with
                     Ms. S. Fatima, Advocate

   CORAM: JUSTICE S. MURALIDHAR

   1. Whether Reporters of local papers may be
        allowed to see the judgment?                                  No
   2. To be referred to the Reporter or not?                          No
   3. Whether the judgment should be reported in Digest?             No

                                    JUDGMENT

23.07.2010

1. The Petitioner was awarded a contract by the Respondent No. 1

Airports Authority of India („AAI‟) for providing CNS facilities in the

new runway 29/11 at the IGI Airport, New Delhi on 3 rd November

2008 for an amount of Rs. 41,79,126/-. By the impugned order dated

19th March 2009, the AAI cancelled the said contract and the

Petitioner has filed this petition challenging the said order. Also

challenged in this writ petition is a show cause notice dated 6 th April

2009 issued by the AAI to the Petitioner asking him to show cause

why he should not be debarred from participating in the AAI Tenders

and the subsequent order dated 6th May 2009 passed by the AAI

debarring him from participating in AAI tenders for a period of three

years. The fourth prayer is for a direction to the Respondent AAI to

open the tenders of the Petitioner that have already been received but

not processed.

2. Mr. Vinay Mohan Sharma, learned counsel appearing for the

Petitioner first submits that a show cause notice dated 29th December

2008 issued by the AAI to the Petitioner has been taken as the notice

preceding the termination of the contract. AAI has proceeded on the

basis that the Petitioner‟s reply to the said show cause notice was not

found satisfactory. It is pointed out that the Senior Manager

Engineering (E) AAI, Respondent No. 4 herein, referred to a letter

dated 1st January 2009 of the Petitioner and described it as reply to the

show cause notice dated 29th December 2008 whereas that letter was

a request by the Petitioner for issuance of gate passes. It is claimed

that the dispute regarding non-supply of 13 qualified personnel by the

Petitioner was sorted out by the Petitioner with the Respondent at a

personal meeting on 30th and 31st December 2008 itself. Mr. Sharma

therefore, submits that any allegation contained in the show cause

notice dated 29th December 2008 stood wiped out and the said

document could not be relied upon. In fact subsequent thereto, on 16 th

January 2009 a formal agreement was signed between the parties. Mr.

Sharma submits that if the AAI proposed to terminate the contract

with reference to show cause notice dated 29th December 2008, it

could not have signed an agreement on 16th January 2009 with the

Petitioner herein. It is accordingly contended that there is no basis

whatsoever for cancelling the contract dated 19th September 2009.

3. According to the Petitioner, the action of Respondent No. 4 in

engineering the termination of the contract was malafide because the

Petitioner had in 2007 made a complaint against the misdeeds of

Respondent No. 4 in relation to tampering with the bids submitted

pursuant to the earlier tenders floated. The Petitioner also made a

specific complaint against one Shri V.K. Gupta regarding

reimbursement of certain payments. The third submission made by

Mr. Sharma is that the order dated 6th May 2009 debarring the

Petitioner from participating in the AAI tenders for a period of three

years is wholly without jurisdiction. It is submitted that the General

Manager Engg (E) was not the „accepting authority‟ and, therefore,

had no power to debar the Petitioner in terms of the contract. Such

power vested only with the Senior Manager Engg (E) i.e. the

Respondent No. 4.

4. Without prejudice to the above submissions, it is submitted that the

order dated 6th May 2009 "is conspicuously vague and essentially

non-speaking, arbitrary, unreasonable and discriminatory as it fails to

deal even with a single point/contention of the Petitioner raised by

him in his reply to show cause notice dated 6th April 2009." It is

submitted that the allegation that gate passes were only for five

persons and insufficient in terms of the contract was "taken wholly

out of context and without any relevance or linkage to the alleged

non-performance of contract by the Petitioner." It is the Petitioner‟s

case that he was never allowed to commence work in spite of repeated

requests. It is submitted that the Respondent No. 4 without the

Petitioner‟s consent extended another contract, namely, ARMO of 11

KV Sub-station Internal and External E.I., Operational area by one

month up to 5th April 2009 knowing fully well that the Petitioner had

to depute that staff for the contract in question i.e. provisions of CNS

facilities for new runway at IGI Airport. It is submitted that the

Petitioner had more than the requisite manpower to start the work. It

is submitted that the intimation regarding debarment of the Petitioner

was sent to other government departments where he had worked as a

contractor with a view to defame and embarrass him and tarnish his

reputation. It is submitted that the debarment of the Petitioner is

disproportionate and harsh.

5. It is submitted that the Petitioner has been singled out for the

purpose of debarment. Out of a total of five electrical contracts that

were cancelled on the ground that the work had not commenced, only

the Petitioner has been debarred. Finally, it is submitted that the

response of the vigilance department after rejecting the Petitioner‟s

complaint dated 5th February 2008 was an attempt to „cover-up‟ the

misdeeds of the Respondent No. 2 and this was surprisingly done on

the same date the Petitioner was debarred for a period of three years.

6. According to learned counsel for the Petitioner, the central issue in

the present case is that of corruption and when the Petitioner picked

up courage to point it out he was punished by the Respondents by not

only terminating his contract but debarring him from participating in

tenders for a period of three years. It is alleged that for the very same

work, a fresh contract consequent upon the termination of the

Petitioner‟s contract was awarded and the government exchequer

suffered a loss of over Rs.2.82 lakhs on that score.

7. In reply to above submission, Ms. Anjana Gosain, learned counsel

for the Respondents submits that the Petitioner was aware of the terms

and conditions of the contract on 3rd November 2008 itself and that it

was only a formal agreement which was required to be signed

subsequently. In terms of the contract, the Petitioner had to take over

the site on 18th November 2008. Despite reminders being sent on

several dates i.e. 12th, 24th and 25th November 2008, the Petitioner did

not take over the site. The work of runway 29/11 at the IGI airport

was a time bound one and no delay in commencing the work could be

tolerated. In those circumstances, another reminder was sent on 10th

December 2008 with a further request to send the stamp paper on

which the agreement had to be drawn. It was made clear that if the

labour was not deployed by 18th December 2008 a show cause notice

would be served.

8. Thereafter when no steps were taken, a show cause notice was

issued to the Petitioner on 29th December 2008 requiring a reply

within seven days. Although no formal reply was received, a letter

dated 1st January 2009 giving the names of five employees was

received. This was followed by letters dated 13th February 2009, 16th

February 2009 and 9th March 2009 giving details of the staff.

However, in these letters the Petitioner did not indicate the

preparedness to undertake the work. In view of the urgency and the

fact that the contract was a time-bound one, a letter terminating the

contract was issued and a short notice tender was floated on 20 th

March 2009.

9. Ms. Gosain submitted that since despite the first show cause notice

dated 29th December 2008 the Petitioner did not commence work, it

was decided to terminate the contract. Thereafter a show cause notice

dated 6th April 2009 was issued to the Petitioner to which a reply was

received on 13th April 2009. Consequent thereto, the impugned order

dated 6th May 2009 debarring the Petitioner for a period of three years

was passed.

10. Since the Petitioner had made serious allegations in his complaint

which included charges of corruption, his complaint was referred to

the Vigilance Department. The question of debarment of the Petitioner

was considered by a Committee of three persons. The decision was

left to the General Manager since the Petitioner had levelled

allegations against the accepting authority. This in fact demonstrated

the fairness of the procedure. Six months‟ time had been lost before

the debarment of the Petitioner. In the circumstances, it was submitted

by the learned counsel for the Respondent that the decision taken by

the AAI to terminate the contract debarring the Petitioner for a period

of three years was justified. She relied upon the judgment of this

Court in Integrated Techno Systems Pvt. Limited v. New Delhi

Municipal Council 143 (2007) DLT 541.

11. The Petitioner does not deny that at no point in time he was able

to provide 13 qualified persons as required under the contract. His

case was that he was prepared to provide five persons at any point in

time. Over three shifts he would provide ten. However, this did not

meet the requirement of having to make available 13 qualified persons

for the contract. Once having accepted the contract, the Petitioner

cannot go back and interpret the contract just to suit his convenience.

Clearly there was an unpreparedness on the part of the Petitioner to

undertake the work in terms of the contract.

12. This Court has considered the above submissions. The work of

construction of the new runway at the IGI airport is certainly a time

bound one. Any delay in the completion of the said work would entail

adverse consequences for the AAI including loss of time and money.

If the AAI insisted on zero tolerance in completing the work on time,

no fault can be found with such decision. If the AAI does take specific

action pursuant to its show cause notice dated 29th December 2008

then certainly such action could not be termed as arbitrary. It appears

that the Petitioner was nevertheless given sufficient opportunities to

fulfill its obligation.

13. Also the Petitioner‟s allegation that the action was malafide only

because he made a complaint of corruption against the senior officers

of AAI is also without merit. Those complaints were taken seriously

and examined by the Vigilance Department. The report of the

Vigilance Department showed that these complaints were not

substantiated. Faced with this situation, the Petitioner is now seeking

to blame the Vigilance Department for "covering up" the misdeeds of

the officials of the AAI. This Court fails to appreciate the Petitioner

not sparing the Vigilance Department as well. Such a plea has to be

substantiated by some positive material. The Petitioner has failed to

discharge the burden.

14. This Court has examined the decisions in Sahara India (Firm),

Lucknow v. Commissioner of Income Tax, Central-I (2008) 14 SCC

151, S. Brahmanand v. K.R. Muthugopal (Dead) (2005) 12 SCC

764, Tata Cellular v. Union of India (1994) 6 SCC 651, Meerut

Development Authority v. Association of Management Studies 2009

(6) SCALE 49, Southern Painters v. Fertilizers & Chemicals

Travancore Limited 1994 Supp (2) SCC 699, Mahabir Auto Stores v.

Indian Oil Corporation (1990) 3 SCC 752, Raghunath Thakur v.

State of Bihar (1989) 1 SCC 229 and Harbanslal Sahnia v. Indian

Oil Corporation Limited AIR 2003 SC 2120. While it is the settled

law, as explained in the above decisions that an instrumentality of the

State has to be fair and reasonable in its dealings, it is the validity of

the order of termination in the circumstances of the present case

which is required to be examined. In the considered view of this

Court, the Petitioner has not been able to persuade the Court to hold

that the action of the Respondent No. 1 terminating the contract and

debarring him for a period of three years suffers from unfairness or

arbitrariness. Further, no fault can be found with the procedure

adopted in arriving at the said decisions.

15. Consequently, this Court finds no merit in the writ petition. This

petition is dismissed with costs of Rs. 5,000/- which will be paid by

the Petitioner to the Respondents within a period of four weeks.

16. The writ petition and the pending applications are dismissed.

S. MURALIDHAR, J JULY 23, 2010 rk