Delhi High Court
Hyundai Rotem Company vs Delhi Metro Rail Corporation on 21 July, 2016
$~19
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision: 21st July, 2016
+ LPA 397/2016 & CM Nos.24697/2016 (stay) & 24700/2016 (addl.
docs.)
HYUNDAI ROTEM COMPANY ..... Appellant
Through: Mr. Parag P. Tripathi, Sr. Adv. with
Mr. Arunav Patnaik, Ms. Bhabna Das &
Mr. Shikhar Saha, Advs.
Versus
DELHI METRO RAIL CORPORATION ..... Respondent
Through: Mr. P.P. Malhotra, Sr. Adv. with
Mr. Tarun Johri, Adv. for R-1/DMRC.
Mr. Puneet Garg, Law Officer.
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MS. JUSTICE SANGITA DHINGRA SEHGAL
JUDGMENT
MS. G. ROHINI, CHIEF JUSTICE:
1. This appeal is directed against the order of the learned Single Judge
dated 08.07.2016 in W.P.(C) No.5851/2016. The unsuccessful petitioner is
the appellant before us.
2. By order dated 10.08.2015, the appellant/writ petitioner was
blacklisted by the respondent/Delhi Metro Rail Corporation (for short
'DMRC') for a period of five years from 15.07.2015 on the ground that the
appellant/writ petitioner, at the time of submission of its bid, had not
disclosed that it was debarred for a period of three years by the Airport
Authority of India by order dated 14.12.2011. Challenging the order of
DMRC dated 15.07.2015, the appellant herein filed W.P.(C) No.7656/2015.
The said writ petition along with W.P.(C) No.7265/2015 and LPA
No.547/2015 was disposed of by the Division Bench, to which one of us
(Chief Justice) was a member, by judgment dated 23.11.2015 setting aside
the impugned order of blacklisting.
3. Having regard to the fact that the order of blacklisting dated
10.08.2015 was set aside by this Court on the ground of absence of reasons
and no proper opportunity of personal hearing was afforded, the
respondent/DMRC passed a fresh order dated 06.07.2016 after giving an
opportunity of hearing to the petitioner/appellant. By the said order, the
petitioner/appellant has again been blacklisted for a period of five years with
effect from 15.07.2015. Challenging the same, the appellant filed W.P.(C)
No.5851/2016. By the order under appeal dated 08.07.2016, the learned
Single Judge dismissed the writ petition so far as the issue of blacklisting is
concerned. However, with regard to the period of blacklisting, notice has
been issued to the respondent, returnable on 07.09.2016.
4. The said order is assailed before us in the present appeal.
5. We have heard Shri Parag P. Tripathi, the learned Senior Counsel
appearing for the appellant/writ petitioner and Shri P.P. Malhotra, Senior
Advocate appearing for the Delhi Metro Rail Corporation.
6. One of the grounds upon which the order of blacklisting dated
06.07.2016 was impugned before the learned Single Judge was that the
Managing Director of DMRC who passed the said order is not the
competent authority. It was contended that the Board of Directors of DMRC
alone is the competent authority.
7. The said contention was rejected by the learned Single Judge
observing that as no such ground had been raised in the earlier round of
litigation, the petitioner is barred by principles of constructive res judicata
from raising the plea of competence.
8. It is contended before us by Shri Parag P. Tripathi, the learned Senior
Counsel appearing for the appellant/writ petitioner that the
respondent/DMRC for the first time in its counter affidavit dated 15.09.2015
in LPA No.547/2015 had pleaded that the competent authority was the
Managing Director of DMRC and till such time the appellant was not aware
of the same and therefore, there was no occasion to raise the said ground
when the previous blacklisting order dated 10.08.2015 was challenged.
9. Pointing out that the name of the competent authority was not stated
in the order of blacklisting dated 10.08.2015 which was passed by the
Executive Director, it is submitted by the learned Senior Counsel that even
the Minutes of the Meeting of the Board of Directors dated 15.07.2015 was
not available to the appellant when the earlier writ petitions were filed and
that the appellant could obtain a copy of the Minutes only on 14.09.2015 by
making an application under the Right to Information Act.
10. Thus, it is contended by the learned Senior Counsel that the
conclusion of the learned Single Judge that the petitioner/appellant is barred
by principles of constructive res judicata from raising the plea of the
competence of the Managing Director to pass the order of blacklisting is
unsustainable.
11. On the other hand, the learned Senior Counsel appearing for DMRC,
while placing before this court a copy of the minutes of 13 th Board Meeting
held on 12.01.1998, submitted that the powers of the Board of Directors had
been delegated to the Managing Director. A copy of the minutes of the 105th
Board Meeting held on 21.01.2016 has also been produced in which the
Board having taken note that fresh process for taking suitable action against
the appellant has been initiated and a personal hearing has been given by the
Managing Director on 19.01.2016 resolved that on receipt of the written
submission the competent authority i.e. Managing Director will take
appropriate view and inform the Board.
12. The extract of the Minutes of the Meeting of the Board of Directors
dated 12.01.1998 with regard to delegation of powers to Managing Director
may be reproduced hereunder:
"Resolved that in terms of clause 21 of Article 162 of the
Articles of Association of the Company, the Managing Director
be and is hereby delegated all powers as are exercisable by the
Board of Directors, subject to the restrictions under Article 161
and proviso to Section 292 and 293 of the Companies Act, 1956
with further restriction that such delegation shall be subject to
the approval of the Board in the following circumstances:-
a. For any substantive change in the scope of work of the
Delhi MRTS Project from the D.P.R.
b. For any item of expenditure where more than Rs.10
crores is involved which is not contemplated in the
D.P.R."
13. Thus, it is clear that by virtue of the delegation of powers by the
Board of Directors in its meeting dated 12.01.1998, the Managing Director
is competent to pass the order of blacklisting. Therefore, the contention of
the appellant that the Managing Director is not competent and the Board
alone is competent is without any substance.
14. However, it is vehemently contended by the learned Senior Counsel
for the appellant that in the facts and circumstances of the case, the personal
hearing should have been granted before the Board of Directors which alone
had the authority to reiterate, modify or withdraw its previous decision to
blacklist the appellant in its meeting dated 15.07.2015. It is also contended
that the Managing Director, in the absence of any specific delegation of
powers by the Board to take a fresh decision in the matter after hearing the
appellant, could not be expected to overrule or act contrary to the decision of
the Board. The further contention is that the Managing Director being a
party to the decision of the Board of Directors dated 15.07.2015 cannot be
expected to give an impartial hearing to the appellant.
15. We do not find substance even in the above contentions.
16. The earlier decision of the Board of Directors which culminated in the
order dated 10.08.2015 was already set aside by this Court. Thereafter, a
fresh order has been passed following due process of law which cannot be
held to be in continuation of the earlier proceedings. Hence, the contention
that the Managing Director cannot take a fresh decision modifying or
withdrawing the decision of the Board of Directors is without any substance.
17. The further contention that the Managing Director cannot be expected
to give an impartial hearing to the appellant since he was a party to the
earlier decision of the Board of Directors is also untenable. The mere fact
that the Managing Director was a party to the earlier decision of the Board
of Directors dated 15.07.2015 is not sufficient to accept the allegation of
bias. In fact, the same situation would have arisen even if the opportunity of
hearing was given before the Board of Directors since the earlier decision
was taken by the Board. At any rate, the law is well settled that bias cannot
be presumed in the absence of any material to suggest that there is any real
likelihood of bias.
18. In State of Punjab v. V.K. Khanna, (2001) 2 SCC 330, it was
explained by the Supreme Court:
"8. The test, therefore, is as to whether there is a mere
apprehension of bias or there is a real danger of bias and
it is on this score that the surrounding circumstances
must and ought to be collated and necessary conclusion
drawn therefrom. In the event, however, the conclusion is
otherwise that there is existing a real danger of bias,
administrative action cannot be sustained. If on the other
hand allegations pertain to rather fanciful apprehension in
administrative action, question of declaring them to be
unsustainable on the basis therefor, would not arise."
19. The same principle has been reiterated in N.K. Bajpai v. Union of
India, (2012) 4 SCC 653 observing:
"48. Bias must be shown to be present. Probability of
bias, possibility of bias and reasonable suspicion that bias
might have affected the decision are terms of different
connotations. They broadly fall under two categories i.e.
suspicion of bias and likelihood of bias. Likelihood of
bias would be the possibility of bias and bias which can
be shown to be present, while suspicion of bias would be
the probability or reasonable suspicion of bias. The
former lead to vitiation of action, while the latter could
hardly be the foundation for further examination of
action with reference to the facts and circumstances of a
given case. The correct test would be to examine whether
there appears to be a real danger of bias or whether there
is only a probability or even a preponderance of
probability of such bias, in the circumstances of a given
case. If it falls in the prior category, the decision would
attract judicial chastisement but if it falls in the latter, it
would hardly affect the decision, much less adversely."
20. We are, therefore, unable to accept the allegation of bias.
21. Regarding the other contention of the appellant that the allegation of
"fraudulent practice" has not been established in the facts and circumstances
of the case, we agree with the reasoning of the learned Single Judge and we
do not find any justifiable reason to interfere with the conclusion of the
learned Single Judge on the said issue.
22. So far as the period of blacklisting is concerned, the same is yet to be
decided by the learned Single Judge.
23. Hence, the appeal is devoid of any merit and the same is accordingly
dismissed.
24. Order dasti under the signatures of the Court Master.
CHIEF JUSTICE
JULY 21, 2016/kks SANGITA DHINGRA SEHGAL, J
