Delhi High Court
Instalaciones Inabensa S.A. & Anr vs Railway Electrification ... on 12 April, 2017
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on : 12th April, 2017
+ W.P.(C) 5617/2014 & CM No.13908/2014
INSTALACIONES INABENSA S.A. & ANR
..... Petitioners
Through : Mr.Ashish Dholakia, Mr.Ashish
Bhan, Mr.Gautam Bajaj, & Mr.Pallav
Shukla, Advocates.
versus
RAILWAY ELECTRIFICATION (PROJECTS) & ANR
..... Respondents
Through : Ms.Geetanjali Mohan, Advocate.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE YOGESH KHANNA
S. RAVINDRA BHAT, J (Oral)
1. This writ petition was filed challenging the show cause notice
dated 22.07.2014 issued by the first respondent i.e. the Railway
Board. The show cause notice required the petitioner to explain and
answer as to why action be not taken against them for the bank
guarantees furnished by the joint venture of which they are the
constituent(s) together with Instalaciones Inabensa S.A. and Protech
Galvanisers & Fabricators Private Limited.
2. The allegations were the bank guarantee, said to have been
issued by the Dena Bank was in fact a forged document for which the
JV was responsible. The entire petition is premised upon the
distinctiveness of the Spanish Corporation business entity i.e. the
present petitioner Instalaciones Inabensa S.A. The respondent -
Railway Board relied upon the clause No.12.2(A) (xiii) of the tender
document is as follows:-
"Joint and several liability- The members of the JV firm
to which the contract is awarded, shall be jointly and
severally liable to the Employer (Railways) for execution
of the project in accordance with General and Special
Conditions of the Contract. The JV members shall also
be liable jointly and severally for the loss, damages
caused to the Railways during the course of execution of
the contract or due to non-execution of the current part
thereof."
3. Likewise, clause No.65.12.1 of the Indian Railways Standard
General conditions of Contract' (GCC) July is 2013 also relevant and
read as under:-
"Clause 65.12.1 of „Indian Railways Standard General
Conditions of Contract‟ (GCC) July 2013 also states
that, "Joint And Several Liability - Members of the JV
Firm to which the contract is awarded, shall be jointly
and severally liable to the Employer (Railways) for
execution of the project in accordance with General and
Special Conditions of Contract. The JV members shall
also be liable jointly and severally for the loss, damages
caused to the Railways during the course of execution of
the contract or due to non-execution of the contract or
part thereof. Therefore in connection with all matters
relating to the contract, all individual members of the JV
are jointly and, severally responsible."
4. It is contended that the petitioner could not have been put to
prejudice in the manner that the Railway Board did eventually.
During the pendency of these proceedings, on 05.03.2015 the ban on
future business between Railway Board and the constituent of the JV
including the petitioner for five years from its date of issue was
imposed. However, previous orders of this Court which continued
from time to time have kept the order dated 05.03.2015 in abeyance.
5. The petitioner's original proceeding was a challenge to the
show cause notice. Eventually, this Court permitted the final action
by way of an order that resulted in the ban upon the petitioner and the
other constituent of the concerned JV. The Court has kept that order
in abeyance.
6. Having considered the materials and the submissions, this
Court is of opinion that since there is no formal challenge to the ban,
which has been kept in abeyance by orders of Court, it would be
appropriate that representation of the petitioner against it be first
considered, both on merits as well as to proportionality; in the event
of any adverse order is made by the Railway Board, the petitioner
should be granted opportunity to challenge that order. At the same
time, status quo with respect to the ban may continue till the period
during which the representation is under consideration and a week
after the issuance of the order upon such representation thereon. This
course commends itself to the Court, because the challenge to the
show cause notice has become academic, due to later events.
7. In these circumstances, the Court directs that in the event the
petitioner represents to the respondent / Railway Board within two
weeks from today, its representation shall be duly considered by the
Board which shall grant suitable opportunity before making a
reasoned order. Such order shall be directly communicated to the
petitioner. The order dated 05.03.2015 shall be kept in abeyance for
the period the matter remains under consideration by the Railway
Board and if any adverse order is passed (pursuant to these
directions), for another one week beyond the said order to enable the
petitioner to seek legal recourse.
8. The petition and pending application are disposed of in above
terms.
S. RAVINDRA BHAT, J
YOGESH KHANNA, J
APRIL 12, 2017
M
