Delhi High Court
Sachdeva Instrument Company And ... vs National Council Of Educational ... on 3 December, 2018
$~6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 3329/2017 and CM No. 14543/2017
SACHDEVA INSTRUMENT COMPANY
AND ANR ..... Petitioners
Through: Counsel for petitioners
(appearance not given).
versus
NATIONAL COUNCIL OF EDUCATIONAL RESEARCH
TRAINING AND ORS ..... Respondents
Through: Ms Alka Sharma, Advocate for
NCERT.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 03.12.2018
VIBHU BAKHRU, J
1. The petitioners have filed the present petition, inter alia,
impugning a notification dated 27.02.2017 issued by the respondent
(hereafter 'NCERT') blacklisting the petitioners with effect from
23.02.2017 till further orders.
2. The petitioners are, inter alia, engaged in the business of dealing
in educational kits. The petitioner states that on 25.07.2012, NCERT
had invited open bids for empanelment of firms for supply of science
and mathematics kits. The petitioners submitted their bid pursuant to
the aforesaid invitation to tender. They were successful and were,
accordingly, empanelled for supply of science and mathematics kits
developed by NCERT for a period of one year with effect from
26.07.2012. Their empanelment was extended from time to time.
3. It is the petitioners' case that the petitioners have successfully
supplied all materials (kits) for which orders were placed on them.
Further, the bank guarantees furnished by the petitioners against orders
placed on them have also been released.
4. It is the petitioners' case that they have been blacklisted because
they had approached this Hon'ble Court by way of a writ petition
challenging certain action of NCERT in not extending time for
submission of bids in respect of a notice inviting tender (NIT), that was
issued on 22.12.2016. In terms of the said notice, the last date for
submission of the bids was 23.01.2017. However, NCERT relaxed the
eligibility conditions by the corrigendum dated 23.01.2017 and
extended the time for submission of the bids up to 30.01.2017. The
petitioners became eligible to bid pursuant to the said NIT, by virtue of
the corrigendum. However, they were aggrieved as the time for
submission of the bids was less than a week. Accordingly, they, along
with some other firms, filed a writ petition before this Court - W.P.(C)
1642 of 2017 captioned Sarthak Enterprises and Ors. v. NCERT and
Ors.. The petitioners claimed that NCERT has blacklisted the
petitioners as a punitive measure for raising the dispute.
5. NCERT disputes the aforesaid contention. It is its case that the
petitioners were found wanting in performance of the obligations.
NCERT further claimed that the petitioners had supplied defective kits.
On 02.05.2016, NCERT sent separate emails to the petitioners calling
upon them to submit written explanation with regard to certain issues.
Both the emails were similarly worded. The said emails (referred to as
the show cause notice by the learned counsel for NCERT) sent to
petitioner no.1 is set out below:-
"To,
M/s. Sachdeva Instruments Co,
3574, Timber Market,
Ambala Cantt ‒ 133001
Sub : Supply of Secondary Mathematics Lab Kits
(SMLK) ‒ reg.
Dear Sir,
This is with reference to our supply order of even no.
dated 17.03.2016 and email dt.22.04.2016 regarding
supply of 277 Nos. of Secondary Mathematics Lab Kits
(SMLK) to DEK NCERT New Delhi on or before
29.04.2016. However you have failed to supply these kits
by delivery due date 29.04.2016 and there is no
communication from your end for extension of delivery
date. It reflects inertia on your part to comply with supply
order terms and condition (T&C).
In view of above, you are hereby directed to submit your
written explanation on or before 04.05.2016 for following
points:
1. Why your order should not be cancelled forfeiting
performance security amount for non compliance to T&
C of supply order.
2. Why NCERT should not stop forwarding further
orders to you.
3. Why NCERT should not take any disciplinary
action for repeated delayed deliveries based on your past
performance.
Further it is also added that if you are failed to submit
written explanation and supply 277 Nos. Of Secondary
Mathematics Lab Kits (SMLK) by 04.05.2016, your order
stands automatically cancelled and DEK, NCERT is free
to take further necessary actions deemed fit.
with regards
(Dr. R.K. Parashar)
Prof. & Head, DER"
6. The petitioners responded to the respective emails dated
02.05.2016 on 03.05.2016, inter alia, explaining that additional orders
were placed on them and they would require further time to meet the
said order. The response sent by petitioner no.1 is set out below:-
"Dear sir
The additional order for 130 kits was placed on 22-04-
2015. Previous order for 147 kits are ready with us and
total quantity 277 kits will be supplied within a weak.
Kindly allow us to deliver the kits 277 Nos within a weak
and oblige.
with regards
Gaurav Sachdeva
Sachdeva Instruments Co."
7. The learned counsel appearing for NCERT submitted that since
the explanation was not found satisfactory, NCERT had taken the
action for blacklisting the petitioners.
8. This Court is of the view that the impugned notifications are not
sustainable for several reasons. First of all, there is no reasoned order
for blacklisting the petitioners. Even if, it is accepted that the emails
dated 02.05.2016 were show cause notices calling upon the petitioners
to explain as to why they should not be blacklisted, the same did not
result in a formal communication/ order. The petitioners had submitted
their response. They had sought further time to complete the orders and
it is apparent that the orders were, thereafter, completed as the
performance security was duly released to them. Thus, the action
threatened in terms of the said e-mail was not initiated.
9. Secondly, it is well settled that an action for blacklisting has
serious adverse consequences and, therefore, principles of natural
justice are required to be followed by any authority initiating such
action (See: Erusian Equipment & Chemicals Ltd. v. State of West
Bengal and Anr.: (1975) 1 SCC 70 and Gorkha Security Services v.
Govt. (NCT of Delhi) and Others: (2014) 9 SCC 105). In the present
case, it is admitted that the petitioners were not afforded any
opportunity of being heard.
10. Thirdly, the petitioners have been blacklisted for an indefinite
period. In Kulja Industries Limited v. Chief General Manager,
Western Telecom Project BSNL & Ors.: (2014) 14 SCC 731, the
Supreme Court had held that a contractor cannot be permanently
debarred from participating in contracts with the authority. Paragraph
25 of the said decision is relevant and is set out below:-
"25. Suffice it to say that "debarment" is recognised and
often used as an effective method for disciplining deviant
suppliers/contractors who may have committed acts of
omission and commission or frauds including
misrepresentations, falsification of records and other
breaches of the regulations under which such contracts
were allotted. What is notable is that the "debarment" is
never permanent and the period of debarment would
invariably depend upon the nature of the offence
committed by the erring contractor."
11. The Supreme Court had also summarised various factors that
were required to be considered by an authority in determining whether
the punitive measure of blacklisting ought to be taken against any party
and further, determining the quantum of such measure. Plainly, the
punitive measure must be proportionate to the offending conduct of the
person sought to be visited with such drastic consequences.
12. For the reasons stated above, the notification dated 27.02.2017 is
set aside. It is, however, clarified that this would not preclude the
respondents from issuing a show cause notice and passing an
appropriate order after affording the petitioners an opportunity to be
heard.
13. The petition is disposed of in the above terms. The pending
application is also disposed of.
VIBHU BAKHRU, J
DECEMBER 03, 2018
RK
