Delhi High Court
Satvat Infosol Private Limited & ... vs National Testing Agency on 27 August, 2020
$~10
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of Decision : 27.08.2020
+ W.P.(C) 5710/2020 & CM APPL. 20646/2020
SATVAT INFOSOL PRIVATE LIMITED & ANR.
..... Petitioner
Through: Mr.Jayant Mehta, Mr.Aditya
Chatterjee, Ms.Bhargavi
Kannan & Mr.Shrishail
Navalgund, Advs.
versus
NATIONAL TESTING AGENCY
..... Respondent
Through: Mr.Amit Bansal, Senior
Standing Counsel with
Ms.Seema Dolo, Adv.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
NAVIN CHAWLA, J. (Oral)
1. This petition has been filed challenging the order dated
09.06.2020 passed by the respondent, forfeiting the earnest money
deposit submitted by the petitioner towards Tender for Selection of
Service Provider for Mock Tests at National Testing Centres/Test
Practice Centres, as also blacklisting and banning the petitioner from
future NTA tenders for a period of three years.
2. The order has been challenged by the petitioner on the ground
of violation of Principles of Natural justice as also on the ground of
proportionality.
W.P.(C) 5710/2020 Page 1
3. As far as the ground of violation of Principles of Natural Justice
is concerned, the learned counsel for the petitioner submits that earlier
by a communication dated 24.10.2019, similar order of forfeiture of
EMD and blacklisting was passed by the respondent against the
petitioner. This was challenged by the petitioner before this Court on
the ground of violation of Principles of Natural Justice and this Court
by its order dated 14.01.2020 passed in WP (C) No.180/2020, was
pleased to set aside the communication dated 24.10.2019, directing as
under:
"5. In the overall facts and circumstances, keeping
in mind that the NTA is reconsidering the matter,
which is clear from letter dated 2nd January, 2020,
the impugned order is set aside only on the ground
that the Petitioner was not heard. The NTA is free to
pass appropriate orders on merits after considering
the representation the Petitioner dated 15th
November, 2019, response to the letter dated 2nd
January, 2020 and after affording a hearing to the
Petitioner. This Court has not rendered any opinion
on the merits of the issue."
4. The petitioner asserts that thereafter, the respondent issued a
communication dated 20.01.2020 calling upon the petitioner to attend
a personal hearing, however, no proper Show Cause Notice was issued
to the petitioner. In spite of the same, the petitioner filed a detailed
representation/reply dated 29.01.2020 with the respondent. The
petitioner asserts that in absence of a proper Show Cause Notice, the
W.P.(C) 5710/2020 Page 2
impugned order is liable to be set aside for violation of Principles of
Natural Justice.
5. I do not find any merit in the submission made by the learned
counsel for the petitioner. The letter dated 24.10.2019 had clearly set
out the allegations against the petitioner on which the proposed action
of banning the petitioner was taken. The petitioner also understood the
allegations against it and the action of banning proposed against it,
including the period thereof. The petitioner, in fact, filed a detailed
reply thereto by its letter dated 29.01.2020. It is too late now for the
petitioner to claim that it was not aware of the allegations against it or
has in any manner been prejudiced by a lack of proper Show Cause
Notice.
6. As held by the Supreme Court in The Chairman, Board of
Mining Examination and Chief Inspector of Mines & Anr. vs.
Ramjee, (1977) 2 SCC 256, the Principles of Natural Justice cannot
be put in a straight jacket formula and each violation thereof cannot in
any manner lead to the voidance of the order; prejudice caused needs
to be shown for such an order to be invalidated. Reference may also be
had to State Bank of Patiala & Ors. vs. S.K. Sharma, (1996) 3 SCC
364.
7. In Gorkha Security Services vs. Government (NCT of Delhi) &
Ors., (2014) 9 SCC 105, the Supreme Court, while emphasizing the
need of issuance of a Show Cause Notice and the contents thereof,
further observed that even if the material/grounds which necessitate
the department to take action and particular penalty/action which is
W.P.(C) 5710/2020 Page 3
proposed to be taken are not specifically mentioned in the show-cause
notice but can clearly and safely be discerned from the reading
thereof, that would be sufficient to meet the requirement of principles
of natural justice so far as the issuance of show-cause notice is
concerned.
8. In the present case, the submission of the petitioner is liable to
be rejected also because the High Court in its order dated 14.01.2020
passed in WP (C) No.180/2020, quoted hereinabove, had directed the
respondent to consider the representation of the petitioner after
affording an opportunity of hearing to it. There was no direction to
issue a fresh show-cause notice.
9. As far as the challenge on the ground of proportionality is
concerned, the learned counsel for the petitioner has taken me through
the detailed reply filed by the petitioner by its letter dated 29.01.2020,
to submit that the declaration in question had been submitted by the
petitioner due to a bona fide administrative reason. He submits that on
the date of preparation of the bid for submission, the concerned officer
was not aware of the blacklisting order by the ONGC and therefore,
the bid was submitted due to inadvertence with the concerned
declaration. He further submits that on gaining knowledge of the
inadvertence, the petitioner immediately, on its own, wrote not only to
the respondent herein but also to other Authorities to whom bids had
been submitted, withdrawing such bids and bringing to their notice the
blacklisting order passed by the ONGC. He submits that for such
W.P.(C) 5710/2020 Page 4
inadvertent mistake, the petitioner could not have been banned for 3
years as has been done in the Impugned Order.
10. I again do not find any merit in the submission made by the
counsel for the petitioner. In Patel Engineering Ltd. vs. Union of
India & Anr., (2012) 11 SCC 257, the Supreme Court held that for
testing the argument based on the doctrine of proportionality, the court
is required to examine: (1) the purpose sought to be achieved by the
impugned decision to blacklist the contractor; and (2) the adverse
effects, the impugned action may have on the rights of the contractor.
11. As reflected in the Impugned Order and not disputed by the
petitioner, the bid was submitted by the petitioner with the respondent
on 09.10.2019. Even as per the case of the petitioner, the blacklisting
order had been received by the petitioner at its Registered Office
towards the end of September, 2019 (the actual date of receipt has not
been disclosed till date). The petitioner itself asserts that the said order
reached its Corporate Office on 30.09.2019. As noted hereinabove,
the bid was submitted by the petitioner on 09.10.2019. For a
corporate entity like the petitioner, it is inconceivable that such an
important communication and order would not be brought to the
notice of the relevant officers who are submitting bids/tenders to other
entities. It is common knowledge that in almost all tender floated by
the Government/PSU/Statutory Bodies, a declaration is now sought as
to whether the firm has been blacklisted by any other PSU/Central
Government agency. Even assuming the case of the petitioner that
there were administrative lacunas in its system, such administrative
W.P.(C) 5710/2020 Page 5
lacunas cannot inure the benefit to the petitioner to avoid the
consequences thereof at the hands of the respondent and other parties.
12. In terms of the tender document, on a false declaration being
found, the respondent could have blacklisted the petitioner for a period
of three years, as has been done by the impugned order. Clause 6.5 (5)
of the Bid Document Part II (Special Conditions of Contract) is
quoted hereinunder in this regard:-
"Bid Document Part II (Special Conditions of
Contract)
6.5 Qualification Criteria Parameters:
Note: In case a false declaration is submitted by
the bidder and discovered before tender
finalization, bid will be summarily rejected and
EMD forfeited. If this aspect is discovered after
award of tender, then the contract will be cancelled
and Performance security bank guarantee will be
forfeited. In either case, the bidder may be
blacklisted and prohibited to participate in NTA
tenders for 3 years."
(Only the emphasis by
underlying is of this Court)
13. The petitioner was therefore well aware of the consequence of
submitting a false declaration. The respondent in its impugned order
dated 09.06.2020, has given detailed reasons for rejecting the
submissions of the petitioner and thereafter blacklisting it for a period
W.P.(C) 5710/2020 Page 6
of 3 years. This court in exercise of its powers of judicial review,
cannot sit in appeal over such decision.
14. The learned counsel for the respondent has also vehemently
submitted that even in the present petition, though the petitioner has
referred to the proceedings before the Uttarakhand High Court in
challenge to the blacklisting order passed by the ONGC, it has
intentionally concealed from this Court that by an order dated
27.11.2019, the Uttarakhand High Court in the writ petition filed by
the petitioner, had observed that the petitioner had no prima facie case
against the said order. He submits that though this order is within the
knowledge of the petitioner, the petitioner concealed the same not
only in its representation/reply dated 29.01.2020 filed with the
respondent but also from this Court in the present petition. He has
submitted that therefore, the petitioner deserves no sympathy from this
Court.
15. As observed hereinabove, for invoking the doctrine of
proportionality, the order has to be found to be unreasonable, arbitrary
or so disproportionate so as to shock the conscience of this Court. In
the present case, as the NIT had warned the tenderers that they can be
blacklisted for a period of 3 years if their declaration is found to be
false; there being no doubt that the declaration submitted by the
petitioner was false; the explanation given by the petitioner thereafter
not having found favour with the respondent, the order passed by the
respondent cannot be termed as unreasonable or arbitrary. The period
of blacklisting also does not shock the conscience of this Court.
W.P.(C) 5710/2020 Page 7
16. I, therefore, find no merit in the present petition, the same is
dismissed. There shall be no order as to costs.
NAVIN CHAWLA, J
AUGUST 27, 2020/rv
W.P.(C) 5710/2020 Page 8
