Delhi High Court
Varad Associates Through ... vs National Highways Authority Of ... on 18 November, 2020
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 21.10.2020
Date of decision: 18.11.2020
+ W.P.(C) 8125/2020 & CM APPL. 26380/2020
M/S WADIA TECHNO-ENGINEERING SERVICES LIMITED
..... Petitioner
Through: Mr.Srinath Sridevan, Mr.Nikhil
Swami, Ms.Aishwarya Nathan &
Ms.Divya Swami, Advs.
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA
..... Respondent
Through: Mr.Ankur Mittal & Mr.Abhay
Gupta, Advs.
+ W.P.(C) 8240/2020 & CM APPL. 26708/2020
VARAD ASSOCIATES ..... Petitioner
Through: Mr.Sudhir Nandrajog, Sr. Adv.
with Mr.Varun Tankha &
Ms.Shreya Nair, Advs.
versus
NATIONAL HIGHWAYS AUTHORITY OF INDIA
..... Respondent
Through: Mr.Ankur Mittal & Mr.Abhay
Gupta, Advs.
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
1. These petitions have been filed by the petitioners challenging the
impugned circular/order dated 28.08.2020 and 'debarment notice' dated
W.P.(C) Nos.8125/2020 & 8240/2020 Page 1
25.09.2020 issued by the respondent debarring the petitioners and their
directors for one year from participating/engagement in any future
project/bid of the respondent, directly or indirectly, with effect from
28.08.2020.
2. As common questions of fact and law are involved, these petitions
are being adjudicated by way of this common judgment. The facts are
being taken from WP(C) 8125/2020.
3. The respondent had entered into a Concessionaire Agreement with
West Gujarat Expressways Ltd. (hereinafter referred to as 'WGEL') for
the work of 'widening of the Existing Jetpur - Gondal Section (km
117.000 to km 143.000) from two lane to four lane; making
improvements in the existing four lane Gondal - Rajkot Section (km
143.000 to km and Widening of the existing Rajkot Bypass (km 175.000
to km 185.000) from two lane to four lane on NH-8B in Gujarat on BOT
Basis. The contract period was of 20 years, that is, from 17.03.2008 to
16.03.2028.
4. Article 20.1 of the Agreement provided for appointment of an
Independent Engineer for Inter alia conducting the review of
design/drawings for construction, supervision and monitoring of
construction activities and other activities relating to Operation and
Maintenance (O&M).
5. The respondent appointed SAI Consulting Engineer Limited as an
Independent Engineer to supervise the construction of the said section of
the highway by WGEL for the period of five years from March, 2008 to
W.P.(C) Nos.8125/2020 & 8240/2020 Page 2
January, 2013. Thereafter, M/s. Frischman Prabhu Ltd. was engaged as
an Independent Engineer for the period February, 2013 to January, 2018.
6. The construction of the Highway was completed by WGEL on
17.03.2008.
7. As the agreement with M/s. Frischman Prabhu Ltd. was expiring in
January, 2018, the respondent issued a request for proposal for
appointment of the Independent Engineer, pursuant whereto the
petitioners in these petitions, forming an association, applied and were
successful. An agreement dated 16.01.2018 was executed between the
petitioners and the respondent appointing the petitioners as Independent
Engineer for operation and maintenance of the existing Four Lane Jetpur-
Gondal-Rajkot section of the Highway from 117.600 to 185.000 on NH-
8B in the State of Gujarat.
8. On 08.06.2020, a portion of the retaining wall at Ch.180 collapsed
causing the unfortunate death of two persons. The respondent vide its
letter dated 09.06.2020 directed the petitioners to take immediate action
against the Concessionaire and submit a detailed report on the occurrence
of the said incident. The said letter further recorded as under:-
"In this regard, this office at various times have shown
concern regarding pre monsoon activity and maintenance
required to be performed prior to start of Monsoon vide
letters under ref 6 & 7 and during site visits of undersigned
to ensure smooth flow of traffic and trouble free Highways
for the road users. In continuation to this, a meeting was
called by undersigned on 14.05.2020 regarding preparation
of pre monsoon activity at PIU-Rajkot and during the
meeting it was directed by PD Rajkot to Independent
W.P.(C) Nos.8125/2020 & 8240/2020 Page 3
Engineer to submit the action plan with micro planning for
carrying out the pre monsoon activity well in time before the
start of Monsoon."
9. Thereafter, the respondent appointed a team from the Sardar
Vallabhai National Institute of Technology, Surat (hereinafter referred to
as 'SVNIT') to conduct an onsite investigation.
10. The respondent vide its letter dated 15.06.2020 called upon the
petitioners to show cause as to why their Bridge/Structural expert was not
available on the site during the visit by the SVNIT expert team and even
thereafter.
11. The petitioner (M/s. Wadia Techno-Engineering Services Ltd.)
submitted a reply dated 17.06.2020 to the Show Cause Notice informing
the respondent that the Bridge/Structural expert was not present due to
the Lockdown declared by the Central Government because of the
COVID-19 pandemic. The petitioner further informed the respondent
that the accident occurred because of negligence of the construction
agency and the Independent Engineer appointed at the time of the
construction, as the construction was different from the submitted design
and drawings by the Concessionaire.
12. The respondent issued another Show Cause Notice dated
17.06.2020 to the petitioners asking them to show cause as to why they
be not blacklisted and penal action be not taken against them for having
failed to discharge their duties leading to the collapse of the part of the
retaining wall.
W.P.(C) Nos.8125/2020 & 8240/2020 Page 4
13. SVNIT also submitted its report of investigation to the respondent
on 17.06.2020, reporting the following causes for the accident:-
"Based on the above observations and review of the design
reports, the following causes of failure have been identified:
1. The submitted design report shows that the stability
analysis has been carried out and adequate factors of
safety have been obtained. However, this stability
analysis is applicable for RCC retaining wall. In the
present case the retaining wall is made of PCC which
acts like a Gravity Wall. The essential stability analysis
for a Gravity Wall has not been carried out in the
submitted design report. The factor of safety for the
constructed cross section of the PCC wall at the
location of failure is found to be less than unity which is
inadequate for stability of the wall.
2. Major horizontal and vertical cracks are visible from
the CCTV footage before failure. Due to rainfall on 8th
June, 2020 morning at Rajkot, the percolation of rain
water through the horizontal cracks may have occurred
which increases the horizontal pressure acting on the
wall leading to its failure. The seepage water into the
backfill increases the unit weight of the back-fill from
dry unit weight to saturated unit weight which is higher
by 20 to 25%."
14. The petitioners submitted their reply to the Show Cause Notice
vide letter dated 10.07.2020 inter alia contending that they had
performed their task diligently and informed the Concessionaire of all the
defects and deficiencies observed in the project Highway on regular
basis. As far as the non-availability of the Bridge Engineer is concerned,
the petitioners represented as under:-
W.P.(C) Nos.8125/2020 & 8240/2020 Page 5
"4. Whereas as per Enclosure-B of Description of Services,
Bridge Engineer shall undertake structure condition survey
once in a year and submit an inspection work. However, no
Bridge Engineer is deployed on site by the consultant in the
subject project. - Our Bridge Engineer assigned for the
above project was suffering from serious Knee problem due
to which she was not able to visit and inspect the stretch but
was available and connected with telephonic conversation
with us when required. Due to which all inspection was
performed by our Team Leader (Senior most Key person)
with continuous online meeting with our Bridge Engineer
and 2 Highway Maintenance Engineer available at site on
full time basis. All regular required reports were submitted
well within stipulated time period by our Team Leader to
Authority and Concessionaire.
On 03rd February 2020 PD Rajkot instructed our IE team to
Mobilize Bridge Engineer before monsoon. On 10th
February, 2020 we informed and requested our Bridge
engineer Miss Shobha Khanna through our Letter
No.WTESL/NHAI/RJT/18-19/015 Date:- 25-11-2018, Letter
No. WTESL/NHAI/RJT/19-20/07 Date:- 20-04-2019 and
Letter No.WTESL/NHAI/RJT/18-19/038 Date:- 28-02-2020
to confirm her Availability for inspection of Bridges of our
Project stretch and travel and hospitality arrangements can
be made well in advance. Our bridge engineer informed
every time that due to her health condition she needed bed
rest and could not travel 750 Km distance by Road from
Ujjain to Rajkot and she would be only available to travel
and visit in 1st week of April, 2020 by Flight or Train. On
25th March, 2020 due to Covid-19 Pandemic lockdown was
announced across the country by our Honorable Prime
Minister and All transport facilities were shutdown. Due to
which she could not come in the month of April, 2020.
On 9th June, 2020, we informed Bridge/Structure Engineer
regarding collapse of RE Wall accident, but due to lockdown
and as per SOP issued by Ministry of Home Affairs Rail
transport facility is not yet started and she could not inspect
W.P.(C) Nos.8125/2020 & 8240/2020 Page 6
and visit physically the accident site, so our Engineer
himself visited and inspected the site with IE Team and had
a VC with Bridge Engineer and submitted the reports to PIU
Rajkot well within time and again requested Our Bridge
Engineer to confirm her availability at the earliest. She
agreed and informed that she will be visiting the site at the
earliest when the train connectivity will resume from Ujjain
to Rajkot."
15. As far as the cause of the accident is concerned, the petitioners
again blamed the Concessionaire as also the Independent Engineer
appointed at the time of the construction of the Highway.
16. In the meantime, the respondent constituted a Committee of
Officers to report on the accident. The Committee submitted its Report
inter alia observing that there were serious lapses on the part of the
construction agency and the supervising team, ignoring construction
drawings and other basic construction requirements such as provision of
surface reinforcement and filter medium behind retaining wall as per
specifications.
17. The respondent, thereafter, issued a fresh Show Cause Notice
dated 27.07.2020 to the petitioners inter alia observing as under :-
"5. It has been reported that owing to Consultant's default,
a portion of the retaining wall at Ch. 180 collapsed on
08.06.2020 causing the death of two persons. The matter has
been investigated and following has been reported
highlighting the culpability and carelessness on part of the
Consultant:
W.P.(C) Nos.8125/2020 & 8240/2020 Page 7
I. Weep holes were found to be choked. Such a
major lapse went unreported and unnoticed by the
Consultant.
II. In CCTV footage of the location, the cracks were
visible much before the actual collapse which was
not attended to during O&M.
III. No provisions of longitudinal Pucca drain
(alongside the crash barrier) were made to drain
off the carriageway surface runoff during rains
properly which caused uncontrolled flow in the
backfill of retaining wall. Whereas the weep holes
in the wall are not found to be functioning as there
are no water marks of seepage below the holes.
6. However, it is notified that the consultant had not
reported any of the defects or deficiencies which are
highlighted in the inspection report. It is to be noted that as
per Enclosure-B of description of services, bridge engineer
shall undertake structure condition survey once in a year and
submit an inspection work. However, no bridge Engineer is
deployed on site by the consultant in the subject project. The
same was duly notified by NHAI vide letter no.D-72 dated
09.01.2019.
7. Needless to state that the very purpose of entering into
Consultancy Agreement and to avail services of an
Independent Engineer is to make the road travel safe, secure
and easy for the public. Compromising on the road safety by
avoiding the important terms and conditions laid down in the
Consultancy Agreement calls for a strict and immediate
action. The very act of avoiding the terms laid down to
ensure safety of road users calls not only for condemnation of
the Consultant but also for a punitive action against it."
18. The petitioners submitted their reply to the Show Cause Notice
vide letter dated 05.08.2020. The petitioners were also granted an oral
W.P.(C) Nos.8125/2020 & 8240/2020 Page 8
hearing on 17.08.2020. During the oral hearing, the petitioners requested
for being supplied the Committee report as also the CCTV footage,
which were being relied upon by the respondent. Admittedly, the
Committee report was supplied to the petitioner (M/s Wadia Techno-
Engineering Services Ltd.), however, the petitioners claim that the CCTV
footage has not been supplied to them.
19. The respondent, thereafter issued the Impugned Circular dated
28.08.2020 debarring the petitioners for a period of one year. The said
Circular, however, did not contain any discussion on the replies
submitted by the petitioners.
20. The petitioners submit that WGEL and SAI Consulting Engineer
Ltd. were debarred for a period of two years by similar Circular dated
28.08.2020. M/s. SAI Consulting Engineer Ltd. challenged the same by
way of a petition under Section 9 of the Arbitration and Conciliation Act,
1996, being O.M.P. (I) (COMM) No.287/2020. As the debarment order
was non-speaking in nature, the same was withdrawn by the respondent
with liberty to issue a fresh, reasoned debarment order.
21. It seems that, realizing its mistake of passing an unreasoned order
even against the petitioners, the respondent issued the Debarment Order
dated 25.09.2020, now giving reasons for rejecting the representation of
the petitioners against the Show Cause Notice.
22. The learned counsels for the petitioners challenged the Impugned
Notices dated 28.08.2020 and 25.09.2020 on the ground that the accident
had occurred due to latent defects in the construction of the retaining
W.P.(C) Nos.8125/2020 & 8240/2020 Page 9
wall, as was verified by the report from SVNIT as also the Committee
report. The construction had taken place under the supervision of M/s.
SAI Consulting Engineer Ltd, which was the Independent Engineer at
that time. Thereafter, M/s Frischman Prabhu Ltd. was appointed as an
Independent Engineer, who also could not notice such defects and did not
report the same. The petitioners could also not have noticed such defects
as they were not apparent to naked eye and therefore, could not be
blamed for not having reported the same. They submit that the Impugned
Order is, therefore, completely arbitrary and unsustainable.
23. They further submit that there is a violation of the Principles of
Natural Justice inasmuch as the Committee Report was not supplied to
the petitioner (M/s. Varad Associates) and the CCTV footage on which
much reliance has been placed by the respondent, was also not supplied
to either of the petitioners. In absence of these documents, the right of
the petitioners to duly reply to the Show Cause Notice was seriously
jeopardized and the Impugned Order is liable to the set aside on this
account alone.
24. On the other hand, the learned counsel for the respondent, placing
reliance on various terms and conditions of the Consultancy Agreement
submits that the petitioners have clearly failed to discharge their duties
and obligations under the agreement resulting in the unfortunate accident.
He submits that for a period of more than two years, the petitioners had
not even cared to have a Bridge/Structural Engineer on site, though this
was a mandatory requirement under the Contract. He submits that apart
from the latent defects, on a proper inspection of the site as was required
W.P.(C) Nos.8125/2020 & 8240/2020 Page 10
under the Contract, the defects in the same would have been easily
noticed by the petitioners. Failure to do so was merely because of the
negligence of the petitioners and therefore, they have been rightly
debarred by the respondent.
25. As far as non-supply of the CCTV footage is concerned, the
learned counsel for the respondent submits that such footage was relied
upon even by the SVNIT team while making its observations and
recommendations. He submits that it is inconceivable that the same was
not in possession of the petitioners. He submits that the same should
have been obtained by the petitioners from the District Administration.
He submits that even otherwise the Impugned Orders cannot be set aside
merely because of non-supply of such footage to the petitioners and in
support of this submission, he places reliance on the judgment of the
Supreme Court in Grosons Pharmaceuticals (P) Ltd. & Ors. vs. State of
UP & Ors., (2001) 8 SCC 604. He submits that no prejudice has been
caused to the petitioners by non-supply of the CCTV footage.
26. I have considered the submissions made by the learned counsels
for the parties. At the outset, certain principles enunciated by the
Supreme Court in relation to the consideration of challenge to orders
blacklisting Contractors need to be reiterated. In M/s Patel Engineering
Ltd. vs. Union of India & Anr., (2012) 11 SCC 257, the Supreme Court
held that the authority of a State to blacklist a person is a necessary
concomitant to the executive power of the State to carry on the trade or
business and making of the contract for any purpose, etc. There need not
be any statutory grant of such power. The only legal limitation upon the
W.P.(C) Nos.8125/2020 & 8240/2020 Page 11
exercise of such an authority is that the State has to act fairly and
rationally without in any way being arbitrary-thereby such a decision can
be taken for some legitimate purpose; what is the legitimate purpose that
is sought to be achieved by the State in a given case can vary depending
upon various factors. Before taking a decision to blacklist or debar a
Contractor, it is necessary that an opportunity of hearing and
representation against the proposed action is given to the party likely to
be affected, however, there is no inviolable rule that a personal hearing of
the affected party must precede every decision of the State. The Supreme
Court further held that the doctrine of proportionality would also have
application to a decision of an authority to debar/blacklist a Contractor.
Relying upon Jagdish Mandal v. State of Orissa & Ors., (2007) 14 SCC
517, it was held that no doubt the order of blacklisting is likely to have
some adverse effect on the business of the Contractor, however, this
being brought by its own making, power of judicial review will not be
invoked to protect such private interest at the cost of public interest.
27. In Kulja Industries Limited vs. Chief General Manager, Western
Telecom Project BSNL & Ors., (2014) 14 SCC 731, the Supreme Court
held that the power to blacklist the Contractor, whether it be a contract
for supply of equipment or for execution of any work whatsoever, is
inherent in the party allotting the Contract. There is no need for any such
power being specifically conferred by statute or reserved by Contract.
However, any such decision is subject to judicial review when the same
is taken by the State or any of its instrumentalities. This implies that any
such decision will be open to scrutiny not only on the touchstone of the
W.P.(C) Nos.8125/2020 & 8240/2020 Page 12
Principles of Natural Justice, but also on the doctrine of proportionality.
A fair hearing to the party being blacklisted, thus, becomes an essential
precondition for a proper exercise of the power and a valid order of
blacklisting made pursuant thereto. The order must be reasonable, fair
and proportionate to the gravity of the offence and is subject to scrutiny
by a Writ Court. The Supreme Court further observed as under:-
"20. It is also well settled that even though the right of the
writ petitioner is in the nature of a contractual right, the
manner, the method and the motive behind the decision of the
authority whether or not to enter into a contract is subject to
judicial review on the touchstone of fairness, relevance,
natural justice, non-discrimination, equality and
proportionality. All these considerations that go to determine
whether the action is sustainable in law have been sanctified
by judicial pronouncements of this Court and are of seminal
importance in a system that is committed to the rule of
law......"
28. In Daffodills Pharmaceuticals Ltd. & Anr. v. State of U.P. &
Anr., 2019 SCC OnLine SC 1607, the Supreme Court reiterated the
requirement of grant of opportunity of hearing before taking the action of
blacklisting.
29. At the same time, it has been held that the Court exercising writ
jurisdiction under Article 226 of the Constitution of India does not sit as a
Court of appeal over such decision. The decision is, therefore, to be
tested on the grounds of illegality, irrationality and procedural
impropriety. Unless found to be totally arbitrary, unreasonable or mala
fide, amongst other such grounds, the High Court in exercise of its power
W.P.(C) Nos.8125/2020 & 8240/2020 Page 13
under Article 226 of the Constitution of India does not generally interfere
with such decision of the authority. (Michigan Rubber (India) Ltd v.
State of Karnataka & Ors., (2012) 8 SCC 216; Master Marine Services
(P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. & Anr., (2005) 6 SCC 138;
Kanwar Singh Yadav v. AIIMS & Ors., MANU/DE/0165/2019.)
30. Tested on the above parameters, in the present case, admittedly the
respondent had issued two Show Cause Notices dated 17.06.2020 and
27.07.2020 to the petitioners before taking the Impugned Decision. The
Impugned Decision was also preceded by an opportunity of oral hearing
granted to the petitioners on 17.08.2020.
31. The petitioners, as has been mentioned hereinabove, have alleged
violation of Principles of Natural Justice on the ground that the CCTV
footage and, in case of M/s. Varad Associates, the Committee report were
not supplied to the petitioners, thereby violating Principles of Natural
Justice. I, however, do not find any merit in the said submission. As far
as the CCTV footage is concerned, the report of the SVNIT also relied
upon the same. As far as the Committee report is concerned, admittedly
the same was given to the petitioner (M/s. Wadia Techno-Engineering
Services Ltd.) after an oral hearing. The said petitioner also made
representations against the same. In any case, the Impugned Order dated
25.09.2020, apart from the CCTV footage, has given other reasons for
holding the petitioners negligent. Paragraphs 11, 14 and 15 of the
Impugned Order dated 25.09.2020 are quoted hereinbelow:-
"11. In response to above Show Cause Notice dated
27.07.2020, you have submitted your reply vide letter
W.P.(C) Nos.8125/2020 & 8240/2020 Page 14
dated 05.08.2020. The reply submitted by you were
found unacceptable due to the following reasons;
i. With reference to choking of weep holes,
your reply is self-contradictory. While at
one point you are submitting that the weep
holes were working last year, at another
point you are claiming that the filter media
placed behind the wall during construction
stage was in the category of silty gravel
which is not suitable to serve purpose as
filter media. Further, as per investigation
Report dated 10.07.2020, non-availability
of effective filter medium as per
specifications behind the wall has added
problem due to buildup of pore water
pressure causing additional horizontal
thrust as pore water could not seep through
the available weep holes.
ii. With reference to no provisions made for
longitudinal Pucca drain (alongside the
crash barrier) to drain off the carriageway
surface runoff properly during rains which
caused uncontrolled flow in the backfill of
retaining wall, you have submitted that the
provision of longitudinal Pucca drain is out
of your scope. Further, longitudinal
gradient in the design approved bride is
quite high in comparison to the camber.
Therefore, the provision of longitudinal
drain was not envisaged. In this regard, as
per clause 6.3 of the Consultancy
Agreement, in separate section of the O&M
Inspection Report, the Independent
Engineer shall describe in reasonable
details the lapses, defects or deficiencies
observed by it in O&M of the project
highway. Further, it is pertinent to mention
W.P.(C) Nos.8125/2020 & 8240/2020 Page 15
that as per Investigation Report dated
10.07.2020, one of the causes of failure is
that non availability of L-drains causes
entire surface water to flow towards the
retaining wall travelling through the
earthen portion between edge of carriage
way and top of retaining wall. Such type of
uncontrolled flow might have caused
cracks in the backfill of the retaining wall
in the long run since its completion and due
to heavy rain on 8th June, 2020, an excess
percolation of water through these cracks
might have developed an additional pore
water pressure creating more horizontal
thrust causing the failure. Hence, the reply
submitted by you is not acceptable.
iii. With reference to the cracks visible much
before the actual collapse, you have
submitted that the portion is not part of
Structural design but to prevent more
ingress water, the Concessionaire filled
this portion by plain cement surface in
limited length near VUP, hence crack on to
cement surface is not a default of O&M
inspection. In this regard, it is again
submitted that as per clause 6.3 of the
Consultancy Agreement, in separate
section of the O&M Inspection Report, the
Independent Engineer shall describe in
reasonable detail the lapses, defects or
deficiencies observed by it in O&M of the
project highway. Such kind of deficiencies
which you are pointing out now must have
been included in your inspection reports.
Hence, the same is not acceptable.
14. Further, it is to be noted that as per Enclosure-B
of description of services, Bridge Engineer shall
W.P.(C) Nos.8125/2020 & 8240/2020 Page 16
undertake structure condition survey once in a year
and submit an inspection work. However, no Bridge
Engineer is deployed on site by the Consultant in the
subject project. The same was duly notified by NHAI
vide letter no. D-72 dated 09.01.2019.
15. Needless to state that the very purpose of
entering into Consultancy Agreement and to avail
services of an Independent Engineer is to make the
road travel safe, secure and easy for the public.
Compromising on the road safety by avoiding the
important terms and conditions laid down in the
Consultancy Agreement calls for a strict and immediate
action. The very act of avoiding the terms laid down to
ensure safety of road users calls not only for
condemnation of the Consultant but also for a punitive
action against it."
32. It has been repeatedly held that Principles of Natural Justice cannot
be put in a strait-jacket. In Grosons Pharmaceuticals (supra), the
Supreme Court rejected the contention that it was incumbent upon the
respondent/authority to have supplied the material on the basis of which
the charges against the appellant/Contractor was based. It was held that
this was not a mandatory requirement of the principles of audi alteram
partem; it was sufficient requirement of law that an opportunity to show
cause was given to the Contractor before it was blacklisted.
33. In Dharampal Satyapal Limited v. Deputy Commissioner of
Central Excise, Gauhati & Ors., (2015) 8 SCC 519, the Supreme Court
reiterated that the Principles of Natural Justice are flexible principles;
they cannot be applied in any strait-jacket formula.
W.P.(C) Nos.8125/2020 & 8240/2020 Page 17
34. Tested on the above principles, it cannot be said that in the present
case there has been a violation of the Principles of Natural Justice that
must result in the quashing of the Impugned Orders. The CCTV footage
has been relied upon by SVNIT in its report. Some video footage has also
been discussed by the petitioners in their reply. In any case, the order is
based on other material and reasoning as well. As far as non-supply of
Officers report to M/s. Varad Associates is concerned, admittedly the
same was supplied to M/s. Wadia Techno-Engineering Ltd., which is an
associate of M/s. Varad Associates in the Contract. M/s. Wadia had also
filed further representation to the respondent on receipt of the report.
35. As far as the submissions on merit of the Impugned Order is
concerned, as noted hereinabove, the respondent has discussed the replies
given by the petitioners in detail while rejecting such contentions of the
petitioners.
36. The role and functions of the Independent Engineer are mentioned
in Clause 3.1 of the Agreement which is reproduced hereinunder:-
"3. Role and functions of the Independent
Engineer
3.1 The role and functions of the Independent
Engineer shall include the following:
(i) review of the Drawings and Documents as set
forth in Paragraph 4;
(ii) determine the Project Facilities Completion
Schedule;
(iii) review, inspection and monitoring of
Construction Works as set forth in Paragraph 5;
W.P.(C) Nos.8125/2020 & 8240/2020 Page 18
(iv) conducting tests on completion and construction
and issuing Completion Certificate as set forth in
Paragraph 5;
(v) review, inspection and monitoring of O&M as
set forth in Paragraph 6;
(vi) review, inspection and monitoring of Divestment
Requirements as set forth in Paragraph 7;
(vii) determining, as required under the Agreement,
the costs of any works or services and/or their
reasonableness;
(viii) determining, as required under the Agreement,
the period or any extension thereof, for
performing any duty or obligation;
(ix) assisting the Parties in resolution of disputes as
set forth in Paragraph 9; and
(x) undertaking all other duties and functions in
accordance with the Agreement."
37. Clause 6 of the Agreement provides for duties of the Independent
Engineer during the Operation and Maintenance as under:-
"6. Operation & Maintenance
6.1 The Independent Engineer shall review the
annual Maintenance Programme furnished by
the Concessionaire and send its comments
thereon to the Authority and the Concessionaire
within 15 (fifteen) days of receipt of the
Maintenance Programme.
6.2 The Independent Engineer shall review the
monthly status report furnished by the
Concessionaire and send its comments thereon
W.P.(C) Nos.8125/2020 & 8240/2020 Page 19
to the Authority and the Concessionaire within 7
(seven) days of receipt of such report.
6.3 The Independent Engineer shall inspect the
Project Highway once every month, preferably
after receipt of the monthly status report from
the Concessionaire, but before the 20th
(twentieth) day of each month in any case, and
make out an O&M Inspection Report setting
forth an overview of the status, quality and safety
of O&M including its conformity with the
Maintenance Requirements and Safety
Requirements. In a separate section of the O&M
Inspection Report, the Independent Engineer
shall describe in reasonable detail the lapses,
defects or deficiencies observed by it in O&M of
the Project Highway. The Independent Engineer
shall send a copy of its O&M Inspection Report
to the Authority and the Concessionaire within 7
(seven) days of the inspection.
6.4 The Independent Engineer may inspect the
Project Highway more than once in a month, if
any lapses, defects or deficiencies require such
inspections.
6.5 The Independent Engineer shall in its O&M
Inspection Report specify the tests, if any, that
the Concessionaire shall carry out or cause to be
carried out of the purpose of determining that
the Project Highway is in conformity with the
Maintenance Requirements. It shall monitor and
review the results of such tests and the remedial
measures, if any, taken by the Concessionaire in
this behalf.
6.6 In respect of any defect or deficiency referred to
in Paragraph 3 of Schedule-K, the Independent
Engineer shall, in conformity with Good Industry
Practice, specify the permissible limit of
W.P.(C) Nos.8125/2020 & 8240/2020 Page 20
deviation or deterioration with reference to the
Specifications and Standards and shall also
specify the time limit for repair or rectification of
any deviation or deterioration beyond the
permissible limit.
6.7 The Independent Engineer shall determine if any
delay has occurred in completion of repair or
remedial works in accordance with the
Agreement, and shall also determine the
Damages, if any payable by the Concessionaire
to the Authority for such delay.
6.8 The Independent Engineer shall examine the
request of the Concessionaire for closure of any
lane(s) of the carriageway for undertaking
maintenance/repair thereof, keeping in view the
need to minimize disruption in traffic and the
time required for completing such
maintenance/repair in accordance with Good
Industry Practice. It shall grant permission with
such modifications, as it may deem necessary,
within 3 (three) days of receiving a request from
the Concessionaire. Upon expiry of the permitted
period of closure, the Independent Engineer
shall monitor the re-opening of such lane(s), and
in case of delay, determine the Damages payable
by the Concessionaire to the Authority under
Clause 17.7
6.9 The Independent Engineer shall monitor and
review the curing of defects and deficiencies by
the Concessionaire as set forth in Clause 19.4.
6.10 In the event that the Concessionaire notifies the
Independent Engineer of any modifications that
it proposes to make to the Project Highway, the
Independent Engineer shall review the same and
send its comments to the Authority and the
W.P.(C) Nos.8125/2020 & 8240/2020 Page 21
Concessionaire within 15 (fifteen) days of
receiving the proposal.
6.11 The Independent Engineer shall undertake traffic
sampling, as and when required by the Authority,
under and in accordance with Article 22 and
Schedule-O."
38. The RFP required the petitioner to appoint a Bridge/Structural
Engineer and also defined his/her responsibilities as under:-
"BRIDGE / STRUCTURAL ENGINEER
The Bridge Engineer shall be responsible for
supervising the works of existing or proposed bridges,
interchanges and any other structure related to the
Project Highway. He shall undertake structure
condition survey once in a year and submit an
exclusive report on repair and rehabilitation
requirements of bridges/ structures. He shall also
inspect the bridge rehabilitation and repair works
which are required to be undertaken by the
Concessionaire. He shall review and suggest
modifications to the maintenance manual/ programme
relating to his duties."
39. The petitioners though claim to have appointed a Bridge/Structural
Engineer, admitted in their reply that she had never visited the site for a
physical inspection. This, in my opinion, was a serious lapse.
40. The learned counsels for the petitioners submitted that this was not
the major ground on which the impugned action has been taken by the
respondent. However, I do not find any substance in this submission.
W.P.(C) Nos.8125/2020 & 8240/2020 Page 22
This is clearly one of the grounds taken by the respondent not only in the
Show Cause Notice but also in the Impugned Order and cannot be said to
be minor.
41. The learned counsels for the petitioners have submitted that the
reports in terms of the Agreement were duly submitted to the respondent
and the respondent knew fully well that the Bridge/Structural engineer
had not visited the site, however, never objected to the same. In my
opinion, this would not absolve the petitioner of the lapse, though it may
warrant an inquiry by the respondent on what action it took on receipt of
such reports and to fix responsibility for the same on its own officers as
well.
42. As far as the submission of the petitioners that the defects being
latent in nature and therefore the petitioners could not have been
penalized, the respondents have in detail discussed the reply submitted by
the petitioners in the Impugned Order. The reasons for the rejection of the
reply of the petitioners by the respondent have been reproduced
hereinabove. Such reasons cannot be termed as arbitrary or unreasonable.
The same clearly reflect the lapses on part of the petitioners. It may be
true that the defects in the wall were latent in nature and therefore may
not have been detectable to an untrained eye without proper investigation,
however, the respondent has come to a conclusion that the petitioners,
with the responsibilities cast on them, should have been able to detect the
same and remedied the same in time so as to prevent the accident in
question from taking place. This Court cannot sit in appeal over such
findings. The role and responsibility of the petitioners as Independent
W.P.(C) Nos.8125/2020 & 8240/2020 Page 23
Engineer have been culled out hereinabove. Keeping in view the same, it
cannot be said that the decision of the respondent is so arbitrary or
irrational so as to warrant an interference by this Court.
43. In view of the above, I find no merit in the present petitions. The
same are dismissed. There shall be no order as to cost.
NAVIN CHAWLA, J.
NOVEMBER 18, 2020
'AA'
W.P.(C) Nos.8125/2020 & 8240/2020 Page 24
