Delhi High Court
Pmi Electro Mobility Solutions Pvt.Ltd vs Convergence Energy Services Limited & ... on 24 July, 2024
Author: Sudhir Kumar Jain
Bench: Sudhir Kumar Jain
$~3
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: July 24, 2024
+ W.P.(C) 9061/2024, CM APPL. 37032-37033/2024
PMI ELECTRO MOBILITY
SOLUTIONS PVT.LTD .....Petitioner
Through: Mr. Sunil Dalal, Sr. Advocate
with Ms. Ahsish Dholakia, Sr.
Advocate with Mr. Aditya
Singh, Mr. Sumant Narang,
Mr. Nikhil Beniwal, Mr. N.
Bhati, Ms. Ananya Narain
Tyagi, Advocates
versus
CONVERGENCE ENERGY
SERVICES LIMITED & ANR. .....Respondents
Through: Mr. Samdarshi Sanjay and Mr.
Ashish Kr. Sharma, Advocates
for R-1 with Mr. Abhishek
Srivastava, Authorised
Signatory
Mr. Rakesh Kumar, CGSC
with Mr. Yash Tyagi, Mr.
Sunil, Advocates with Mr.
Amrendra Kishore Singh,
Deputy Secretary, MHI for
UOI
CORAM:
HON'BLE DR. JUSTICE SUDHIR KUMAR JAIN
J U D G M E N T (oral)
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 1
1. The present petition is filed under Article 226 of the
Constitution for issuance of the direction to set aside the
communication bearing Ref No. Co-Contracts/CESL/PM E-BUS
SEWA-NOTICE/03/1187 dated 22.03.2024 and impugned
communication Letter no. PMI/PM EBUS SEWA/2024-25/03 dated
05.07.2024.
2. The respondent no.1 is stated to be a green energy focused
venture of EESL Group owned by central public sector undertakings
under the Ministry of Power, New and Renewable Energy. The
respondent no.1 on 17.11.2023 had floated a tender for bus operator
for Procurement, Supply, Operation and Maintenance of 3,600
Electric Buses and development of allied electric and civil
infrastructure on Gross Cost Contracting (GCC) under PM-eBus
Sewa in Tier 2 and Tier 3 cities in India based on aggregation of
demand. The said tender is stated to be amended from time to time
and lastly it was amended on 06.02.2024.
3. The counsel for the petitioner submitted that the bids for the lot
no.7 and 8 is for the State of Jammu & Kashmir and lot no.4 is for
the Union Territory of Chandigarh has lead member consortium on
06.02.2024. The petitioner also participated in other consortium. The
respondent no.1 on 09.02.2024 had sought clarification and removal
of deficiency in the bid documents.
4. The respondent no.1 vide letter dated 22.03.2024 addressed to
the petitioner intimated that earlier the petitioner had informed that
no investigation is pending against the petitioner but in fact an
investigation undertaken by the respondent no.2 was pending against
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 2
the petitioner and due to this non-disclosure was considered to be the
violation of PMP Guidelines and the petitioner was directed to
respond to the issue within 07 days. Thereafter, the petitioner replied
to the letter dated 22.03.2024 vide reply dated 02.04.2024 wherein
refuted the allegation as contained in the notice dated 22.03.2024.
5. The respondent no.1 vide communication dated 05.07.2024
addressed to the Chief Executive Officer of the petitioner has
proceeded with the cancellation of the bids and invocation of the
EMD's submitted by the petitioner/consortium partners for lots in
respect of Chandigarh and Jammu & Kashmir. The petitioner being
aggrieved filed the present petition.
6. Mr. Sunil Dalal, learned Senior Counsel for the petitioner
stated that the communication dated 05.07.2024 was passed without
giving appropriate opportunity to the petitioner to present its case and
is without any reason and is also in violation of the Principle of
Natural Justice besides other grounds.
7. Mr. Samdarshi Sanjay, Advocate for the respondent no.1 stated
that the respondent no.1 is ready to withdraw the communication
dated 05.07.2024 and the respondent no.1 shall pass appropriate
reasoned order after giving proper opportunity of being heard and
also after considering the reply dated 02.04.2024.
8. The principles of natural justice involve a procedural
requirement of fairness and have become an essential part of any
system of administrative justice. Natural Justice is considered to be
part of rule of law. The Supreme Court in Sangram Singh V
Election Tribunal Kotah, AIR 1955 SC 425 observed that one
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 3
should not be condemned unheard and decision should not be
reached behind the back. The Supreme Court in Maneka Gandhi V
Union of India, AIR 1978 SC 597 emphasized that natural justice is
an essential element of procedure established by law and state action
must be right, just and fair and not arbitrary, fanciful and oppressive.
It was held that Article 14 of the Constitution strikes at arbitrariness
of state action and ensures fairness and equality of treatment. It was
also observed in Union of India V Tulsi Ram Patel, AIR 1985 SC
1416 that Article 14 is not creator of principles of natural justice but
it is constitutional guardian of Article 14. The Supreme Court in
Mohinder Singh V Chief Election Commissioner, AIR 1978 SC
851 observed that the principles of natural justice are bones of
healthy government.
8.1 The Supreme Court in Indian Oil Corporation Limited and
others V Shashi Prabha Shukla and Another, (2018) 12 SCC 85
observed as under:-
33. (a) public authority in its dealings has to be fair,
objective, non arbitrary, transparent and non
discriminatory. The discretion vested in such an authority,
which is a concomitant of its power is coupled with duty
and can never be unregulated or unbridled. Any decision or
action contrary to these functional precepts would be at the
pain of invalidation thereof. The State and its
instrumentalities, be it a public authority, either as an
individual or a collective has to essentially abide by this
inalienable and non negotiable prescriptions and cannot act
in breach of the trust reposed by the polity and on
extraneous considerations. In exercise of uncontrolled
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 4
discretion and power, it cannot resort to any act to fritter,
squander and emasculate any public property, be it by way
of State largesse or contracts, etc. Such outrages would
clearly be unconstitutional and extinctive of the rule of law
which forms the bedrock of the constitutional order.
8.2 The Supreme Court in Southern Power Distribution
Company Limited of Andhra Pradesh (APSPDCL) & Another V
M/s Hinduja National Power Corporation Limited & Another,
2022 Livelaw (SC) 117 and also cited by the counsel for the
petitioners observed as under:-
Every action of a State is required to be guided by the
touchstone of non arbitrariness, reasonableness and
rationality. Every action of a State is equally required to be
guided by public interest. Every holder of a public office ·is
a trustee, whose highest duty is to the people of the country.
The Public Authority is therefore required to exercise the
powers only for the public good.
8.3 The principles of natural justice are equally applied in purely
administrative functions. The Supreme Court in A.K. Kraipak V
Union of India, AIR 1970 SC 150 observed that the principles of
natural justice are applicable to administrative inquiries and
established that observance of principles of natural justice in decision
making process of the administrative body having civil
consequences. The Supreme Court again in Neelam Mishra V
Harinder Kumar Paintal, AIR 1990 SC 1137 observed that
administrative order involving civil consequences must be passed in
accordance with notions of fairness.
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 5
8.4 The purpose of the principles of natural justice is to prevent
miscarriage of justice. The expression audi alteram partam implies
that a person must be given an opportunity to defend himself and
ensures that no one should be condemned unheard. Audi alteram
partam makes it obligatory for an authority that a party should not
suffer in person or in purse without an opportunity of being heard and
implies that before an order is passed against any person real,
reasonable and effective opportunity of being heard must be given to
him. The rule of fair hearing is consisting of two components which
are notice and hearing. It is basic principle of natural justice that the
authority should give to the affected party a notice of the case against
him so that he may defend himself adequately. Notice is starting
point of any hearing and sine qua non of fair hearing. The
administrative authority is also required to afford reasonable
opportunity to the party to present his case. A real, rationale and
effective hearing includes disclosure of all relevant material or
information which the authority wishes to use against the individual
in arriving of its decision. The administrative authority cannot take a
decision on the basis of any material unless the person against whom
it is sought to be utilised is given an opportunity to rebut or explain
the same.
9. It is suitably established in India that an adjudicatory authority
is Engineer and Manufacturing Co. V Union of India, AIR
1976 SC 1785 reiterated the principle with an emphasis that the rule
requiring reasons to be given in support of an order is a basic
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 6
principle of natural justice, which must inform the quasi-judicial
process. It should be observed in its proper spirit and "mere pretence
of compliance with it would not satisfy the requirement of law". It
was observed in Maneka Gandhi V Union of India, AIR 1990 SC
1984 that giving of reasons is a healthy check against abuse or
misuse of power. The requirement of duty to give reasons was further
crystallized in S.N. Mukherjee V Union of India, AIR 1990 SC
1984 and reasons due to which a reasoned decision must be passed
were discussed. It was observed that reasoned decision: (i) guarantee
consideration by the authority; (ii) introduce clarity in decisions; and
(iii) minimize chances of arbitrariness in decision-making thereby
ensuring fairness in the process. It was observed as under:
In our opinion, therefore, the requirement that reason must
be recorded must be recorded should govern the decisions
of govern the an administrative authority exercising quasi
judicial functions irrespective of fact whether the decision
is subject to appeal, revision or judicial review. It may,
however, be added that it is not required that the reasons
should be as elaborate as in the decision of a court of law.
The extent and nature of the reasons would depend on
particular facts and circumstances. What is necessary is
that the reasons are clean and explicit so as to indicate that
the authority has given due consideration to the points in
controversy.
9.1 The Supreme Court in Rani Lakshmi Bai Kshetriya Gramin
Bank V Jagdish Sharan Varshney & others, (2009) 4SCC496 held
that the purpose of disclosure of reasons is that people should have
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 7
confidence in judicial and quasi-judicial authorities and minimize
chances of arbitrariness. It was held as under:-
The purpose of disclosure of reasons, as held by a
Constitution Bench of this Court in the case of S.N.
Mukherjee vs. Union of India reported in (1990) 4 SCC
594, is that people must have confidence in the judicial or
quasi-judicial authorities. Unless reasons are disclosed, how
can a person know whether the authority has applied its
mind or not? Also, giving of reasons minimizes chances of
arbitrariness. Hence, it is an essential requirement of the
rule of law that some reasons, at least in brief, must be
disclosed in a judicial or quasi-judicial order, even if it is an
order of affirmation.
9.2 The Supreme Court in the case of Namit Sharma V Union of
India, (2013) (1) SCC 745 regarding duty to give reasons held as
under:-
It is not only appropriate but is a solemn duty of every
adjudicatory body, including the tribunals, to state the
reasons in support of its decisions. Reasoning is the soul of
a judgment and embodies one of the three pillars on which
the very foundation of natural justice jurisprudence rests.
It is informative to the claimant of the basis for rejection of
his claim, as well as provides the grounds for challenging
the order before the higher authority/constitutional court.
The reasons, therefore, enable the authorities, before whom
an order is challenged, to test the veracity and correctness
of the impugned order. In the present times, since the fine
line of distinction between the functioning of the
administrative and quasi- judicial bodies is gradually
becoming faint, even the administrative bodies are required
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 8
to pass reasoned orders. In this regard, reference can be
made to the judgments of this Court in the cases of Siemens
Engineering & Manufacturing Co. of India Ltd. v. Union of
India &Anr. [(1976) 2 SCC 981]; and Assistant
Commissioner, Commercial Tax Department Works
Contract and Leasing, Kota v. Shukla & Brothers [(2010) 4
SCC 785].
9.3 Any authority when conferred with a discretionary power must
exercise that power after applying its mind to the facts and
circumstances of the case. The authority should not act mechanically
in exercise of discretion. The Supreme Court in East Coast Railway
V Mahadev Appa Rao, (2010) 7 SCC 2794 observed that every
order passed by a public authority must disclose due and proper
application of mind by the person making the order.
10. The impugned communication dated 05.07.2024 is appearing
to be issued without assigning any reason and is in violation of the
Principles of Natural Justice. The counsel for the respondent no.1
also stated that the respondent no. 1 is ready to withdraw the
communication dated 05.07.2024 and the respondent no.1 shall pass
appropriate reasoned order after giving proper opportunity of being
heard and also after considering the reply dated 02.04.2024.
11. Accordingly, the impugned communication dated 05.07.2024
is set aside and the respondent no.1 is directed to pass a reasoned
order in pursuance of the show cause notice dated 22.03.2024 after
giving fresh opportunity of being heard to the petitioner which may
also include the personal hearing and thereafter to pass a reasoned
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 9
order.
12. The petitioner shall be at liberty to file the fresh representation
which shall be accordingly considered by the respondent no.1. The
petitioner is directed to do the needful within 02 weeks from today.
Thereafter, the respondent no.1 is directed to pass the reasoned order
in pursuance of the show cause notice dated 22.03.2024 preferably
within a period of 04 weeks with an intimation to the petitioner.
13. The present petition along with pending applications stand
disposed of.
14. The petitioner shall be at liberty to initiate appropriate legal
proceedings in case of altered circumstances within 15 working days
in case of any adverse order passed by the respondent no.1 subject to
the condition that the petitioner shall keep the bank guarantee alive
during this period which shall not be encashed by the respondent no.1
during this period.
DR. SUDHIR KUMAR JAIN
(JUDGE)
JULY 24, 2024
j/abk/ak
Signing Date:31.07.2024 W.P.(C) 9061/2024 Page 10
