Jammu & Kashmir High Court - Srinagar Bench
International Institute Of ... vs Union Territory Of Jk & Anr on 29 June, 2021
Serial No. 103
Before Notice List
IN THE HIGH COURT OF JAMMU AND KASHMIR
AT SRINAGAR
{Through Virtual Mode}
WP(C) No. 807/2021
CM No. 2432/2021
Dated: 29th of June, 2021.
International Institute of Professional Studies (IIPS)
..... Petitioner(s)
Through: -
Mr Syed Faisal Qadri, Senior Advocate with
Ms Jasiya Ali, Advocate.
V/s
Union Territory of JK & Anr.
..... Respondent(s)
Through: -
Mr Shah Aamir, AAG with
Ms Sharaf Wani, Assisting Counsel.
CORAM:
Hon'ble Mr Justice Ali Mohammad Magrey, Judge.
(JUDGMENT)
01. In this Petition, the Petitioner has prayed for the grant of
following relief(s) in his favour:
"(i) Issue a Writ of Certiorari and quash Order No. 53-
JKMSCL of 2021 dated 08.02.2021 passed by Respondent No.2
cancelling the contract allotted in favour of the Petitioner
abinitio;
(ii) Issue a Writ of Certiorari and quash Order No. 69
JKMSCL of 2021 dated 06.04.2021 in terms of which the
Petitioner's firm stands blacklisted for a period of 02 years for
participating and competing in any of the tendering process to
be initiated by the Respondents in future;
(iii)Directions are sought declaring Condition No.2 of
the Policy framed by the Respondents for black-listing/
WP(C) No. 807/2021; CM No. 2432/2021
debarring of product or Company that stands invoked in
respect of the case of the Petitioner declaring it as illegal,
arbitrary and unconstitutional with a consequential direction
in the form of Writ of Mandamus commanding the Respondents
to allow the Petitioner to participate in future tendering
process initiated by the Respondent Corporation; and
(iv) Any other Writ, order or direction which this
Hon'ble court may deem fit and proper also be issued in favour
of the Petitioner and against the Respondents."
02. The background facts leading to the filing of the Petition on
hand, as stated by the Petitioner in his Petition, are that the Petitioner claims
to be a proprietorship concern, being run under the name and style of
'International Institute of Professional Studies' with its office located at
Khanyar, Srinagar. It is stated that the activities in which the Petitioner
concern is involved relate to providing manpower facilities of trained
professionals in the discipline of computer related software activities and the
said trained manpower is supplied to both the Government agencies as well
as Semi-Government agencies operating Within the Union Territory of
Jammu and Kashmir. In terms of tender Notice No. of 2020 issued by
Respondent No.2, quotations are stated to have been invited by the
Respondent Corporation from different manpower supplying agencies for
supply of different categories of manpower, including Assistant
Programmer/Data Entry Operators/ other supporting staff for working in
Jammu and Kashmir Medical Supplies Corporation Ltd. The Petitioner,
being eligible in all respects, claims to have responded to the aforesaid
tender notice by submitting all the relevant documents. The Respondent
Corporation accepted the bid of the Petitioner and same was found to have
qualified in the technical evaluation process amongst other eligible bidders.
WP(C) No. 807/2021; CM No. 2432/2021
Accordingly, the case of the Petitioner, along with other bidders, was
recommended for purpose of financial evaluation by the Financial
Evaluation Committee. The Financial Evaluation Committee, in its meeting
held on 27th of November, 2020, opened the financial bids of the bidders
who were recommended by the Technical Evaluation Committee, wherein,
as stated, the Petitioner was found to be the lowest bidder amongst the
bidders who had qualified in the technical evaluation process upon opening
up of the financial bids. Thereafter, in terms of order dated 28th of
November, 2020, passed by the Purchase Committee of the Respondent
Corporation, the rates offered by the Petitioner were approved and, vide
order dated 6th of January, 2021, the letter of intent was issued by the
Respondent Corporation in favour of the Petitioner, whereby the Petitioner
was asked to submit an undertaking in the shape of an Affidavit assuring
therein the successful performance of the contract before the issuance of the
formal contract in favour of the Petitioner. It is submitted that the said
condition on part of the Respondent Corporation was in excess of the terms
and conditions provided in the original tender notice, as such, the Petitioner
approached the Respondents with a representation seeking clarification on
the excess condition(s) imposed by the Respondents in the letter of intent. It
is contended that instead of clarifying the entire issue that had crept in the
contents of the letter of intent issued by the Respondent No.2, the
Respondents issued the impugned communication dated 8th of February,
2021 followed by impugned order dated 6th of April, 2021, in terms whereof
not only the contract that was successfully allotted in favour or the Petitioner
stands cancelled, but the Petitioner firm has also been blacklisted for a
WP(C) No. 807/2021; CM No. 2432/2021
period of two years. It is this communication dated 8th of February, 2021 and
order dated 6th of April, 2021 that have been assailed by the Petitioner
through the medium of the instant Petition.
03. Mr Syed Faisal Qadri, the learned Senior Counsel appearing for
the Petitioner, submitted that the impugned communication of blacklisting
the Petitioner has been issued by Respondent Corporation in gross violation
of the principles of natural justice inasmuch as no opportunity of hearing
was accorded to the Petitioner before issuance of the impugned
communication/ order of cancellation of the contract/ blacklisting the
Petitioner. It is pleaded that since the impugned communication/ order has
visited the Petitioner with penal consequences qua cancellation of contract
as well as blacklisting the Petitioner, thus it was incumbent upon the
Respondent Corporation to provide adequate opportunity to the Petitioner to
put forth his stand before issuing the impugned communication/ order. It is
further submitted that the impugned action of the Respondent Corporation is
without jurisdiction and authority. It is averred that upon assessment of the
Petitioner's bid as L1, the Respondent No.2 issued a letter of intent in favour
of the Petitioner, whereby he was asked to submit an undertaking duly
attested by the Judicial Magistrate to the effect of the completion of the
contractual liability on part of the Petitioner. The Petitioner, as stated, in
compliance to the said direction submitted the requisite undertaking with
respect to completion of the contract allotted in his favour, however, the
Respondent Corporation did not accept the undertaking so furnished by the
Petitioner and, as a consequence thereof, cancelled the contract. The learned
WP(C) No. 807/2021; CM No. 2432/2021
Senior Counsel vehemently argues that the offer made by the Petitioner was
not accepted by the Respondents leading to the non-completion/execution of
the contract in between the Petitioner and the Respondent Corporation,
hence, the action of the Respondents is without jurisdiction and authority.
04. Objections stand filed on behalf of the Respondents, resisting
and controverting the averments made by the Petitioner in his Petition. It is
submitted that since the Petitioner firm failed to submit the undertaking in
the shape of Affidavit for successful performance of the contract, therefore,
the Respondent Corporation cancelled the contract ab initio. It is further
submitted that, thereafter, a meeting of the Purchase Committee of the
Respondent Corporation was held on 27 th of January, 2021 wherein,
amongst other decisions, the General Manager (Adm) was permitted to issue
letter of intent to enter into an agreement and issue rate contract in favour of
L2 bidder on matched rates of L1. The said Purchase Committee, as stated,
also approved debarring/ blacklisting of L1 bidder-Petitioner firm for
participating in future tenders issued by the Respondent Corporation for a
period of two years.
05. Heard learned counsel for the parties, perused the pleadings on
record and considered the matter.
06. At the very outset, what requires to be stated is that the decision
to allot the works or enter into contract with citizens has to be rational, non-
WP(C) No. 807/2021; CM No. 2432/2021
arbitrary and reasonable. The decision-making process of the Government or
Government agencies in contractual matters has to be reasonable and
conforming to the requirements of fundamental rights of the Petitioner
guaranteed under Articles 14 and 19 of the Constitution of India. In the case
on hand, the Respondents have cancelled the contract in favour of the
Petitioner and blacklisted the Petitioner firm on the ground that the
Petitioner did not submit the undertaking in the manner required. The
pleadings on record bring it to fore that prior to the issuance of the impugned
communication dated 8th of February, 2021 and Order dated 6th of April,
2021, the Respondent Corporation did not provide any opportunity of being
heard to the Petitioner. This course of action adopted by the Respondent
Corporation has visited the Petitioner with major punishment, and for such
major punishment, as per procedure, fair and due opportunity of hearing had
to be offered to the Petitioner by associating him in the entire process.
07. Law is no more res integra to the effect that there must be
judicial restraint in interfering with the administrative action, particularly in
the matters of tender or contract and that, ordinarily, the soundness of the
decision taken by the tender issuing authority ought not to be questioned, but
the decision-making process can certainly be subject to judicial review. The
soundness of the decision may be questioned, firstly, if the decision made is
so arbitrary and irrational that the Court can say that the decision is such that
no responsible authority acting reasonably and in accordance with relevant
law could have reached or, second, if the process adopted or decision made
by the authority is malafide or intended to favour someone or, third, if the
WP(C) No. 807/2021; CM No. 2432/2021
public interest is affected. In the instant case, when the Petitioner was not
given any opportunity, muchless a fair and adequate one, to show cause
against the proposed punishment to be imposed against him, in such
eventuality, the decision of the Respondent Corporation to cancel the
contract/ blacklist the Petitioner amounts to such action where they have
acted in a manner in which no responsible authority acting reasonably and in
accordance with the relevant law would have acted.
08. The contention of the learned counsel for the Respondents that
in contract matters, a Writ Petition is not maintainable, in the facts and
circumstances of the present case, is not only misconceived, but also
misdirected as well. This is so because it is settled legal position that if an
authority acts in an arbitrary matter even in a matter of contract, an
aggrieved party can approach the Court by way of Writ under Article 226 of
the Constitution and that the Court, depending on the facts of the said case,
is empowered to grant the relief. Although, ordinarily, a superior Court, in
exercise of its Writ jurisdiction, would not entertain a Petition involving
contractual obligations between the parties, it is trite that when an action of
an authority is arbitrary or discriminatory and, thus, violative of Article 14
of the Constitution of India, a Writ Petition would be maintainable. There
cannot be any doubt whatsoever that a 'Writ of Mandamus' can be issued
only when there exists a legal right in the Writ Petition and a corresponding
legal duty on the part of the authority, but then if any action on the part of
the authority is wholly unfair or arbitrary, the superior Courts are not
powerless. This view is fortified by the law laid down by Hon'ble the
WP(C) No. 807/2021; CM No. 2432/2021
Supreme Court in case titled 'Karnataka State Forest Industries
Corporation v. Indian Rocks', reported as 'AIR 2009 SC 684'.
09. Again, the Apex Court of the country, while dealing with a
similar issue, in case titled 'Zonal Manager, Central Bank of India v. Devi
Ispat Ltd. & Ors.', reported as '(2010) 11 Supreme Court Cases 186' has, at
Paragraph No.25, provided as under:
".....
It is clear from the above observations of this Court in the
said case, though a writ was not issued on the facts on that case, this
Court has held that on a given set of facts if a State acts in an
arbitrary manner even in a matter of contract, an aggrieved party
can approach the Court by way of writ under Article 226 of the
Constitution and the court depending on facts of the said case is
empowered to grant the relief. This judgment in K.N. Guruswamy v.
State of Mysore (AIR 1954 SC 592) was followed subsequently by
this Court in DFO v. Ram Sanehi Singh [(1971) 3 SCC 864] wherein
this Court held:
"4. By that order he has deprived the respondent of
a valuable right. We are unable to hold that merely
because the course of the right which the respondent claims
was initially in a contract, for obtaining relief against any
arbitrary and unlawful action on the part of a public
authority he must resort to a suit and not to a petition by
way of writ. In view of the judgment of this Court in K.N.
Gueruswamy case there can be no doubt that the petition
was maintainable, even if the right to relief arose out of an
alleged breach of contract, where the action challenged
was of a public authority invested with statutory power."
WP(C) No. 807/2021; CM No. 2432/2021
10. For the foregoing reasons, coupled with the enunciation of law
discussed hereinabove, the impugned communication dated 8th of February,
2021 as well as impugned Order dated 6th of April, 2021; whereby the
contract in favour of the Petitioner has been cancelled and Petitioner has
been blacklisted by the Respondent Corporation, cannot withstand the test of
judicial scrutiny. That being so, this Writ Petition is allowed and the
impugned communication dated 8th of February, 2021 as well as impugned
Order dated 6th of April, 2021 are hereby quashed.
11. Writ Petition disposed of on the above terms. Pending
applications, if any, shall also stand disposed of, accordingly.
(Ali Mohammad Magrey)
Judge
SRINAGAR
June 29th, 2021
"TAHIR"
i. Whether the Judgment is reportable? Yes/ No.
ii. Whether the Judgment is speaking? Yes/ No.
TAHIR MANZOOR BHAT
2021.06.30 11:32
I attest to the accuracy and
integrity of this document
