Abdul Qayoom Dar vs Chief Engineer (Nz-V)
2021 Latest Caselaw 579 j&K/2

         IN THE HIGH COURT OF JAMMU AND KASHMIR
                       AT SRINAGAR


                             WP(C) No. 437/2020
                              CM No. 879/2020

                                                          Reserved on: 11th of May, 2021.
                                                        Pronounced on: 21st of May, 2021.


Abdul Qayoom Dar
                                                                 ..... Petitioner(s)

                               Through: -
                     Mr Manzoor Ahmad Dar, Advocate.

                                       V/s

Chief Engineer (NZ-V), CPWD, Satwari, Jammu & Ors.
                                                               ..... Respondent(s)

Through: -

Mr Tahir Majid Shamsi, ASGI.

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:

"(a) Quashing of the communication dated 21.1.2019 issued vide No. 23(o4)-5/2018/19 /1752 issued by respondent No.1 (Anncxure-1) in terms whereof the petitioner has been debarred from tendering or taking part in CPWD, MOEF PWD Govt of Delhi etc. for a period of three years with effect from date of the communication/order;

(b) Declaring the communication aforesaid as being illegal, inoperative, null and void on account of being in violation of the settled legal principles; and

(c) Any other writ, order or direction which this court may deem fit in the facts and circumstances attendant to the case be passed in favour of the petitioner so as to meet the ends of justice."

WP(C) No. 437/2020; CM No. 879/2020

02. Sans details, 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 an "A" Class Contractor registered under the

Contractors Registration Act, besides being second generation Civil

Contractor associated with the execution of various construction projects

involving the Respondent-Central Public Works Department (for short

'CPWD') for the last four decades. It is stated that the average turnover of

the Petitioner insofar as it pertains to the execution of works of the CPWD

ranges from Rs.10 to 15 Crores per annum. It is pleaded that certain disputes

arose between the Petitioner and the Respondent Department in relation to

various contract matters which were referred to Arbitrators, either appointed

by the Respondent Department itself or upon seeking intervention of the

Court in terms of Section 11 of the Arbitration and Conciliation Act. The

Petitioner has further proceeded to state that on account of pendency of

multiple arbitration matters between the parties, the Respondent Department,

in order to inflict punishment upon the Petitioner, tried to find out ways and

means to stop the Petitioner from participating in the tendering process

initiated by the Respondent Department for execution of various contracts,

one such instance being issuance of notice dated 23rd of October, 2018

bearing No 23(04)/2018/BSF/1251, asking the Petitioner to show case as to

why he should not be debarred from taking up any work in CPWD, MOEF,

PWD (Government of Delhi), etc., all over India. This show cause notice is

stated to have been issued in reference to: i) construction of Airbase,

including provision for Cabin/Helicopter Hanger at BSF Campus,

Humhama, Srinagar, Kashmir alleging that the flooring work of Helicopter

WP(C) No. 437/2020; CM No. 879/2020

Hanger was found sub-standard on account of poor workmanship; ii)

construction of Trainers Training Hostel/ Farmers Hostel Block at CITH,

Rangreth, Kashmir with the allegation that the subject building was not

taken over by the concerned Department on account of non-rectification of

the defects; and iii) submission of false documents at the time of tendering

qua mismatch in date of renewal shown by two Executive Engineers of the

State department. This show cause notice, as stated, was replied by the

Petitioner vide communication dated 9th of November, 2018, whereby all the

points/ issues raised by the Respondent Department were clarified/ answered

by the Petitioner in detail. Notwithstanding the reply submitted by the

Petitioner to the show cause notice dated 23rd of October, 2018 and without

taking into consideration the contents thereof, the Respondent No.1 has

proceeded to issue the impugned communication dated 21st of January,

2019, thereby debarring the Petitioner from tendering or taking up work in

CPWD, MOEF, PWD (Government of Delhi), etcetera, all over India for a

period of three years with effect from the date of issuance of communication

impugned. It is this communication that has been assailed by the Petitioner

through the medium of the instant Petition.

03. Mr Manzoor Ahmad Dar, the learned counsel appearing for the

Petitioner, submitted that the impugned communication of debarring the

Petitioner has been issued by Respondent No.1 in gross violation of the

principles of natural justice inasmuch as no fair opportunity of hearing was

accorded to the Petitioner before issuance of the impugned communication

of debarring the Petitioner. It is pleaded that since the impugned

WP(C) No. 437/2020; CM No. 879/2020

communication has visited the Petitioner with penal consequences qua

debarring the Petitioner from taking up works in CPWD, MOEF, PWD, etc.,

all over India, thus it was incumbent upon the Respondent Department to

take into consideration the reply submitted by the Petitioner in response to

the show case notice, however, the response of the Petitioner has not been

considered while issuing the impugned communication. It is further

submitted that the impugned communication has an effect of debarring the

Petitioner from executing any civil contract and that, if same is allowed to

remain in operation, the Petitioner would have no chance or opportunity to

execute the contracts for three years period from the date of issuance of

impugned communication which would have an effect of affecting his

eligibility to participate in the tendering process in future, thereby violating

the fundamental right of the Petitioner as guaranteed under Article 19 of the

Constitution.

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 the impugned communication of debarment in relation to the

Petitioner was only issued after the Petitioner violated the terms and

conditions prescribed in the agreement(s) with respect to the works

mentioned in the impugned communication. The Petitioner, as stated, did not

execute the works in question in tune with the terms and conditions

prescribed in the agreement(s), resulting in huge loss to Government

exchequer as well as damage to the reputation of the Department. It is

averred that the decision of debarring the Petitioner from further

WP(C) No. 437/2020; CM No. 879/2020

participation in the tendering process was taken after due consideration of

the response/ reply submitted by the Petitioner, ground realities and in terms

of the provisions of the CPWD manual by the competent authority.

05. Heard learned counsel for the parties, perused the pleadings on

record and considered the matter.

06. When this matter was taken up on motion hearing, i.e., on 24th

of February, 2020, this Court, after hearing the learned counsel for the

Petitioner, directed that the Petitioner shall not be debarred from

participating in the tendering process with a further stipulation that in case

the Petitioner submitted any bid in response to any tender notice, the same

shall not be finalized if he is found as the successful bidder till the next date

of hearing before the Bench.

07. 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-

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 debarred the Petitioner from further

participation in the tendering process on the ground that the Petitioner has

not followed the terms and conditions stipulated in the tender agreements

WP(C) No. 437/2020; CM No. 879/2020

and did not execute the works concerned in the manner required. The

pleadings on record bring it to the fore that prior to the issuance of the

impugned communication dated 21st of January, 2019 debarring the

Petitioner from further participation in tendering process, the Respondent

Department issued show cause notice to the Petitioner on 23rd of October,

2018. In this show cause notice, certain discrepancies in the allotted works

executed by the Petitioner were pointed out which had formed the basis for

the proposed action against the Petitioner. This show cause notice was duly

replied by the Petitioner with the support of documents vide communication

dated 9th of November, 2018. The reply so submitted by the Petitioner

appears to be quite elaborate and all the points raised by the Respondent

Department in the show cause notice stand replied with documentary

evidence. The Respondent Department ought to have given a thoughtful

consideration to the contentions/ assertions made by the Petitioner in the

reply to the show cause notice, however, this has not been done as is quite

clearly evident from a plain reading of the impugned communication of

debarring. This course of action adopted by the Respondent Department has

visited the Petitioner with major punishment as the Petitioner has been

debarred from further participation in tendering process, 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.

08. 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

WP(C) No. 437/2020; CM No. 879/2020

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

public interest is affected. In the instant case, when the Petitioner has duly

replied to all the points raised by the Respondents in the reply so submitted

by him in relation to the show cause notice and has furnished all the

requisite documents in support of his claim, in such eventuality, the decision

of the Respondent Department to debar the Petitioner from further

participation in the tendering process 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.

09. The contention of 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

WP(C) No. 437/2020; CM No. 879/2020

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 Supreme Court in case titled

'Karnataka State Forest Industries Corporation v. Indian Rocks', reported

as 'AIR 2009 SC 684'.

10. 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

WP(C) No. 437/2020; CM No. 879/2020

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."

11. For the foregoing reasons, coupled with the enunciation of law

discussed hereinabove, the impugned communication; whereby the

Petitioner has been debarred from further participation in the tendering

process by the Respondent Department, cannot withstand the test of judicial

scrutiny. That being so, this Writ Petition is allowed and the impugned

communication bearing No. 23(04)-5/2018/19/1752 dated 21st of January,

2019 issued by Respondent No.1 is hereby quashed.

12. Writ Petition disposed of on the above terms. Pending

applications, if any, shall also stand disposed of, accordingly.

(Ali Mohammad Magrey) Judge SRINAGAR May 21st, 2021 "TAHIR"

                               i.     Whether the Judgment is reportable?                      Yes/ No.
                               ii.    Whether the Judgment is speaking?                        Yes/ No.




TAHIR MANZOOR BHAT
2021.05.21 15:54
I attest to the accuracy and
integrity of this document