Madhya Pradesh High Court
Cds Infra Projects Ltd.(Formerly ... vs Union Of India on 15 June, 2022
Author: Chief Justice
1
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE RAVI MALIMATH,
CHIEF JUSTICE
&
HON'BLE SHRI JUSTICE VISHAL MISHRA
ON THE 15th OF JUNE, 2022
WRIT PETITION No. 11494 of 2022
Between:-
CDS INFRA PROJECTS LTD.(FORMERLY
KNOWN AS CENTRODORSTORY INDIA
PRIVATE LIMITED) THROUGH ITS
AUTHORISED SIGNATORY NAVIN PRAKASH S/O
SHRI KC PRASAD AGED ABAOUT 42 YEARS
OCCUPATION DGM HAVING OFFICE AT B-94
OKHLA PHASE II NEW DELHI -20 (DELHI)
.....PETITIONER
(BY SHRI ADITYA ADHIKARI - SENIOR ADVOCATE WITH SHRI
GAGAN ANAND, SHRI SATYENDRA KUMAR AND SHRI ABHIJEET
AWASTHI - ADVOCATES)
AND
1. UNION OF INDIA THROUGH ITS SECRETARY
MINISTRY OF ROAD TRANSPORT AND
HIGHWAYS (S AND R ZONE) 1 PARLIAMENT
STREET TRANSPORT BHAWAN NEW DELHI
(DELHI)
2. MADHYA PRADESH ROAD DEVELOPMENT
CORPORATION THROUGH MANAGING
D I R ECTOR 45-A, ARERA HILLS, BHOPAL,
(MADHYA PRADESH)
3. SUPERINTENDENT ENGINEER OFFICE OF
CHIEF ENGINEER, REGIONAL OFFICE,
MINISTRY OF ROAD TRANSPORT AND
HIGHWAYS 2ND FLOOR, NIRMAN BHAWAN,
ARERA HILLS, BHOPAL, (MADHYA PRADESH)
Signature Not Verified
SAN
.....RESPONDENTS
(MS. GUNJAN SINHA JAIN - ADVOCATE FOR THE RESPONDENT
Digitally signed by PRARTHANA
SURYAVANSHI NOS. 1 AND 3 AND SHRI ANVESH SHRIVASTAVA - ADVOCATE
FOR THE RESPONDENT NO.2)
Date: 2022.06.17 18:52:23 IST
2
This petition coming on for orders this day, Hon'ble Shri Justice Ravi
Malimath, Chief Justice passed the following:
ORDER
The case of the petitioner is that the petitioner is one of the leading
construction companies having expertise in construction of rigid and flexible
pavements of roads, highways and airfields etc. That the respondents invited
bids for the project "Rehabilitation and upgradation of Goharganj to Bhopal
section of NH-12 from existing Kilometer 255/300 to kilometers 301/200
including construction of Obedullaganj Bypass etc". The petitioner and others
bid for the same. The petitioner was the lowest tenderer and was awarded the
contract. That the contract is still under progress. The respondent No.3 with the
approval of respondent No.1 issued the impugned order dated 02.05.2022
declaring that the petitioner is not eligible to participate in any tender or RFP
issued by any Authority/MoRTH/NHIDCL/State Government for NH works for
a period of two years. Questioning the same, the instant petition is filed.
Shri Aditya Adhikari - learned senior counsel appearing for the
petitioner's counsel contends that the impugned order is erroneous and liable to
be set aside. That even though various show-cause notices were issued earlier
with regard to the merits of the contract, its completion and non-completion,
etc. in none of the show-cause notices was there any indication that the failure
to comply with the terms of the show-cause notice would lead to a penalty of
being declared as ineligible to participate in any tender. Therefore, it is
contended that until and unless it is narrated that the failure to answer the show-
cause notice satisfactorily would lead to the petitioner being debarred, such an
Signature Not Verified
order could not have been passed. In support of his contention, he relies on the
SAN
Digitally signed by PRARTHANA
SURYAVANSHI
Date: 2022.06.17 18:52:23 IST judgment of the Hon'ble Supreme Court in the case of Vet India
Pharmaceuticals versus State of Uttar Pradesh and another, reported in (2021) 1
SCC 804 with reference to paragraph-11 as well as in the case of UMC
Technologies Private Limited vs. Food Corporation of India and another,
reported in (2021) 2 SCC 551. Various other contentions are raised with regard
to the merits of the impugned notices. We do not propose to go through all the
contentions advanced since the petition could be considered on this ground
alone.
Smt. Gunjan Sinha, learned counsel appearing for respondents No.1 and
3 defends the impugned action. She contends that there are various irregularities
committed by the petitioner and as a result of which earlier notices and
communications were already issued to the petitioner. They have failed to
comply with the same, therefore, as a necessary consequence to its failure, this
order has been passed. That the respondent is entitled to pass such an order in
terms of the conditions of the contract which enables him to do so. That even
the terms of the contract entered into between the parties would indicate that the
terms of the RFP and other documents should also be made part and parcel of
the agreement which inter-alia indicates that the respondents are entitled in law
to debar the petitioner from tendering any of the project. Hence, she pleads that
there is no error committed by the authorities in passing the impugned order.
Heard learned counsels.
Irrespective of the various contentions advanced, it would be appropriate
for us to deal with the question as to whether the impugned order is sustainable
or not. In terms of the impugned communication the petitioner had been
debarred from participating in any tender or RFP issued by any of the
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authorities therein. The various show-cause notices issued to the petitioner do
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SURYAVANSHI
not indicate that as a consequence to the show-cause notice and its reply, such
Date: 2022.06.17 18:52:23 IST
an action is contemplated by the respondents. The Hon'ble Supreme Court Vet
India Pharmaceuticals (supra) has clearly held in paragraph-11 as follows:
"11. If the respondents had expressed their mind in the show
cause notice to blacklist, the appellant could have filed an
appropriate response to the same. The insistence of the respondents
to support the impugned order by reference to the terms of the
tender cannot cure the illegality in absence of the appellant being
a successful tenderer and supplier. We therefore hold that the order
of blacklisting dated 08.09.2009 stands vitiated from the very
inception on more than one ground and merits interference."
Further, the Hon'ble Supreme Court in the case of UMC Technologies
(supra) has clearly held in para 24 and 25 as follows:
"24. A plain reading of the notice makes it clear that the
action of blacklisting was neither expressly proposed nor could it
have been inferred from the language employed by the Corporation
in its show cause notice. After listing 12 clauses of the Instruction to
BiddersÂ, which were part of the Corporation'™s Bid Document
dated 25.11.2016, the notice merely contains a vague statement
that in light of the alleged leakage of question papers by the
appellant, an appropriate decision will be taken by the
Corporation. In fact, Clause 10 of the same Instruction to Bidders
section of the Bid Document, which the Corporation has argued to
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SAN be the source of its power to blacklist the appellant, is not even
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SURYAVANSHI
Date: 2022.06.17 18:52:23 IST
mentioned in the show cause notice. While the notice clarified that
the 12 clauses specified in the notice were only indicative and not
exhaustive, there was nothing in the notice which could have given
the appellant the impression that the action of blacklisting was
being proposed. This is especially true since the appellant was
under the belief that the Corporation was not even empowered to
take such an action against it and since the only clause which
mentioned blacklisting was not referred to by the Corporation in its
show cause notice. While the following paragraphs deal with
whether or not the appellant™s said belief was well-founded,
there can be no question that it was incumbent on the part of the
Corporation to clarify in the show cause notice that it intended to
blacklist the appellant, so as to provide adequate and meaningful
opportunity to the appellant to show cause against the same.
25. The mere existence of a clause in the Bid Document,
which mentions blacklisting as a bar against eligibility, cannot
satisfy the mandatory requirement of a clear mention of the
proposed action in the show cause notice. The Corporations notice
is completely silent about blacklisting and as such, it could not
have led the appellant to infer that such an action could be taken
by the Corporation in pursuance of this notice. Had the
Corporation expressed its mind in the show cause notice to black
list, the appellant could have filed a suitable reply for the same.
Therefore, we are of the opinion that the show cause notice dated
10.04.2018 does not fulfil the requirements of a valid show cause
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notice for blacklisting. In our view, the order of blacklisting the
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SURYAVANSHI
appellant clearly traversed beyond the bounds of the show cause
Date: 2022.06.17 18:52:23 IST
notice which is impermissible in law. As a result, the consequent
blacklisting order dated 09.01.2019 cannot be sustained."
Admittedly, in the instant case the intention of the respondents to debar
the petitioner from participating in the contract has not been stated by them in
any of the show-cause notices. Even though they referred to the earlier show-
cause notices, the only consequence is that they passed an order of debarring.
Since the said issue is covered by the aforesaid judgment of the Hon'ble
Supreme Court, we are of the view that on this ground itself the impugned
communication deserves to be quashed.
Consequently, the petition is allowed. The impugned communication
dated 02.05.2022 issued by the respondent No.3 insofar as it relates to
debarring the petitioner from participating in any tender/RFP issued by any
authority is set aside. The respondents are always at liberty to pursue such
remedies as available to them under the contract in accordance with law.
(RAVI MALIMATH) (VISHAL MISHRA)
CHIEF JUSTICE JUDGE
Prar
Signature Not Verified
SAN
Digitally signed by PRARTHANA
SURYAVANSHI
Date: 2022.06.17 18:52:23 IST
