Rajasthan High Court
Sawhney Electricals Works vs Rajasthan State Industrial ... on 18 December, 2023
Bench: Manindra Mohan Shrivastava, Shubha Mehta
[2023:RJ-JP:40498-DB]
HIGH COURT OF JUDICATURE FOR RAJASTHAN
BENCH AT JAIPUR
D.B. Civil Special Appeal (Writ) No. 395/2022
In
S.B. Civil Writ Petition No.1819/2022
Sawhney Electricals Works, 192/168, Pratap Nagar, Sanganer,
Jaipur Through Its Proprietor Devi Singh Shekhawat, Son Of Shri
Bahadur Singh, Aged About 49 Years, Resident Of 192/168,
Pratap Nagar, Sanganer, Jaipur (Rajasthan)
----Appellant
Versus
1. Rajasthan State Industrial Development And Investment
Corpporation Ltd, Chairman Cum Additional Chief
Secretary, Govt Of Rajasthan, Secretariat, Jaipur
2. Managing Director, Rajasthan State Industrial
Development And Investment Corporation Ltd, Udhyog
Bhawan, Tilak Marg, C-Scheme, Jaipur
3. Financial Advisor, Rajasthan State Industrial Development
And Investment Corporation Ltd, Udhyog Bhawan, Tilak
Marg, C-Scheme, Jaipur
4. Deputy Managing Director (II), Rajasthan State Industrial
Development And Investment Corporation Ltd, Udhyog
Bhawan, Tilak Marg, C-Scheme, Jaipur
5. Superintending Engineer (Power-I), Rajasthan State
Industrial Development And Investment Corporation Ltd,
Udhyog Bhawan, Tilak Marg, C-Scheme, Jaipur
6. Executive Engineer (Power-I), Rajasthan State Industrial
Development And Investment Corporation Ltd, Udhyog
Bhawan, Tilak Marg, C-Scheme, Jaipur
7. Shri Kuldeep Singh, Assistant Engineer (Power-),
Rajasthan State Industrial Development And Investment
Corporation Ltd, Udhyog Bhawan, Tilak Marg, C-Scheme,
Jaipur
8. Unit Head Cum Regional Manager, Rajasthan State
Industrial Development And Investment Corporation Ltd,
Mewar Industrial Area, Road No 2, Udaipur
(Downloaded on 22/12/2023 at 08:49:54 PM)
[2023:RJ-JP:40498-DB] (2 of 8) [SAW-395/2022]
----Respondents
For Appellant(s) : Mr. Ashwani Chobisa Advocate.
For Respondent(s) : Mr. Ajit Kumar Bhandari, Senior
Advocate with Mr. Jitendra Mishra
Advocate.
HON'BLE THE ACTING CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA
HON'BLE MRS. JUSTICE SHUBHA MEHTA
Judgment
18/12/2023
1. With the consent of the parties, this appeal is heard finally.
2. Briefly stated, the relevant facts for decision of the
controversy involved in the appeal are that the appellant had
participated in the process of award of works contract pursuant to
tender notice issued by the respondents. The appellant emerged
as successful bidder and contract was also awarded in his favour.
The parties entered into an agreement on 29.06.2021. However,
later on, a dispute arose and the contract was cancelled by the
respondent vide order dated 20.01.2022 and the appellant was
blacklisted.
Aggrieved by the aforesaid order, writ petition was filed by
the appellant. The writ petition was partly allowed. Though the
order of blacklisting was set aside, learned Single Judge, instead
of examining legality and validity of cancellation allowed the
appellant to invoke statutory remedy of appeal under the
provisions of the Rajasthan Transparency In Public Procurement
Act, 2012 (hereinafter referred to as 'the Act of 2012').
3. This appeal has been filed by the appellant challenging the
impugned order passed by the learned Single Judge only to the
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extent it directs the appellant to prefer an appeal before the
Competent Authority.
4. The submission of learned counsel for the appellant is that
Section 38 of the Act of 2012, which is the substantive sole
provision relating to appeal would not be applicable where there is
cancellation of contract post award of contract. The argument of
learned counsel for the appellant is that the aforesaid provision,
on its rational construction, is applicable only in cases of dispute,
orders and action, which arose before the process of procurement
is complete and not thereafter. Referring to the provisions
contained in Sections 26 & 27 of the Act of 2012 and Rules 76 &
77 of the Rajasthan Transparency In Public Procurement Rules,
2013 (hereinafter referred to as 'the Rules of 2013'), he would
submit that these provisions make it clear that the remedy of
appeal as provided under Section 38 of the Act of 2012 is only in
respect of the orders and proceedings before the award of
contract and not post award.
5. On the other hand, learned Senior counsel appearing for
respondent-RIICO would submit that the language of Section 38 of
the Act of 2012 does not warrant the appellate remedy to be
confined only to orders and actions before the award of contract.
Referring to Section 11 of the Act of 2012, he would submit that
the powers conferred on the authorities to cancel contract clearly
shows that the authorities even after entering into contract after
completion of procurement process, may cancel contract in
contingencies specified in Section 11 of the Act of 2012. He would
submit that in the present case, the cancellation of the contract is
in exercise of powers conferred under Section 11(3) of the Act of
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2012 and, therefore, the provision with regard to the appeal under
Section 38 of the Act of 2012 would apply. Appellant has a remedy
of appeal and he may prefer appeal, which shall be examined in
accordance with law and on its own merit.
6. In order to decide the controversy involved in the present
case, it is relevant to extract the provisions relating to appeal as
contained in Section 38 of the Act of 2012, reads as under:-
"38. Appeals.- (1) Subject to section 40, if any
bidder or prospective bidder is aggrieved that any
decision, action or omission of the procuring entity is in
contravention to the provisions of this Act or the rules
or guidelines issued thereunder, he may file an appeal
to such officer of the procuring entity, as may be
designated by it for the purpose, within a period of ten
days or such other period as may be specified in the
pre-qualification documents, bidder registration
documents or bidding documents, as the case may be,
from the date of such decision or action, omission, as
the case may be, clearly giving the specific ground or
grounds on which he feels aggrieved:
Provided that after the declaration of a bidder as
successful in terms of section 27, the appeal may be
filed only by a bidder who has participated in
procurement proceedings:
Provided further that in case a procuring entity
evaluates the technical bid before the opening of the
financial bid, an appeal related to the matter of
financial bid may be filed only by a bidder whose
technical bid is found to be acceptable.
(2) On receipt of an appeal under sub-section (1),
the officer designated under that sub-section shall,
after affording a reasonable opportunity of being heard
to the parties, determine as to whether or not the
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procuring entity has complied with the provisions of
this Act, the rules and guidelines made thereunder and
the terms of the pre-qualification documents, bidder
registration documents or bidding documents, as the
case may be, and pass an order accordingly which
shall, subject to the order passed under sub-section
(5), be final and binding on the parties to the appeal.
(3) The officer to whom an appeal is filed under
sub-section (1) shall deal with the appeal as
expeditiously as possible and shall endeavour to
dispose it of within thirty days from the date of filing of
the appeal.
(4) If the officer designated under sub-section (1)
fails to dispose of the appeal filed under that sub-
section within the period specified in sub-section (3), or
if the bidder or prospective bidder or the procuring
entity is aggrieved by the order passed under sub-
section (2), the bidder or prospective bidder or the
procuring entity, as the case may be, may file a second
appeal to an officer or authority designated by the
State Government in this behalf within fifteen days
from the expiry of the period specified in sub-section
(3) or of the date of receipt of the order passed under
sub-section (2), as the case may be.
(5) On receipt of an appeal under sub-section (4),
the officer or authority designated under that sub-
section shall, after affording a reasonable opportunity
of being heard to the parties, determine as to whether
or not the procuring entity has complied with the
provisions of this Act, the rules and guidelines made
thereunder and the terms of the pre-qualification
documents, bidder registration documents or bidding
documents, as the case may be, and pass an order
accordingly which shall be final and binding on the
parties to the appeal.
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(6) The officer or authority to which an appeal is
filed under sub-section (4) shall deal with the appeal as
expeditiously as possible and shall endeavour to
dispose it of within thirty days from the date of filing of
the appeal:
Provided that if the officer or authority to which
an appeal is filed under sub-section (4) is unable to
dispose of the appeal within the aforesaid period, he
shall record reason for the same.
(7) The officer or authority to which an appeal
may be filed under sub-section (1) or (4) shall be
indicated in the pre-qualification documents, bidder
registration documents or bidding documents, as the
case may be.
(8) Every appeal under sub-sections (1) and (4)
shall be filed in such form and manner and shall be
accompanied by such fee as may be prescribed.
(9) While hearing an appeal under this section,
the officer or authority concerned shall follow such
rules of procedure as may be prescribed.
(10) No information which would impair the
protection of essential security interests of India, or
impede the enforcement of law or fair competition, or
prejudice the legitimate commercial interests of the
bidder or the procuring entity, shall be disclosed in a
proceeding under this section."
7. The provision relating to appeal provide that if any bidder or
prospective bidder is aggrieved that any decision, action or
omission of the procuring entity is in contravention to the
provisions of the Act of 2012 or Rules or guidelines issued
thereunder, he may file an appeal. This provision is couched in
words of wide import. If we look into this part of the provision,
there is nothing which indicates that the remedy of appeal is
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confined only to such orders and actions, which are taken or
passed before completion of the process of procurement.
The other part of the provisions also does not indicate that
the remedy of appeal is to be confined only to those orders and
actions which have taken place prior to award of contract.
8. The cancellation of appellant's contract has taken place in
purported exercise of powers under Section 11 of the Act of 2012.
Section 11 (3) of the Act of 2012 empowers the Competent
Authority to take proper measures in case of any breach of the
code of integrity by a bidder or prospective bidder, as the case
may be. One of the measures, which could be taken as provided
under Clause 3(e) of the Act of 2012 is cancellation of relevant
contract and recovery of compensation for loss incurred by the
procuring entity.
That means where there is a breach of code of integrity, a
contract which has been entered into may also be cancelled. We
find that the impugned order which has been passed by the
Authority refers to the powers exercise under Section 11(3) of the
Act of 2012. Though reference has been made to the provisions
contained in Sections 26 & 27 of the Act of 2012 as also Rules 76
& 78 of the Rules of 2013 to persuade this Court to accept that
there is distinction between bidder, prospective bidder and
successful bidder, in our view, when the order passed by the
Authority is in exercise of powers under Section 11(3) of the Act of
2012 cancelling contract on the allegation of breach of code of
integrity, that clearly amounts to an order passed under the
provisions of the Act of 2012. In the absence of their being any
limitation specified under Section 38 of the Act of 2012, there is
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no warrant for us to place limited meaning, scope and ambit to
the remedy of appeal as provided under Section 38 of the Act of
2012.
9. In view of the above, we are not inclined to interfere with the
order passed by the learned Single Judge.
10. The appeal is, therefore, dismissed.
11. Considering that even though learned Single Judge had
passed an order giving liberty to file an appeal, it was not filed for
the reason that this appeal was preferred, it is directed that in
case appellant prefers an appeal within a period of 30 days from
today, the appeal shall be considered and decided on merits
without any objection on the ground of delay.
(SHUBHA MEHTA),J (MANINDRA MOHAN SHRIVASTAVA),ACTING CJ
SANJAY KUMAWAT-44
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