JUDGMENT
Pradeep Nandrajog, J.
1. DDA invited tenders for the work of development of land for Group Housing Societies at Dallupura/Chilla. A drain along the 45 metres wide road between 66 KV electric sub-station to Saraswati Kunj Cooperative Group Housing Societies Limited was to be laid. Bid of the petitioner in the sum of Rs. 1,58,13,781 was accepted vide letter dated 24.09.1998. Stipulated date of commencement of work was 04.10.1998. The date of completion was 19.02.1999. Petitioner claims to have completed the work on 26.08.2000. Delay is attributed to contractual failures on the part of DDA.
2. Petitioner claims that abutting the site of the proposed storm water drain was an unauthorised colony named New Ashok Nagar. Said colony had no drainage system with the result that effluent discharge from the colony would flow in the area which was in the alignment of the drain as per the scope of work. Under these hard conditions, work had to be carried out by erecting temporary bandhs to stop the flow of drainage water from the unauthorised colony. In spite of best efforts, sewage water would seep into the site and would affect the mortar joints and lean concrete top surface. Petitioner claims that the harsh site conditions were brought to the notice of the concerned Executive Engineer under cover of letters dated 12.10.1998, 17.11.1998, 01.12.1998, 01.02.1999, 02.02.1999, 10.02.1999, 16.03.1999, 02.08.1999, 17.08.1999, 08.10.1999, 14.01.2000 and 06.03.2000.
3. Quantum of work went far beyond the estimated volume of work. Total value of work got enhanced to Rs. 2,20,00,062. Deviation worked out to 39.12%. The Executive Engineer (Eastern Division) sought approval to pay the additional amount on the estimated cost based on DSR, 1997 vide note dated 10.02.2000.
4. According to the petitioner, when the work was in progress, the only deficiencies pointed out were under cover of letter dated 16.09.1999 and 01.11.1999. Vide letter dated 16.09.1999, deficiencies pointed out were:
“1. One truck of bricks was lying at site, which was substandard and explained to your representative at site by Q.C. team of DDA. You are requested to get it removed immediately along with other sorted pilla bricks at site on priority.
2. Lean concrete 1:4:8 laid between the drain section was got damaged due to in flow of water from Ashok Nagar. You are requested to rake the same and re-do the same with 3″ thick layer of 1:4:8.
3. It was also observed at site that your masons are not raking the brick joints invariably. You are requested to get it attended with pointed tools.
4. The brick work was also checked at three to four places, wherein it was observed that mortar has not achieved the desired strength due to improper mixing, etc. You are requested to dismantle and re-do the same.
5. Your representative laid C.C. 1:4:8 on 15.09.1999 at the corner near E.S.S. which was not at all mixed properly. You are requested to remove the same and re-do the same at the earliest.”
5. Petitioner states in the petition that deficiencies were rectified to the satisfaction of all. Another letter dated 01.11.1999 was received informing the petitioner that sample of cement mortar and water used in the works, on being tested showed that the cement mortar ratio was contrary to the tender specifications which required the ratio of 1:5 whereas ratio found was 1:9. It was also intimated that water sample was highly alkaline.
6. On 25.06.2001, petitioner received a show cause notice calling upon it to show cause as to why the respondent should not suspend the business of the firm with it. The show cause notice reads as under:
Dated : 25.06.2001
“No. F. 4(8)80/21 /89/1(B&R)Secy./233
To,
M/s. G.D. Tewari & Co.,
F-68, Green Park,
New Delhi-110 016
Show Cause Notice
The work of D/O land for CGHS at Chilla/Dallupura (SH : C/O S.W. Drain along 45 M road between 66 KV sub-station to Saraswati Kunj, CGHS) area, was awarded to you. It has been reported by CE (EZ) that some serious observations were noticed by various officers of DDA during the inspection of the said work such as use of coarse sand and bricks below acceptable limits, use of ordinary mixer against the required hopper mixer, base concrete was loose/segregated, poor workmanship of brick work etc. By this act, you have committed breach in the terms of contract and have rendered yourself for action.
I, Suresh Mehta, Secretary, Contractors Registration Board, DDA, issue you a show cause notice as to why for the abovementioned breach, the business of your firm may not be suspended with DDA. Your reply to notice must be received in this office within 15 days of the issue of this notice. In case no reply is received within stipulated period to the satisfaction of the Contractors Registration Board, action as deemed fit shall be taken against you, without giving any further opportunity.
Sd/-
(SURESH MEHTA)
Secretary (CRB)
D.D.A.”
7. Petitioner submitted a reply on 05.07.2001. Petitioner gave its response to the show cause notice.
8. Vide order dated 14.08.2002, petitioner was debarred from tendering with the DDA for a period of five years. The order dated 14.08.2002 reads as under:
“M/s. G.D. Tewari & Co., F-68, Green Park, New Delhi-110 016, enlisted with DDA as Class I (B&R) contractor vide Office Order No. F. 4(8)72/ Pt. IV/Secy./CRB/18351, dated 17.10.1989.
Whereas a show cause notice was served to the agency vide this Office Letter No. F. 4(8)80/21/89/1(B&R)Secy./233, dated 25.06.2001. The reply of which has been received vide their letter dated 05.07.2001. The said reply of the agency was considered by the CRB, but has not been found satisfactory.
Now after careful consideration, the CRB has decided to debar the agency for further tendering in DDA for a period of FIVE YEARS. All the partners of the firm M/s. G.D. Tewari & Co. also stand debarred.
No tender paper shall be issued and no work shall be awarded to them from the date of issue of this letter.
Sd/-
Secretary (CRB)
D.D.A.”
9. Petitioner filed writ petition against the order dated 14.08.2002. The said writ petition being WP (C) No. 5477/2002 was disposed of vide order dated 02.09.2002. Challenge succeeded. It was held by a learned Single Judge of this Court that the impugned order was not a speaking order, in as much as no reasons were discernible from the order.
10. While quashing the order dated 14.08.2002, liberty was granted to DDA to hear the petitioner and pass speaking order.
11. At the remanded proceedings, the petitioner not only made written submissions, but gave justifications in support of the defense.
12. defense was rejected. Vide order dated 09.01.2003, disposing the show cause notice, the respondent inflicted the penalty of debarring the petitioner from tendering for a period of five years. The order dated 09.01.2003 reads as under:
“WHEREAS the standing counsel, DDA in her letter dated 02.09.2002 has conveyed the decision of Hon’ble High Court of Delhi in the matter of G.D. Tewari & Co. v. DDA, CWP 5477/2002 which follows as under:
‘The respondents were held to be under an obligation to assign reasons in support of the show cause notice in the order itself which could be subject to appeal or judicial review. It was held that it was not possible for the appellant authority or the Court exercising the power of judicial review to ascertain how and in what manner the concerned authority had applied its mind.
The aforesaid ratio applied on all fours in the present case. Admittedly, no reasons have been finally assigned in the impugned order and in view of this impugned order is not sustainable in law. It is not possible to appreciate as to which reason finally prevailed with the concerned authorities in passing the impugned order dated 14.08.2002 which is hereby quashed.
It is directed that the petitioner will appear before the respondent no. 2 on 23.09.2002 at 3.00 p.m. when the petitioner will be given a hearing and thereafter respondent no. 2 shall pass speaking order within a period of four weeks thereafter.
Writ petition is allowed in the aforesaid terms leaving the parties to bear their own costs.
In the above case M/s. G.D. Tewari & Co. was debarred for five years by the DDA vide decision taken in CRB meeting, the minutes of which were circulated vide Letter No. 4(8)72/Misc./Secy./CRB/2002/34, dated 29.07.2002.’
The direction of Hon’ble High Court of Delhi for giving a personal hearing on 23.09.2002 at 3.00 p.m. was complied with and the petitioner was informed verbally regarding reasons for debarring. After hearing two partners of the firm M/s. G.D. Tewari & Co. i.e. Shri Anil Dutt Tewari and Shri Harsh Sindhu, who reiterated their same stand based on reply to the show cause notice dated 25.06.2001.
The other direction of Hon’ble High Court in the order for passing speaking order within four weeks thereafter is given hereunder:
‘WHEREAS the work of D/O land for CGHS at Chilla/Dallupura. SH : C/O S.W. Drain along 45 M road between 66 KV sub-station to Saraswati Kunj, CGHS area, was awarded to M/s. G.D. Tewari & Co. stipulated date of start 04.10.1998, stipulated date of completion on 18.02.1999, actual date of completion being 26.08.2000. The estimated cost of the work was Rs. 2,00,41,493 and the tendered cost was Rs. 1,58,13,781. The final bill of the work has already been paid on 25.10.2002 in full and final settlement. The security deposit has also been released.’
WHEREAS Clause 15 of the agreement reads as under:
‘All work under or in course of execution executed in pursuance of the contract shall at all times be open to the inspection and supervision of the Engineer-in-charge and his authorised subordinates and the Central Vigilance Commission or by the Chief Engineer Quality Control, DDA or his authorised subordinate officer and the contractor shall at all times during the usual working hours, and at all times at which reasonable notice of the intention of the Engineer-in-charge or his authorised subordinate to visit the works shall have been given to the contractors either himself be present to receive orders and instructions or have a reasonable agent duly accredited in writing present for that purpose. Orders given to the contractor’s agent shall be considered to have the same force as if they had been given to the contractor himself. The work during its progress can also be inspected by the Chief Technical Examiner/ Technical Examiner of the Central Vigilance Commission or by Chief of the Vigilance Control, DDA or by an officer of the Vigilance Cell of the authority on behalf of the Engineer-in-charge.’
WHEREAS aforesaid work was inspected by QC Cell, DDA and various officers of DDA in accordance with the provision contained in the aforesaid contract and many observations were made out of which following severe defects were observed:
‘1. The quality of building material such as coarse sand and bricks being used were not as per acceptable standards.
2. Ordinary mixer was used against required hopper mixer.
3. Dry bricks were being used.
4. The base concrete was loose/segregated.
5. Brick bats were being used.
6. The brick work was not being done properly.
7. At some locations, rectification has been done but all the deficiencies could not be rectified and for which RIS had to be initiated.
8. Failure of water sample for not confirming to the required standards for construction purposes.’
WHEREAS show cause notice was served on M/s. G.D. Tewari & Co. vide Letter No. F. 4(8)80/21/89/1(B&R)Secy./233, dated 25.06.2001.
WHEREAS the reply to the show cause notice was received from M/s. G.D. Tewari & Co. in the office of Secy. (CRB) on 08.07.2001. The reply to the said notice was duly considered and the parties of the firm were also heard in person. That after consideration of the case, it was found that substantial work was executed by the firm at the site by using inferior quality of materials and water which was not found suitable for construction work.
WHEREAS the firm above named have exhibited gross negligence in execution of work and have executed substandard work for which the department had no option but to reduce the rates for such item of works and pay to the agency accordingly.
WHEREAS by the above act the agency M/s. G.D. Tewari & Co. have committed breach of contract and attempted to misuse public fund, they are liable to be debarred from further tendering in DDA for 5 years.
Accordingly, the decision taken by the competent authority to debar the agency from further tendering in DDA for 5 years is justified.”
13. These being writ proceedings, this Court would not be concerned with issues of fact. It would be impermissible for this Court to re-appreciate the evidence on which the subjective satisfaction of the respondent is based. Scope of the present proceedings would be limited to see whether objective facts exist which are relevant and if they exist, to see whether the same have been considered by the respondent. Further, scope of consideration would be whether the order impugned is a reasoned order, in that, defense has been considered.
14. Perusal of the order aforesaid would reveal that the first two pages are nothing but a recital of the directions passed by this Court vide order dated 02.09.2002 disposing of WP (C) No. 5477/2002 followed by recitals of the fact that petitioner was heard, followed by a recital of the award of tender at the cost of Rs. 1,58,13,781, followed by reproduction of Clause 15 of the agreement, followed by 8 alleged deficiencies. Thereafter recital records that the defense has been considered. The operative part of the order where findings are recorded reads as under:
“That after consideration of the case, it was found that substantial work was executed by the firm at the site by using inferior quality of materials and water which was not found suitable for construction work.
WHEREAS the firm above named have exhibited gross negligence in execution of work and have executed substandard work for which the department had no option but to reduce the rates for such item of works and pay to the agency accordingly.
WHEREAS by the above act the agency M/s. G.D. Tewari & Co. have committed breach of contract and attempted to misuse public fund, they are liable to be debarred from further tendering in DDA for 5 years.”
15. Are the reasons aforesaid enough to be classified as a speaking order is the first and foremost issue to be decided.
16. Reasons, to my mind, require the authority to deal with the defense and reflect the consideration in the order with such minimum clarity, that to an discerning eye, it is revealed that the authority concerned, after applying its mind has found the defense to be not sustainable.
17. In Erusian Equipment & Chemicals Ltd. v. State of West Bengal, AIR 1975 SC 266 (at p. 269), the Supreme Court observed that blacklisting has effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamental of power play require that the person concerned should be given an opportunity to state his case before he is put on the blacklist.
18. It follows from the aforesaid observation of the Supreme Court that the satisfaction of the relevant authority has to be objective and not subjective. A mere formal compliance with the requirement of law of giving a hearing offers no real justice to the party if the order which is passed is arbitrary.
19. In the decision reported as 106 (2003) DLT 573=2004(2) CTLJ 515 (Del.)–Mekaster Trading Corporation v. Union of India and others, it was held that an order which after spelling out deficiencies contained in the show cause notice goes on to record that the reply filed has not been found to be convincing cannot be said to be a speaking order. Further, an order which merely records that available evidence does not reveal that firm has fulfillled its contractual obligation would not be a speaking order.
20. It was held in the aforesaid decision that to be classified as a speaking order, the order must give sufficient reasons in support of the consequence arrived at.
21. Reasons for mandate of law requiring reasons to be recorded in an order having adverse consequences against a person are to be found in the observations of the Constitution Bench of the Supreme Court in the decision reported as (1990) 4 SCC 594–S.N. Mukherjee v. Union of India. Their Lordships of the Supreme Court pointed out that where reasons are recorded it enables the superior Court to effectively exercise the appellate or supervisory jurisdiction. Orders which are subject to judicial review must be in compliance with the principles of natural justice, namely:
(a) Proper hearing;
(b) Decision by an unbiased person;
(c) Taking into consideration all relevant factors.
22. How would one determine whether relevant factors have been considered and irrelevant factors have been excluded thereon. In other words, proper application can be discerned by the supervisory Court only from the reasons which emanate in the order before it.
23. Another judicial rational requiring reasons to be stated is that a person affected by an order is entitled to know the decision of the mind against him. A decision may be right, but not sound. Such decision leaves grievance in the mind of the person affected that he was not told why the decision has been given.
24. Form or scope of reasons can not be judicially laid down in a strait jacket. The extent and nature of the reasons depend upon each case. What is essential is that the order must state the elements which had lead to the decision. The order must reflect the process of the mind. These reasons must show that the decision maker successfully came to grips with the contentions advanced by the parties. These reasons must inform the party, may be in broad terms. Reasons are links between material on which conclusions are based. Conclusions are not reasons.
25. Seven alleged deficiencies were pointed out in the show cause notice. These alleged 7 deficiencies have been noted in the impugned order. One more finds mention in the order. In the briefest language, thrust of the reply of the petitioner need be noted:
Deficiency No. 1–The quality of building material such as coarse sand and bricks being used were not as per acceptable standards
26. Reply of the petitioner was that in the entire work, 5000 cum (approximately 500 truck loads) of coarse sand was used. This is a natural product mined from the quarries. The material brought to site is tested and if found fit is used. Material brought to site was tested from time to time and result was recorded in the master register maintained by the DDA. As and when the sample failed, evidenced by the fact that on 25.02.1999, 16.09.1999, 09.10.1999 and 10.01.2000 petitioner was required to remove the coarse sand, rejected material was removed. 73 tests were conducted pertaining to the quality of coarse sand. Results were noted in master register maintained. 72 tests passed and only one failed. This had resulted in reduction of rate. Rate for only 20.0 cum coarse sand was reduced as against 5000 cum of sand used in the entire work. It came to minuscule 0.40% of the total quantity of the work.
27. Pertaining to the bricks, defense of the petitioner was that samples of bricks were tested in the laboratory of the respondent. Approximately 77 lacs bricks i.e. approximately 1540 truck loads of bricks were used. Site Order Book revealed that on 23.02.1999, 15.04.1999, 23.08.1999 and 16.09.1999 bricks were directed to be removed which were removed on 28.02.1999, 19.04.1999, 24.08.1999 and 18.09.1999. During the execution of the work 600 bricks tests were carried out. It was explained in the reply that bricks are purchased from outside Delhi and testing cannot be done before they are brought at site. It was pointed out that no consignment was used without being tested. It was, therefore, wrong that inferior quality of bricks was used.
Deficiency No. 2–Ordinary mixer was used against required hopper mixer
28. defense taken was that as per the tender, mechanical mixer with lifting hopper for mixing cement concrete required for RCC works were to be used. DDA accepted the work knowing fully well that ordinary mixer was used and for this it reduced the rate. While accepting the work and reducing the rate, DDA noted that the structural stability of the structure remains unaffected. Admitting its fault, petitioner pleaded that the nature of default being trivial, proposed action of debarring the petitioner for five years for this lapse Would be disproportionate.
Deficiency No. 3–Dry bricks were being used
29. At the outset, it may be noted that this was not a listed deficiency in the show cause notice dated 25.06.2001 which finds mention in the impugned order dated 09.01.2003. Therefore, its defense would not be available in the reply to the show cause notice. However, in the writ petition, petitioner has explained that it was not understood how this grievance was being raised in as much as during the course of work no such discrepancy was ever pointed out. All material was tested and, therefore, there was no basis to record said deficiency in the impugned order.
Deficiency No. 4–The base concrete was loose/segregated
30. defense raised was that the work was carried out in most hostile and treacherous site conditions wherein drainage water from the neighbouring unauthorised colony by the name of New Ashok Nagar was flooding the site. Only once on 16.09.1999 petitioner was asked to re-do the base concrete work, which was re-done. It was further the defense that notwithstanding the hostile and treacherous site conditions, if in spite of best preventive measures, some freshly executed work got damaged, it was rectified immediately. Further defense was that in the Site Order Book, vide Entry No. 16 on 18.09.1999, the Engineer-in-charge had recorded that the work was re-done.
Deficiency No. 5–Brick bats were being used
31. Petitioner denied use of brickbats. defense was that during execution of work no such complaint was ever made. It was stated that whenever bricks are brought to site, some bricks get broken and generate brick bats. These were never used. On 16.09.1999, respondent noted broken bricks (brick bats) at site which was removed by the petitioner on 18.09.1999. It was further the defense that while settling the bills, no reduction was initiated on this account which showed that no brick bats were used.
Deficiency No. 6–The brick work was not being done properly
32. defense raised was that charge was suggestive as if entire brick work was defective. It was explained in the defense that the process of doing brick work is a manual work. It is the product of manual labour of the mason. Work churned out cannot be of the same quality every time. In the entire duration of work only on 16.09.1999, this deficiency was pointed out in a part of the work. Petitioner dismantled the said brick work and re-did the work to the satisfaction of the Engineer-in-charge evidenced by the certification recorded in the Site Order Book on 18.09.1999.
Deficiency No. 7–At some locations, rectification has been done but all the deficiencies could not be rectified and for which RIS had to be initiated
33. defense taken by the petitioner was that the total quantity of brick work was 14776.25 cum. Deficiency pointed out was for only 250 cum of work. Out of this, qua 125 cum deficiency pointed out was that grouting was being done on the layers of bricks resulting in non-uniform thickness of joints and qua 125 cum deficiency was noted in the joints. Accepting this deficiency, it was pointed out that in proportion to the volume of work of 14776.25 cum, deficiency in 250 cum was too small to visit the petitioner with the proposed penalty. It was pointed out that after the result of manual work, some deficiencies are bound to occur and remedy was available within the agreement i.e. reducing the payment. It was stated that the petitioner was paid at reducing rates for 250 cum for deficient work.
Deficiency No. 8–Failure of water sample for not confirming to the required standards for construction purposes
34. defense raised was that out of 16 samples of water taken, only one was found to be deficient. Even the sample which failed succeeded on all parameters except one i.e. alkalinity. Petitioner stated that it was little surprised as to how one sample failed because it did not change the water source. Be that as it may, when one sample failed, petitioner made an arrangement for an alternative source of water.
35. As observed by me earlier, it is not for this Court to re-appreciate the defense. But the question is, has the same been considered.
36. A perusal of the order aforesaid would reveal that there is not even a whisper to the substratum of the defense taken. Was it not for the concerned officer to consider what was the effect of the sand and bricks being tested before being used ? What was the effect of the failed sample being removed ? What was the effect of the defense that sand and bricks were not manufactured by the petitioner ? They were brought from outside. Before being used, they were subjected to a test and only after the sample is passed, was the product used ? What was the effect of the defense that out of 5,000 cum of sand used, only 20 cum i.e. a minuscule quantity was found to be deficient ? Similarly, out of approximately 77 lakhs bricks used, only a few had failed the sample and that too resulted in entire consignment being not used. What was the effect of ordinary mixer used as against hopper mixer in the context of the defense that that structural stability was not affected and the petitioner was paid at a lesser rate were the breaches serious enough warranting penalty of suspension for five years ? Further, was it not to be considered as to what was the resultant effect of adverse site conditions, if at all, due to existence of an unauthorised colony abutting the site of the drain ? Was it not to be considered that bricks get broken at site, generating brick bats ? How much of brick work in proportion to the total quantity of work done was defective ? 15 out of 16 water samples being cleared and only 1 failed, what was the effect ? Proportionality of the deficiency to the penalty: was it not to be considered ?
37. All the questions aforesaid, in the context of the charge and the defense remained unanswered.
38. The order records the conclusion without indicating the process of reasoning. The order does not even indicate that the defense was noted. No reasons have been recorded as to why the defense was unacceptable. That there were some deficiencies which were accepted but justification was given.
39. Rationale criticism of a decision can be made only when reasons for the decisions are known. The so called reasons as recorded in the order are not even a concise statement of the way in which the decision has been arrived at. The order does not tell its own story and one is totally unable to infer as to why the order was made. Except to note that their were some deficiencies the impugned order nowhere reveals that the officer, who passed the order, came to grip with the contentions raised by the petitioner. The links between the material on which the conclusions were required to be based and the conclusions arrived at are missing.
40. In my considered opinion, the impugned order gives no reasons for the conclusions, namely, why the reply and the submissions of the petitioner were found not to be convincing. The order is set aside.
41. Should the matter be re-remanded to enable the respondent to give reasons thereon ?
42. This is a second round of litigation. Petitioner has not been allowed to tender since the earlier order dated 14.08.2002 was issued. The said order was set aside by the judgment and order dated 02.09.2002 passed by this Court in WP (C) No. 5477/2002. In fact, for two years, petitioner is suffering the penalty.
43. Keeping in view the nature of the allegations against the petitioner, his defense, coupled with the fact that the respondent has not given reasons, required to be stated while passing a final order, ends of justice would require that the chapter should be closed.
44. Allowing the writ petition and quashing the impugned order dated 09.01.2003, I allow the matter to be buried as it is, without allowing any fresh consideration.
45. No costs.