BEFORE THE MADURAI BENCH OF THE MADRAS HIGH COURT DATED : 31/03/2006 CORAM: THE HONOURABLE MR.JUSTICE P.JYOTHIMANI W.P.No.2116 of 2005, W.P.Nos.2117,4822 and 4823 of 2005 and W.P.M.P.Nos.2135,5188,2136,5191 of 2005 T.Jothimani ... Petitioner in W.P.Nos.2116,4822 of 2005 V.K.J.Constructions, rep.by its, Managing Partner,V.Kaviyarasu, No.507/183, Sandiyan Street, Maniyanpuram,Pattukottai Town, Thanjavur District. ... Petitioner in W.P.Nos.2117, 4823 of 2005 Vs. 1.Pattukottai Municipality represented by its Commissioner, Pattukottai, Thanjavur District. 2.Ms.Jayabarathi Viswanathan, Chairman, Pattukottai Municipality, Nadimuthu Nagar, Pattukottai Thanjavur District. ... Respondents in all the W.Ps. PRAYER in W.P.No.2116 & 2117 of 2005: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus, to call for the records made in Ma.No.E1/20/04/-05, dated 28.02.2005 passed by the first respondent and quash the same. PRAYER in W.P.No.4822 and 4823 of 2005: Writ Petition filed under Article 226 of the Constitution of India praying for the issuance of a Writ of Certiorarified Mandamus, to call for the records relating to the impugned order of the first respondent dated 18.05.2005 in ref.Na.Ka.No.20/04-05/A1 and consequential order of re-tender dated 23.05.2005 in the same reference number and quash the same. !For Petitioners ... Mr.T.V.Sivakumar for Mr.G.R.Swaminathan ^For Respondents ... Mr.M.Suresh Kumar Standing Counsel for Corporation. :ORDER
Heard the learned counsel appearing for the petitioners and the learned
Standing counsel for the respondents.
2. The petitioners in these cases are the registered contractors with the
respondent municipality. The municipality has called for tender on 16.07.2004
for various works including the Sivakollai road work. The petitioner in
W.P.No.2117 of 2005 namely V.K.J.Constructions represented by its Managing
Partner V.Kaviarasu and the petitioner in W.P.No.2116 of 2005 have participated
in the tender and the said auction and V.K.J.Constructions has quoted the lower
rates. At the time when the tender was opened it was admitted that the
petitioners requested the officer that the amount quoted in the tender forms
have to be corrected and with the permission of the officer the correction was
made in the tender forms. When the respondent Commissioner has called upon the
petitioners to explain, admittedly the petitioners have admitted the truth and
also given written apology on 19.07.2004. Subsequently the municipality passed
resolution on 03.09.2004 black listing the petitioners and cancelling the works.
3. By a subsequent order on 10.09.2004 the first respondent has passed an
order in terms of the resolution. The petitioners have filed writ petitions in
W.P.Nos.1242 and 1243 of 2004 challenging the resolution of the municipality
dated 03.09.2004. They have also filed Writ petitions in W.P.Nos.1420 and 1421
of 2004 challenging the consequential orders of the first respondent dated
10.09.2004 blacklisting the petitioners. The said writ petitions were disposed
of by this Court on 29.12.2004. This Court has allowed the W.P.No.1420 and 1421
of 2004, black listing the petitioners on the basis that the same was passed
without giving opportunity to the petitioners and therefore, the black listing
order was set aside. This Court has also dismissed the writ petitions in
W.P.Nos.1242 and 1243 of 2004 holding that no interference is called for in
respect of the resolution of the municipality.
4. It was also held that it does not prevent the municipality to proceed
further to pass fresh orders after giving opportunity to the petitioners. It
was pursuant to the order of this Court the respondents have given show cause
notice to the petitioners dated 01.02.2005 and the petitioners have also given
their explanation on 14.02.2005 which was received by the municipality on
15.02.2005. Ultimately by the impugned orders of the first respondent dated
28.02.2005 the first respondent has again black listed the petitioners and
confirmed the earlier order dated 10.09.2004. The impugned order was passed on
the basis that the petitioners have admitted that they have corrected their
tender forms while the tender was opened by the first respondent and that
conduct is unbecoming of a tenderer and not a desirable conduct and it was on
that basis the black listing was done.
5. It is against the said order a black listing the petitioners dated
28.02.2005 the petitioners have filed the present writ petitions W.P.No.2116 and
2117 of 2005. When the said writ petitions were pending before this Court there
was no interim order and the first respondent has called for fresh tender
notification on 10.02.2005 in respect of the said items of work. It was against
the said fresh notification, the petitioners have filed writ petitions in
W.P.Nos.1210 and 1211 of 2005 and this Court by a common order dated 19.04.2005
while allowing the said petitions has given liberty to the first respondent to
pass fresh orders after giving opportunity to the petitioners. Separate show
cause notices were issued to the petitioners by the first respondent on
27.04.2005 pursuant to the earlier order of this Court dated 29.12.2004 and the
petitioners have also replied on 14.02.2005. Based on the said reply the first
respondent has passed the impugned order dated 18.05.2005 cancelling the earlier
work allotted in favour of the petitioners and subsequently on 23.05.2005 a
fresh tender notice was issued in respect of many works including the works
allotted to the petitioners which were cancelled as stated above. It is
challenging the said order of cancellation of earlier work on 18.05.2005 and
consequent re-tender notice issued by the first respondent dated 23.05.2005, the
petitioners have filed writ petitions in W.P.Nos.4822 and 4823 of 2005.
6. The case of the petitioners is that the impugned of black listing is
passed against the principles of law and natural justice. Further it is the
case of the petitioners that while admittedly the corrections were made, they
were not made openly in the presence of the other tenderers and officers at the
time when tender was opened and it was only a rectification of mistakes done
with the permission of the officers. It is also the case of the petitioners
that the correction of mistake which was done on 19.07.2004 was a closed one and
that cannot be reopened now. The black listing has been ordered without giving
any opportunity to the petitioners. The conduct of the petitioners cannot be
treated as a misconduct. It is only a political rivalry which has resulted in
passing of the order. It is also the case of the petitioners that while the
petitioners were served with show cause notices dated 27.04.2005 seven works
were awarded and the show cause notice was only relating to three works in
respect of which the alternations was made by mistake. However, the impugned
order seeks to cancel the allotment all the seven works and fresh notification
issued in respect of the works including the works to which the petitioners have
been issued the order. According to the petitioners, in any event, the black
listing can only be in respect of the future works and not in respect of the
works already entrusted to the petitioners and the petitioners are ready and
willing to complete the said works.
7. In the counter affidavit filed by the first respondent it is stated
that on 16.07.2004 at 03.30 p.m. when the tender box was opened, the petitioners
who were present at that time took away the tender forms which were opened by
the officers without permission and corrected the rates as Rs.50/- per square
metre instead of Rs.5/- and Rs.500/- instead of 50 per cubic metre in column 5
and 6 of the tender forms. The said conduct was in violations of the tender
conditions and shows high handed activity of the petitioners. The conduct was
seriously opposed by all the contractors and the municipal council meeting held
ultimately on 03.09.2004 discussed the above issue and passed a resolution
directing that a fresh tenders should be called for in respect of laying tar,
Sivakkollai Road cancelling all the works and also for a proper action against
the petitioners. Earlier this Court has clearly held that it would not
interfere with the resolution of the council, but only set aside the order of
black listing on the basis no opportunity was given. It was consequent to that
opportunity was given to the petitioners by a show cause notice and since it was
emergently required to lay down to tar road to Sivakkollai, the earlier tenders
notification was issued. However this Court has disposed of all the subsequent
writ petitions filed by the petitioners by setting aside tender notification
dated 10.02.2005 with liberty to the respondents to issue fresh tender
notification after giving opportunity. In the mean time since the petitioners
given their explanation on 14.02.2005 and after considering the same the black
listing order was passed on 28.02.2005 and the subsequent notification has been
issued. Infact even after the order of this Court dated 19.04.2005 a subsequent
notice was given on 27.04.2005 for retendering the works in which the work
orders were given to the petitioners, the petitioners have already given reply
on 04.05.2005 and ultimately the respondents has passed an order of 18.05.2005.
8. According to the respondents, there is absolutely no substance in the
allegation of bias. The impugned order is passed only to ensure rule of law.
It is also denied that the impugned order passed with a pre-judged mind. In the
notice dated 17.04.2005 only work orders to the petitioners alone were
mentioned. In respect of item Nos.6, 7,13 and 14 of the tender notice dated
23.5.2005, no work orders issued to the petitioners and the petitioners have no
right to challenge the same. It is also the case of the first respondent that
this Court has already upheld the resolution passed by the Municipality in
cancelling all the previous tenders in favour of the petitioners and the same
has become final. In these circumstances, the writ petitions are liable to be
dismissed.
9. I have heard the learned counsel for the petitioners as also the
learned counsel for the respondents and perused the entire records submitted by
them.
10. Mr.T.V.Sivakumar learned counsel appearing for the petitioners would
submit that on the face of the impugned order by black listing including in
respect of the existing contract it shows bias. Such contract itself can only
be black listing for a future contract. Apart from that he would submit that the
black listing of the petitioners for ever takes away the rights of the
petitioners being the contractors to participate in all the contracts in future.
He would also submit that in respect of the incident which took place on
19.07.2004, the petitioners have already given apology letter stating that the
same has not been done stealthily but it was in the presence of the officers
and all the contractors and therefore, it cannot be stated to be an evil act.
The present impugned orders have been passed only based on the order dated
10.09.2004 and therefore, it should be presumed that no prior opportunity has
been given. The learned counsel also would rely upon a judgment of the Supreme
Court rendered in M/s. Erusian Equiments & Chemicals Limited Vs. State of West
Bengal and another reported in 1975 (1) SCC 70 to substantiate his contention
that black listing is effectively preventing a person from entering into lawful
profession for gain and therefore, while passing such order, the person must be
given a proper opportunity.
11.According to the learned counsel, the municipality being the larger
authority cannot give any opportunity and therefore, the black listing itself
cannot be done, since giving of opportunity is difficult and which cannot be
possible by the municipality. The black listing is an administrative action
which cannot be done by the municipality and therefore, according to him, the
impugned order of black listing is void. He would also submit that the very
fact that the municipality has filed a caveat petition shows that the
municipality has prejudged the issue. According to the learned counsel for the
petitioners dehors the resolution of the municipality, at least the first
respondent Commissioner should have given opportunity. Infact the petitioners
reply to the show cause notice has specifically requested for personal hearing.
According to the learned counsel giving show cause notice was only an empty
formality and therefore, black listing is liable to be set aside.
12. The learned counsel would contend that by issuing fresh re-tender even
the earlier works allotted to the petitioners have been taken away by cancelling
all the seven items of work. While the show cause notice itself was for only
three items, taking away of all the four other works for which work should have
been given is patently illegal.
13. Per contra, Mr.Suresh Kumar, learned counsel appearing for the
respondents would submit that the very conduct of the petitioners which has
been admitted by them in writing in changing the amount in tender which is
expected to be kept secretly amounts to an undesirable conduct. Especially when
the petitioners themselves admitted their mistake, there is no question of
opportunity to them. According to the learned counsel, the other four items
have not been entrusted to the petitioners at all and therefore there was no
question of taking away the rights. Eventhough the correction was in respect
of three items the respondents are entitled to cancel all the works on the
basis that admittedly the petitioners conduct as contractors by using forceful
methods for the purpose of correcting openly using muscle power, cannot be
permitted in the systems of contract.
14. The fact remains that this Court in the order passed on 29.12.2004 in
W.P.Nos.1420 and 1421 of 2004, has not set aside the resolution passed by the
municipality dated 03.09.2004. What was held in that case was about the black
listing whereby the petitioners were sought to be black listed without giving
opportunity. The Court has directed the opportunity to be given before black
listing the petitioners while holding that the resolution passed by the first
respondent municipality dated 03.09.2004 has not been set aside. That
resolution of the municipality dated 03.09.2004 states that the contract given
to the petitioners are cancelled with the right to the municipality to forfeit
the security deposit and also to take steps to recover any loss which may be
caused to the municipality due to the re-auction. That resolution even as on
today remains valid.
15. Therefore, I am of the considered view that the cancellation of the
works allotted to the petitioners based on the said date of tender on 16.07.2004
remains valid. The present order of the first respondent dated 18.05.2005
under which all the works given to the petitioners have been cancelled and also
the consequential tender notification dated 23.05.2005 which are impugned in
W.P.No.4822 and 4823 of 2005 are only based on the resolution of the
municipality dated 03.09.2004 in resolution No.356 which as I have stated
earlier remains valid as on date especially after this Court in the order dated
29.12.2004 has clearly held that the resolution of the municipality is not
interfered.
16. In view of the same, the writ petitions in W.P.Nos.4822 and 4823 of
2005 are not sustainable and the same are dismissed. Now the only question
remains is in respect of the black listing of the petitioners.
17. It is no doubt true that the Hon’ble Supreme Court has held in M/s.
Erusian Equiments & Chemicals Limited Vs. State of West Bengal and another
reported in 1975 (1) SCC 70 that black listing a contractor is certainly
creating a disability and therefore, proper opportunity is required. In this
regard, it is relevant to extract the relevant paragraph which is as follows:
“20.Black listing has the 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. Fundamentals of fair play require that the person should be given
an opportunity to represent his case before he is put on the blacklist.”
18. In the present case, the issue involved is as to whether the conduct
of the petitioners in altering the contents of the tender papers when the same
was opened in the presence of the officers and in the presence of all the
contractors is a desirable conduct or not. When the petitioners have admitted
and admittedly they have also given apology letter stating that they will not
involve such activities in future, I do not think that the principles of natural
justice can be extended beyond that for giving another opportunity to them. It
is admitted that a separate show cause notice have been given by the first
respondent even subsequently on 01.02.2005 for which the petitioners have given
explanation on 14.02.2005. In the explanation also the petitioners have
admitted their conduct and they would only say that after they realised mistake
krept in the tender papers in respect of amount they have no option than
rectifying the mistake and that was with the permission of the officers. When
the municipal Council has decided the issue and by majority have disapproved
conduct of the petitioners as contractors, this Court cannot sit on the said
decision to say otherwise. The argument of the learned counsel for the
petitioner that the municipality as a larger body cannot give a personal hearing
which is required by the petitioner and therefore, municipality cannot pass an
order of blacklisting has absolutely no substance. The municipality as an
authority is represented by his Officer namely, the Commissioner who has infact
given a show cause notice. Admittedly when the petitioners have given
explanation for that, in my considered view, there is no question of now going
back to say that the municipality has no power of blacklisting the petitioners.
19. As far as the contentions of the learned counsel for the petitioners
that when show cause notice was given for three works all the seven works has
been taken away as I have already stated the resolution of the municipality
dated 03.09.2004 was relating to the cancellation of all the works given to the
petitioners and therefore in my considered view this argument is also not
sustainable. Only the other point to decide is as to whether the blacklisting
of the petitioners passed by the Municipality should be forever. The learned
counsel for the municipality would submit that as far as the period of
blacklisting is concerned they have no objection leaving it to this Court to
decide.
20. In the facts and circumstances of the case, I am of the considered
view that the cancelling of the works allotted to the petitioners itself is a
punishment for the conduct of the petitioners for unauthorisedly making
corrections. That cannot deprive the right of the petitioners to earn their
livelihood forever, especially when the petitioners have been the registered
contractors under the respondents municipality and it is not even the case of
the respondents that the petitioners are in such habit throughout. In view of
the same, I am of the considered view that the blacklisting of the petitioners
should be only for a limited period and the same cannot be perpetual.
21. In view of the same, it is held that the blacklisting of the
petitioners apart from applying in the present contract will apply against them
for one more year namely the next term and thereafter the petitioners shall be
made eligible for participating in the tenders of the first respondent
municipality. The writ petitions in W.P.Nos.2116 and 2117 are ordered in terms
of the above conditions.
22. With the result, the Writ petitions in W.P.Nos.4822 and 4823 which are
dismissed and the writ petitions in W.P.Nos.2116 and 2117 of 2005 are ordered
accordingly. There is no order as to costs. Consequently, connected W.P.M.Ps.
are closed.
sms
To
1.Pattukottai Municipality
represented by its
Commissioner, Pattukottai,
Thanjavur District.
2.Ms.Jayabarathi Viswanathan,
Chairman, Pattukottai Municipality,
Nadimuthu Nagar,
Pattukottai
Thanjavur District.