Dismissed

Shaik Vazeer v. Rashtriya Ispat Nigam Limited

Andhra Pradesh HC1 Sept 2021WP/15385/2021

Case brief

AI extract

What is this about?

In a writ petition challenging the termination of a contract and five-year debarment by the Respondent, the Court held that since the petitioner could not demonstrate patency of arbitrariness, public interest, or malafides, and the action was based on tender clauses and an Integrity Pact, the order was not amenable to judicial review. The petition was dismissed.

What did the court decide?

The Writ Petition is dismissed; no order as to costs. Pending miscellaneous petitions are closed.

Shaik Vazeer Vs Rashtriya Ispat Nigam… — Public Procurement and Tenders | Andhra Pradesh HC (2021)

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THE HON’BLE SRI JUSTICE A.V.SESHA SAI

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WRIT PETITION No.15385 OF 2021

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ORDER:

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Present Writ Petition, instituted under Article 226 of the Constitution of India, calls in question the proceedings of the respondent-Visakhapatnam Steel Plant, issued vide Reference No.VSP/ WK/WC/21/2600006442/499 dated 23.07.2021.

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According to the petitioner, he is running a Proprietorship firm in the name and style of M/s. Shaik Vazeer and offering services in the field of civil works, earth works, transport services and also supply of Hictachi-200 and tippers. On 14.01.2021, the 1^st respondent herein issued a notice, inviting tenders for the loading of BPG Slag into the Railway Wagons, vide NIT No: 2600006442. The petitioner herein responded to the said tender notice and eventually, the 1^st respondent herein declared him as successful tenderer and vide Ref.No.VSP/WC/ 2600006442/BF/OT/DAK No.245 dated 15.05.2021, award of contract in favour of the petitioner herein was also informed to the petitioner herein by the 1^st respondent. According to the learned counsel for the petitioner, the petitioner herein started attending the work.

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The respondent-organization issued a show cause notice, vide Ref.No.VSP/WC/21/368 dated 17.06.2021, calling upon the petitioner herein to show cause as to why action should not be taken against the petitioner as per Clause No.30 of SCC of tender document for termination of all the contracts in operation and to debar the petitioner for a period of five years.

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In response to the said show cause notice, the petitioner submitted his explanation dated 30.06.2021. Eventually, the respondent-Visakhapatnam Steel Plant, vide Ref.No.VSP/WR/WC/21/ 2600006442/499 dated 23.07.2021, ordered termination of the contracts and also debarred the petitioner from entering into the future business for a period of five years and also ordered forfeiture of EMD/Security Deposits, apart from cancellation of the registration. In the above background, the petitioner herein is before this Court by way of the present Writ Petition, challenging the validity and the legal sustainability of the said order dated 23.07.2021.

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Heard Sri Hemadri V.S.S.R.R.Chandrakanth, learned counsel for the petitioner and Sri W.B.Srinivas, learned Standing Counsel for the respondents, apart from perusing the material available on record.

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Reiterating the averments and the grounds urged in the Writ Petition, it is contended strenuously by the learned counsel for the petitioner that the action impugned in the present Writ Petition is highly illegal, arbitrary, unreasonable and violative of Articles 14 and 19(1)(g) of the Constitution of India. It is further contended by the learned counsel that since the petitioner herein has been carrying on the work without any default and by strictly adhering to the terms and conditions of the tender, the impugned action is not warranted. It is further submitted by the learned counsel that M/s. Shaik Vazeer and M/s. VSS Constructions and Logistics are different and distinct concerns and though the petitioner herein is the Proprietor of the said two concerns, the order of debarring VSS Constructions and Logistics cannot be the basis and foundation for the impugned action. It is further submitted by the

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learned counsel that the petitioner herein never suppressed any information or documents nor the petitioner submitted any false/fake/ doctored documents and that M/s. Shaik Vazeer had never been debarred by Visakhapatnam Steel Plant. It is further submitted by the learned counsel that the petitioner received the show cause notice on 17.06.2021, but the respondent-authorities issued work order and awarded contract on 15.05.2021, as such, the respondents herein ought to have withheld the grant of contract and instead of doing so, the respondent-organization awarded the work to the petitioner and basing on which, the petitioner herein started work on 23.05.2021, and the petitioner invested approximately an amount of Rs.2 crores.

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On the contrary, it is contended by Sri W.B.Srinivas, learned Standing Counsel for the respondent-organization that there is absolutely no illegality nor there exists any procedural infirmity in the impugned action and in the absence of the same, the questioned order is not amenable for any judicial review under Article 226 of the Constitution of India. It is further submitted by the learned counsel that strictly in accordance with the procedure and only after issuing the show cause notice, calling for the explanation and only after considering the said explanation dated 30.06.2021, the respondent-organization passed the impugned order, as such, the same cannot be faulted. It is also the submission of the learned counsel that in the absence of any arbitrariness, involvement of the public element and the malafides, the present Writ Petition, touching the contractual issues, cannot be maintained by this Court.

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In the above background, now the issue that emerges for consideration of this Court in the present Writ Petition is, “Whether the

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petitioner herein is entitled for any relief from this Court under Article 226 of the Constitution of India?”

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There is absolutely no controversy as regards the award of contract in favour of the petitioner herein. The respondents herein, while referring to Clause No.30 of SCC and Section 3 of the Integrity Pact, issued the show cause notice. The said Clause and Section read as under:

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"a) Clause No.30 of SCC:

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Quote:

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“If it comes to the notice of VSP at any stage right from request for registration/tender document that any of the certificates/documents submitted by applicant for registration or by bidders are found to be false/fake/ doctored, the party will be debarred from participation. In all VSP tenders for a period of 05 (FIVE) YEARS including termination of Contract, if awarded. EMD/Security Deposit, etc., if any, will be forfeited. The Contracting Agency in such cases shall make good to VSP any loss or damage resulting from such termination. Contracts in operation anywhere in VSP will also be terminated with attendant fall outs like forfeiture of E.M.D. /Security Deposit, if any, and recovery of risk and cost charges etc. Decision of V.S.P. Management is will be final and binding.”

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Un-Quote:

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b) As per the Integrity Pact:

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Section 3 – Disqualification from tender process and exclusion from future contracts.

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(2) If the Bidder(s)/Contractor(s), before award of contract or after award of contract has committed a transgression through a violation of Section 2 above or in any other form such as to put his reliability or credibility in question, the Principal is entitled to disqualify the Bidder(s) from the tender process or to terminate the contract, if already awarded, for that reason, without prejudice to other

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remedies available to the Principal under the relevant GCC of the tender/contract."

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After receipt of the explanation dated 30.06.2021, the respondent-organization issued the impugned order. In the explanation, the petitioner herein stated that the concerns, viz., M/s. Shaik Vazeer and VSS Constructions and Logistics are different and distinct concerns and both are proprietary concerns. In the explanation, the petitioner herein also stated that they never suppressed any information nor documents regarding M/s. Shaik Vazeer nor produced any fake or false documents and that M/s. Shaik Vazeer was never debarred by VSP. It is significant to note in this context that prior to awarding the contract, a declaration was also given by the petitioner and to the issue as to whether they have ever been debarred in VSP, the petitioner herein filled up the said column with ‘NO’. A reading of Clause 30 of SCC and Section 3 of the Integrity Pact would make it very much manifest that the respondents are empowered to take action in accordance with the same.

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The contention of the learned counsel for the petitioner that since M/s. Shaik Vazeer and VSS Constructions and Logistics are two different and distinct proprietorship firms, simply because M/s. VSS Constructions and Logistics was debarred, the same cannot be a foundation for the respondents herein to resort to the impugned action against the petitioner herein. It is absolutely not in controversy that the Proprietor of both the firms, viz., M/s. Shaik Vazeer and VSS Constructions and Logistics happened to be the deponent of the present Writ Petition. In the name of the technicality sought to be pressed into service by the learned counsel for the petitioner, the object behind the above referred clauses cannot be frustrated and in the considered

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opinion of this Court, the contention advanced by the learned counsel for the petitioner cannot sustain for judicial scrutiny. It is a settled and well-established principle of law that in the contractual matters, the Courts are required to be very slow in exercising the jurisdiction unless the action complained is patently arbitrary, involves public interest and suffers from malafides. In the considered opinion of this Court, the said contingencies are conspicuously absent in the case on hand. Therefore, this Court does not find any valid reason to meddle with the impugned order.

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Accordingly, this Writ Petition is dismissed. There shall be no order as to costs of the Writ Petition.

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Miscellaneous Petitions pending, if any, in this case shall stand closed.

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___________________ A.V.SESHA SAI, J

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Date: 01.09.2021 siva

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THE HON’BLE SRI JUSTICE A.V.SESHA SAI

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WRIT PETITION No.15385 OF 2021

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Date: 01.09.2021

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siva

Shaik Vazeer v. Rashtriya Ispat Nigam Limited

Case brief

What is this about?

What did the court decide?

Shaik Vazeer v. Rashtriya Ispat Nigam Limited

Case brief

What is this about?

What did the court decide?

What the court decided

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