Allowed

G.V.P.R. Engineers Ltd. v. Hubli Electricity Supply Company Ltd.

Karnataka HC21 Jun 2024WP/102646/2015

Case brief

AI extract

What is this about?

The High Court quashed an official memorandum blacklisting a contractor and ordering recovery due to violation of natural justice, specifically the failure to serve the enquiry report before passing orders.

What did the court decide?

The impugned official memorandum dated 18.02.2015 is quashed. Respondent No.3 must furnish the special team report to the petitioner for explanation.

G.V.P.R. Engineers Ltd. Vs Hubli… — Public Procurement and Tenders | Karnataka HC (2024)

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W.P.NO.102646/2015

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 21^ST DAY OF JUNE, 2024

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BEFORE

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THE HON'BLE MR JUSTICE SACHIN SHANKAR MAGADUM WRIT PETITION NO.102646 OF 2015 (GM-RES)

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BETWEEN

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G.V.P.R. ENGINEERS LTD NO.103, LALEHZAR APARTMENTS, 45/1-2, PALACE ROAD, BENGALURU-560 001. REPRESENTED BY ITS GENERAL MANAGER (PROJECTS), MR. PRASANTO ROY, AGE: 67 YEARS.

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...PETITIONER

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(BY SRI.L.M.CHIDANANDAYYA, ADVOCATE) AND

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1 . HUBLI ELECTRICITY SUPPLY COMPANY LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT 1956, REPRESENTED BY ITS MANAGING DIRECTOR, CORPORATE OFFICE, NAVANAGAR, P.B. ROAD, HUBBALLI-580 025.

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2 . THE CHIEF ENGINEER (ELE) HUBLI ELECTRICITY SUPPLY COMPANY LIMITED, CORPORATE OFFICE, NAVANAGAR, P.B. ROAD, HUBBALLI-580 025.

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3 . THE SUPERINTENDENT ENGINEER (ELE), PROJECTS (PMC), HUBLI ELECTRICITY SUPPLY COMPANY LIMITED, CORPORATE OFFICE, NAVANAGAR, P.B. ROAD, HUBBALLI-580 025.

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4 . ASST. EXECUTIVE ENGINEER, HUBLI-ELECTRICITY SUPPLY COMPANY LIMITED, CORPORATE OFFICE, NAVANAGAR, P.B. ROAD, HUBBALLI-580 025.

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…RESPONDENTS

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(BY SRI.B.S.KAMATE, ADVOCATE)

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W.P.NO.102646/2015

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THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO CALL FOR THE RECORD WHICH ULTIMATELY RESULTED IN PASSING OF OFFICIAL MEMORANDUM DATED 18.02.2015 PRODUCED AT ANNEXURE-A BEARING NO.HESCOM/SEE (PMC) /EE-P1/2014-15 CYS-3513 PASSED BY THE 3^RD RESPONDENT; ISSUE AN ORDER, DIRECTION WRIT IN THE NATURE OF CERTIORARI QUASHING THE OFFICIAL MEMORANDUM DATED 18.02.2015 PRODUCED AT ANNEXURE-A BEARING NO.HESCOM/SEE (PMC)/EE-P1/2014-15 CYS-3513 PASSED BY THE 3^RD RESPONDENT AS ILLEGAL, VOID AND ULTRAVIRES THE POWERS CONFERRED TO THE RESPONDENT.

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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDER ON 20.06.2024, COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner company has filed the captioned petition assailing the impugned official memorandum dated 18.02.2015 passed by respondent No.3 as per Annexure-A wherein respondent No.3 on an enquiry has blacklisted the petitioner-company and has debarred it from participating either in the tender or in execution of the work in HESCOM jurisdiction for a minimum period of two years.

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The facts leading to the case are that; petitioner-company pursuant to invitation floated by respondent No.1 to implement the project styled as Rajiv Gandhi Grameena Vidyuthikarna Yojana Scheme,

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W.P.NO.102646/2015

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participated and being the lowest bidder, bid was accepted and the respondents issued letters of award followed by the agreement. Petitioner contends that the work of the project is completed as per the terms and conditions mentioned in the work order and the concerned official of the respondents has issued work completion certificate followed by performance certificate and consequently, the bank guarantee is returned. The petitioner has alleged that after completion of the contractual obligation, the impugned order blacklisting the petitioner-company and also ordering recovery of money is without material on record. Therefore, petitioner-company is seeking quashing of the impugned proceedings blacklisting the petitionercompany and also ordering recovery of pecuniary losses suffered by respondent/HESCOM.

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3. Per contra, the respondents on receipt of notice

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have filed statement of objections and have countered the petitioner’s claim. The respondents in the statement of objections disputing the petitioner’s claim have contended that the special team constituted by respondent/HESCOM

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W.P.NO.102646/2015

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have verified the work executed by the petitioner and on spot inspection have found several irregularities committed by the petitioner-company. Therefore, the respondents have contended that these irregularities were committed by the contractor in connivance with the HESCOM officers/officials.

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Heard the learned counsel for the petitioner, learned counsel for the respondents and perused the impugned official memorandum.

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The impugned official memorandum in blacklisting the petitioner-company and debarring it from participating for a minimum period of two years and also recovery of pecuniary loss clearly hinges on the special team’s report. Before adverting to the facts of the case, this court deems fit to cull out para 15 of the official memorandum, which reads as under:

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“15. I have given my anxious consideration to the written & oral submissions made on behalf of contractor. The special teams constituted by HESCOM have verified the actual works executed by the contractor by making spot inspection and the reports of the said special teams unclinchingly point out

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W.P.NO.102646/2015

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the irregularities have been committed by the contractor. I have carefully gone through the said reports and same are based on detailed physical verification of infrastructure created & BPL households serviced. The said irregularities were committed by the contractor with a view to cheat HESCOM that too in connivance with HESCOM officers/officials. The materials placed on record prima facie show that the said officers and officials of HESCOM were hand in glove with the contractor in cheating HESCOM. The said officials have been suspended. The contractor has not only cheated HESCOM but has committed the offence of criminal breach of trust along with out said officers and as such HESCOM has no other go but to file complaints against the contractor with jurisdictional police for the offences punishable under sections 408, 409 and 420 IPC. The jurisdictional police have commenced the investigation on the basis of the complaints lodged by HESCOM. There is the prima facie material on record to show that the contractor has miss-appropriated public fund and has cheated HESCOM as well.”

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Respondent No.3 referring to the spot inspection done by the special team constituted by HESCOM and placing reliance on the report submitted by this special team has come to the conclusion that work executed by the petitioner-company suffers from several irregularities.

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The order under challenge is not sustainable on

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two counts. Firstly, the report submitted by the special team is not served on the petitioner-company and this

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W.P.NO.102646/2015

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factual matrix is not seriously disputed by the respondents while arguing before this court. This report is also not a part of the statement of objections. This report even otherwise is not reflected in the impugned official memorandum. There is clear ambiguity in regard to nature of the irregularities alleged to have been committed by the petitioner-company. The irregularities are not specifically pointed out and the same can be gathered from para 15, which is found to be too vague to be accepted. If the impugned official memorandum is based on the report submitted by the special team, the order blacklisting the petitioner-company obviously is in gross violation of principles of natural justice.

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Secondly, there are serious allegations that petitioner-company has cheated HESCOM in connivance with HESCOM officers/officials. Though learned counsel appearing for the respondents submitted that some of the officials are placed under suspension, but he has no instruction as to what is the action taken against these erring officials.

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W.P.NO.102646/2015

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This writ petition is filed in 2015. The respondents have not placed any materials to substantiate that the petitioner-company in connivance with the officials of HESCOM has committed serious irregularities which has resulted in financial loss to HESCOM. The entire procedure adopted by respondent No.3 suffers from material irregularities as there is no proper enquiry. The impugned official memorandum also does not substantiate and there is no reason adverting to the completion certificate relied on by the petitioner-company.

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In view of these significant details, the impugned official memorandum is liable to be quashed. The matter requires fresh consideration to redo the enquiry by compliance of the report submitted by the special team to the petitioner-company.

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For the forgoing reasons, this court passes the following:

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ORDER

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i) The writ petition is allowed.

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W.P.NO.102646/2015

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ii) The impugned official memorandum dated 18.02.2015 is hereby quashed.

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iii) Respondent No.3 before proceeding with the enquiry shall furnish copy of the report submitted by the special team.

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iv) If such a report is furnished to the petitionercompany, the petitioner-company shall offer its explanation by filing objections.

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v) After hearing the petitioner-company, respondent No.3 shall proceed to pass

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appropriate order, in accordance with law.

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Sd/JUDGE

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MBS Ct-mck

G.V.P.R. Engineers Ltd. v. Hubli Electricity Supply Company Ltd.

Case brief

What is this about?

What did the court decide?

G.V.P.R. Engineers Ltd. v. Hubli Electricity Supply Company Ltd.

Case brief

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What did the court decide?

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