Allowed

Dayanand Prasad Sinha @ Company v. The State Of Bihar and Ors.

Patna HC12 Feb 2013CWJC/1541/2013

Case brief

AI extract

What is this about?

The court quashed an order declaring the petitioner a defaulter and debaring them from future tenders. It held that the State authorities could not unilaterally decide disputed questions of breach and fault; such matters must be decided by an independent court or arbitral tribunal before debarment.

What did the court decide?

The letter dated 6.12.2012 declaring the petitioner a defaulter and imposing debarment is quashed, and the respondents are restrained from considering it for tender decisions.

Dayanand Prasad Sinha @ Company Vs The State Of… — Public Procurement and Tenders | Patna HC (2013)

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.1541 of 2013

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====================================================== Dayanand Prasad Sinha & Company through its Partner In Charge, Mr. Dayanand Prasad Sinha, Dayanand Bhawan, Janta Path, Kankarbagh, Patna- 800020 .... .... Petitioner Versus 1. The State of Bihar through the Secretary, Rural Works Department, Govt. of Bihar, Bishwashraiya Bhawan, Bailey Road, Patna 2. The Engineer-in-Chief, Rural Works Department, Govt. of Bihar, Bishwashraiya Bhawan, Bailey Road, Patna 3. The Chief Engineer, Road Construction Department, Govt. of Bihar, Bishwashraiya Bhawan, Bailey Road, Patna 4. The Executive Engineer, Road Construction Department, N.H. Division, Bhabhua 5. The Executive Engineer, Road Construction Department, N.H. Division, Bihar Sharif 6. The Chief Engineer, Road Construction Department, N.H. Wing, Bihar, Patna .... .... Respondents ====================================================== Appearance : For the Petitioner/s : Mr. Suresh Prasad Singh No. 1, Advocate For the Respondent/s : Mr. Anil Kr Uapdhyay SC 20 ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA ORAL ORDER 2 12-02-2013 Heard learned counsel for the petitioner and learned counsel for the State. The petitioner seeks quashing of the letter dated 6.12.2012 issued by the Engineer-in-Chief, Rural Works Department, Government of Bihar by which the petitioner along with others in 123 pages list have been declared as defaulters in terms of Clause 4.8 of the Standard Bid Document and have been debarred from participating in any future tender.

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Patna High Court CWJC No.1541 of 2013 (2) dt.12-02-2013

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The petitioner was awarded two contracts under Mukhya Mantri Gram Sadak Yojna (MMGSY) in package No.20509/10 in Nalanda district in which it is stated that he has completed 56.90% and 64.56% of the works as against the contracts and accordingly declared as defaulter in the list of 123 pages by the Engineer-inChief and in terms of clause 4.8 of the SBD debarred from participating in any future tender.

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It is submitted by learned counsel for the petitioner that the petitioner had already completed more than 80% of the work even before June, 2011 and the work is on the verge of completion and thus the order dated 6.12.2012 is factually incorrect as the same is not based on any actual measurement. It is the contention of learned counsel for the petitioner that whatever delay caused was not on the part of the petitioner but due to non-payment of part bill and that the order has been passed in a biased manner and based on mala fide and extraneous reason.

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Learned counsel for the petitioner relies upon a decision of this Court dated 10.1.2013 passed in CWJC No. 19809 of 2011 (M/s. NCC Ltd. vs. The State of Bihar & Ors.) and its analogous case, in which it has been held as follows :

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“From a perusal of the facts and circumstances enumerated above it is evident that in the present matter the petitioners have been declared defaulters in carrying out their contractual work by the authorities of the State

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Patna High Court CWJC No.1541 of 2013 (2) dt.12-02-2013

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which factual situation is denied by the petitioners who have on the other hand made allegations against the State authorities as being equally liable and at fault in the matter. The contention of learned counsel for the petitioners that in such circumstances the issue regarding default can only be decided by an impartial adjudicatory body has much force in view of the law laid down by the Apex Court in M/s. J.G.Engineering case (supra). The Apex Court has clearly held that the question whether the other party has committed a breach cannot be decided by the party which alleges the breach nor the contract can provide that one party to the contract can decide whether they committed the breach or the other party committed the breach, which question can only be decided by a judicial forum, i.e., a court or an Arbitral Tribunal.

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The said proposition laid down by the Apex Court applies squarely in the present situation where the petitioners have been declared defaulters by alleging breach of contractual terms on their part and as being liable and at fault on account of the slow progress of the work as compared to what was required under the contract. This should be specially so since the petitioners not only do not admit such allegation of liability and fault on their part as made by the respondents but have on the contrary raised the plea of liability and fault on the part of the State authorities in the matter on various grounds. It is evident that the authorities of the State cannot be permitted to decide such matter which involves liability on the part of the State officials also. Thus, even if it is accepted that the authorities of the State have the power to debar a contractor from participating in future contract after they are declared defaulter on account of not making the targeted progress to the extent of 80% in the work, still the finding regarding the default cannot be made by the State authorities and that must come from a proper adjudicatory forum, whether a court or arbitral tribunal. Only after such finding it can be open to the authorities of the State to declare a contractor as a defaulter and debar it from participating in future tenders. It is evident that the effect of such declaration as defaulter and debarment would have serious civil consequence on the party concerned and cannot be left to be decided by the party which has made allegation against whom also there is counter allegation by

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Patna High Court CWJC No.1541 of 2013 (2) dt.12-02-2013

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the contractor concerned.”

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Learned counsel for the State is unable to show as to how the aforesaid case does not apply in the facts and circumstances of the present case.

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It is evident that the petitioner does not admit the delay as having been caused by it and thus it is not open to the respondents to unilaterally decide the same and debar the petitioner without the matter of delay and default being first decided by an independent adjudicatory body, whether a court or arbitral tribunal. The same having not been done, the impugned order debarring the petitioner cannot stand.

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The letter dated 6.12.2012 in so far as it relates to the petitioner is, accordingly, quashed and the respondents are restrained from taking the same into consideration while deciding any tender submitted or to be submitted by the petitioner.

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The writ application is, accordingly, allowed with the aforesaid directions and observations.

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(Ramesh Kumar Datta, J)

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spal/-

Dayanand Prasad Sinha @ Company v. The State Of Bihar and Ors.

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Dayanand Prasad Sinha @ Company v. The State Of Bihar and Ors.

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