Allowed¶32

Aim of People (Society) v. The State of Bihar

Patna HC25 Jul 2024CWJC/3129/2024

Case brief

AI extract

What is this about?

blacklisting of sanitation contractor; Nagar Nigam Sasaram 48-ward cleanliness contract; no power to blacklist contractor; municipal board dictate versus municipal commissioner award and show cause notice; Annexure-P/9 blacklisting order set aside; contract cancellation not challenged; no arbitration clause; monetary claims by civil suit or representation; Patna High Court; K. Vinod Chandran CJ; Partha Sarthy J; CWJC 3129/2024; 25-07-2024

What did the court decide?

Impugned order set aside to the extent it blacklists the petitioner (contract cancellation left untouched as unchallenged); petitioner permitted to pursue any monetary claims against the Nagar Nigam by civil suit or, first, by a representation to the authorities. ¶32

Aim of People (Society) Vs The State of Bihar — Patna HC (2024) — LawSathi Research

What the court decided

AI extract

Outcome

¶32

Issue for consideration

Whether the authority (Municipal Corporation, Sasaram) possessed any power to blacklist the petitioner-contractor, the petitioner contending that the granting authority had only the right to cancel the work allotment and not to blacklist. +1 more

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Court's answer

No power was found vesting in the authority to blacklist the petitioner; accordingly, the impugned order is set aside to the extent it blacklists the petitioner.

¶31

Ratio / Principle

When the Municipal Commissioner had issued the award and the show cause notice, there could have been no dictate from the Municipal Board insofar as blacklisting of the petitioner was concerned.

¶27

Key takeaways

Any monetary claims of the petitioner against the Nagar Nigam must be pursued by way of a civil suit, since the agreement contains no arbitration clause; alternatively, the petitioner may first approach the authorities with a representation before initiating such a suit.ratio¶31

Detailed headnote1 paragraphs

Patna High Court, CWJC No.3129 of 2024 (oral judgment per the Chief Justice, 25-07-2024): Petitioner-society held the contract for cleanliness work across all 48 wards of Nagar Nigam, Sasaram — door-to-door garbage collection, segregation, sweeping, drains, parks and campuses — under an agreement executed 30.08.2023 valid for one year. The petitioner itself sought cancellation (Annexure-P/4, 13.12.2023) citing worker strikes over wages; after a defect notice threatening blacklisting (Annexure-P/6) and its reply (Annexure-P/7), it was blacklisted by Annexure-P/9. The Court found no power in the awarding authority to blacklist the contractor and observed that once the Municipal Commissioner had issued both the award and the show cause notice, no dictate from the Municipal Board could govern the blacklisting. The impugned order was set aside only to the extent it blacklisted the petitioner, the contract cancellation being left intact as unchallenged. Monetary claims, if any, were directed to a civil suit in view of the absence of an arbitration clause, or to a prior representation before the authorities. Writ petition allowed.

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IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.3129 of 2024

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======================================================

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Aim of People (Society) having its registered office at Madhav Nagar Road No.4, Jehanabad (Bihar), Pin -804408, represented through its Managing Director namely Satyendra Kumar (male), aged about 61 years, Son of Late Bharosha Sharma, resident of Madhav Nagar Colony, P.O and P.S.Jehanabad, District-Jahanabad

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... ... Petitioner/s

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Versus

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The State of Bihar Through Principal Secretary, Urban Development and Housing Department, Government of Bihar, Patna.

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The Principal Secretary, Urban Development and Housing Department, Government of Bihar, Patna.

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The Municipal Corporation, Sasaram through its Municipal Commissioner.

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The Municipal Commissioner, Municipal Corporation, Sasaram, Bihar.

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The Mayor, Municipal Corporation, Sasaram, Bihar.

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Hafiz, son of not known, the Ward Councellor Municipal Corporation, Sasaram, Bihar.

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Baby Devi, daughter of not known, the Ward Councellor, Municipal Corporation, Sasaram, Bihar.

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Param Jyotiya @ Prabhawati Devi, daughter of not known, v The Ward Councellor, Municipal Corporation, Sasaram, Bihar.

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Vinita Devi, daughter of not known, the Ward Councellor Municipal Corporation, Sasaram, Bihar.

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Munni Devi, daughter of not known, the Ward Councellor Municipal Corporation, Sasaram, Bihar.

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Kalawati Devi, daughter of not known, the Ward Councellor, Municipal Corporation, Sasaram, Bihar.

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================	===	... ... ==========================	Respondent/s =========
Appearance : For the Petitioner/s	:	Mr.Ashish Giri, Advocate Mr. Sumit Kumar Jha, Advocate Ms. Riya Giri, Advocate
For the State For the respondent nos.	:	Mr. P.K. Shahi, Advocate General Mr. S.K. Mandal SC-3 Ms. Neelam Kumari AC to SC-3
3 to 5	:	Mr. Bajrangi Lal, Advocate
For the respondent nos.
6 to 11 ================	: ===	Mrs. Mayuri, Advocate ==========================	=========
CORAM: HONOUR	ABL	E THE CHIEF JUSTICE

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and

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HONOURABLE MR. JUSTICE PARTHA SARTHY

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Patna High Court CWJC No.3129 of 2024 dt.25-07-2024 2/4

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ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE)

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Date : 25-07-2024

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The petitioner was awarded cleanliness work in all (48) ward of Nagar Nigam Sasaram which includes door to door garbage collection work, segregation, secondary Storage, sweeping and cleaning of all road, pavements, lanes, Galis, all major and minor drains, Parks, Collectorate Campus, Court Campus etc, in day time and an agreement was executed 30.08.2023. The contract was valid for one year. Immediately after the contract was taken up, the petitioner made a request to the Nagar Nigam who had awarded the contract; for cancellation of the same. Annexure-P/4 dated 13.12.2023 is the communication addressed to the Municipal Commissioner. The petitioner in the said communication had stated that the workers employed by them are going on constant strikes and demanding more wages and in such circumstance they are unable to carry on with the work.

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The Municipal Commissioner on the other hand issued Annexure-P/6 pointing out a number of defects in the work and threatened blacklisting of the organization and also depriving the petitioner from the work, for gross negligence in

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Patna High Court CWJC No.3129 of 2024 dt.25-07-2024 3/4

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the cleaning activities. The petitioner replied to the same by Annexure-P/7. Eventually by Annexure-P/9 the petitioner was blacklisted. As of now it is submitted by both parties that the petitioner’s contract is also no more functional and the Nagar Nigam is handling the sanitation work through other agencies.

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The petitioner’s contention is only with respect to the blacklisting having been carried out. The petitioner does not even challenge the cancellation. The petitioner relies on Annexure-P/1 agreement and points out that if there is defective work, the authority who granted the contract has only the right to cancel the work allotment and not to blacklist the petitioner. The respondent also was not able to show us any authority to blacklist the contractor except for the submission that the Municipal Board had decided that the petitioner would be blacklisted. When the Municipal Commissioner has issued the Award and the show cause notice also, there could have been no dictate from the Municipal Board insofar as blacklisting of the petitioner.

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In any event, we did not find any power on the authority to blacklist the petitioner and as we noticed above the petitioner does not challenge the cancellation of contract despite pointing out that in the impugned order there are many

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Patna High Court CWJC No.3129 of 2024 dt.25-07-2024 4/4

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other reasons which have not been stated in the show cause notice. Learned Counsel for the Nagar Nigam submits that there were several show cause notices issued.

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In any event, we are not concerned with that since the cancellation of work is not challenged. Finding that there is no power to blacklist the petitioner, the impugned order to the extent it blacklists the petitioner is set aside. If the petitioner has any monetary claims against the Nagar Nigam, the petitioner would have to avail the appropriate remedy by way of filing a civil suit since there is no arbitration clause in the agreement. The petitioner could also approach the authorities for any monetary claims with a representation before a civil suit is initiated.

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The writ petition stands allowed with the above directions.

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(K. Vinod Chandran, CJ)

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(Partha Sarthy, J)

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ranjan/-

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Aim of People (Society) v. The State of Bihar

Case brief

What is this about?

What did the court decide?

Aim of People (Society) v. The State of Bihar

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Procedural history

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