Allowed

M/s. Ferrari Video, v. Andhra Pradesh Technology Services Limited

Telangana HC4 Sept 2012WP/18138/2012

Case brief

AI extract

What is this about?

The High Court in a writ petition held that cancelling a contract award, forfeiting EMD, and blacklisting the petitioner was unjustified because the tender notice did not explicitly include international bodies like the World Bank within the debarment disclosure clause.

What did the court decide?

The impugned order cancelling the award notification, forfeiting the EMD, and blacklisting the petitioner was set aside. An undertaking was directed to be given to execute the contract solely.

M/s. Ferrari Video, Vs Andhra… — Constitutional and Fundamental Rights | Telangana HC (2012)

¶1

THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY W.P.No.18138 of 2012

¶2

Date : 4-9-2012

¶3

Between:

¶4

M/s. Ferrari Video Represented by its Proprietor Pradeep Kumar Somani .. Petitioner

¶5

And Andhra Pradesh Technology Services Limited (APTS), Represented by its Managing Director, Hyderabad and others .. Respondents

¶6

Counsel for the petitioner: Sri Dinesh Babu for Sri V. Harish Kumar Counsel for the respondent No.1 : Sri P. Rajesh Babu

¶7

The Court made the following:

¶8

ORDER:

¶9

This Writ Petition is filed for a mandamus to set-aside letter No.APTS/RVM-NRC-APEGEL/2012, dated 15-6-2012 of respondent No.1 whereby it has cancelled the contract awarded in favour of the petitioner, forfeited the Earnest Money Deposit (EMD) and blacklisted it.

¶10

The petitioner is a proprietary concern. It is engaged in the business of selling and hiring of various Fast Moving Consumer Goods (FMCG), namely, Electronic and Information Technology products, including Computers, Printers, Mobile Phones, Digital Cameras, LCD Televisions etc., to various Central and State Government Departments. Respondent No.1 initially called for tenders on 25-7-2011 for procurement and commission of Electronic items for Mandal Resource Centers and various Schools under the Rajiv Vidya Mission Project, Sarva Siksha Abhiyan Department. The said tender along with two subsequent tender notifications became abortive with their cancellation. In response to the fourth tender notification issued on 30-1-2012, the petitioner filed its tender and after holding of the pre-bid meeting on 3-2-2012, it has

¶11

submitted its quotations on e-Procurement Portal. Subsequently, the tenders were opened in which the petitioner has emerged the lowest tenderer. The petitioner’s bid was accepted by the Technical-cum-Purchase Committee (TCPC) in its meeting held on 30-3-2012 and the notification of award was made on the same day. As required, the petitioner has submitted the performance guarantee for Rs.24,69,275/- on 9-4-2012 in favour of respondent No.1, two days beyond the permitted time. The petitioner requested the respondents to extend the time by furnishing sufficient reasons for the delay caused in submitting the performance guarantee. It has also submitted demand draft for an amount of Rs.9880/- towards the Corpus Fund.

¶12

On 11-4-2012, respondent No.1 has issued notice to the petitioner stating that a complaint was received that the latter’s consortium partner i.e., Videocon Industries Limited, was debarred by the World Bank for a period of three years, and that in its declaration, the petitioner has not disclosed the said fact. The petitioner was therefore called upon to state, on or before 18-4-2012, as to why the notification of award made in its favour should not be cancelled. The petitioner has given a detailed explanation wherein it has stated that as per Clause 5 of Section B-B(1) of the Tender Call Notice, the bidder should submit a declaration that it is not debarred/blacklisted by any State Government, Union

¶13

Government, Central and State Government Undertakings/Enterprises/Organisations; that the consortium partner of the petitioner, which was blacklisted by the World Bank, does not fall under the said Clause and that therefore there was no necessity for the petitioner to disclose the said fact. However, by the impugned order, apart from cancelling the notification of award, the petitioner’s EMD was forfeited and it was blacklisted for one year. Feeling aggrieved by the said order, the petitioner filed the present Writ Petition.

¶14

I have heard Sri Dinesh Babu, learned counsel representing Sri V. Harish Kumar, learned counsel for the petitioner and Sri P. Rajesh Babu, learned Standing Counsel for respondent No.1. I have also perused the averments in the counter-affidavit filed on behalf of respondent No.1.

¶15

The controversy centers around the alleged nondisclosure of the blacklisting of the petitioner’s consortium partner i.e., M/s. Videocon Industries Limited. According to the respondents, Clause B(1)(5) of Section B of the Tender Call Notice, mandates the bidder to disclose such blacklisting. It is therefore necessary to consider the said Clause, which reads as under:

¶16

“The bidder should submit/give declaration stating that they are not debarred/blacklisted by any State Government, Union Government, Central & State Govt. Undertakings/enterprises/Organisations and any other Quasi Government

¶17

bodies/Organisation for non-satisfactory performance, corrupt & fraudulent or any other unethical business practices. Further stating/declaring that no cases pending against the firm/organization either in Government (State or Union) for involvement in cases for supply of sub-standard goods/material or track record of supply of inferior quality furniture or no enquiries on past supplies are being conducted or underway as per Format P7.”

¶18

The above reproduced Clause refers to debarment/blacklisting by any State Government, Union Government, Central and State Government Undertakings/Enterprises/Organisations and any other Quasi Government bodies/Organisations. The World Bank, which is an International organization, cannot be said to fall under any of the agencies mentioned in the above mentioned Clause (5). The action of cancellation of award of contract, forfeiture of the EMD and blacklisting of a bidder, results in serious adverse consequences. Such an action cannot be taken on the basis of a term in the tender notice which does not specifically include the agency which has blacklisted the petitioner’s consortium partner. It is not the pleaded case of the respondents that the petitioner has been blacklisted or that its performance is unsatisfactory. On the contrary, there is no whisper of allegation against the petitioner. As the World Bank is not specifically included in Clause B(1)(5) of Section B of the Tender Call Notice, there is every justification for the petitioner to have thought that

¶19

there was no need for it to disclose the information relating to blacklisting of its consortium partner by an agency which is not included in the said Clause. Therefore, I am of the opinion that the extreme action of respondent No.1 in cancelling the notification of award made in favour of the petitioner, forfeiting of the E.M.D. and blacklisting it, is unjustified, iniquitous and cannot be sustained in law. The impugned order is accordingly set-aside. Since the petitioner’s consortium partner is under cloud, the petitioner shall give an undertaking before respondent No.1 to the effect that it will execute the contract without relying upon its consortium partner and that it will be solely responsible for due performance of the contract in question.

¶20

The Writ Petition is accordingly allowed. As a sequel, WPMP No.23233 of 2012 is disposed of as infructuous.

¶21

_____________________ C.V.Nagarjuna Reddy, J

¶22

Date : 4-9-2012

¶23

M/s. Ferrari Video, v. Andhra Pradesh Technology Services Limited

Case brief

What is this about?

What did the court decide?

M/s. Ferrari Video, v. Andhra Pradesh Technology Services Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Parties & counsel

Coram

Case details

Similar cases

M/s. G.K. Organic Life Sciences Vs The Commissioner and Director of Agriculture

M/s. Gene 7 Biotech Private Limited Vs The Commissioner and Director of Agriculture

M/s. Oil Palm Developers and Processors Association Vs The Government of Andhra Pradesh

Annie Besant College of Education, Vs The Acharya Nagarjuna University

Vivekananda College of Education, Vs The Acharya Nagarjuna University

Venkateswara College of Education, Bestawaripet, Vs The Acharya Nagarjuna University