M/S Ratan Kumar Singh v. Central Railside Warehouse Company Limited

order itself being reasonable, fair and proportionate to the gravity of the offence is similarly examinable by a writ Court. The legal position on the subject is settled by a long line of decisions rendered by this Court starting with Erusian Equipment & Chemicals Ltd. v. State of West Bengal and Anr. (1975) 1 SCC 70 where this Court declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the Authority passing any such order was required to give a fair hearing before passing an order blacklisting a certain entity. This Court observed: "20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."

¶23In the present case, it is observed that no specific show cause notice was given prior to the blacklisting of the Petitioner. As per the tender, it is the maximum period for which the blacklisting can be undertaken.

¶24Vide letter dated 25th November, 2021, the Respondent had mentioned that the non-adherence to the order for taking over the operation at the RWC would lead to actions being initiated against the Petitioner in terms of the tender clauses including the clause relating to blacklisting. However, undeniably, no opportunity to be heard was given.

¶25However, on merits, this Court is of the opinion that the charges payable to the Board are not such as to give the Petitioner a legal basis for resiling from the bid it had submitted. In fact, the Petitioner would have been conscious of the occurrence of such events especially when labour boards of this nature are involved. The Petitioner has clearly resiled from the bid without a justifiable cause. While, the five years blacklisting is on the higher side, the Petitioner also cannot go completely scot-free. A perusal of the letter dated 25th November 2021, shows that the Petitioner was called upon to deposit a sum of Rs. 18,00,000/- and take over the work. The relevant extract of the letter reads: "You are once again requested to kindly deposit amount of Rs. 18,00,000/- (Rupees Eighteen Lakhs only) and takeover the work of service provider at railside warehouse complex: Badnera, Maharashtra on or before 27.11.2021 failing which necessary action will be initiated against you as per the aforesaid tender cause and Bid Security Declaration submitted by you, without further notice." This letter was followed by the impugned blacklisting letter dated 30th November 2021.

Directions

¶26Applying the principles in Kulja Industries (supra) and in the overall facts and circumstances of this case, it is deemed appropriate to direct the Petitioner to deposit a sum of Rs. 18,00,000/-, with the Respondent for having resiled from the bid.

¶27Accordingly, the Petitioner is directed to deposit a sum of Rs.18,00,000/- in accordance with the conditions laid down in the tender, with the Respondent within four weeks. Upon the said deposit being made, the impugned black listing order shall stand lifted and the Petitioner will no longer be treated as having been a blacklisted entity vide the said order.

¶28The communications issued by the Respondent dated 25th November, 2021 and the grounds stated in the black listing order dated 30th November, 2021 shall be treated as a show cause notice to the Petitioner as to why black listing should not be done and why the amount of Rs.18,00,000/- ought not to be forfeited.

¶29The Petitioner shall file its reply to the said communications within a period of four weeks. A hearing shall be given to the Petitioner and a reasoned decision shall be passed by the Respondent. The deposit of Rs. 18,00,000/- shall abide by the final order to be passed.

¶30With these observations, the present petition and all pending applications are disposed of.

PRATHIBA M. SINGH JUDGE JANUARY 23, 2023/MR/Am

* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of Decision: 23rd January, 2023 + W.P.(C) 222/2022 & CM APPL. 614/2022 M/S RATAN KUMAR SINGH ..... Petitioner Through: Mr. Neeraj Malhotra, Sr. Advocate with Mr. Parmatma Singh, Mr. Mayank Jain, Mr. Madhur Jain and Mr. Nimish Kumar, Advocates. (M: 8826719057). versus CENTRAL RAILSIDE WAREHOUSE COMPANY LIMITED ..... Respondent Through: Mr. Ashish Tiwari and Mr. Sahib Patel, Advocate for CRWC. CORAM: JUSTICE PRATHIBA M. SINGH Prathiba M. Singh, J. (Oral) 1. This hearing has been done through hybrid mode. 2. The present petition has been filed by M/s Ratan Kumar Singh, which is a sole proprietary concern, challenging the blacklisting order dated 30th November, 2021 passed by the Respondent- Central Railside Warehouse Company Ltd. which has now been transferred to Central Warehousing Corporation. The said order reads as: "Whereas, you have participated in the tender and furnished all requisite documents as per eligibility criteria along with the declaration that you agree to abide by all terms and conditions of Contract. Whereas as you were selected as L1 bidder and accordingly the said contract was awarded to you vide letter no.- CRWC-II/RWC-Badnera/H&T-Tender/2021- 22/1429 dated 12.11.2021. Whereas, vide award letter dated 12.11.2021 you were asked to take over the work at RWC Badnera w.e.f. 16.11.2021 and submit the security deposit within 15 days of the date of award letter as per tender terms & conditions. Whereas, vide letter dated 15.11.2021, you had shown your inability to take over work and asked for cancellation of the award letter. Whereas, vide this office letter dated 25.11.2021 you were again requested to take over the work at RWC Badnera and submit the security deposit within 15 days of the date of award letter i.e., by 27.11.2021 failing which necessary action will be initiated against you as per the tender clause, terms & conditions mentioned below: • BLACKLISTING/ DEBAR (Clause 19, page 29/75): The non-performing/defaulting service provider may be Suspended / banned for trade relation/black listed/debarred for participation in future Tender enquiry for the period upto 5 years based on the gravity of non-performance/breach of any terms of the Contract/default of the service provider by the Managing Director of the CRWC whose decision in the matter shall be final and binding. • BID SECURITY DECLARATION (Appendix- XV-page 75/75): As per Bid Security Declaration duly stamped, signed and submitted by you wherein you have accepted that in case of withdrawal of bid during the validity period you would be suspended for a period of 05 years from the date of NIT by CRWC. • SECURITY DEPOSIT (Clause iv, page 12- 13/75): The successful Bidder shall furnish, within a fortnight from the date of award of work by CRWC, Security Deposit of Rs. 18, 00, 000/- (Rs. Eighteen Lakhs Only) failing which the work order shall be liable to be cancelled at his/their risk and cost and also subject to such other remedies as may be available to the Company under the terms of the contract. Besides the CRWC may suspend/ban the trade relations with him/them or debar to participate in all future Tender enquiries with CRWC based on the merit of each case upto a period of five years without prejudice to any other rights and remedies of the CRWC under the contract and law. Whereas, vide letter dated 26.11.2021, you have conveyed your inability to take over the work for handling rail/road borne cargo at Railside Warehouse Complex Badnera, Maharashtra. Whereas, you have failed to take over the work awarded, failed to execute the agreement with CRWC and failed to submit the security deposit within fortnight from the dated of award of contract, as per terms and condition agreed by you. Whereas, you have breached the terms and conditions of the tender. Therefore, you have been backlisted and debarred by CRWC for participation in future tender enquiries of CRWC for a period of 05 (five) years from date of issue