Bharti Airtel Services Limited vs Directorate Of Treasuries, Pension And Entitlements

Raghvendra Singh Chauhan, CJ

With the consent of the learned counsel for the parties, this case is being decided at the admission stage itself.

The appellant M/s Bharti Airtel Services Limited has challenged the legality of the order dated 01.11.2021, passed by the Additional District Judge / Commercial Court, Dehradun, whereby the learned Judge had dismissed the application filed by the appellant under Section 9 of the Arbitration and Conciliation Act, 1996 ("the Act", for short).

Briefly, the facts of the case are that the respondent, Directorate of Treasuries, Pension and Entitlements, had issued a tender notice. The appellant had participated in the tender process; on the completion of the tender process, the appellant was declared as the lowest bidder (L-1).

After the finalization of the financial bid, M/s Reliance Retail Limited, one of the bidders, submitted a complaint on 06.04.2021, wherein it requested that M/s Reliance Retail Limited should be declared as the lowest bidder, and not the appellant. Notwithstanding the complaint dated 06.04.2021, on 26.06.2021, the work order was issued to the appellant by the respondent.

On 02.07.2021, another complaint was filed by the respondent. Relying on the said complaints, the respondent cancelled the work order by its order dated 21.08.2021. Therefore, the appellant filed an application under Section 9 of the Act for staying the operation of the order dated 21.08.2021. However, by the impugned order, the said application has been dismissed. Hence, the present appeal before this Court.

Mr. A.S. Rawat, the learned Senior Counsel for the appellant, submits that neither the complaint dated 06.04.2021, nor the complaint dated 02.07.2021, were ever brought to the notice of the appellant. Therefore, without giving an opportunity of hearing to the appellant, the order dated 21.08.2021 was passed by the respondent. According to the learned Senior Counsel, once civil rights are adversely affected, no order can be passed without giving an opportunity of hearing. Therefore, the order dated 21.08.2021 suffers from non-application of mind, and suffers from a colourable exercise of power. However, these points have not been noted by the learned Commercial Court. Therefore, the order dated 01.11.2021, deserves to be set aside.

After the cancellation of the work order, by order dated 01.11.2021, the respondent has issued a tender notice, and invited tenders from the prospective persons. Since the very foundation of cancellation of the work order is illegal, the issuance of a tender notice by the respondent is legally unsustainable. Hence, even the subsequent steps taken by the respondent should be stayed.

This Court has asked a pointed query to the learned counsel for the respondent, namely whether any opportunity of hearing was given to the appellant prior to the passing of the order dated 21.08.2021? The learned counsel for the State has frankly conceded, and in the opinion of this Court rightly so, that no such opportunity of hearing was granted to the appellant by the respondent.

The importance of principles of natural justice cannot be over emphasised. It is, indeed, a settled principle of law that no adverse order can be passed against a party, without giving that party an opportunity of hearing. Admittedly, in the present case, the appellant was declared as the lowest bidder; the work order was issued to it on 26.06.2021. Yet, without giving an opportunity of hearing, the work order has been cancelled by order dated 21.08.2021. Thus, prima facie, the said order is patently illegal.

Therefore, the appellant has a strong, prima facie, case in its favour; since the work order was issued to the appellant, the balance of convenience also lies in favour of the appellant. In case, the work order were to be cancelled, and that too without giving the opportunity of hearing, an irreparable loss will be caused to the appellant. Therefore, this Court sets aside the order dated 01.11.2021, and stays the operation of the order dated 21.08.2021.

Consequently, any steps taken by the respondent for issuing of a fresh tender notice, and inviting tender bids are, hereby, stayed.

With these directions, the appeal stands allowed.

Let a certified copy of this order be issued to the learned counsel for the parties, on payment of the prescribed charges, today itself.