IVRCL Limited vs State of Rajasthan and Others

Mohammad Rafiq, J.—This writ petition has been filed by petitioner M/s. IVRCL Limited challenging show-cause notice dated 15.12.2014, debarment order dated 26.12.2014 and subsequent debarment/suspension order dated 06.02.2015.

Shri G.K. Garg, learned senior counsel for petitioner-company, has submitted that the respondent No. 4 issued a notice-inviting-tender bearing No. 1/2012-13 for execution of work of transmission main pipeline from Mallah (Bharatpur) to Kumher, Deeg, Kaman, Pahari and Nagar, and RWSS for 97 villages from Mallah Head works under Chambal Dholpur, Bharatpur Project Part-II Package-1 with operation and maintenance for ten years on single point responsibility turnkey basis. In response thereto, petitioner-company submitted its tender for the said work and its bid, being lowest, was accepted and work order was issued to it on 13.09.2012. A formal agreement between the parties was entered on 21.09.2014. As per work order, the date of commencement of work was 23.09.2012 and it was to be completed by 22.03.2015 followed by ten years of operation and maintenance part after completion of defect liability period.

According to learned Senior Counsel for petitioner-company, the petitioner-company immediately on receipt of work order, employed its manpower and machinery for completion of work within the stipulated period as fixed under the agreement, but the respondent department was negligent in performing its part which caused unnecessary delay in execution of work for various reasons. Petitioner-company sent letter to this effect to the respondent No. 4 the Additional Chief Engineer (Project), Public Health Engineering Department, Government of Rajasthan, Bharatpur. The respondent No. 3, despite delay on the part of the respondent department and prior to expiry of the period of contract dated 13.09.2012, unilaterally rescinded the contract on 20.09.2012. Petitioner-company raised various disputes and moved an application on 07.01.2015 as per Clause 23 of the General Conditions of the contract along-with the requisite fee for referring the dispute to the standing committee. It was thereafter that the respondent No. 2 issued a show-cause notice dated 15.12.2014 calling upon the petitioner-company to explain why the permanent enlistment of the petitioner-company be not suspended and it be debarred from participating in the future tenders. Petitioner-company submitted a detailed reply on 24.12.2014 much prior to expiry of period of 15 days provided under the show-cause notice. The respondent No. 2, before expiry of the period of 15 days as envisaged under the show-cause notice, vide order dated 26.12.2014, debarred the petitioner-company from participating in the future tenders of the respondent department. Petitioner-company submitted a combined reply to show-cause notice as well as debarment order, on 07.01.2015 and sought withdrawal of the show-cause notice as well as the debarment order dated 26.12.2014. Even when the matter was pending before this court, the respondent passed further order on 06.02.2015 suspending/debarring the enlistment of the petitioner-company on the grounds not even contained in show-cause notice.

Learned Senior Counsel for the petitioner-company has submitted that the petitioner-company is carrying out work on nine other major projects of the respondent department and that debarment of the petitioner-company may affect the work of the petitioner-company of those such other works of the respondent department and elsewhere in the country it may adversely affect the petitioner-company.

Learned Senior Counsel for the petitioner-company argued that the debarment is for unlimited period and it is not specified as to when it is going to last.

Shri Abhinav Sharma, learned Additional Advocate General for respondents, opposed the writ petition and submitted that the writ petition may not be maintainable directly before this court because the petitioner-company has alternative remedy to get the order dated 06.02.2015 reviewed before the Principal Secretary to the Government Public Health Engineering Department, Government of Rajasthan, Jaipur. It is submitted that the petitioner-company has not shown adequate progress of the work. As per clause 2 of the General Conditions of the contract, the petitioner-company should have executed 70% of work amounting to Rs. 131.306 crore upto 30.06.2014, as against which the petitioner-company completed work of Rs. 10.26 crore only, which is roughly 5.79% of the total work given on contract. Moreso, when there was full mobilization of advances provided in the month of March, 2013 itself. As per Clause 2, the entire project of Rs. 187.58 crore was divisible into four spans. It was expected of petitioner-company to have completed 1/4th work by 07.05.2013, likewise upto 22.12.2013 half of the work was required to be completed, by 07.08.2014 3/4th of the job was required to be accomplished and by 23.03.2015 the entire work was to be completed. It was owing to all these deficiencies on their part, the impugned order has been passed by the respondent department. This has also happened due to poor financial conditions of the petitioner-company, whose bankers have adjusted the advance money transferred to them against other defaults of the petitioner-company.

Learned Additional Advocate General submits that debarment of the petitioner-company from the work in question, would not affect its other projects as the same have not been interfered with by the respondent department and debarment/suspension of the registration of the petitioner-company is for the future only.

Learned Additional Advocate General for respondents submitted that the order dated 06.02.2015 has in any case been modified by another order dated 06.02.2015 itself, wherein it has been provided that the order dated 06.02.2015 can be reviewed by the respondent Principal Secretary. Learned Additional Advocate General submitted that since the order can be reviewed by the respondent Principal Secretary, this court may not interfere in terms of Clause 1.31 of the General Conditions.

Having regard to the facts afore-stated, this court, for the present, deems it appropriate not to enter into the merits of the case, particularly when the respondents themselves have submitted that the impugned order can be reviewed by the Principal Secretary to the Government. This court therefore requires the petitioner-company to approach the Principal Secretary to the Government by way of review application along-with a copy of this order, who shall reconsider the entire matter particularly when it is shown that the petitioner-company is executing the work of other nine projects of the respondents themselves and decide the same by providing opportunity of hearing to the petitioner-company. It would be open to the petitioner-company to raise all the arguments, which it has raised in the present writ petition. The respondent Principal Secretary, in its discretion, consider the review application and decide the same within one month from the date of its filing/submission before him along-with a copy of this order.

Writ petition accordingly stands disposed of. This also disposes of stay applications.