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Judgment
Debangsu Basak, J
The writ petition and the application for vacating of the interim order made therein have been taken up for final hearing. The writ petitioner came to
Court challenging the cancellation of the participation of the petitioner in a tender process initiated by A.A.I. in respect of Netaji Subhas Chandra
Bose International Airport at Kolkata.
The writ petitioner has also assailed the Order of debarment of the first petitioner as contained in the writing dated January 8, 2019 issued by the
respondent No. 4.
Learned Senior Advocate appearing for the petitioner has submitted that, the petitioner participated in a tender for collection of parking fees at Lal
Bahadur Shastri International Airport, Varanasi. The petitioner was awarded the contract. A licence agreement was entered into between the
petitioner and the Airports Authority of India (A.A.I.) on July 4, 2016. The licence agreement was for a period of three years. However, after the
petitioner commencing the work, A.A.I. Varanasi unilaterally increased the entry fees. With such unilateral increase, the business became unviable.
The petitioner applied for foreclosure of the licence agreement on July 18, 2017. Such licence agreement was foreclosed on July 24, 2017. A.A.I.
Varanasi issued a ‘No Due’ Certificate on August 1, 2017. He has referred to the show-cause notice leading up to the Order of the debarment.
He has submitted that, the show-cause notice dated October 29, 2018 relates to deposit of a Bank Guarantee of the amount of Rs. 12, 48, 832/-. The
show-cause notice required the petitioner to reply within seven days thereof as to whether the penalty/debarring action should be initiated against the
petitioner or not. He has submitted that, the petitioner filed a reply thereto on November 5, 2018. Thereafter, A.A.I. issued the impugned notice of
debarment dated January 8, 2019 without initiating any proceeding for penalty/debarring action as stated in the show-cause notice dated October 29,
2018. Consequently, the petitioner was not heard in a proceeding for imposing penalty/debarring action. The show-cause notice cannot lead to the
decision of debarment as sought to be taken by A.A.I. on January 8, 2019. According to him, the petitioner was not afforded an opportunity of
hearing. He has relied upon 1975 Volume 1 Supreme Court Cases page 70 (Erusian Equipment & Chemicals Ltd. v. State of West Bengal & Anr.)
and 1994 Supp Volume 2 Supreme Court Cases page 699 (Southern Painters v. Fertilizers & Chemicals Travancore Ltd. & Anr. )in support of the
contention that, when, there is a breach of principles of natural justice, then, the decision arrived at stands vitiated. Moreover, according to him, A.A.I.
exceeded the charges framed in passing the impugned order of debarment. He has relied upon 1964 Volume 3 Supreme Court Report page 616 (Sur
Enamel and Stamping Works Ltd. v. Workmen) in support of such contention.
Learned Senior Advocate appearing for the petitioner has submitted that, the impugned decision of debarment is tainted with mala fides. The
impugned decision is vindictive and is the result of a criminal complaint lodged by the petitioner against a Director of one of the airports under the
control of A.A.I. He has submitted that, the impugned show-cause notice was issued three days after the petitioner lodged the criminal complaint. He
has referred to the order of debarment and submitted that, the fact that, the Bank issued the Bank Guarantee, was verified by A.A.I. with the Bank.
Bank has stated that, they issued the Bank Guarantee. The contract came into end with the issuance of the ‘No Due’ Certificate on August 1,
2017. Therefore, according to him, A.A.I. did not have any reason to issue the show-cause notice dated October 29, 2018 long after expiry of a year
from the date of closure of the contract and issuance of the ‘No Due’ Certificate.
Learned Senior Advocate appearing for A.A.I. has submitted that, the petitioner furnished a Bank Guarantee for the sum of Rs. 12,48,832/-.
However, such Bank Guarantee did not contain any number. A.A.I. subsequently came to learn that, the original Bank Guarantee for the sum of Rs.
12,48,832/- was never submitted with A.A.I. It is subsequent to such discovery that, A.A.I. initiated proceedings for debarment and issued the
impugned Order dated January 8, 2019. The petitioner was given an opportunity of hearing. He was allowed to submit a reply which the petitioner did.
The reply was considered and a decision taken. Therefore, it cannot be alleged that, A.A.I. acted in breach of the principles of natural justice in
conducting the show-cause proceeding and arriving at its decision. He has referred to the affidavit filed on behalf of the Bank and submitted that, the
Bank Guarantee in question was requested to be closed by the petitioner on August 1, 2016 and closed on August 3, 2016 as per the request of the
petitioner. Therefore, according to him, the original Bank Guarantee was never submitted with A.A.I. as, the contract was terminated on July 24, 2017
much after the closure of the Bank Guarantee by the petitioner. Consequently, the decision arrived at by A.A.I. cannot be faulted.
In reply learned Senior Advocate appearing for the petitioner has submitted that, an appropriate proceeding is required be initiated for the purpose of
arriving at a decision of debarment. In the facts of the present case, such proceeding is yet to be initiated. The show-cause notice merely speaks of a
desire to initiate such proceeding by A.A.I.
Such proceeding not having been initiated, a decision of debarment cannot be arrived at by A.A.I. On the closure of the Bank Guarantee on August 3,
2016 he has submitted that, question thereof does not arise as, the contract was terminated subsequently on July 24, 2017.
The writ petition was taken up for consideration on February 8, 2019. It was alleged on behalf of the petitioner that, A.A.I. was denying participation
of the petitioner in the tender process on the basis of an alleged order of debarment. It was submitted on behalf of the petitioner then that, A.A.I. was
contending that the petitioner did not submit the Bank Guarantee for the sum of Rs. 12,48,832/-. However, there was overwhelming evidence that, the
petitioner had done so. Given the nature of the challenge, by an Order dated February 8, 2019, Bank of India, Mira Road, Thane, Mumbai who issued
the Bank Guarantee in question was called upon to confirm whether they had issued such Bank Guarantee or not. A.A.I. was directed to produce the
original Bank Guarantee.
By the Order dated February 20, 2019, Bank of India, Mira Road Branch, Mira Road (East), Thane, Mumbai was added as a party respondent in the
writ petition and was directed to inform the Court as to whether it issued the concerned Bank Guarantee to A.A.I. or not. Bank of India has filed an
affidavit. Opportunity was granted to the other parties to the writ petition to deal with such affidavit.
The challenges of the writ petitioner revolve around its dealings with a bank guarantee for the sum of Rs. 12,48,832/- which was required to be
furnished as a security to A.A.I. Varanasi for the Varanasi contract. In its affidavit, Bank of India has stated that, Bank of India issued a Bank
Guarantee bearing a number for the amount of Rs. 12,48,832/- in favour of A.A.I., Varanasi and that such Bank Guarantee was closed on August 3,
2016 at the request of the petitioner. The affidavit goes on to say that, Bank of India responded to a query from A.A.I. as to whether, a Bank
Guarantee bearing No. Nil for Rs. 12,48,832/- was issued in favour of A.A.I. or not by answering such query in the negative that is to say, Bank of
India never issued a Bank Guarantee bearing No. Nil for Rs. 12,48,832/- in favour of A.A.I., Varanasi. The contents of the affidavit of Bank of India
remain uncontroverted.
The petitioner entered into a contract with A.A.I., Varanasi which required the petitioner to submit a Bank Guarantee for a sum of Rs. 12,48,832/-.
The contract was entered into on July 4, 2016. The contract was valid for three years. The contract was for collection of parking fees and toll at the
Varanasi Airport. In the midst of working of the contract, A.A.I., Varanasi increased the parking fees. The petitioner found the contract to be
unviable consequent upon the increase in the fees. Petitioner thereafter applied on July 18, 2017 for foreclosure of the contract. On July 24, 2017,
A.A.I., Varanasi accepted the request for foreclosure. It thereafter proceeded to issue ‘No Due’ Certificate in favour of the petitioner on
August 1, 2017. The Bank Guarantee for the contract entered into on July 4, 2016 was therefore required to be kept valid upto July 24, 2017 if not till
August 1, 2017 or thereafter. However, the affidavit of the Bank and the affidavit in opposition of the respondent Nos. 1 to 4 establish that, the Bank
issued a Bank Guarantee bearing a number for a sum of Rs. 12,48,832/- and that, such Bank Guarantee was closed on August 3, 2016 as per the
request of the petitioner made on August 1, 2016 that is within the period when, the contract was in operation. A Bank Guarantee once issued can
only be closed by the Bank when the original of the Bank Guarantee is returned to the Bank. Therefore, the petitioner never submitted the original
Bank Guarantee bearing a number for the sum of Rs. 12,48,832/- with A.A.I., Varanasi as it was not returned by A.A.I. to the petitioner prior to
August 1, 2016 for it to be closed by the Bank. Apparently, the petitioner submitted a Bank Guarantee with A.A.I., Varanasi for the same amount of
Rs. 12,48,832/- bearing a nil number. The Bank in its affidavit stated that it never issued a Bank Guarantee bearing a nil number for the sum of Rs.
12,48,832 in favour of A.A.I., Varanasi. Therefore, the only inference possible is that, the petitioner never submitted the Bank Guarantee for the sum
of Rs. 12,48,832/- bearing a number which was actually issued by the Bank with A.A.I., Varanasi. The petitioner submitted a Bank Guarantee of a
sum of Rs. 12, 48, 832/- bearing a nil number which was never issued by the Bank. Petitioner therefore never submitted a valid Bank Guarantee with
A.A.I., Varanasi for the contract.
A.A.I., Varanasi issued the show-cause notice dated October 29, 2018 alleging that the petitioner deposited a Bank Guarantee for a sum of Rs. 12,
48, 832/- and that on verification Bank denied the issuance of such Bank Guarantee. In such view, a reply was called for from the petitioner as to why
penalty/debarring action should not be initiated against the petitioner. Petitioner replied thereto by the writing dated November 5, 2019. Petitioner in
such writing contended that, the Bank Guarantee was issued by the Bank. The petitioner relied upon a letter dated October 30, 2018 issued by Bank
of India, Mira Road Branch to the effect that, a Bank Guarantee bearing a number for the sum of Rs. 12, 48, 832/- was issued in favour of A.A.I.,
Varanasi by the Bank. The letter however does not say that, such Bank Guarantee was closed on August 3, 2016. Such closure statement appears in
the affidavit filed by the Bank in the writ petition as also the affidavit in opposition of the respondent Nos. 1 to 4. A.A.I., Varanasi thereafter
considered the reply of the petitioner, found it to be unacceptable and proceeded to issue the impugned order of debarment. Erusian Equipment &
Chemicals Ltd. (supra) has held that, 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. It has held that, the person concerned should be given an opportunity to represent his case
before he is put on the blacklist. Southern Painters (supra) has expressed a similar view. In the facts of that case, it has held that, the person effected
was not given a right of hearing before the decision of blacklisting was taken.
One of the principles of natural justice is that, the deciding authority must afford the person affected a reasonable opportunity of hearing. Reasonable
opportunity of hearing does not mean that, in each and every case the person sought to be proceeded against is to be afforded an oral hearing.
Allowing the person sought to be affected by the decision, an opportunity to meet the allegations in writing, and the deciding authority considering such
representation with a fair and open mind while taking its decision, is compliance with the requirement of hearing the person affected. In the facts of
the present case, the petitioner was issued a show-cause notice and was allowed to submit a reply. In the show cause notice there are sufficient
indication that, the petitioner would suffer debarment if the reply was not satisfactory. The petitioner submitted a reply. The same was considered by
A.A.I. authorities and the impugned decision was taken. The impugned decision cannot be said to be in breach of the principles of natural justice.
Principles of natural justice now have been interpreted to bring within its wake the requirement of the decision making authority to give reasons for its
decision. Absence of reasons in the decision renders the decision a nullity. In the present case, the order of debarment is contained in the writing dated
January 8, 2019. It contains reasons why the petitioner was blacklisted. The writing dated January 8, 2019 states that, the decision to blacklist the
petitioner was taken since, the petitioner was guilty of submitting a counterfeit Bank Guarantee. It refers to tender Clauses 7 and 8 of the subject
electronic notice inviting tender. Although, A.A.I. cannot be allowed to improve upon the decision as contained in the writing dated January, 2019 by
bringing on record any new or further material, but a Court can consider the attending circumstances and materials on the basis of which the decision
was taken to evaluate its validity and legality. In the present case, petitioner presented A.A.I., Varanasi with a Bank Guarantee which was never
issued by the Bank. The Bank Guarantee which was actually issued by the Bank was returned by the petitioner to the Bank. The petitioner had it
closed during the subsistence of the contract. The finding of A.A.I., Varanasi that, a counterfeit Bank Guarantee was submitted, therefore, cannot be
faulted. In view of the conduct of the petitioner in dealing with A.A.I., Varanasi so far as the tender contract and the furnishing of the bank guarantee
is concerned, the allegation of vindictiveness against A.A.I. is an afterthought and a pathetic attempt to camouflage the misdeeds of the petitioner, if
possible.
The writing dated January 8, 2017 not only debars the petitioner but also partner/proprietor/joint venture firms including Government Agency
constituting the joint venture where the petitioner is involved. Significantly, apart from the petitioner, no other person is before the Court challenging
the decision of debarment. The decision to debar such other entities apart from the petitioner can be taken in terms of the E-NIT.
Sur Enamel and Stamping Works Ltd. (supra) has held that, a punishment cannot be imposed in excess of what a delinquent is charged with. In the
facts of the present case, the petitioner, through the show-cause notice dated October 29, 2018 was put on notice that, the Bank Guarantee in question
was in issue. The petitioner was also put on notice that, the petitioner might suffer the penalty of debarment. The decision taken on January 8, 2019 is
a decision of debarment. Therefore, according to me, A.A.I. did not exceed the charge levelled against the petitioner while arriving at the impugned
decision.
In view of the discussions above C.A.N. 5236 of 2019 is allowed.
The interim Order is vacated. W.P. No. 1183 (W) of 2019 is dismissed.
No order as to costs.
Urgent certified website copies of this judgment and order, if applied for, be made available to the parties upon compliance of the requisite formalities.