THE HON'BLE SRI JUSTICE K.C.BHANU WRIT PETITION NO. 27930 OF 2011 O R D E R: This writ petition is filed to issue writ of Mandamus declaring the action of the second respondent in black listing the petitioner through proceedings No.011345/DEE-I/Regn-3/2010, dated 22.12.2010 in terms of G.O. Ms. No.94, Irrigation and CAD (PW-COD) Department, dated 01.07.2003 on account of alleged short use of steel rods in respect of LS Agreement No.147/2007-08, dated 26.03.2008 as illegal and arbitrary and consequently set aside the same and direct the respondents to arrange payment for the work done. 2. The averments, in brief, stated in the affidavit filed in support of the Writ Petition may be stated as follows: The petitioner was awarded tender for construction of Road Over Bridge (ROB) in lieu of L.C. No.236 at Railway KM 143/10-12 of Guntur-Nandyal section and R&B road at KM 37/2 of Podili-Markapur Road through C.R. Agreement No.147/2007-08 dated 26.03.2008, and it completed the work in the month of September, 2011 except wearing coat on 13 slabs that are awaiting retrofitting. The work is executed in accordance with specifications under direct and specific instructions of Junior Engineer, Deputy Executive Engineer and Executive Engineer and supervision by the third respondent, and they inspected the site on various dates and did not find any irregularity. Unless the number of members, the quality of steel and the adherence to specifications are checked and approved by the above officers, petitioner cannot proceed with concreting of the span. However, the Chief Engineer (QC) inspected the work on 13.3.2010 and pointed out that instead of 87 rods of 25 mm @ 360 C.c., the span under fabrication contained only 58 rods. As per Measurement Book and the bills paid, it was found that all the 13 spans that were completed had only 58 roads of 25 mm @ 360 C.c. and payment was made only for the said quantity. There was neither fraud nor manipulation of records for unlawful gain. The Chief Engineer explained that the drawings contemplated 29 rods of 25 mm @ 320 C.c. for each of a1, a2 and a3 and not 58 as understood by the officers of respondents including the third respondent. Thus, the short usage of rods was due to ambiguity in the drawings and there was no deliberate or wanton short use of steel either with ulterior motive or for unlawful gain, and that the use of 58 members was with the express approval and directions of the concerned engineers as reflected in the drawing furnished to the petitioner that was prepared and approved as per MORTH norms. In this regard, the third respondent issued a show cause notice on 21.04.2010 calling upon the petitioner to submit its explanation, and the petitioner submitted its explanation to it on 05.05.2010 reiterating the above facts. But, without regard to the explanation and without giving an opportunity of being heard, the first respondent issued the Memo No.7264/R.II(2)/2010-4 dated 27.11.2010 instructing the second respondent to take further steps in accordance with law to black list the petitioner and banning business with the petitioner, which will have severe and far reaching consequences on the ongoing works in addition to social stigma of black listing. There are absolutely no motives for short using the steel rods but for the ambiguity in the drawings, due to use of the word ‘or’ instead of ‘and’ between a2 and a3 for which petitioner cannot be blamed. The respondents initially suspended some of the engineers, but admitting that there was ambiguity and error in drawings, reinstated the suspended officials, whereas the petitioner is penalized for the drawings furnished by the very same officials. Hence, the Writ Petition. 3. The respondents filed counter affidavit stating inter alia as follows. The work is being executed in accordance with the specifications specified in drawings supplied by the department and the directions of department officers. After satisfaction of reinforcement fabrication of deck slab, the contractor will be allowed to lay concrete duly giving O.K. card, as per agreement condition vide clause No.35.2, and the contractor cannot proceed with concreting of the span without permission of departmental officers. The petitioner executed 13 slabs out of 26 slabs on Markapur side with deficiency of steel, and in this case, O.K. card has not been issued by the department for all 13 slabs, but the petitioner laid concrete. After inspection on 27.11.2009, the Superintending Engineer, R&B Quality Control submitted a report to the higher authorities for deficiency of steel in 13 deck slabs. The Chief Engineer, R&B Quality Control inspected the ROB on 13.3.2010 and the report was given to him. ROB should be constructed duly following MORTH drawings BD/8-74 and BD/7-74, which are standard drawings issued by the Ministry of Shipping, Road, Transport and Highways (MORTH). The petitioner failed in reading the drawings but there is no ambiguity in drawings. The contract is lumpsum contract, where the contractor is responsible for any lapses and any deficiency of work as per the contract. Payment is based on actual work done by the contractor as per measurement book. Five Engineers were suspended and out of them, one had retired on 31.8.2010 on attaining age of superannuation. Thereafter, the other four engineers were reinstated. As per directions of Government, charges were framed against the Engineers and also seven staff members. The petitioner, being a special class contractor, is well aware of construction techniques and shall employ technical personnel for construction of major bridges. If any ambiguity is felt, the Head of the Department should have been addressed or approached by the petitioner. The contractor cannot deny his lapses and negligence on the pretext of reinstatement of departmental officers. Hence, it is prayed to dismiss the Writ Petition. 4. The petitioner filed reply affidavit stating inter alia as follows. The contention that the petitioner concreted 13 slabs without O.K. Card cannot be accepted in view of the fact that once the respondents admit that the fabrication as well as the measurements is test checked and found to be correct, issuing O.K. card being a formality, was deliberately dispensed with by the respondents to augment the work. The respondents admitted that the work is being executed in accordance with the specifications, specified drawings supplied by the department and directions of department officers and so there was no occasion for the petitioner to execute the work independently or in gross violation of the agreement conditions or drawings furnished by the respondents. Petitioner cannot be blamed for any omission or commission in the drawing. From the order issued reinstating the suspended engineers, it is clear that the alleged deficiency was not on account of deliberate and wanton action of the petitioner for unlawful gain but for the defective drawing and the respondents admit that the drawings are designed and approved by MORTH. The reasons assigned for black listing the petitioner do not fit in the conditions laid down in G.O. Ms. No.94, dated 1.7.2003. 5. The learned counsel for the petitioner contended that the impugned order does not contain any reasons; that the explanation submitted by the petitioner to the show-cause notice has not been considered; that the G.O. Ms. No.94, dated 1.7.2003 under which the petitioner was black listed, is not applicable to the case on hand; that the petitioner constructed the ROB strictly in accordance with the drawings designed and approved by MORTH and for the mistake by the officials, the petitioner cannot be made to suffer, and hence, he prays to set aside the impugned order. 6. On the other hand, the learned Government Pleader appearing for the respondents contended that the contractor has not executed the work in accordance with the designs, and that basing on the expert opinion, the Government has taken a decision to blacklist the petitioner, and hence, there are no grounds to interfere with the same. 7. The factual matrix is not in dispute. The third respondent awarded the contract for construction of ROB on Guntur-Nandyal section at Podili-Markapuram road to the petitioner. It is also not in dispute that the work has to be executed as per the drawing No.BD/7-74A and BD/8-74. The said designs were designed and approved by Ministry of Shipping, Road, Transport and Highways (MORTH). It is also not in dispute that the petitioner has carried out the steel fabrication as per the approved schedule of the reinforcement of each span. It is also not in dispute that before concreting the fabrication, it is being checked by the Deputy Executive Engineer, counter checked by the Executive Engineer and randomly test checked by the Superintending Engineer. As a matter of fact, the respondents admitted in the counter affidavit that the petitioner carried out the work in terms of the specifications. The Superintending Engineer Quality Control, who inspected the work, did not find any lapses or short use of any material. The case of the respondents is that as against the required 87 rods, only 58 rods were being used for a length of 360 mm. It is a case where the petitioner has not used 87 rods and he claimed the amount for the actual number of rods used. As a matter of fact, the measurement book reflected only using of 58 rods and therefore there was no undue advantage to the petitioner as the petitioner was paid only for the work done as recorded in the measurement book. In respect of this ROB, five officials of the Engineering Department were placed under suspension. A show-cause notice dated 21.4.2010 was issued to the petitioner for which it submitted a reply. It is stated in the reply by the petitioner that the entire work was executed under the direct guidance, instructions and supervision of the concerned engineers. 8. It is not in dispute that in G.O. Ms. No.1082, Transport, Roads and Buildings (Vig.I.1) Department, dated 27.11.2010, whereunder the suspended officials were reinstated into service, it is observed : ‘The drawing contained a small technical defect in the reinforcement schedule for the work. The entire trouble was the result of an error in the drawing. Instead of indicating ‘a 2 and a 3 bars’ it was written as ‘a 2 or a 3 bars’. The error has gone unnoticed till it was pointed out by the Quality Control Officials. The above codal rules have specified the functionaries who are responsible for designs. In the present work, they have stated that they have no role in the structural design of the approaches of the ROB and they have not done anything unwarranted requiring their suspension.” It is further observed in the said G.O. that there were no financial irregularities or misuse of funds, but the concerned officials are undoubtedly guilty of casual approach, slack supervision and inadequate concern for public safety. It is also stated that the Engineer-in- Chief’s report indicated that structure is safe and other deviations are within the acceptable limits and he also attributed the problems as to error in the drawings. Therefore, from the material on record, it can be said that there was error in the drawings. The lapses are also on the part of the concerned Engineering Officials. It is not a case where the petitioner had deliberately or wantonly disobeyed the instructions of the officials or deviated from the approved reinforcement schedule. 9. In G.O. Ms. No.94, Irrigation and CAD (PW-COD) Department, dated 01.07.2003, paragraph 5 of Annexure-II deals with ‘Black Listing’, which reads thus: “Only the administrative department will black list the contractor. (a) The head of the department (Chief Engineer) may blacklist a contractor with the approval of Government, where: (i) there are sufficient and strong reasons to believe that the contractor or his employee has been guilty or malpractice (s) such as irregular practices including formation of ring, bribery, corruption, and fraud including substitution and in tenders smuggling, pilfering of unauthorized use of disposal of Government materials issued for specific work. (ii) A contractor continuously refuses to pay Government dues without showing adequate reasons. (iii) A contractor or his partner or his representative has been convicted by a court of law for offence involving moral turpitude in relation to business dealing(s). (iv) Security consideration including suspected disloyalty to the State so warrant. (v) The EMD shall also be forfeited.” As seen from the impugned proceedings No.011345/DEE-I/Regn-3/2010, dated 22.12.2010 issued by the Engineer-in-Chief (R&B), Admn. & NH, black listing the petitioner, the grounds stated therein do not attract any one of the clauses stated in G.O. Ms. No.94, dated 01.07.2003. None of the clauses in paragraph 5 of Annexure-II of the said G.O. is applicable to the case of the petitioner. On this aspect, the learned counsel for the petitioner relied on a decision in Indian Oil Corporation Limited v. SPS Engineering Limited[1], wherein it is held thus: (para 32). “It is well settled that the impugned order cannot be supplemented by additional material either in the form of an affidavit or otherwise vide Mohinder Singh Gill vs. Chief Election Commissioner, AIR 1978 SC 851; State Govt. Houseless Harijan Employees’ Association vs. State of Karnataka, (2001) 1 SCC 610 (para 49) = AIR 2001 SC 437 (para 48); Pavanendra Narayan Verma vs. Sanjay Gandhi PGI of Medical Sciences, (2002) 2 SCC 520 = AIR 2002 SC 23 (para 34); Union of India vs. GTC Industries Ltd., AIR 2003 SC 1381, etc. In our opinion, reasons must be contained in the order under challenge, and mere existence of reasons in the show-cause notice, or any material referred to in the show cause notice, is not sufficient. In our opinion, the authority concerned must, atleast in brief, deal in the impugned order with the explanation given in the reply to the show cause notice. This, in our opinion, is even more necessary where a personal hearing is not being given. The authority concerned must discuss the explanation given in the reply, and give its reasons for holding that the explanation is not satisfactory. In the present case, all that has not been done.” The impugned proceedings do not contain any reasons for black listing the petitioner. Further more, the explanation submitted by the petitioner has not been taken into consideration. It is settled principle of law that the authority must give reasons for not accepting the explanation given by the petitioner. In view of the foregoing discussion, the impugned order is liable to be set aside and is, accordingly, set aside. The matter is remanded to the second respondent to reconsider the case of the petitioner with reference to the explanation submitted by the petitioner to the show-cause notice and other relevant records and G.Os. and take appropriate decision in accordance with law. 10. The Writ Petition is, accordingly, disposed of. No costs. ________________ (K.C.BHANU, J.) 28.12.2011 DRK THE HON'BLE SRI JUSTICE K.C.BHANU WRIT PETITION NO. 27930 OF 2011 Date: 28 .12.2011 [1] 2007 (Suppl.) Arb. LR 520 (Delhi) (DB)