IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. CWP No.17845 of 2009 (O&M) Date of decision:21.1.2010 Ackruti City Limited -----Petitioner Vs. State of Punjab and others -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE ALOK SINGH Present:- Mr. Ashok Aggarwal, Sr.Advocate with Mr. JS Sidhu, Advocate for the petitioner. Mr. Jaswinder Singh, DAG, Pb. for the State. Mr. Sajal Koser, Advocate for respondent No.2. Mr. Anupam Singla, Advocate for respondent No.3. Mr. Ashish Grover, Advocate for respondent No.4. Mr. Rohit Gupta, Advocate for respondent No.5. --- Adarsh Kumar Goel,J. 1. This petition seeks quashing of order dated 18.9.2009, Annexure P.24 debarring the petitioner from participating in tenders of the State Government projects to CWP No.17845 of 2009 (O&M) be floated by respondent No.2 – Punjab Infrastructure Development Board (PIDB) for a period of five years from the date of the said order. 2. Case of the petitioner is that it gave its bid in pursuance of advertisement dated 12.1.2008 for the project of a Bus Terminus with commercial complexes on Build Operate Transfer (BOT) basis at Mohali. This was followed by further correspondence and grant of letter of award dated 21.8.2008, Annexure P.11. Later on, the petitioner withdrew the request for proposal (RFP) on 9.1.2009 for reasons mentioned by it and filed a suit seeking injunction against encashment of bank guarantee. However, interim injunction was declined and the two bank guarantees for Rs.50 lacs each were forfeited. Notice for blacklisting/debarring was served on the petitioner and, thereafter, the impugned order was passed. 3. Challenge is based on three grounds:- (i) bias; (ii) lack of jurisdiction; (iii) proportionality. 2 CWP No.17845 of 2009 (O&M) 4. In support of first ground, learned counsel for the petitioner submits that the Executive Committee of respondent No.2 - PIDB took a decision in meeting held on 20.1.2009 to blacklist the petitioner as mentioned in the minutes of the meeting Annexure P.29 and after such a decision, impugned order was only a formality. 5. As regards lack of jurisdiction, it was submitted that Managing Director had no jurisdiction under the rules to pass the order as such power could be exercised only by Board of Directors. It was further submitted that under the rules, there is no power of blacklisting. 6. As regards point (iii), it was submitted that principle of proportionality was principle of fair procedure and blacklisting for a period of five years would be disproportionate to the alleged default of the petitioner. Learned counsel for the petitioner submitted that the petitioner undertakes not to participate in any project as floated by PIDB for a period of one and a half years in case, the impugned order is withdrawn. 7. We are unable to accept the first two submissions as decision to initiate steps for blacklisting taken by the 3 CWP No.17845 of 2009 (O&M) Executive Committee did not amount to taking of a final decision. It cannot, thus, be held that the decision was vitiated by bias. 8. As regards lack of jurisdiction, it has been stated in the reply that the Executive Committee in its meeting held on 29.5.2009 authorised the Managing Director to take a decision on the issue of blacklisting. Even otherwise, Managing Director being the principal officer of the respondent Board, will be authorized to exercise that power under section 23(1) of the Punjab Infrastructure (Development and Regulation) Act, 2002 read with Clause 10(2) of the Bye-Laws. The power of blacklisting implies that a public authority may not deal with a particular person for some valid reasons and though a public authority unlike a private person cannot make a choice of dealing or not dealing with persons of its own choice. For valid reasons, it can decline to deal with a particular person. We are unable to accept the plea of lack of jurisdiction. 9. We, however find substance in the submission that exercise of power by any public authority has to be fair 4 CWP No.17845 of 2009 (O&M) and reasonable and doctrine of proportionality is attracted to exercise of such power. Such power cannot be exercised arbitrarily. Period of five years is too long period for blacklisting unless there are circumstances justifying exercise of such power. Even though, the Court cannot normally substitute its opinion in such matters, but where decision is irrational, the same can certainly be set aside for enforcing Article 14 of the Constitution. Normally, we may have set aside the order with liberty to pass a fresh order, taking a pragmatic view, we direct that the period of blacklisting will stand reduced to one and a half years. As regards submission of the petitioner that if the order is withdrawn, the petitioner may not of its own deal with respondent No.2 for any project for a period of one and a half years from the date of the order, the same may be considered by respondent No.2. If any such representation is made by the petitioner, decision thereon be taken within one month from the date of receipt thereof. 10. The petition is disposed of accordingly. (Adarsh Kumar Goel) Judge January 21, 2010 (Alok Singh) 5 CWP No.17845 of 2009 (O&M) ‘gs’ Judge 6