4FA HIGH COURT OF CHHATTISGARH AT BILASPUR W.P. (C} No.6915 OF 2009 PETITIONER M/s Pannalal Sunderlal Rathi Vs RESPONDENTS : State of Chhattisgarh and others ORDER FOR CONSIDERATION HPN'BLE SHRI R.N. CHANDRAKAR. J Sd/- J U D G E ^5/2/2010 ^) Sd/- R.N. Chandrakar Judge POST FOR ORDER ON -^IY / FEBRUARY. 2010 ^ Sd/- Dhirendra Mishra Judge /£ \ .^rf"^ '^' ^ HIGH COURT OF CHHATTISGARH AT BILASPUR Division Bench: Hon'ble Shri Dhirendra Mishra. & Hon'ble Shri R.N. Chandrakar. JJ W.P. (Cl No.6915 OF 2009 PETITIONER RESPONDENTS Vs 1. 2. 3. 4. 5. M/s Pannalal Sunderlal Rathi, through its Proprietor Pradeep Rathi, aged about 42 years, S/o Late Shri Sunderlal Rathi, having shop at Jain Mandir Road, Jagdalpur (CG) State of Chhattisgarh, through the Secretary, Home Department, DKS Bhawan, Raipur (CG) Director General of Police, Police Headquarters, Raipur (CG) <. Deputy Inspector General of Police, (Planning and Provision) Police Headquarters, Raipur (CG) Commandant, 4th Battalion, Chhattisgarh Armed Force, Mana, Raipur (CG) In-charge, Central Stores, 4th Battalion, Chhattisgarh Armed Force, Mana, Raipur (CG) Present: Mr. Ashish Surana, Advocate For the petitioner. Mr. Vinay Harit,Dy. Advocate General : For State/respondents with Mr. SK Mishra, Panel Lawyer O R DE R (Passed on^/_February, 2010) Per Dhirendra Mishra. J The petitioner has filed this petition under Article 226 of the Constitution of India and prayed for the following substantive relief(s): '1. That, this Hon'ble Court may kindiy be pleased to set aside/quash the impugned ^^y^.. /^'^ ''% 1 1%??S^.. ^s \b ^- orcfer dated 7.10.2009 (Annexure P/11) passed by respondent No.2. 2. That, the Hon'ble Court may kindly be pleased to direct the respondent authorities to duly perform and discharge the agreement dated 23.9.2008 and make the payment of amount due with respect to goocfs supplied by the petitioner firm or 'in alternative goods supplied by the petitioner be returned in thecondition as has been suppfied by the petitioner. Briefly stated.facts of the case are that in response to Notice Inviting Tender (in short "NIT") dated 28.5.2008 (Annexure P/1) issued for purchase of 38 articles in quantities indicated against each article, the petjtioner submitted his offer for 15 items as per terms of NIT along with necessary samples. Respondent No.2 vide its Memo dated 27.8.2008 (Annexure P/3) issued purchase order for items: (i) woolen drawer, 8364 number @ Rs. 85.75, (ii) woolen vest, 5736 number @ Rs. 75.00, and directed the petitioner to supply entire quantity of the approved articles as per specifications within 90 days from the date of issue of the order in Central Store, Mana, Raipur of 4th Battalion, Chhattisgarh Armed Security Force (CAF). The purchase order also mentioned that if the articles are supplied with delay, penalty shall be imposable as indicated in Para-3 of the purchase order. An agreement was executed on 29.9.2008 between the petitioner and the respondent authorities in the format of Annexure P/4 annexed with the supply order. The goods were supplied to the respondents as per supply order and the same were received by respondent No.5 vide receipts cumulatively filed as Annexure P/5. However, for a short duration, the respondents were not accepting the supply as the Central Store of CAF caught fire, as a result, the goods brought by the petitioner to be supplied to the respondents got struck .^-T^- :'^1 93 —^ .^' ^ in railways in transport. The petitioner vide Memo dated 16th January, 2009 (Annexure P/6) requested respondent No.3 to issue suitable instructions as to where the goods may be supplied, so that the petjtioner is not saddled with wharfage and damarage charges. The petitioner was called upon by respondent No.3 vide its Memo dated 13th/14th January, 2009 (Annexure P/7) to furnish quality certificate issued from a government agency of 3000 pieces of woolen vest supplied by the petitioner, so that payment may be made against the bitl raised. The petitioner in replydated 3.4.2009 (Annexure P/8) submitted that the goods supplied by the petitioner were in accordance with the approved sample and therefore. after approving the sample of the goods, there is no justification for demand of quality certjfi'cate. However, the petitioner demanded three pieces of woolen drawer and vest each, so that he could obtain quality certificate. By this letter, the petitioner also prayed for release of security deposit of Rs.1,15,000/- and payment of bill. However, respondent No.2 vide its notice dated 10.8.2009 (Annexure P/9) informed the petitioner that the woolen drawers and woolen vests supplied by the petitioner, as per supply order dated 27.8.2008, were sent for quality examination to Textile Committee, Nagpur and on laboratory test, zero per cent wool was found in both the items. Thus, the test result confirms cheating by the petitioner-firm, and conduct of the petitioner-firm is in utter violation of the supply order and conditions of the agreement. The petitioner was called upon to show cause as to why the agreement should not be terminated as per Clause 15 and the security deposit be forfeited as per Clause 16. It was also contemplated as to why any excess expenditure that may be incurred by the department in purchasing ^^s:^_ A-'i K , • J J •^,.^^' ^ "::..:..^^ 8. \^ both the items from any other agency, may not be recovered from the petitioner's firm as per Clause 15 of the agreement. The petitjoner, jn its reply (Annexure P/10) to the show cause notice, contested the altegations and stated that the goods supplied by the petitioner were as per approved sample 'B' of woolen drawer and approved sampie 'A' IAS/3330/1978 of woolen vest. Neither the petitioner was ever informed as to which article is being sent for quality examination, nor report of the Textile Committee has been provided to him. In these circumstances, the alleged report of the Commjttee has been obtained without affording the petitioner an opportunity to put up his case and therefore, the alleged report is not binding on the petitioner and the petitioner-firm has not violated any of the terms of the agreement. However, respondent No.2 vide its order dated 7th October, 2009 (Annexure P/11) cancelled the supply order dated 27.8.2008, terminated the agreement dated 23.9.2008 and forfeited the security deposit as per Clause 16 of the agreement, and further directed that in the event of purchase of the above two items from any other firm, the excess amount spent in purchase shall be recovered from the petitioner, and the petitioner-firm was included in the blacklist of Chhattisgarh Police for five years from the date of issue of the order. Learned counsel for the petitioner submitted that as per CondJtion No.18 of NIT, the participating firms were required to furnish samples of every category of articles proposed to be supplied. Evaluation of the samples and technical bid was to be examined by a Technical Committee to ascertain whether it conforms to the pattern/standard of the police department. The ^:.-.:-^^ ^^•y^^, ^ •;^—.^./€7 V r envelopes of financial bids of only those firms were to be opened whose samples and technical bids are approved by the departmental committee as per Clause 19 of NIT. Since the samples of the woolen drawer and woolen vest described at SI.No.24 & 25 ofAnnexure P/1 were found to be suitable and as per specified standard, supply order was issued vide Annexure P/3, which is evident from perusal ofthe supply order itself. 9. jt has been further argued that Clause 3 of the agreement also envisages that the goods or materials to be supplied under the agreement should conform to the price patterns of samples sent with the tender, such as the purchaser has approved. There is no provision either in the terms and conditions of NIT or in the agreement that the supplier would be required to produce quality certificate with respect to the goods supplied. The entire quantjty of the goods, as ordered, was duly supplied by the petitioner and the same was accepted by respondent No.5 without any objection or protest, and quality of the supplied goods was in conformity with the samples approved by the respondents. The respondents did not make available three pieces of woolen drawers and vests to the petitioner to enable him to get it tested, as demanded vide letter dated 3.4.2009 (Annexure P/8). They did not even care to reply to the notice, and by the impugned order, the petitioner has also been blacklisted for five years in police department, though before blacklisting, no notice was given to the petitioner for blacklisting, which is necessary as held by the Hon'ble Supreme Court in Raghunath Thakur Vs. State of Bihar and others, reported in (1989) 1 SCC 229 and the order dated 11th April, 2008 passed in WP(c) No.7077/07 by the Division Bench of this Court in the matters of Satlsh Kumar Agrawal Vs. Chhattisgarh State Civil Supplies ^m Y.i Corporation Ltd. When the petitioner's goods were rejected on the ground that the same did not conform to the quality prescribed by the department, in that case, the respondents were duty bound to return the entire goods supplied by the petitioner. 10. The respondents have raised a preliminary objection that the instant petition is not maintainable as the petitioner has an alternative and efficacious remedy of settling the dispute through arbitration when there is an arbitration clause in the agreement. The respondents, in Para 14 & 15 of their return, have denied the averments that the samples of the clothes supplied by the petitioner were approved by the authorities, and it has been stated that only on the declaration of the petitioner, the same were taken to be correct. Not disputing the averments that the entire supply was made by the petitioner, it has been averred that the goods supplied by the petitioner were no.t in conformity with the specifications entered in the supply order. 11. We have heard learned counsel for the parties, perused the pleadings of the respective parties as also the documents annexed therewith. 12. From the conditions of the tender for supply of kit material, which js part of NIT (Annexure P/1) and supply/purchase order (Annexure P/3), it is evident that: (i) as per Clause 18 of NIT, the firms participating in the bid were to furnish samples of goods to be supplied. The samples of only three categories were acceptable, and separate security deposit was to be made against the sample of each category, and it was the further requirement that two samples of each category were to be submitted, 1»1 (ii) as per Clause 19 of NIT, valuation of the technjcal bid and samples was to be done by the Technical Commjttee of the department. The financial bid of only such bidders was to be opened whose technical bid/sample conforms to the pattern/standard of the police department. Other samples, which do not conform on technical aspect, were to be returned. (iji) as per Clause 20 of NIT, the tenderers were to submit separate tender form against each item. *< (iv) the supply/purchase order specifically mentions that purchase order is issued for the folfowing articles after approvaf of sampfe, rate, specification and quantity. It specifically mentions that sample 'B' of woolen drawer and sample 'A' of woolen vest have been approved. (v) Clause 6 of the purchase order specifically mentions that if the goods supplied by the firm do not conform to the sample or if the goods are rejected by the Inspection Committee, in that case, transport charges for re-supply of the goods and rejected goods would not be payable separately by the police department and this responsjbility would be that of the firm. (vi) Clause 3 of the format of agreement (Annexure P74) entered into between the parties also mentions that the goods or materials to be supplied under this agreement are to be new made of good stuff of the quality or sort in every respect equal and answerable to the price patterns of samples sent with the tender such as the purchaser has approved. 13. Thus, from perusal of theabove stipulations, we find that there is no stipulation either in the tender conditions or in the agreement that the supplier of TA1 %... |fesg^| '^ %.^J ^sy ,c ^ goods was also required to furnish any quality certificate from a government agency. The supplier was required to submit two samples of each category of goods proposed to be supplied by him. The financial bid of any category of goods could be opened only after the quality of samples proposed to be supplied conforms to the patterns/standards of the police department after examination by a Technical Committee of the department. In view of these conditions in NIT and specific averments in the counter affidavit of the respondents that the samples were accepted without sanction of the samples by any of the authorities on mere declaration of the petitioner-supplier and on examination of quality of the supplied goods in the laboratory by the Textiie Committee, Nagpur, it was found that in both the jtems percentage of wool was zero, a discreet enquiry is calied for in the matter. 14. We are conscious of the fact that the instant purchase process was commenced for purchasing uniform tobe issued to the constabulary of the police department engaged in law and order duties in extreme weather conditions under the open sky. By issuing purchase/supply order only on the declaration of the supplier regarding quality without verifying the quality, as envisaged jn the tender condition, the officers involved in the purchase have seriously compromised with the quality of the goods. Supply of woolen drawers and vests with zero per cent wool content to the constables of the Armed Forces of police of the State would definitely result in adverse affect on their health and efficiency. 15. Indisputably, the petitioner requested respondent No.5 vide Annexure P/8 dated 3.4.2009 in reply to Memo ^y^ ^•'^&^ -..;. ^T?1% '•-•^N^i "S .1 ^ ^ 16. 17. ^ dated 28.2.2009 (Annexure P/7) to provide him three pieces of woolen drawer and three pieces of woolen vest supplied by him, so that he could get itexamined and obtain quality certificate. However, without considering the above request of the petitioner, after issuing a show cause notice of Annexure P/9, without considering the reply of the petitioner of Annexure P/10, the impugned order of Annexure P/11 has been passed. The entire exercise of getting the quality of goods examined by the Textile Committee (Ministry of Textile, Govt. of India), Nagpur, has been done behind the back of the petitjoner without any notice to him. The alleged report of the Textile Committee, on the basis of which impugned order of Annexure P/11 has been passed.has neither been made available to the petitioner nor produced before this Court. It is also not clear as to what the respondents did with the entire goods supplied by the petitioner as per supply order after the same were rejected on the ground that they contained zero per cent wool. The petitioner has categorically alleged that the goods were never returned to him after rejection and this allegation has not been controverted by the respondents. 11 was obligatory on the part of the respondents to return the goods to the petitioner. We aiso find force in the arguments of the petitioner that the petitioner was blacklisted for a period of five years from the police department without affording him any opportunity of hearing in this regard as in the show cause notice, there is no mention of blacklisting. It js settled law, as has been held in Raghunath Thakur (supra) and followed by this Court in Satish Kumar Agrawal (supra) that blacklisting any person in respect of business ventures has civil consequences for the future business of the person concerned. In any event, even if the rules do not express so, it js an elementary ^'y^ ..... ^F^ \v° principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. 18. So far as objection of the respondents with respect to maintajnability of the petitjon, is concerned, it is settled law that alternative remedy is a rule of discretion and not a rule of law and there is no bar to entertain a petition in exercise of extraordinary jurisdiction under Article 226 of the Constitution of India, despite availabijity of atternative remedy to the petitioner. In the facts of the present case, we hold that the petition can not be djsmissed on the ground of availability of alternative remedy of arbitration. 19. In the result, the petition is disposed of in the following terms: (i) Order dated 7th October, 2009 (Annexure P/11) is hereby quashed, (ii) Respondent No.1 is directed to order a discreet enquiry in the matter through some senior officer of the State, not belongjng to the police department; (iii) The enquiry should be completed within a period of 30 days from the receipt of copy of thjs order, and appropriate action be taken in accordance with the enquiry report thereafter. Copy of the report be also forwarded to the Registrar General of thjs Court forthwith. ____ Sd/- DhirendraMishra Judge Sd/- R.N. Chandrakar Judge ^