CHAUHAN ASSOCIATES Vs. UNION OF INDIA AND ORS

JUDGEMENT

(1.) The appellant M/s. Chauhan Associates (hereafter referred as "Chauhan"), an enlisted contractor with the Military Engineering Services (i.e. the respondent, hereafter referred to as "MES") is aggrieved by the impugned judgment of a learned Single Judge which declined to set aside notification, issuing the Work Load Report (hereafter referred to as "the WLR") dated 30th May, 2017. The impugned WLR has the effect of impeding the award of any fresh contract, till a favourable report is prepared by the relevant authorities of the MES.

(2.) Chauhan is engaged in the business of work contracting; it was enlisted by the MES in 2010. The MES is a department under the control of the Union Ministry of Defence which has been arrayed as second respondent; first respondent is the Union of India. Chauhan was awarded a contract for Rs. 12, 47, 04, 662/- and a work order in that regard was issued on 05.08.2016. The work order indicated the date of handing/taking over of site of Phase I as 10.08.2016 and Phase II after completion of Phase I. The related date of commencement of the Phases of the contract depended upon the handing over/taking over of the sites. Completion of the work under Phase I was 09.08.2017 and Phase II was 60 months after physical completion of Phase I. It is alleged that MES was unable to handover the site duly on time for Chauhan to commence work and could do so partially on 211.2016. Chauhan alleges further that before this event it had sought approval (of MES) for HT and LT Panels, Transformers, LT and HT Cables and other equipments on which it did not take action. It apparently replied much latter, i.e. after six months on 20.03.2017. According to Chauhan, without approval it was not permissible for it to commence work on the even partially provided site. Apart from the delayed handing over of site and delayed approval, the contract specified a single make for supply of sewer pipes; however, the manufacturer mentioned in the contract was not in fact producing the products. These defects, according to Chauhan, were apprised to MES on 08.03.2017. Further, Chauhan alleges that there were numerous other difficulties and the MES adopted a go slow approach and also did not clear pending payments to accelerate the work at the site. In this background, Chauhan alleges that when MES applied for fresh tender for other works in its portal in May, 2017, Chauhan found place in the list of firms not eligible to participate. Chauhan was apprised then that the slow progress of work in the contract was a reason for its listing or debarment; it claims to have represented to MES on 04.06.2017 against the move to bar award on further contracts. A show cause notice was issued to it, why it ought not to be banned by the MES, on 13.06.2017. Chauhan caused a legal notice to be issued on 21.06.2017. Chauhan attempted to apply for fresh tender in respect of work but was unsuccessful and one application was rejected on 11.07.2017, aggrieved by it approached this Court by filing WP(C) 6244/2017.

(3.) Before the learned Single Judge MES contended that the actions which Chauhan claimed to be adverse were based upon the departmental circular that dealt with ongoing contract and consequently as the public agency apprising the progress of work, MES was entitled to take an objective view that till the contract performance in respect of the ongoing work is improved fresh contract or work ought not to be awarded. This was accepted by the learned Single Judge who by a short impugned order, rejected the Chauhan's writ petition. The learned Single Judge inter alia held as follows: