GAMMON INDIA LIMITED Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE petitioner M/s. Gammon India Limited (hereinafter referred to as the Company) is a company incorporated under the Indian Companies Act. It has its registered office in Mumbai and a branch office at Patna. It undertakes construction of large projects on contract from Government and other agencies and it has to its credit some large and important constructions both within and outside the country.

(2.) THE petitioner has filed this writ petition seeking to challenge the decision of the Commissioner -cum -Secretary, Water Resources Department, Government of Bihar, dated April 30/May 2, 2001 and the order, dated, 10.5.2001 issued pursuant to that decision. By the impugned decision and order the company has been black -listed. The petitioner company might or might not have contested so strongly the decision for its black -listing if the effect and consequences of black -listing were confined to the concerned department, as appears to be the import of the relevant rules, but copies of the order, dated 10.5.2001 were despatched for information, to the Chief Secretaries of all the States in the Union of India. This action of the respondent authorities is likely to have devastating consequences for the company and it finds itself pushed to a corner; the country -wide circulation of the black -listing order has put into serious jeopardy the companys chances of winning contracts even outside the State and this leaves it with no option but to contest the decision and the order of its black listing with full seriousness.

(3.) THE provision for black listing is contained in a set of guide lines called the Revised Bihar Enlistment of Contractors Rules, 1992. These rules were published in the Bihar gazette of 29.12.1993. Evidently the so called rules are not framed under any statutory provisions but are a set of executive instructions and guide -lines but that would not detract from their application and enforceability. Clause 18(1) of these rules deals with deregistration of a registered contractor and clause 18 (2) deals with the black -listing of a contractor. Clause 18 (2) is as follows: "18(ii) Black -listing.If obvious defect is found at a later date in the work done by the contractor or his conduct and behaviour is found unbecoming of a civilised person either during or after the construction period (but within period of registration or he is found guilty of any. criminal offence, or it is established that he has managed to receive excess payment from the Department, or Engineers, employed by him are found to be assopiated or employed simultaneously with other firms, or any information furnished by him is found to be wrong or misleading during any time his registration is valid, then for any, or all of the above reasons, it will be open to the Department to black -list the contractor for an indefinite or a specified period and/or de -register him and withhold any further payment due to him and forfeit his earnest money, and security deposit after giving him proper opportunity to present his case. During the period the contractor has been black listed, he will not be eligible to purchase tender or apply for any work or receive contract anywhere for any work in the Department."