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PETITIONER: PATNA REGIONAL DEVELOPMENTAUTHORITY & ORS.

       Vs.

RESPONDENT: M/S.RASHTRIYA PARIYOJANA NIRMANNIGAM & ORS.

DATE OF JUDGMENT:       07/05/1996

BENCH: VERMA, JAGDISH SARAN (J) BENCH: VERMA, JAGDISH SARAN (J) MANOHAR SUJATA V. (J)

CITATION:  1996 AIR 2074            1996 SCC  (4) 529  JT 1996 (6)   113        1996 SCALE  (4)488

ACT:

HEADNOTE:

JUDGMENT:                             WITH                CIVlL APPEAL NO 7830  OF 1996         (Arising out Or S.L.P. (C) No.4434 of 1996) M/s.Walia Builders V. Rashtriya Pariyojana Nirman Nigam & Ors.                          O R D E R      Leave granted.      The Patna  Regional Development  Authority (hereinafter referred to  as the  ’appellants’) invited  tenders tor  the construction of  a high rise building ’Maurya Towers’ in the town of  Patna. Of  the three bids which were submitted, the bid of  the first  respondent, namely,  Rashtriya Pariyojana Nirman Nigam  was found  to be the lowest. The second lowest bid was of respondent No.4, M/s.Walia Builders. Although the tender submitted by the first respondent was the lowest, the Tender Committee  took into  account the fact that the first respondent had  been black-listed for a period of five years by the Water Resources Department, Government of Bihar under a black-listing  order dated  26.9.1991, and  decided not to award the  contract to  the first  respondent.  Instead,  it awarded the  contract to  the fourth  respondent. The fourth respondent, after  negotiation, agreed to do the work at the rates offered by the first respondent.      This decision  of the  appellants was challenged by the first respondent  by filing  a writ  petition being C.W.J.C. No.3964 of  1995 which  was filed  on 13.6.1995 in the Patna High Court.  The first  respondent also  filed another  writ petition bearing  C.W.J.C. No.4064  of 1995  challenging the black-listing order  of 26.9.1991.  Writ  Petition  C.W.J.C. No.4064 of  1995 was  rejected by  a learned Single Judge of the Patna  High Court  by his  order dated  18.9.1995 on the ground of  delay,  since  the  order  of  black-listing  was challenged more than four years after it was made. The first

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respondent filed  an appeal to a Division Bench of the Patna High Court being L.P.A. No.1473 of 1995.      Writ Petition  C.W.J.C. No.3964  of 1995  filed by  the first respondent  against the  decision  not  to  award  the contract to it, was allowed by a learned Single Judge of the Patna High  Court. He  held, inter  alia,  that  before  the appellants decided  not to  award the  contract to the first respondent on the ground of its being black-listed, no show- cause notice  was issued  by the  appellants  to  the  first respondent. Hence  their decision was against the principles of natural  justice and  was bad  in law. Two Letters Patent Appeals were  filed from  this  judgment  and  order,  being L.P.A. No.912  of 1995  filed by  the appellants  and L.P.A. No.1078 of  1995 filed  by the  fourth respondent, M/s.Walia Builders.      These two  Letters Patent  Appeals  along  with  L.P.A. No.1473 of l9g5 were heard together by the Division Bench of the Patna  High Court.  It has held that the order of black- listing  must  be  set  aside  because  the  order  was  not communicated to  the first  respondent. It  has further held that since  the order  of black-listing  has been set aside, the question  of award  of tender must be re-examined by the first respondent.      In our view the impugned decision of the Division Bench of the Patna High Court cannot be sustained. The decision of 26.6.1991 taken  by the water Resources Department to black- list the first respondent for five years was communicated by a letter  of the same date to the first respondent. The High Court has,  however,  held  that  the  letter  of  26.9.1991 addresses by  the Water  Resources Department, Government of Bihar to  the first  respondent was  not served on the first respondent. This  conclusion is arrived at by the High Court only on the ground that the allegation of non-service of the letter, made  by the  first respondent  in their pleading is not denied  by the  appellants in their pleading. But as the High Court’s judgment itself records, the appellants had, in fact, stated  in their pleading that the letter of 26.9.1991 was communicated  to the  first respondent.  The High Court, however, has  proceeded on  the basis  that there  was  non- traverse of  the statement made by the first respondent that the letter  of 26.9.1996  was  not  received  by  the  first respondent. The  appellants had  clearly  pleaded  that  the order of 26.9.1991 was communicated to the first respondent. This cannot  be construed  as non-traverse. In any case, the proviso to  Order VIII Rule 5(1) of the Civil Procedure Code states that   the  court may, in its discretion, require any fact so  admitted to  be proved  otherwise than  by such  ad issue. Looking to the nature of the pleadings the High Court should have  asked that  the receipt  or nonreceipt  of  the order of  26.9.1991 be  proved otherwise than by the alleged admission. It  should not have set aside the order of black- listing after  a lapse  of four  years only on the ground of alleged non-traverse.      The decision of the Tender Committee taken on 30.5.1995 not to  award the  contract to the first respondent has been set aside  by the  Division Bench  of the High Court only on the ground  that the  order of  black-listing is not a valid order. Hence  the decision  of the Tender Committee requires to be  re-considered. The  very basis  for this  finding  is defective. In considering whether the decision of the Tender Committee to  award the  tender to  the fourth respondent is arbitrary or  unreasonable, one  will have  to  examine  the existing circumstances  at the  time when  the decision  was taken. The  Tender Committee  rightly took  into account the fact that  the Water  Resources Department  of the  State of

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Bihar had  black-listed the first respondent for a period of five years.  This was  a relevant  consideration in deciding whether a  tender should be awarded to the first respondent. There was  no challenge  to the  black-listing order  at the relevant  time.   The  performance   record  of   the  first respondent while  executing previous  contracts was relevant in deciding  whether to  award the  contract  to  the  first respondent or  note. The  impugned decision  thus took  into account  relevent   factors.  It  cannot  be  considered  as arbitrary or unreasonable.      The first  respondent contended that the order of black -listing was  not in  force because  even after 1991, it had been awarded  two contracts.  The first contract referred to in this  connection by  the first  respondent is  a contract for the construction of the  Lok Nayak Bhawan given to it by the Patna  Zilla Parishad.  This contract was awarded to the first respondent  before 27.2.1991 and prior to the order of black-listing. The  second contract  relied upon  is by  the Chief Engineer,  Rural Engineering  Organization  of  Chotta Nagpur and  Santhal Pargana  Wing. This  contract relates to the Bihar  Plato Development  Project and was awarded to the first respondent  in 1994.  On enquiry  from the appellants, the Chief  Engineer of  the Rural  Engineering  Organization informed the  appellants that  when the contract was awarded to the  first respondent, the fact of its having been black- listed in  the State of Bihar was not brought to his notice. It was  because of  the suppression of this information that the  work   was  allotted  to  the  first  respondent.  This contention of the first respondent, therefore, has no force.      The   first   respondent   also   contends   that   the disqualification imposed  by the  State Government  will not automatically  disqualify   the  first  respondent  qua  the appellants, an autonomous body. The appellants, however, can legitimately take  into account  the  fact  that  The  first respondent has  been  blacklisted  by  the  Water  Resources Department, State of Bihar, in deciding whether to give work to the first respondent or not.      There was also no question of issuing of any show-cause notice to  the first  respondent before the Tender Committee of the  appellants  took  the  decision  on  30.5.1995.  The appellants were  merely taking  note of  an existing  order. There was  no question of their sitting in judgment over the black-listing order.  Nor was  this a case of the appellants themselves  issuing   an  order   black-listing  the   first respondent.      The  appeals  are,  therefore,  allowed.  The  impugned judgment and  order of the Patna High Court is set aside and Writ Petitions  bearing C.W.J.C.  Nos.3964 and  4064 of 1995 filed in the Patna High Court are dismissed with costs.