Patna HC Cancels Company Blacklist and Orders New Tender for NMCG Project

The Patna High Court ruled severely on Bihar Urban Infrastructure Development Corporation Limited (BUIDCo) for disqualifying a bidder M / S EMS Infracon Pvt. Ltd on the basis of a complaint alleging falsification of facts from an unknown source. BUIDCo had also served a notice of justification on the company without attaching the copy of the complaint, and ordered the government’s technical tender committee to review the technical tender evaluation reports (TBER) for a ₹World Bank funded sewer and sewerage project of 300 crore in Hajipur.

“The Court is of the opinion that BUIDCo acted irresponsibly by passing the contested order in a casual and cavalier manner, which has serious negative consequences not only with regard to the applicant’s eligibility to participate in the offer. with others in public procurement, but has also negatively affected the progress of the project in question, ”said Judge Chakradhari Sharan Singh, quashing the blacklisting order and ordering a re-evaluation of the bids by a committee. reporting to the Commissioner for Development, not the Secretary for Urban Development. The order was placed on Monday.

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“That a new evaluation of the technical offer be carried out by a technical committee with the development commissioner, Bihar, as chairman and executive director of the national technical mission for Clean Ganga (NMCG) as one of the members. The Development Commissioner will be free to reconstitute the technical tender committee for the purposes of said evaluation. It will be open to the technical tender committee to take into account the facts mentioned in the notice of justification and the petitioner’s response, also bearing in mind the Court’s observation, for the limited purposes of evaluation of the technical offer of the works in question; if this is allowed under the template tender documents and other provisions under which the project must be implemented to disqualify the applicant. It is expected that the chair and other members of the technical tender committee will address broader aspects of the issue in accordance with the mandatory requirements of the January 2011 World Bank guidelines. call for tenders as indicated in the letter from the World Bank dated June 15, 2021, the Court expects the meeting of the Technical Committee for Tendering to be held, if not before, by Thursday, ”the court said.

Since three orders blacklisting bidders by the same chief engineer were found to be illegal and overturned by the court, the judiciary left it up to the planning commissioner to consider whether he should be allowed to participate. as a member of the technical tender committee for the evaluation of the bids and if there is any chance that his opinion will be biased due to the facts and circumstances of this matter recounted above.

“The contested blacklisting order dated March 4, 2021 is quashed. It is specified that the court interferes in the contested order mainly for four reasons, viz. he does not take due account of the applicant’s explanation submitted in response to the show cause notice, he referred to a new fact that was not part of the show cause notice, he completely ignored the comments made by this court in his previous and most important order, the Chief Engineer had the obligation to register a finding on the applicability of the registration rules of Bihar contractors, which is in the nature of executive instructions to take measures against the tender process in question while the tender documents are based on a template tender document established by NMCG as part of a financing agreement from the World Bank, a plea that was specifically taken up in the response to the notice of justification. This aspect goes to the root of the problem, which has been completely ignored. The Tender Technical Committee will be required to review all communications received from the NMCG in this regard. “, said the court.

“The court did not give the petitioner a clear and unambiguous notice and that BUIDCo will be free to act in accordance with the law in this regard and to issue the petitioner with a new notice of justification, if a blacklist is proposed in the part of the registration of the entrepreneur Bihar. Rules, 2007. Before issuing such a justification notice, however, the competent authority will be obliged to record a finding that the said executive instruction is applicable even with respect to the project receiving external assistance in question, ”he added.

Applicants’ attorney and former Supplementary Solicitor General SD Sanjay said BUIDCo exercised the blacklisting power only for the purpose of keeping the applicant out of competition in the bidding process. He argued that the chain of events shows that the blacklist order was hastily passed, overtaking the leadership of the NMCG and the World Bank on the pretext that the state government’s share of funding was also there to the tune of 30%. Advocate General Lalit Kishore represented BUIDCo and defended the decision.

The court said that the applicant’s technical offer was rejected on other grounds and that, by a subsequent letter dated August 14, 2020, the secretary of the Department of Urban Development and Housing of the Government of Bihar and the Director of program, SMCG, were asked to review the TBER regarding the M / s EMS, these points, which were the basis for the rejection of the petitioner’s tender documents, were ignored and BUIDCo put the petitioner in formal notice to propose a blacklist by means of the notice of justification dated 31 October 2020, for quite different reasons.

“I must register that if the State of Bihar or any of its companies intends to have or adopt a document in the form of a law, rules, regulations, notifications or directives in order to blacklist an entrepreneur, it must be clear and structured. in its half-baked arrangement form to casually adopt an executive instruction issued by the Department of Road Construction for all works and projects under the jurisdiction of the state government or its enterprises, in the opinion of the Court , is not going well, given the sharp increase in infrastructure development projects, ”said the court.

The petitioner, aggrieved by an order from BUIDCo to blacklist him on March 4, 2021, which rendered him disqualified from the award of any contract by BUIDCo for a period of one year, requested that the rules of registration of contractors of Bihar, 2007 (Department of public works) were ultra vires and non-enforceable insofar as this was contrary to the provisions of the financial rules of Bihar, 1950. He challenged the legality of the TBER of the BUIDCo for a project in the basin of the World Bank-funded Ganga River in Hajipur, citing his representations as well as letters from other officials of the Government of India, the Government of Bihar as well as the Director, NMCG, New Delhi, and Team Leader, World Bank , New Delhi, claiming that he had been wrongly disqualified by the tender evaluation committee. The Director (Projects), NMCG, sent a letter on August 14, 2020 to the Secretary, Department of Urban Development and Housing, Government of Bihar, to consider the petitioner’s offer for the project, but BUIDCo again disqualified him , which, according to the petitioner, seemed to help the other competitors.

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