MS. Rysa Infratech Pvt. Ltd v. Union of India

1. This hearing has been done through hybrid mode.

2. The Petitioner-M/s. Rysa Infratech Pvt. Ltd is an enlisted contractor with the Military Engineer Services (MES), Government of India. It is engaged in construction of Pre-Engineered Building & Infrastructure Water & Wastewater Treatment Projects, Sewage Disposal and Water Distribution Network, Electro-mechanical utility services, Low Tension Electric Works and Incinerators.

3. The case of the Petitioner is that it has undertaken various projects for the MES. The said MES has various zones through which it operates and floats tenders for projects across the country. The Petitioner has been enlisted as a B-Class contractor and stated to have completed several projects for the MSE, particularly for Sewage Treatment Plant Tenders. Currently, the Petitioner is also undertaking various projects for the MES.

4. According to the Petitioner, a Work Load Return (hereinafter “WLR”) is issued on a quarterly basis by each of the zones of the MES which records the names of all the contractors and gives a remark about the capacity of the contractor to take on more work load or not. It is on the strength and the basis of these WLRs, that further works are allotted to the enlisted contractors. The allocations of tenders on a regular basis depends upon the satisfactory performance of the contractor in the previous WLR by the various zones.

5. In the present petition, the grievance of the Petitioner is that for the quarter ending September, 2022, the MES Chennai Zone through the Director (Contracts) has published the WLR dated 29th November, 2022, where the Petitioner has been recorded as showing “Slow Progress”. The Petitioner has challenged this adverse remark against it, which, according to the Petitioner could lead to it being disqualified and rendered ineligible for subsequent tenders issued by the MES.

6. It is the claim of the Petitioner is being deprived of the opportunity to bid for the following two Notice Inviting Tenders (NIT): “(i) NIT for Modernization of Sewage Treatment Plant at HQ EAC(U), Shillong

(ii) NIT for Repair/Maint of RO Plant and STP At KWC Area

7. Ms. Mittal, ld. Counsel for the Petitioner submits that the subsequent to this impugned WLR, the Petitioner had in fact, submitted a bid against the NIT for Modernisation of sewage treatment plant at headquarter in Shillong, EACU for which the Petitioner’s bid has, in fact, being rejected as not fulfilling the eligibility criteria. According to the Petitioner, this shows that the impugned WLR is having an adverse impact on the Petitioner’s business.

8. She further submits that in the WLRs of the previous quarters, the remarks of the Petitioner have been satisfactory and, in fact, a large number of projects have already been executed by the Petitioner successfully. Thus, it has been submitted that the Petitioner ought to be permitted to participate in the future tenders. It is also the case of the Petitioner that under the Manual of Contracts published by the MES, Section 33.2(b)(vii) and Section 33.2(b)(viii) requires a show cause notice to be issued to the Petitioner before any adverse remarks can be passed.

9. On the last date of hearing, i.e., 21st February, 2023, Mr. Vineet Dhanda, ld. CGSC had sought time to seek instructions in the matter. Today, he has handed across a communication dated 7th September, 2022 issued by the MES Goa through the Chief Engineer, Coast Guard to the Petitioner wherein a show cause has been issued to the Petitioner, as to why the Petitioner firm should not be banned for issuance of tenders in future due to persistent delays.

10. The reply to this letter on 9th September, 2022 given by the Petitioner shows that an assurance has been given by the Petitioner to complete the work in the stipulated period. This itself shows that the Petitioner had knowledge of the MES contemplating banning of the Petitioner for future tenders.

11. Heard. A perusal of a Manual of Contracts Section 33.[2] shows that a proper show cause notice would have to be issued for any adverse remarks in the WLRs. The said Clause reads as under: - “(vii) Show cause notices for proposed adverse remarks in work load returns shall be served by the Accepting Officer of Contracts latest by 10th of the last month of the quarter and copy of the same alongwith reply of, Contractors shall be enclosed with WLR by GE/CWE, while forwarding report to CE Zone, and by CE Zone to CE Command.

(viii) In the forwarding letter of the WLR to higher formation, there shall be specific mention that against the contractor who have then adversely remarked, necessary Show Cause Notices (SCNs) have been issued to the contractors, replies received from contractors and replies analysed before putting the adverse remark.”

12. The documents which have been produced today, have been issued by MES Goa. According to the Petitioner, the non-performance leading to the adverse remarks relates to a project in Nagpur and not to the Goa related projects, though both belong to the Chennai Zone of MES. Be that as it may, ld. Counsel for the Petitioner also submits that the show cause notice is to be issued in a particular format, as given in the Manual of Contracts issued by the MES.

13. A perusal of the documents which have been placed on record today would show that the guidelines qua show cause notice require the Respondent to give a period of notice, the background for giving the show cause notice and the manner in which the reply is to be considered. In the present case, the adverse remarks have, admittedly, been incorporated without considering the reply given by the Petitioner firm or giving any hearing to the Petitioner.