M/S. MKC Infrastructure Limited v. Union of India & Anr.

1. This hearing has been done through hybrid mode.

2. The Petitioner challenges the impugned debarment order dated 5th January, 2023 by which the Petitioner Company- MKC Infrastructure Limited has been debarred for a period of three months under Rule 151 of General Financial Rules, 2017. The debarment order reads: “A report was received that CBI, ACB, Gandhinagar has filed an FIR No. RC0292022A0003 dated 15.07.2022 on the ground of Criminal Conspiracy, bribing a public servant, Bribing a Public Servant by commercial organization etc. in the Construction of Four lane expressway from start of DSIR zone of Ahmedabad district to Adhelai village of Bhavnagar district (ch.71.00 to ch.109.019) section of Ahmedabad- Dholera Greenfield alignment (NH-751) on EPC mode-under Bharatmala Pariyojana in the State of Gujarat (Package-IV). The said case has been registered against the employee of M/s MKC Infrastructure Ltd under Section 120-B IPC Read with section 7, 7A, 8 of PC Act 1988 (as amended in 2018).

2. The report indicated that prima facie M/s MKC Infrastructure Ltd. had violated Article 2 of the Integrity Pact of the contract agreement signed between NHAI and M/s MKC Infrastructure Ltd for the Construction of Four lane expressway from start of DSIR zone of Ahmedabad district to Adhelai village of Bhavnagar district (ch.71.00 to ch.109.019) section of Ahmedabad- Dholera Greenfield alignment (NH-751) on EPC modeunder Bharatmala Pariyojana in the State of Gujarat (Package-IV).

3. The matter has been examined in the Ministry by the Competent Authority nominated to decide such matters vide O.M. No. NH-35014/20/2020-H-Part (2), dated 18.08.2022. M/s MKC Infrastructure Ltd. was also given an opportunity vide this Ministry's letter dated 14th December, 2022 to explain their case before the competent authority in this Ministry.

4. After careful examination of all records made available by NHAI vide File No. NHAI/Guj/ Ahmedabad-Dholera/pkg-IV /2018/11, clarification submitted by M/s MKC Infrastructure Ltd. and taking into account Rule 151 of GFR 2017 read with the Debarment Guidelines of Ministry of Finance, dated 02/11/2021, it has been concluded beyond material doubt by the Competent Authority that M/s MKC Infrastructure Ltd. has violated Article 2 of the Integrity Pact entered into by them with NHAI.

5. Therefore, in accordance with O.M. NH- 3501412012020-H-Part (2), dated 18.08.2022, the Competent Authority has deemed it fit to impose the penalty of debarment upon M/s MKC Infrastructure Ltd. In deciding the quantum of penalty in terms of the duration of debarment, the Competent Authority has taken into account the guidance available in Rule 151 of GFR 2017, the Debarment Guidelines of Ministry of Finance, dated 02111 /2021 and the views of the executing agency and other relevant material available on the file.

6. In view of the need to ensure action against the violation of the Integrity Pact which is 'beyond material doubt' and the imperative of maintaining continuity of construction work with pace and quality in the national highways sector, the Competent Authority has deemed it fit that M/s MKC Infrastructure Ltd. be debarred under Rule 151 of GFR 2017 for a period of 03 months from the date of issue of this order of debarment.

7. This issues with the approval of the Competent Authority as nominated vide O.M. NH- 35014/20/2020- H-Part (2), dated 18.08.2022.”

3. In the present petition, the Petitioner also seeks the quashing of the Office Memorandum dated 18th August, 2022 issued by Respondent No. 1- Ministry of Road Transport & Highways (MorRTH) on the subject of Integrity in Public Procurement (hereinafter ‘subject OM’). In the alternative, the Petitioner is seeking an order prohibiting MoRTH from enforcing the subject OM qua the Petitioner.

4. The submission of ld. Senior Counsel is that the Petitioner is not to be blamed for the conduct of one of its officials who has also been suspended and has been charge-sheeted by the Central Bureau of Investigation (CBI). It is also submitted that in the performance of the contract itself, the Petitioner is way ahead of the deadlines which have been prescribed and there is no complaint against the Petitioner qua its performance.

5. Ld. Counsel for the Respondent, on the other hand, has taken the Court through the charge-sheet which shows the manner in which the concerned official of the Petitioner was held to be complicit in the allegations made in the chargesheet against the certain officials of other companies as also the officials of the Respondent No. 2- NHAI.

6. The said Rule of General Financial Rules, 2017 reads as: “Rule 151 Debarment from bidding.

(i) A bidder shall be debarred if he has been convicted of an offence—

(a) under the Prevention of Corruption Act, 1988; or (b) the Indian Penal Code or any other law for the time being in force, for causing any loss of life or property or causing a threat to public health as part of execution of a public procurement contract.

(ii) A bidder debarred under sub-section (i) or any successor of the bidder shall not be eligible to participate in a procurement process of any procuring entity for a period not exceeding three years commencing from the date of debarment. Department of Commerce (DGS&D) will maintain such list which will also be displayed on the website of DGS&D as well as Central Public Procurement Portal.