Full Text
HIGH COURT OF DELHI
Date of Decision: 8th December, 2022
53256/2022 CREST DIGITEL PRIVATE LIMITED ..... Petitioner
Through: Mr. Sandeep Sethi & Mr. Dayan Krishnan, Sr. Advocate with Mr. Sanjeev Kapoor, Mr. Sahil Narang, Mr. Dhitiman Roy, Ms. Sania Abbast
& Mr. Ayushman Kacker, Advocates.
(M:9501339098)
Through: Mr. Nikhilesh Krishnan, Ms. Harshita Sinha & Mr. Abhishek Bhushan
Singh, Advocates. (M:9810683803)
Executive Director, TCIL - Ms. Shivalini Sinha
JUDGMENT
1. This hearing has been done through hybrid mode. CM APPL. 53256/2022 (for exemption)
2. Allowed, subject to all just exceptions. Application is disposed of. W.P.(C) 16825/2022 & CM APPL. 53255/2022(for stay)
3. This is a classic case which reflects the manner in which, due to noncreation of supervision and governance mechanisms coupled with what appears to be unscrupulous conduct of an official, substantial revenue loss has been caused to the Respondent - Telecommunications Consultants India Limited (hereinafter, “TCIL”) which is a Government undertaking.
4. The Petitioner - Crest Digitel Pvt. Ltd. (formerly known as Space Teleinfra Pvt. Ltd.) has filed the present writ petition seeking issuance of a writ/order for setting aside the blacklisting/debarment order issued by TCIL vide letter dated 2nd December, 2022 (hereinafter, “Impugned Letter”). By virtue of the said order the Petitioner and its subsidiary companies have been blacklisted/debarred/banned from participating in all future tenders of the Respondent for a period of 5 (five) years with effect from 2nd December
2022. The operative portion of the impugned letter is reproduced hereinbelow for ease of reference:
5. The Petitioner is a company engaged in the digital infrastructure space claiming to have experience in providing services for enhancement of mobile networks at more than 2,500 sites across the country.
6. In 2016, TCIL issued an expression of interest for certain works at seven hospital sites for establishing radio frequency coverage for all mobile service providers on neutral inbuilding solutions. On 3rd March 2016, Letters of Intents (LoIs) were issued by TCIL in favour of the Petitioner confirming that it had been selected as an Original Equipment Manufacturer (OEM) partner. Under the said LoIs, permission was also granted to the Petitioner to commence work at six hospital sites, including Chacha Nehru Bal Chikitsalaya, Delhi. The LoIs also contemplated the execution of detailed agreements between the parties regarding the revenue sharing arrangement between the parties.
7. The said revenue sharing arrangement that had to be entered into between the parties was to the effect that the Petitioner would enter into agreements with various cellular service companies for boosting their networks and a percentage of the revenue collected by the Petitioner would be paid to the TCIL as part of the revenue sharing arrangement.
8. In September, 2022 after reviewing certain electricity payments by the Petitioner TCIL realised that the hospital site at Chacha Nehru Bal Chikitsalaya, Delhi was being operated by the Petitioner as per the LOI without any revenue share being paid to TCIL. Upon further enquiry it was revealed that the aforementioned six hospitals sites including Chacha Nehru Bal Chikitsalaya, Delhi for which LoIs were issued on 3rd March, 2016 were operating merely with LoIs and were not paying the revenue share to the TCIL.
9. Thereafter, show cause notice dated 5th September 2022 was issued by TCIL, wherein the Petitioner was directed to produce certain documents within 7 days. On 19th September 2022 a detailed reply to the show cause notice was given by the Petitioner.
10. The stand of the Petitioner in the reply to the show cause notice was that work had commenced at the hospital sites post the execution of the LoIs. It was not disputed that the Petitioner had to pay a share of revenue to TCIL. However, due to the lack of a detailed revenue sharing agreement and invoices not being raised by TCIL, the revenue share could not be paid.
11. After issuing subsequent showcase notices and receiving their replies, TCIL vide impugned letter dated 2nd December, 2022 issued the blacklisting/debarment order thereby, debarring/ blacklisting the Petitioner from future tender processes for a period of 5 years. The same is under challenge in the present petition.
12. Today, it is submitted by Mr. Sethi, ld. Sr. Counsel and Mr. Krishnan, ld. Sr. Counsel appearing for the Petitioner that no complaint against the Petitioner’s services is raised by TCIL and that the Petitioner never intended to defraud TCIL. Further, at sites with respect to which detailed revenue sharing agreements were entered and invoices had been raised by TCIL, the revenue share payment had been made by the Petitioner without any delay. Insofar as the six hospital sites, including Chacha Nehru Bal Chikitsalaya, Delhi are concerned, even though the obligation to execute proper revenue sharing agreement was upon TCIL, a draft revenue sharing agreements was shared by the Petitioner with the official in-charge from TCIL i.e., Mr. Narender Yadav, however the same was not executed.
13. It is submitted by the ld. Sr. Counsels for the Petitioner that that even qua the five hospital sites excluding Chacha Nehru Bal Chikitsalaya, Delhi, a sum of Rs.1.09 crores has already been paid to TCIL. Further, monetary liability has never been disputed by the Petitioner and it is only due to the fact that the revenue sharing agreement was not executed that the amounts were not paid. Thus, the Petitioner is willing to abide by any conditions that this Court may impose.
14. It is submitted that the blacklisting/ debarment order can have deleterious consequences upon the Petitioner. The Petitioner would be required to disclose the said debarment in all other government company tenders, which would affect the Petitioner’s business immensely. Lastly, ld. Sr. Counsels for the Petitions submit that the total number of sites where the Petitioner is operating without a revenue sharing arrangement is not six sites but, in fact, nine sites.
15. Mr. Nikhilesh Krishnan, ld. Counsel appearing for TCIL, under instructions from the Executive Director, TCIL - Ms. Shivalini Sinha who is present in Court, submits that the detailed internal inquiry within TCIL has revealed that the Petitioner was dealing with one individual i.e., Mr. Narender Yadav. All emails and correspondence including the LoIs were sent by Mr. Narender Yadav and at no point was it brought to the notice of TCIL management that there are a number of sites where operations are being conducted by the Petitioner without revenue sharing agreements and without receiving revenue. It is claimed that Mr. Yadav has been conniving with the Petitioner’s officials from the beginning. It is also suspected that he has been involved fraudulently with other service providers as well. Thus, he has now been suspended from TCIL after a preliminary inquiry. It is in this background that the decision to debar the Petitioner has been taken only in respect of TCIL’s future works. The existing projects can however continue to operate.
16. After hearing ld. Counsels for the parties and perusing the record it is seen clearly that undoubtedly there were certain governance issues within TCIL which led to this state of affairs. It is incomprehensible as to how, for the last six years the Petitioners could operate at nine sites without revenue sharing agreements that too without the knowledge of TCIL management and with connivance with one official. Moreover, even this case was detected by chance. There should have been an audit or supervisory mechanism by which this situation ought to have been detected earlier.
17. At the prima facie stage, this Court considers that the Respondent/TCIL does not have any complaint against the Petitioner’s quality of services. The grievance of TCIL is that the Petitioner had a duty to inform the higher management of TCIL about the revenue sharing agreements not being executed. However, considering the fact that an official of TCIL was involved in this whole process and acted in a fraudulent manner the Petitioner cannot alone be blamed. There is however no doubt that the Petitioner has also been complicit with the official concerned and has comfortably concealed the fact that they have been operating from nine sites without paying to TCIL, until it was detected.
18. Considering the facts and circumstances of this case as also the stand of the Petitioner that it does not dispute monetary liability and is willing to abide by any conditions that this Court may impose, it is deemed appropriate to issue the following directions, at this stage:
(i) That a meeting between the representatives of the Petitioner and a committee of at least three officials from the TCIL shall be held. The representatives of the Petitioner shall consist of senior officials with at least one such official who has knowledge of the Petitioner’s arrangement with TCIL since 2016.
(ii) That the representatives of the Petitioner shall provide to the TCIL committee all documents and information in respect of the nine sites where no revenue sharing agreements have been entered into between the Petitioner and TCIL. If any other documents or details are deemed relevant or sought for by TCIL the same shall be provided by the Petitioner.
(iii) The meeting shall be held on 15th December, 2022 at 11:30 a.m. at the office of the Executive Director, TCIL.
(iv) That after the meeting, a detailed status report, including the minutes of the meeting shall be placed on record.
(v) Considering the fact that for six years qua nine sites, the Petitioner has paid revenues only after show cause notices were issued by the TCIL, a further sum of Rs.75,00,000/- shall be deposited by the Petitioner with TCIL, subject to future adjustments. Until then, no fresh orders of TCIL shall be placed upon the Petitioner.
(vi) That the blacklisting/debarment order issued vide the impugned letter dated 2nd December, 2022 passed against the Petitioner shall remain stayed till the next date of hearing, subject to the above conditions.
(vii) That all the existing sites/projects of the Petitioner shall, continue to operate without any impediment.
19. At this stage, it is pointed out that in respect of AIIMS, Ghorakpur, an LoI has been issued by TCIL and ground work is stated to have been done by the Petitioner. The same shall be considered in the aforementioned meeting on 15th December, 2022.
20. If the work in respect of AIIMS, Ghorakpur, is not allotted to the Petitioner, it is free to approach this Court.
21. Counter affidavit to be filed by TCIL within six weeks. Rejoinder within four weeks thereafter.
22. List on 2nd March, 2023.
PRATHIBA M. SINGH JUDGE DECEMBER 8, 2022 dj/kt