TaxTMI 
TaxTMI 
2019 (4) TMI 1838
X X X X Extracts X X X X
X X X X Extracts X X X X
....as not submitted declaration on black listed or holiday listed shall be considered as non-responsive and offer shall be rejected. ii. The bidder shall give a written declaration indicating that they are not on holiday list/banned/blacklisted as on due date of this tender." 3. The appellant was issued a show cause notice on 5.12.2017 in respect of another tender, i.e., after floating of the tender, but before submitting of the bid, for blacklisting on the allegation of furnishing false information and bid documents, submitted for providing Kisan Call Centre Services to the Department of Agriculture, Cooperation & Farmers Welfare, Ministry of Agriculture & Farmers Welfare, Government of India. 4. The show cause notice alleged that on questions being raised about the correctness of information furnished by the appellant in the bid documents regarding running of call centres at different locations, an inquiry was made through officers and despite further information being sought, the same was not forthcoming. The operative portion of the show cause notice reads as under: "Accordingly, in the above circumstances a situation has, prima facie, emerged that M/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hall have the right to summarily cancel our tender and procure the balance quantity from any alternate source. HPCL shall have the right to recover the differential amount between the rates of our contract and the rates at which HPCL is compelled to procure from the alternate source, if the latter rate is higher. To this effect, the recovery can be made by HPCL by encashing any bank guarantee that we may have submitted or from any pending bills under this contract or any other contract with HPCL. Further HPCL shall be at liberty to take any appropriate action as deemed fit in such an eventuality. I/we further undertake as and when called upon by Hindustan Petroleum Corporation Limited, to produce, for its inspection, original(s) of the document(s) of which copies have been annexed hereto. Date: __________ Name of Bidder: _____________ Place: _________ Signature & Seal of Bidder : _____________" 7. Respondent No.1 evaluated the t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... respect to following areas: a) Toll-free services. b) IVRS based call handling. c) Diversion of call traffic at the successful bidder's premises. d) Trained Operators at the time of Go-Live date." .... .... .... .... .... "10. Other Mandatory Requirements: xxxx xxxx xxxx xxxx xxxx g) Valid ISO Certification 27001 for security and ISO 2301 for Business Continuity." It is not disputed that the certificate of registration submitted by the appellant was issued by Elite Certifications Pvt. Ltd., respondent No.2. However, respondent No.3 sought to throw doubts on the certificate and the High Court found reason to believe the same even though in the counter affidavit filed by respondent No.1 a stand was taken to the contrary. 11. On 7.1.2019, notice was issued on the present appeal filed against the impugned order and an interim order was passed in the following terms: "In the meantime, Respondent No.1 (HPCL) may take a decision but not implement it. The petitioner may continue under the contract until further orders." The result of the same is that the appellant has continued to give services un....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of retrospective blacklisting of the appellant. 15. The second limb of the submission is based on clause 20(i) to the extent it refers to "or parties in respect of whom the action for blacklisting and holiday listing has been initiated by HPCL/any Government/quasi Government agencies or PSUs." This clause, it was submitted, had to be read with the wordings of the show cause notice. Undisputedly, the format in which the information had to be furnished only provided for an eventual blacklisting having taken place. The operative portion of the show cause notice, extracted aforesaid, states "why suitable action for blacklisting the firm (M/s. Caretel Infotech Pvt. Ltd.) should not be initiated." Emphasis supplied. The requirement of clause 20(i) was the actual initiation. Thus, it was pleaded that blacklisting had not been "initiated" by mere issuing of the show cause notice, as the notice was to show cause as to why proceedings should not be initiated, i.e., a prior stage. 16. On the other hand, Mr. Vishwanathan, learned senior counsel for respondent No.3, contended that the format was prescribed in the context of clause 20(ii), which was a case where blacklisting had already t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hese three eventualities. It is not a case where no specific format is provided, where possibly it could have been contended that the disclosure has to be in respect of all the four aspects. The format having been provided, if initiation of blacklisting was to be specified, then that ought to have been included in the format. It cannot be said that the undertaking by the appellant made it the bounden duty of the appellant to disclose the aspect of a show cause notice for blacklisting. We say so as there is a specific clause with the specific format provided for, requiring disclosures, as per the same. 22. It may be possible to contend that the format is not correctly made. But then, that is the problem of the framing of the format by respondent No.1. It appears that respondent No.1 also, faced with the factual situation, took a considered view that since clause 20(i) provided for the four eventualities, while the format did not provide for it, the appellant could not be penalised. May be, for future the format would require an appropriate modification! 23. If we refer to the undertaking submitted by the appellant all that it states is that the information furnished in the bid....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the eventuality of respondent No.1 considering it proper to initiate certain action, that would have to be in terms of the guidelines for blacklisting of HPCL. The guidelines itself show that the ban would have prospective effect, for future business dealings. Thus, the same would have no application to the tender awarded. Business Continuity Certificate: 29. The second reason which found favour with the High Court was the doubts created by respondent No.3 over the Business Continuity Certificate filed by the appellant. Clause 8, dealing with business continuity, requires the successful bidder to submit the transition plan to migrate to new platform and facility with zero disruption of services, with respect to four aspects provided hereinbefore. In terms of clause 10(g), valid ISO Certificate 27001 for security and ISO 2301 for business continuity have to be provided. It is not in question that the appellant did submit a certificate of business continuity, as obtained from respondent No.2. 30. Respondent No.3 has sought to cast doubts on this business certificates, and the Division Bench, in terms of the impugned order, has also embarked on a course of inquiry into this cer....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ourt to have issued the direction, as it sought to do. 34. The operative directions of the High Court, as contained in para 47 of the judgment, to take appropriate decisions, in the conspectus of the observations made, really amounts to directing respondent No.1 to breach its contract with the appellant. We are of the view that, thus, no such direction ought to have been issued to compel a breach of the contract by the appellant. 35. We, thus, are unable to sustain the impugned order even on this ground. Epilogue: 36. We consider it appropriate to make certain observations in the context of the nature of dispute which is before us. Normally parties would be governed by their contracts and the tender terms, and really no writ would be maintainable under Article 226 of the Constitution of India. In view of Government and Public Sector Enterprises venturing into economic activities, this Court found it appropriate to build in certain checks and balances of fairness in procedure. It is this approach which has given rise to scrutiny of tenders in writ proceedings under Article 226 of the Constitution of India. It, however, appears that the window has been opened too wide as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uce the observations in this behalf as under: "15. We may add that the owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. The constitutional courts must defer to this understanding and appreciation of the tender documents, unless there is mala fide or perversity in the understanding or appreciation or in the application of the terms of the tender conditions. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given." 39. We may also refer to the judgment of this Court in Nabha Power Limited (NPL) v. Punjab State Power Corporation Limited (PSPCL) & Anr. (2018) 11 SCC 508), authored by one of us (Sanjay Kishan Kaul, J.). The legal principles for interpretation of commercial contracts have been discussed. In the said judgment, a reference was made to the observations of the Privy Council in Attorney General of Belize v. Belize Telecom Ltd. (2009) 1 WLR 1988 (PC) as under: ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....makes business sense without the implication of terms, the courts will not imply the same. 41. The judgment in Nabha Power Limited (NPL)9 concluded with the following observations in para 72: "72. We may, however, in the end, extend a word of caution. It should certainly not be an endeavour of commercial courts to look to implied terms of contract. In the current day and age, making of contracts is a matter of high technical expertise with legal brains from all sides involved in the process of drafting a contract. It is even preceded by opportunities of seeking clarifications and doubts so that the parties know what they are getting into. Thus, normally a contract should be read as it reads, as per its express terms. The implied terms is a concept, which is necessitated only when the Penta-test referred to aforesaid comes into play. There has to be a strict necessity for it. In the present case, we have really only read the contract in the manner it reads. We have not really read into it any 'implied term' but from the collection of clauses, come to a conclusion as to what the contract says. The formula for energy charges, to our mind, was quite clear. We have only expo....