High Court of KeralaSingle Judge2016-01-11Writ petition disposed; debarment shortened to ...

Ancheril Agencies v Lakshadweep Development Corporation Ltd

Case / Petition Number:WP(C).No. 23795 of 2015 (Y)

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: A. Muhamed Mustaque
Judgment Date: 2016-01-11
Court Decision / Holding: Writ petition disposed; permanent debarment was set aside and the petitioner’s debarment was restricted to two years from the date of Ext.P12.
Final Disposition: Writ petition disposed; debarment shortened to two years from Ext.P12, with permanent debarment set aside.

Parties to the Case

Appellants / Petitioners

Ancheril Agencies

Respondents

Lakshadweep Development Corporation Ltd, a Govt. of India Undertaking

Legal Representation & Advocates

Counsels for Petitioners

• Sri K. Ramakumar (Sr.)
• Sri T. Ramprasad Unni
• Sri S.M. Prasanth
• Smt. Asha Babu
• Sri G. Renjith
• Smt. S. Parvathi
• Smt. R.S. Aswini Sankar

Counsels for Respondents

• Sri S. Radhakrishnan, SC

Case Synopsis & Summary

The petitioner, Ancheril Agencies, operates as a steamer agent and participated in a tender process issued by the Lakshadweep Development Corporation Ltd (a Govt. of India undertaking) to act as steamer agent. Tender notice Ext.P2 was issued on 3.12.2014; Ext.P3 (15.4.2015) required offer of maximum discount; Ext.P4 (submission) followed. The petitioner submitted a discount rate but faced alleged discrepancies and was directed to resubmit the rate. Subsequently, Ext.P5 (26.5.2015) alleged deliberate stoppage of work in an ongoing contract, which the petitioner denied in Ext.P6 but admitted a single instance of stoppage. On 3.8.2015 Ext.P12 informed the petitioner of blacklist/debarment from awarding contracts. The petitioner challenged the blacklist as well as the bid consideration under Ext.P12. The respondent argued that the petitioner’s conduct (stoppage of work to pressurize payments) disrupted the tender process and that blacklisting is a stigma and a legitimate action, particularly since the tender process was underway. The court, while noting the petitioner’s conduct and the seriousness of the action, held that permanent debarment is disproportionate and unsustainable, emphasizing proportionality between action and punishment and the need to balance interests. Consequently, the court modified the punishment to a two-year debarment from Ext.P12 and disposed of the petition.

Legal Doctrines & Maxims

Principle of proportionality in punishment and sanctions

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner's counsel argued that permanent debarment without hearing is unsustainable and that prior decisions and doctrines (e.g., Dharampal Satyapal Ltd. v. Deputy Commissioner of Central Excise, Kulja Industries Ltd., and Dr. Marykutty Joseph) establish that due process and proportionality must govern debarment, especially when tender processes are ongoing. The petitioner contended that the solitary supposed stoppage of work does not justify a permanent debarment, and that the punishment should be proportionate to the conduct.

Contentions of Respondents

The respondent argued that the petitioner’s conduct—alleged stoppage of work to press for delayed payments—undermined the tender process and warranted seriousness such as blacklisting. It contended that the decision was a legitimate stigma and part of a fair bidding framework, and that dependency on prior opinions should be managed within the scope of proportionality and the committee’s evaluation during Ext.P12.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Dharampal Satyapal Ltd. v. Deputy Commissioner of Central Excise, Gauhati and others	2015(8) SCC 519	Mentioned Only	Cited by counsel to argue that blacklisting without hearing is unsustainable; the court references it in the context of due process but does not base its decision solely on it.
Dr. Marykutty Joseph v. State of Kerala and others	2007 (4) KHC 512	Mentioned Only	Cited to support a Division Bench position on debarment; the court notes the reference but does not adopt the full ratio.
Kulja Industries Ltd. v. Chief General Manager, W.T.Proj., BSNL and others	2013 (4) KHC SN 17	Mentioned Only	Cited by counsel in relation to debarment mechanics; the court does not discuss its ratio in detail.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** **THE HONOURABLE MR. JUSTICE A.MUHAMED MUSTAQUE** **MONDAY, THE 11TH DAY OF JANUARY 2016/21ST POUSHA, 1937** **WP(C).No. 23795 of 2015 (Y) ----------------------------------------** **PETITIONER(S): ----------------------** **ANCHERIL AGENCIES, TEEPEYEM HOUSE, BRISTOW ROAD, WILLINGDON ISLAND, KOCHI-682 003, REPRESENTED BY ITS PARTNER, ELIAS MATHEW.** **BY ADVS.SRI.K.RAMAKUMAR (SR.) SRI.T.RAMPRASAD UNNI SRI.S.M.PRASANTH SMT.ASHA BABU SRI.G.RENJITH SMT.S.PARVATHI SMT.R.S.ASWINI SANKAR** **RESPONDENT(S):** **-------------------------** **LAKSHADWEEP DEVELOPMENT CORPORATION LTD, A GOVT. OF INDIA UNDERTAKING, 27/1038 B, PANAMPILLY NAGAR, ERNAKULAM-682 036, REPRESENTED BY ITS MANAGING DIRECTOR.** **BY ADV. SRI.S.RADHAKRISHNAN,SC** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 11-01-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **PJ** ## **WP(C).No. 23795 of 2015 (Y)** ## **---------------------------------------** ## **APPENDIX** ## **PETITIONER(S)' EXHIBITS -------------------------------------** - **P1 : COPY OF LETTER OF RESPONDENT REGARDING EXTENSION DTD.23.10.2013.** - **P2 : COPY OF THE TENDER NOTICE AND THE GENERAL TERMS AND CONDITIONS DTD.3.12.2014.** - **P3 : COPY OF THE LETTER OF RESPONDENT DTD.15.4.2015.** - **P4: COPY OF THE LETTER OF THE PETITIONER DTD.20.4.2015** **P4(A) : COPY OF THE LETTER OF THE RESPONDENT DTD.24.4.2015.** **P4(B) : COPY OF THE LETTER OF THE PETITIONER DTD.16.6.2015.** - **P5 : COPY OF THE LETTER OF RESPONDENT DTD.26.5.2015.** - **P6 : COPY OF THE LETTER OF THE PETITIONER DTD.29.5.2015.** **P6(A) : COPY OF THE LETTER OF PETITIONER ENCLOSING E-MAIL DTD.15.6.2015.** - **P7 : COPY OF THE LETTER OF RESPONDENT DTD.9.6.2015.** - **P8 : COPY OF THE LETTER OF PETITIONER DTD.12.6.2015.** **P8(A) : COPY OF THE AGREEMENT DTD.7.5.2015.** **P8(B) : COPY OF THE LETTER OF RESPONDENT DTD.8.4.2014.** - **P8(C) : COPY OF THE LETTER OF THE RESPONDENT DTD.3.7.2015.** - **P9 : COPY OF THE TENDER NO.LDCL/STEAMER/PASSENGER-2015 DTD.7.7.2015.** - **P10 : COPY OF THE CORRIGENDUM TO EXT.P9 DTD.28.7.2015** - **P11 : COPY OF THE ACKNOWLEDGMENT OF SUBMISSION OF BID DTD.3.8.2015.** - **P11(A) : COPY OF THE ACKNOWLEDGMENT OF SUBMISSION OF BID DTD.9.6.2015.** - **P12 : COPY OF THE ORDER OF RESPONDENT BLACKLISTING THE PETITIONER DTD.3.8.2015.** **P13: COPY OF THE BID SUBMITTED BY THE PETITIONER DTD.3/8/2015 RESPONDENT(S)' EXHIBITS ---------------------------------------** **R1(A): COPY OF MINUTES OF THE MEETING OF THE COMMITTEE DATED 8/12/2007** **....2/-** **..2..** **WP(C).No. 23795 of 2015 (Y)** **---------------------------------------** **R1(B): COPY OF THE ABOVE SAID LETTER DATED 7/7/15** **R1(C): COPY OF THE RELEVANT PAGES OF THE AGREEMENT DATED 7/5/12** **R1(D): COPY OF THE LETTER DATED 1/4/13 WITH REMARKS OF COMPETENT AUTHORITY** **R1(E): COPY OF THE RELEVANT PAGES OF THE AGREEMENT DATED 21/10/10** **R1(F): COPY OF SUCH AN INVOICE DATED 8/7/14** **R1(G): COPY OF THE LETTER DATED 19/5/15** **R1(H): COPY OF THE ABOVE SAID LETTER DATED 26/5/15** **R1(I): COPY OF THE MINUTES OF THE COMMITTEE DATED 10/6/15.** **/ TRUE COPY /** **P.S. TO JUDGE** **PJ** ## **A.Muhamed Mustaque, J.** ==================================== W.P.(C)No.23795 of 2015 ==================================== Dated this the 11[th] day of January, 2016. ## **JUDGMENT** - 1.Petitioner is engaged in the business of providing Steamer Agency services. The respondent is a Government of India Undertaking engaged in the operation of vessels between the mainland and the Lakshadweep Islands. 2.Petitioner has taken part in the tender process issued as per Ext.P2 to act as a steamer agent on behalf of the respondent. The notice was issued on 3.12.2014. Thereafter, petitioner has been communicated as per Ext.P3 dt.15.4.2015 to offer maximum discount rate in a sealed cover, on or before - 21.4.2015. Petitioner submitted discount rate as per Ext.P4. Petitioner was informed that some discrepancies were found out W.P.(C)No.23795 of 2015 ## -:2:- in the rate quoted by him and petitioner has been directed to resubmit the rate quoting maximum discount rate. 3.In the meanwhile petitioner has been served with Ext.P5 dt.26.5.2015, alleging deliberate stoppage of work in connection with an ongoing contract. Ext.P5 refers to an incident occurred on 19.5.2015. The petitioner denied any stoppage of work by him as per Ext.P6. 4.Thereafter, petitioner has been communicated by Ext.P12 dt.3.8.2015 that the petitioner has been blacklisted from awarding contract by the respondent. The petitioner challenges the decision to blacklist and also seeking a direction to consider his bid, submitted pursuant to Ext.P12. - 5.Heard Senior Counsel Sri.Ramkumar and Sri.S.Radhakrishnan, counsel for the respondent. The learned Senior Counsel would argue, in the light of the decision of the Hon'ble Supreme Court in _**Dharampal Satyapal Ltd. v. Deputy Commissioner of**_ W.P.(C)No.23795 of 2015 ## -:3:- _**Central Excise, Gauhati and others [2015(8) SCC 519]**_ , that the decision of blacklisting, without hearing the petitioner, is unsustainable. Further, it is argued that, permanent debarment from future contract is also illegal. Learned Senior Counsel also relied on the Division Bench judgment of this court in _**Dr.Marykutty Joseph v. Stte of Kerala and others (2007 (4) KHC 512)**_ . Learned Senior Counsel also referred to the judgment of the Hon'ble Supreme Court in _**Kulja Industries Ltd.**_ _**v. Chief General Manager, W.T.Proj., BSNL and others (2013 (4) KHC SN 17)**_ . 6.On the other hand, learned counsel Sri.S.Radhakrishnan portrayed the approach and attitude of the petitioner throughout the currency of the contract with him. Learned counsel further submits that, petitioner is in the habit of stoppage of service to pressurize the respondents to release payment in shortest possible time. He narrated hardships and loss suffered by the W.P.(C)No.23795 of 2015 ## -:4:- respondent. - 7.The blacklisting is not only a debarment but also would involve a stigma on the contractor. In this case, a decision to blacklist has been taken when the tender process was going on. The petitioner has been acting as a steamer agent at the time Ext.P2 tender notice was issued. As seen from the pleadings, petitioner has been acting as a steamer agent ever since 2006 onwards. Though allegations against the petitioner raised in Ext.P5, followed by decision to blacklist, cannot be interfered with by this court as it is purely a finding of fact, based on materials and reasons, neverthless it has importance while considering the proportionality of the punishment now imposed on petitioner by way of permanent debarment. It is seen from Ext.P12 that a committee has evaluated petitioner's performance. Petitioner was also given an opportunity by Ext.P5. Petitioner's reply also has been considered. In the reply it can be seen that, petitioner ## W.P.(C)No.23795 of 2015 ## -:5:- has not denied about stoppage of work. The petitioner only stated that there was no instance of stopping work for 8 days. 8.If petitioner was engaged in hoodwinking or any other tactics, certainly, action would have initiated against the petitioner during the currency of the agreement. The respondents have taken serious action only when tender process are underway. Therefore, this court is of the view that, only because of the solitary instance of stoppage of work on account of delay in effecting payment, petitioner cannot be permanently debarred. The blacklisting would arise only when action of the contractor is having overtone of malicious nature or fraudulent nature. In this case, it is apparent that the petitioner has stopped the work for release of payment, which according to the petitioner, is delayed by more than two months, even though contract of payment was within one month. Though petitioner cannot be justified for resorting to such tactics, certainly, it cannot result in W.P.(C)No.23795 of 2015 -:6:- a permanent debarment. Further, no action has been initiated against the petitioner for any such illegal tactics during the currency of contract. The overall circumstances would show that permanent debarment is unsustainable, in as much as proportionality strikes the balance between action and punishment. 9.This court is of the view that, permanent debarment has to be set aside and interest of justice demands confining debarment to a lesser period. Accordingly, petitioner's debarment has been modified for a period of two years from the date of Ext.P12. Writ petition is disposed of as above. ## **Sd/** ## **Muhamed Mustaque, Judge.** sl.