Case Note & Summary
The dispute arose from a tender floated by the Municipal Corporation of Greater Mumbai (MCGM) on 08.05.2018 for transportation of municipal solid waste. M.K. Enterprises, a proprietorship concern, submitted a bid in joint venture for Ward K (West) and was the second lowest bidder, while Buildwell Infrastructure Pvt. Ltd. (respondent No. 11) emerged as the lowest. Buildwell had been debarred by MCGM for six years effective 16.03.2013 following a departmental enquiry that found it had submitted fraudulent payment claims for civil works contracts between 2004 and 2006. The enquiry officer recommended debarment, which was approved by the Municipal Commissioner. Subsequently, Buildwell filed an appeal against the debarment, which was entertained by MCGM despite the Rules Governing the Registration of Contractors, 1992 not providing for an appeal. A panel of two Deputy Municipal Commissioners, constituted by the Additional Municipal Commissioner (Projects), first reduced the debarment period to four years on 03.08.2016 and later, on 16.02.2017, withdrew the deregistration entirely with effect from 17.02.2017 to enable Buildwell to participate in the ongoing tender. M.K. Enterprises challenged these orders, contending that the appeal was not maintainable under the Rules, which prescribed the Municipal Commissioner or Additional Municipal Commissioner as the final authority for imposing penalties, and that the appellate orders were passed mala fide to favour Buildwell. The connected petition, W.P.(L) No. 4145 of 2018, was filed by Buildwell Infrastructure Pvt. Ltd. and its director Suresh Mehta against MCGM and its officers. The High Court heard both petitions together, reserved judgment on 22.01.2019, and pronounced it on 21.02.2019. The core legal issue was whether an appeal against the debarment order could be entertained when the governing rules did not expressly provide for such a remedy, and whether the subsequent reduction and withdrawal of the penalty were valid. The excerpted portion of the judgment does not include the court’s final decision or reasoning.
Issue of Consideration
Whether an appeal against the order of debarment passed by the Municipal Commissioner under the Rules Governing the Registration of Contractors, 1992 is maintainable when the Rules do not provide for an appeal; Whether the orders dated 03.08.2016 and 16.02.2017 passed by the Panel of Deputy Municipal Commissioners reducing and withdrawing the debarment of the contractor were valid
Law Points
- Rules Governing the Registration of Contractors
- 1992 do not provide for appeal against debarment
- Debarment order of Municipal Commissioner is final and binding
Case Details
2019 LawText (BOM) (02) 77
Writ Petition (L) No. 2885 of 2018 with Writ Petition (L) No. 4145 of 2018
Ranjit More, Smt. Bharati H. Dangre
Ravi Kadam, Rajiv Chavan, P.K. Dhakephalkar, Milind Sathe, Anant Vadgaonkar
M.K. Enterprises (Proprietor Moin Khan)
Municipal Corporation of Greater Mumbai & 13 Ors. (including Buildwell Infrastructure Pvt. Ltd. as respondent no.11)
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Nature of Litigation
Writ Petition under Article 226 of the Constitution challenging orders reducing and withdrawing a contractor's debarment, and a connected petition by the contractor against MCGM
Remedy Sought
Petitioner M.K. Enterprises sought to set aside the orders dated 03.08.2016 and 16.02.2017 and to declare respondent No. 11 ineligible for the tender
Filing Reason
The impugned orders allowed a debarred contractor to participate in a tender, which the petitioner alleged was illegal and mala fide
Previous Decisions
Municipal Commissioner approved debarment for six years on 16.03.2013; Panel of Deputy Municipal Commissioners reduced it to four years on 03.08.2016; same Panel withdrew debarment w.e.f. 17.02.2017 by order dated 16.02.2017
Issues
Whether the appeal against the debarment order was maintainable under the Rules Governing the Registration of Contractors, 1992
Whether the orders dated 03.08.2016 and 16.02.2017 reducing and withdrawing the debarment were valid
Submissions/Arguments
The petitioner contended that the Registration Rules, 1992 do not provide for an appeal against the debarment order, and the orders were passed to unduly favour respondent No. 11 to enable it to participate in the tender
The petitioner alleged that the process was twisted and Rules bent so that Buildwell Infrastructure gains an advantage
Judgment Excerpts
The above mentioned Writ Petitions revolve around the same set of facts and also involve a similar issue for adjudication and hence are taken up for hearing together.
Writ Petition No.2885 of 2018 is filed by the petitioner, a proprietorship concern who has bid in joint venture for carrying out works of transportation of Solid Waste Management for the Municipal Corporation of Greater Mumbai.
The objection of the petitioner is to the maintainability of such an appeal in light of the existing rules/procedure governing the registration/deregistration of the contractor.
It is contention of the petitioner that Etender No.7100125825 was floated by MCGM on 08.05.2018 and the petitioner along with its joint venture submitted the bid for WardK (West).
Procedural History
Writ Petition (L) No. 2885 of 2018 filed in 2018 challenging orders dated 03.08.2016 and 16.02.2017; Connected W.P.(L) No. 4145 of 2018 filed by respondent No. 11; Both matters heard finally on 22.01.2019, judgment reserved, and pronounced on 21.02.2019
Acts & Sections
- Mumbai Municipal Corporation Act, 1888:
- Companies Act, 1956:
