Bombay High Court Hears Challenge to Reduction of Debarment Period of Contractor by MCGM. Orders Reducing Debarment Alleged to be Without Authority and Vitiated by Mala Fides to Favour Contractor in Tender for Solid Waste Transportation.

Challenge to orders reducing debarment period of a contractor by MCGM, which allegedly enabled the contractor to participate in a tender process, causing grievance to other bidders.

In WP 2885: Quash orders dated 03.08.2016 and 16.02.2017 reducing debarment of respondent 11, and restrain respondent 11 from participating in the tender. In WP 4145: Defend the reduction orders and/or challenge the original debarment.

Petitioner in WP 2885, a bidder in the tender for solid waste transportation, was aggrieved because respondent 11, initially debarred for 6 years, had its debarment reduced and was allowed to bid, becoming the lowest bidder, affecting petitioner's chances. Petitioner alleged mala fides and lack of authority to entertain appeal.

MCGM imposed a penalty of debarment for 6 years on respondent 11 after departmental enquiry; approved by Municipal Commissioner. An appeal was heard by a panel of two Deputy Municipal Commissioners, which reduced debarment to 4 years (order dated 03.08.2016) and later further reduced/withdrew debarment (order dated 16.02.2017).

Whether the imposition and subsequent reduction of debarment penalty on respondent 11 was lawful and authorized under the applicable rules and procedures of MCGM. Whether the orders dated 03.08.2016 and 16.02.2017 reducing/withdrawing the debarment were valid and permissible under the Rules Governing Registration of Contractors, 1992 or any other statutory provision. Whether the appeal against debarment was maintainable before the panel of Deputy Municipal Commissioners, given that the 1992 Rules did not expressly provide for an appeal. Whether the reduction of debarment was motivated by mala fides to accommodate respondent 11 in the tender process floated on 08.05.2018. Whether the petitioner had locus standi to challenge the said orders and the tender process. What relief, if any, should be granted.

The 1992 Rules did not provide for an appeal against debarment; the order of the Municipal Commissioner was final. The MCGM had no power to constitute an appeal committee or entertain an appeal. The orders reducing debarment were passed mala fide to favour respondent 11 and allow it to participate in the tender. The process was twisted and rules were bent to give Buildwell Infrastructure an advantage.

The enquiry report recorded a finding of guilt against the contractors who were implicated with allegation of defrauding the MCGM. According to the petitioner, the said Rules framed in the year 1992 authorised the penalty of deregistration to be imposed on a contractor on the ground mentioned in the said Rules and the authority competent to impose the penalty was the Municipal Commissioner or any of the Additional Municipal Commissioner. According to the petitioners, the Rules did not contemplate an appeal and the order passed by the Municipal Commissioner was final and binding. the petitioner attributes mala fides in the procedure adopted by the MCGM in considering the case of the respondent No.11 and it is averred that the process was twisted, Rules bent so that Buildwell Infrastructure gains an advantage.

MCGM conducted a departmental enquiry against certain officers and contractors for defrauding the corporation. The enquiry report recommended debarment of respondent No.11 (Buildwell Infrastructure Pvt. Ltd.) for a period of six years. The Municipal Commissioner approved the penalty. Respondent No.11 preferred an appeal. The Additional Municipal Commissioner (Projects) directed that the appeal be heard by a committee of two Deputy Municipal Commissioners. On 03.08.2016, the panel reduced the debarment period from six years to four years. On 16.02.2017, the panel further reduced/withdrew the debarment, effectively allowing the contractor to participate in tenders. On 08.05.2018, MCGM floated a tender for hire of vehicles for collection and transportation of municipal solid waste. The petitioner in WP 2885 submitted a bid and became the second lowest, while respondent No.11 became the lowest bidder. The petitioner then filed WP 2885 challenging the reduction orders. Respondent No.11 filed WP 4145, presumably to defend the reduction orders and/or challenge the original debarment. Both writ petitions were heard together.

• Mumbai Municipal Corporation Act, 1888:
• Companies Act, 1956:
• Right to Information Act, 2005: