Blacklisting of contractor

2016 PLD 398 KARACHI-HIGH-COURT-SINDH Judicial Precedent

R. 19Contract for supply of goodsAllegations of fraud and corruptionBlacklisting of contractorNatural justice, principles ofApplicabilityProportionality of punishmentScopePetitioner-contractor was permanently blacklisted due to allegation of fraud and corruption in the supply of goodsContention of petitioner-contractor was that no fair opportunity of hearing was afforded to himValidity

Procuring agency was competent to permanently or temporarily bar the supplier and contractor from participating in its procurement proceedings who failed to provide satisfactory performance or were found to be indulged in corrupt or fraudulent practice

Such supplier or contractor should be afforded adequate opportunity of hearing before blacklisting

Procuring agency could devise manner and mechanism to arrive at an inference for such decision which should base on some material and cogent reasons

Proceedings were conducted before the Standing Committee against the petitioner-contractor and he was given proper opportunity of hearing

No illegality was pointed out in the impugned order

Procuring agency could not be compelled to do business with a specific contractor and supplier

Decision to debar permanently or temporarily a contractor and supplier to participate in the procurement proceedings should depend upon the severity of alleged offence

Principles of natural justice and proportionality should be taken into consideration while awarding a punishment to a contractor for his malfeasance

Petitioner-contractor in the present case, had been permanently debarred from venturing into contractual obligations

Nothing was on record as to whether petitioner-contractor acted or omitted to act in collusion with other alleged culprits, the profits it gained and loss was suffered by the procuring agency

Permanently blacklisting the petitioner-contractor was harsh and heavy punishment in the present case

No right of appeal had been provided to the petitioner-contractor

Party affecting from an adversarial order should have right to challenge the same before the higher forum

If such right was abridged then there would be miscarriage of justice

High Court could examine such order on the touchstone of natural justice

Matter was remanded to the competent authority for decision afresh within a specified period

Constitutional petition was disposed of in circumstances.

2015 PLD 34 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

R.19Constitution of Pakistan, Arts. 4, 10-A, 13 & 199Constitutional petitionBlacklisting of contractorRight to fair trial and due process of lawDouble jeopardy, principle of

Petitioner company was aggrieved of decision made by authorities blacklisting it for a period of three years-Validity-Blacklisting of a contractor or supplier under R.19 of Punjab Procurement Rules, 2009, entailed serious consequences of forbidding contractor/supplier from participating in future tenders, which would not only result in deprivation from its business activities but amounted to commercial killing of the company

Blacklisting also tarnished its reputation, credibility and honour in business community, therefore, such disaster step of blacklisting of contractor/supplier could not be resorted to without observing fair trial and due process of law as envisaged in Arts.4 & 10-A of the Constitution

Words 'mechanism' and 'manner' used in R.19 of Punjab Procurement Rules, 2009, were not meaningless rather it denoted due process and fair procedure which included adjudication by impartial and independent authority, prescribing fair criteria, proportionate duration of punishment and structuring of discretion of authorities exercising power of blacklisting

Word 'shall' used in R.19 of Punjab Procurement Rules, 2009, also made it mandatory and obligatory for procuring agency to provide such fair and transparent mechanism and manner of blacklisting-petitioner was initially blacklisted for a period of three years on 31-10-2012 and remained blacklisted for almost 16 months till date when the' case was remanded with consent of parties on 11-2-2014

On remand while passing order dated 4-4-2014, the period during which petitioner already remained blacklisted was not excluded and petitioner was again blacklisted for another period of three years, which amounted to double jeopardy in clear violation of Art.13 of the Constitution

Contractor could be blacklisted who had consistently failed to provide satisfactory performance

Prior to contract in question, petitioner had not defaulted in any other previous contract relating to authorities-In absence of failure to provide satisfactory performance in any other contract, it could not be said that petitioner had consistently failed to provide satisfactory performance-Order of blacklisting was not within the parameters of R. 19 of Punjab Procurement Rules, 2009-High Court in exercise of Constitutional jurisdiction set aside the order passed by authorities blacklisting the petitioner

Petition was allowed accordingly.

2015 PLD 34 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

R.19Blacklisting of contractorDiscretion-Human subjectivity, removal ofScope

Administrative compulsion and wisdom to structure discretion as in R.19 of Punjab Procurement Rules, 2009, is to remove human subjectivity from exercise of discretion

Constitutional and jurisprudential importance of structured discretion is that it nursed requirement of due process, fairness and fair trial and safeguards unbridled discretion against voice of discrimination and arbitrariness.

2015 CLD 72 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

R. 19Blacklisting of contractorDiscretionHuman subjectivity, removal ofScope

Administrative compulsion and wisdom to structure discretion as in R.19 of Punjab Procurement Rules, 2009, is to remove human subjectivity from exercise of discretion

Constitutional and jurisprudential importance of structured discretion is that it nursed requirement of due process, fairness and fair trial and safeguards unbridled discretion against voice of discrimination and arbitrariness.

2015 CLD 72 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

R. 19Constitution of Pakistan, Arts. 4, 10-A, 13 & 199Constitutional petitionBlacklisting of contractorRight to fair trial and due process of lawDouble jeopardy, principle ofPetitioner company was aggrieved of decision made by authorities blacklisting it for a period of three yearsValidity

Blacklisting of a contractor or supplier under R.19 of Punjab Procurement Rules, 2009, entailed serious consequences of forbidding contractor/supplier from participating in future tenders, which would not only result in deprivation from its business activities but amounted to commercial killing of the company

Blacklisting also tarnished its reputation, credibility and honour in business community, therefore, such disaster step of blacklisting of contractor/supplier could not be resorted to without observing fair trial and due process of law as envisaged in Arts.4 & 10-A of the Constitution

Words 'mechanism' and 'manner' used in R.19 of Punjab Procurement Rules, 2009, were not meaningless rather it denoted due process and fair procedure which included adjudication by impartial and independent authority, prescribing fair criteria, proportionate duration of punishment and structuring of discretion of authorities exercising power of blacklisting

Word 'shall' used in R.19 of Punjab Procurement Rules, 2009, also made it mandatory and obligatory for procuring agency to provide such fair and transparent mechanism and manner of blacklisting

Petitioner was initially blacklisted for a period of three years on 31-10-2012 and remained blacklisted for almost 16 months till date when the case was remanded with consent of parties on 11-2-2014

On remand while passing order dated 4-4-2014, the period during which petitioner already remained blacklisted was not excluded and petitioner was again blacklisted for another period of three years, which amounted to double jeopardy in clear violation of Art.13 of the Constitution

Contractor could be blacklisted who had consistently failed to provide satisfactory performance

Prior to contract in question, petitioner had not defaulted in any other previous contract relating to authorities

In absence of failure to provide satisfactory performance in any other contract, it could not be said that petitioner had consistently failed to provide satisfactory performance

Order of blacklisting was not within the parameters of R. 19 of Punjab Procurement Rules, 2009

High Court in exercise of constitutional jurisdiction set aside the order passed by authorities blacklisting the petitioner

Petition was allowed accordingly.

2015 CLD 72 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

S. 19Words "mechanism and manner"ConnotationBlacklisting of contractorMethod

Procuring agency is required to prescribe method and system for dealing with complaints against contractors and suppliers for their temporary and permanent blacklisting.