Shri. Rizwan S/O Nazir H Motiwala vs. The Chief Engineer Electricity

The petitioner is before this Court seeking the following prayer: “(i) Issue a writ of certiorari and quash the impugned letter / order dated 24/6/2022 bearing No.CEE/ BGKT/ TRNS/ CA/ SEE (O)/ AEE-7/ F-/ 2022-23/ 6178-83 issued by respondent No.1 Chief Engineer Electricity, Transmission Zone, KPTCL, Bagalkot, vide Annexure-D, insofar as it relates to imposition of penalties, forfeiture of EMD and the black listing of the petitioner from future tenders / auction of KPTCL and also permit the petitioner to pay the balance bid amount of Rs.85,56,401/- along with 9% CGST and 9% SGST and lift the scrapped 100 MVA transformer from Hubballi. (ii) Issue any other writ, order or direction to which the petitioner is found entitled to in the present facts and circumstances.” HC-KAR NC: 2025:KHC-D:18030

The petitioner is a participant in a tender notified by the respondent. The issue does not relate to the tender, but the material relating to the tender is dumped in a particular place and has not been lifted by the petitioner. In the light of the said action, the respondent Corporation has not paid EMD or has forfeited the earnest money deposit which the petitioner had deposited pursuant to the tender. The issue is languishing since 15 years as the petitioner is fighting for his EMD for the last 15 years and has now suffered an order of blacklisting as well. Therefore, the petitioner is before this Court seeking the aforesaid prayers.

Insofar as the order of blacklisting is concerned, it is an admitted fact that there was no notice issued to the petitioner prior to the passing an order of blacklisting as it is a common order of blacklisting and forfeiture of EMD. Therefore, the said order of blacklisting could not have been passed at the outset issuing a notice as the order of blacklisting involves civil and economic consequences. In the light of the order of blacklisting being in violation of principle of natural justice, I deem it HC-KAR NC: 2025:KHC-D:18030 appropriate to obliterate that portion of the order which blacklists the petitioner.

Insofar as the forfeiture of EMD is concerned, the learned Counsel Shri Shivaraj Mudhol submits that the entire blame should be laid upon the petitioner as he has not lifted the material and still dumped in a particular area for the last 15 years. Learned counsel also submits that the agreement between the parties also envisaged an arbitration to be the mode of resolution of a dispute in terms of clause 9. Clause 9 of the agreement reads as follows: “9.0 ARBITRATION: a) Any dispute arising between the buyer and KPTCL, BAGALKOT shall be decided by the KPTCL, BAGALKOT and in the case the KPTCL, BAGALKOT is unable to Arbitrate then by such officers of KPTCL, BAGALKOT or any other person as may be appointed. The decision of the arbitrator shall be final and binding on the parties subject to the provisions of Indian Arbitration Act and Rules frame hereunder shall apply. b) Any Dispute arising out of contract are not precluded by clause 8.1, Shall be decided by the Court in Bagalkot and by no other Court. The court in Bagalkot shall have exclusive juri iction to adjudicate upon any such disputes.

KPTCL, BAGALKOT will not be in any way responsible for failure to deliver the goods as per delivery schedule due to force major cause such as strikes, lockouts, HC-KAR NC: 2025:KHC-D:18030 cessation of work, labour problems, shortened hours, acts of God or other causes or contingency whatsoever. The buyer shall not be entitled to cancel the contract and the period of delivery shall automatically be extended accordingly.

Form 39 will not be issued by KPTCL. The buyers has to bring Form 39 along with as the materials are sold on "as is where is basis" from KPTCL premises. If any, additional challan/delivery order copies are requested to comply with check post requirement, the same may be arranged by the buyer themselves by taking photo copies.”

Clause 9 of the agreement directs arbitration to be the mode of resolution of a dispute between the parties of any kind that arises out of the contract. The present dispute undoubtedly is arisen out of the contract. In that light, I deem it appropriate to dispose the petition with a direction to the respondent Corporation to appoint an Arbitrator on consensus and adjudicate the dispute and close the proceedings within outer limit of eight weeks from the date of receipt of the copy of this order. The consequent action would be the grant of EMD or otherwise from the hands of the respondent to the petitioner in terms of the award of the Arbitrator. HC-KAR NC: 2025:KHC-D:18030

Learned counsel for the petitioner also submits that he is ready and willing to deposit the amount and lift the material. The same shall be considered by the Arbitrator as well.

For the aforesaid reasons, the following: ORDER (i) The petition is allowed in part. (ii) The impugned order insofar as it blacklists the petitioner stands quashed. (iii) The impugned order insofar as forfeiture of EMD is concerned is now remitted back to the hands of the Arbitrator who shall enter upon the dispute, adjudicate the same and pass necessary orders thereon, in accordance with law within an outer limit of eight weeks from the date of receipt of the copy of this order. (M.NAGAPRASANNA) JUDGE VNP / CT: ASC List No.: 1 Sl No.: 37