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Guidelines on Banning of Business Dealings-Pawan Hans
  1. Introduction
    1. Pawan Hans Ltd. , being a Public Sector Enterprise has to safeguard its commercial interests. Pawan Hans deals with Agencies, who have a very high degree of integrity, commitments and sincerity towards the work undertaken. It is not in the interest of Pawan Hans to deal with Agencies who commit deception, fraud or exercise of coercion or undue influence or other misconduct in the execution of contracts awarded / orders issued to them. In order to ensure compliance with the constitutional mandate, it is incumbent on Pawan Hans to observe principles of natural justice before banning the business dealings with any Agency.
    2. Since banning of business dealings involves civil consequences for an Agency concerned, it is incumbent that adequate opportunity of hearing is provided and the explanation, if tendered, is considered before passing any order in this regard keeping in view the facts and circumstances of the case.
  2. Scope
    1. The General Conditions of Contract (GCC) of Pawan Hans generally provide that Pawan Hans reserves its rights to remove from list of approved suppliers/contractors or to ban business dealings if any Agency has been found to have committed misconduct, violation of any law or any term of the agreement and also to suspend business dealings pending investigation. If such provision does not exist in any GCC, the same may be incorporated.
    2. Similarly, in case of sale of material there is a clause to deal with the Agencies/customers/buyers, who indulge in lifting of material in unauthorized manner. If such a stipulation does not exist in any Sale Order, the same may be incorporated.
    3. However, absence of such a clause does not in any way restrict the right of Company to take action/decision under these guidelines in appropriate cases.
    4. The procedure of (i) Removal of Agency from the List of approved suppliers / contractors; (ii) Suspension and (iii) Banning of Business Dealing with Agencies, has been laid down in these guidelines.
    5. These guidelines apply to all the Departments/Stations and subsidiaries of Pawan Hans.
    6. It is clarified that these guidelines do not deal with the decision of the Management not to entertain any particular Agency due to its poor/inadequate performance or for any other reason.
    7. The banning shall be with prospective effect, i.e., future business dealings.
  3. Definitions
    1. ‘Party/Contractor/Supplier/Purchaser/Customer’ shall mean and include a public limited company or a private limited company, a firm whether registered or not, an individual, a cooperative society or an association or a group of persons engaged in any commerce, trade, industry, etc. ‘Party/Contractor/Supplier/Purchaser/Customer’ in the context of these guidelines is indicated as ‘Agency’.
    2. ‘Inter-connected Agency’ shall mean two or more companies having any of the following features:
      1. If one is a subsidiary of the other.
      2. If the Director(s), Partner(s), Manager(s) or Representative(s) are common;
      3. If Management is common;
      4. If one owns or controls the other in any manner;
    3. ‘Competent Authority’ and ‘Appellate Authority’ shall mean the following:
      1. For Company (entire Pawan Hans) Wide Banning
        The Executive Director (ED)/ General Manager (Engineering) shall be the ‘Competent Authority’ for the purpose of these guidelines. Chairman & MD, Pawan Hans shall be the ‘Appellate Authority’ in respect of such cases.
      2. In case the foreign supplier is not satisfied by the decision of the First Appellate Authority, it may approach Pawan Hans Board as Second Appellate Authority.
      3. For Departments / Regions only
        Any officer not below the rank of Deputy General Manager appointed or nominated by the General Manager shall be the ‘Appellate Authority’ in all such cases.
      4. For Corporate Office only
        For procurement of items / award of contracts, to meet the requirement of Corporate Office only, Deputy General Manager (Admin) shall be the “Competent Authority” and General Manager (Engineering) shall be the “Appellate Authority”.
      5. For Corporate Office only
        For procurement of items / award of contracts, to meet the requirement of Corporate Office only, Deputy General Manager (Admin) shall be the “Competent Authority” and General Manager (Engineering) shall be the “Appellate Authority”.
    4. ‘Investigating Department’ shall mean any Department or Regioninvestigating into the conduct of the Agency and shall include the Vigilance Department, Central Bureau of Investigation, the State Police or any other authority or agency set up by the Central or State Government having powers to investigate.
    5. ‘List of approved Agencies - Parties/Contractors/Suppliers/ Purchasers/Customers shall mean and include list of approved/registered Agencies - Parties/Contractors/Suppliers/ Purchasers/Customers, etc.
  4. In these Guidelines, unless the context otherwise requires:

  5. Initiation of Banning/Suspension
  6. Action for banning/suspension of business dealings with any Agency should be initiated by the department having business dealings with them after noticing the irregularities or misconduct on their part. The Vigilance Department of Pawan Hans shall have the right to recommend banning/suspension and this shall be binding on the Department/Regions/corporate office and non-compliance of these recommendations/instructions shall be deemed to be misconduct on the part of the Head of the Department/Regional Head/corporate office.

  7. Suspension of Business Dealings
    1. If the conduct of any Agency dealing with Pawan Hans is under investigation by any department the Competent Authority may consider whether the allegations under investigation are of a serious nature and whether pending investigation, it would be advisable to continue business dealing with the Agency. If the Competent Authority, after consideration of the matter including the recommendation of the Investigating Department, if any, decides that it would not be in the interest to continue business dealings pending investigation, it may suspend business dealings with the Agency. The order to this effect may indicate a brief of the charges under investigation. If it is decided that inter-connected Agencies would also come within the ambit of the order of suspension, the same should be specifically stated in the order. The order of suspension would operate for a period not more than six months and may be communicated to the Agency as also to the Investigating Department. The Investigating Department may ensure that their investigation is completed and whole process of final order is over within such period.
    2. The order of suspension shall be communicated to all Departmental Heads within the Departments/Regions/corporate office. During the period of suspension, no business dealing may be held with the Agency.
    3. As far as possible, the existing contract(s) with the Agency may continue unless the Competent Authority, having regard to the circumstances of the case, decides otherwise.
    4. If the gravity of the misconduct/violation under investigation is very serious and it would not be in the interest of Pawan Hans, as a whole, to deal with such an Agency pending investigation, the Competent Authority may send his recommendation to Chief Vigilance Officer (CVO), Pawan Hans Corporate Office along with the material available. If Corporate Office considers that depending upon the gravity of the misconduct/violation, it would not be desirable for all the Departments/Regions/corporate office and Subsidiaries of Pawan Hans to have any dealings with the Agency concerned, an order suspending business dealings may be issued to all the Departments/Regions/corporate office by the Competent Authority of the Corporate Office, copy of which may be endorsed to the Agency concerned. Such an order would operate for a period of six months from the date of issue.
    5. For suspension of business dealings with Foreign Suppliers, following shall be the procedure :-
      1. Suspension of the foreign suppliers shall apply throughout the Company including Subsidiaries.
      2. Based on the complaint forwarded by ED/General Manager (Engineering) or received directly by Corporate Vigilance, if gravity of the misconduct under investigation is found serious and it is felt that it would not be in the interest of Pawan Hans to continue to deal with such agency, pending investigation, Corporate Vigilance may send such recommendation on the matter to ED/General Manager(Engineering) to place it before a Committee consisting of the following :
        1. Head of Corporate Finance;
        2. Head of Department concerned;
        3. Head of Department at Corporate Office;
        4. Head of Department (Legal).
      3. The committee shall expeditiously examine the report, give its comments/recommendations within twenty one days of receipt of the reference by ED/General Manager (Engineering).

      4. The comments/recommendations of the Committee shall then be placed by General Manager (Engineering) before the Board of Pawan Hans and if the Board opines that it is a fit case for suspension, Departmental Head may pass necessary orders which shall be communicated to the foreign supplier by General Manager (Engineering).
    6. If the Agency concerned asks for detailed reasons of suspension, the Agency may be informed that its conduct is under investigation. It is not necessary to enter into correspondence or argument with the Agency at this stage.
    7. It is not necessary to give any show-cause notice or personal hearing to the Agency before issuing the order of suspension. However, if investigations are not complete in six months time, the Competent Authority may extend the period of suspension by another three months, during which period the investigations must be completed.
  8. Grounds on which Banning of Business Dealings can be initiated
    1. If the security consideration, including questions of loyalty of the Agency to the State, so warrants;
    2. If the Director/Owner of the Agency, proprietor or partner of the firm, is convicted by a Court of Law for offences involving moral turpitude in relation to its business dealings with the Government or any other public sector enterprises or Pawan Hans, during the last five years;
    3. If there is strong justification for believing that the Directors, Proprietors, Partners, owner of the Agency have been guilty of malpractices such as bribery, corruption, fraud, substitution of tenders, interpolations, etc;
    4. If the Agency continuously refuses to return/refund the dues of Pawan Hans without showing adequate reason and this is not due to any reasonable dispute which would attract proceedings in arbitration or Court of Law;
    5. If the Agency employs a public servant dismissed/removed or employs a person convicted for an offence involving corruption or abetment of such offence;
    6. If business dealings with the Agency have been banned by the Govt. or any other public sector enterprise;
    7. If the Agency has resorted to Corrupt, fraudulent practices, coercion, undue influence and other violations including misrepresentation of facts;
    8. If the Agency uses intimidation/threatening or brings undue outside pressure on the Company or its official in acceptance/ performances of the job under the contract;
    9. If the Agency indulges in repeated and/or deliberate use of delay tactics in complying with contractual stipulations;
    10. Wilful indulgence by the Agency in supplying sub-standard material irrespective of whether pre-despatch inspection was carried out by Company or not;
    11. Based on the findings of the investigation report of CBI/Police/internal Vigilance or any other investigative agency including Government Audit against the Agency for malafide/unlawful acts or improper conduct on his part in matters relating to the Company or even otherwise;
    12. Established litigant nature of the Agency to derive undue benefit;
    13. Continued poor performance of the Agency in several contracts;
    14. If the Agency misuses the premises or facilities of the Company , forcefully occupies tampers or damages the Company’s properties including land, water resources, forests / trees, etc.

      (Note: The examples given above are only illustrative and not exhaustive. The Competent Authority may decide to ban business dealing for any good and sufficient reason).

  9. Banning of Business Dealings
    1. Normally, a decision to ban business dealings with any Agency should apply throughout the Company including Subsidiaries. However, the Competent Authority of the Department/Region except Corporate Office can impose such ban unit-wise only if in the particular case banning of business dealings by respective Department/Region will serve the purpose and achieve its objective and banning throughout the Company is not required in view of the local conditions and impact of the misconduct/default to beyond the Department/Region. Any ban imposed by Corporate Office shall be applicable across all Departments/Regions of the Company.
    2. For Company-wide banning, the proposal should be sent by The CVO through the Chief Executive of the Department/Region setting out the facts of the case and the justification of the action proposed along with all the relevant papers and documents.

      The Corporate Vigilance shall process the proposal of the Department/Region for a prima-facie view in the matter by the Competent Authority nominated for Company-wide banning.

      The CVO shall get feedback about that agency from all other Departments/Stations. Based on this feedback, a prima-facie decision for banning/or otherwise shall be taken by the Competent Authority.

      If the prima-facie decision for Company-wide banning has been taken, the Corporate Vigilance shall issue a show-cause notice to the agency conveying why it should not be banned throughout Pawan Hans.

      After considering the reply of the Agency and other circumstances and facts of the case, a final decision for Company-wide banning shall be taken by the Competent Authority.

    3. There will be a Standing Committee in each Department/Region to be appointed by Chief Executive for processing the cases of “Banning of Business Dealings” except for banning of business dealings with foreign suppliers of coal/coke. However, for procurement of items/award of contracts, to meet the requirement of Corporate Office only, the committee shall be consisting of Executive Director/General Manager from Finance, Procurement and Legal:
      1. To study the report of the Investigating Agency and decide if a prima-facie case for Company-wide/Local Region wise banning exists, if not, send back the case to the Competent Authority.
      2. To recommend for issue of show-cause notice to the Agency by the concerned department.
      3. To examine the reply to show-cause notice and call the Agency for personal hearing, if required.
      4. To submit final recommendation to the Competent Authority for banning or otherwise.
    4. If the Competent Authority is prima-facie of the view that action for banning business dealings with the Agency is called for, a show-cause notice may be issued to the Agency as per paragraph 9.1 and an enquiry held accordingly.
  10. Removal from List of Approved Agencies - Suppliers/Contractors, etc.
    1. If the Competent Authority decides that the charge against the Agency is of a minor nature, it may issue a show-cause notice as to why the name of the Agency should not be removed from the list of approved Agencies - Suppliers/Contractors, etc.
    2. The effect of such an order would be that the Agency would not be disqualified from competing in Open Tender Enquiries.
    3. Past performance of the Agency may be taken into account while processing for approval of the Competent Authority for awarding the contract.
  11. Show-cause Notice
    1. In case where the Competent Authority decides that action against an Agency is called for, a show-cause notice has to be issued to the Agency. Statement containing the imputation of misconduct or misbehaviour may be appended to the show-cause notice and the Agency should be asked to submit within 15 days a written statement in its defence.
    2. If the Agency requests for inspection of any relevant document in possession of Pawan Hans, necessary facility for inspection of documents may be provided.
    3. The Competent Authority may consider and pass an appropriate speaking order:
      1. For exonerating the Agency if the charges are not established;
      2. For removing the Agency from the list of approved Suppliers/Contactors, etc.
      3. For banning the business dealing with the Agency.
    4. If it decides to ban business dealings, the period for which the ban would be operative may be mentioned. The order may also mention that the ban would extend to the interconnected Agencies of the Agency.
  12. Appeals against the Decision of the Competent Authority
    1. The Agency may file an appeal against the order of the Competent Authority banning business dealing, etc. The appeal shall be to the Appellate Authority. Such an appeal shall be preferred within one month from the date of receipt of the order banning business dealing, etc.
    2. Appellate Authority would consider the appeal and pass appropriate order which shall be communicated to the Agency as well as the Competent Authority.
  13. Review of the Decision by the Competent Authority

    Any petition/application filed by the Agency concerning the review of the banning order passed originally by Chief Executive/Competent Authority under the existing guidelines either before or after filing of appeal before the Appellate Authority or after disposal of appeal by the Appellate Authority, the review petition can be decided by the Chief Executive/Competent Authority upon disclosure of new facts/circumstances or subsequent development necessitating such review. The Competent Authority may refer the same petition to the Standing Committee for examination and recommendation.

  14. Circulation of the names of Agencies with whom Business Dealings have been banned
    1. Depending upon the gravity of misconduct established, the Competent Authority of the Corporate Office may circulate the names of Agency with whom business dealings have been banned, to the Government Departments, other Public Sector Enterprises, etc. for such action as they deem appropriate.
    2. If Government Departments or a Public Sector Enterprise request for more information about the Agency with whom business dealings have been banned, a copy of the report of Inquiring Authority together with a copy of the order of the Competent Authority/Appellate Authority may be supplied.
    3. If business dealings with any Agency have been banned by the Central or State Government or any other Public Sector Enterprise, Pawan Hans may, without any further enquiry or investigation, issue an order banning business dealing with the Agency and its inter-connected Agencies.
    4. Based on the above, Departments/Stations may formulate their own procedure for implementation of the Guidelines.
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