Mahtab Alam v. Nagar Panchayat Distt Gonda — 1997 DIGILAW 983 (ALL)

JUDGMENT (1.) AGGRIEVED by the illegal cancellation of the contract bid of the petitioner for realising Vahan Adda Shulk of the vehicles within the limit of Nagar Panchayat Pachperwa, District Gonda and the allotment made in favour of one Sri Dharmendra Pratap Singh by order dated 28-4-1977 contained in Annexure-5 to the writ petition and the order dated 23-4-1997; by which the Commissioner, Faizabad Division, Faizabad has communicated the said decision to the District Magistrate, Gonda the petitioner has approached this Court under Article 226 of the Constitution seeking to quash the orders dated 28-4-1997 and 23-4-1997 passed by the Executive Officer, Nagar Panchayat, Pachperwa, District Gonda and the Commissioner, Faizabad Division, Faizabad, respectively. (2.) ACCORDING to the petitioner a notice dated 12-3-1997 was issued by the Nagar Panchayat inviting tenders/sealed offers for the auction of 'vahan Adda Shulk' and the offers were to be submitted on 22- 3-1997. The petitioner after completing the necessary terms and conditions of the notice offered bid of Rs. 2,05,000. The bid of the petitioner was found to be the highest and was accepted by the Chairman of the Nagar Panchayat and petitioner was required to execute the agreement for realising the 'vahan Adda Shulk' through letter dated 31-3-1997. The petitioner after depositing 1/4th amount of bid i. e. Rs. 51,250 signed the agreement and the Chairman also executed the documents on behalf of Nagar Panchayat, thus, a concluded contract has come into existence. It has been alleged by the petitioner that all of a sudden on 28-4-1997 the opposite party No. 2 on the basis of an order passed by the Commissioner, Faizabad Division, Faizabad dated 23-4-1997 cancelled the petitioner's contract and it was further communicated that second highest bid of Sri Dharmendra Pratap Singh has been accepted. The petitioner has challenged the order mainly on the ground that he had not been given any opportunity whatsoever either by the Chairman, Nagar Panchayat or Commissioner, Faizabad Division, Faizabad. The petitioner has also alleged that after the contract was concluded and the same was executed, the Commissioner, Faizabad Division, Faizabad had no authority to rescind the contract and to allot the Theka to the second highest bidder, the opposite party No. 4. The petitioner has also alleged that after the contract was concluded and the same was executed, the Commissioner, Faizabad Division, Faizabad had no authority to rescind the contract and to allot the Theka to the second highest bidder, the opposite party No. 4. The petitioner has also alleged that he had completed all the necessary formalities as required under the terms and conditions of the auction notice and the agreement was also executed and thereafter he had started working on the Theka, which cannot be cancelled without assigning any reason and by conducting some enquiry behind the back of the petitioner at the instance of respondent No. (3.) COUNTER affidavit has been filed on behalf of respondent No. 4 and it has been alleged that the petitioner has placed forged documents and in collusion with the Chair man of Nagar Panchayat Pachperwa, District Gonda he has manipulated the entire record to complete the proceedings for grant of Theka in his favour. The respondent No. 4 has alleged that the contract has been obtained by petitioner by playing fraud in connivance of the Chairman to deprive the respondent No. 1 of his lawful claim which has been found to be legally correct after necessary enquiry was made by the District Magistrate on the direction of the Commissioner, Faizabad Division, Faizabad. The respondent No. 4 has alleged that by notice dated 17-3-1997, Nagar Panchayat Pachperwa invited sealed offers for auction of 'vahan Adda Shulk'. The price of the tender form was fixed as Rs. 500 with the security money of Rs. 5,000 to be deposited through Bank draft. It has been alleged that in all 5 persons namely, Shakeel Ahmad, Shambhu Nath Sharrna, Aftab Alam Khan, Kanoj Kumar and Dharmendra Pratap obtained tender forms vide receipt No. 547 to 551 after depositing Rs. 500 through Bank draft and deposit of earnest money of Rs. 5,000 by each one of them. The bid of the respondent No. 4 was found to be the highest at Rs. 2,00,101 and he was directed to deposit 1/4th of the said amount. The respondent No. 4 has deposited 1/4th of the said amount by receipt No. 552 dated 29-4-1997. The respondent No. 4 has alleged that after he has deposited 1/4th amount, the petitioner in connivance with the Chairman, submitted a forged and fictitious tender after depositing Rs. 2,00,101 and he was directed to deposit 1/4th of the said amount. The respondent No. 4 has deposited 1/4th of the said amount by receipt No. 552 dated 29-4-1997. The respondent No. 4 has alleged that after he has deposited 1/4th amount, the petitioner in connivance with the Chairman, submitted a forged and fictitious tender after depositing Rs. 500 as the price of the tender form in cash and Rs. 5,000 as the earnest money on anther book of receipts vide receipt No. 553 dated 22-3-1997. The petitioner on the basis of forged notice deposited the amount of Rs. 500 in cash towards the price of tender form and also an order passed by Adhyaksha Nagar Panchayat dated 31-3-1997 contained in Annexure-2 to the writ petition approving the offer made by the petitioner of Rs. 2,05,000. The petitioner also got the agreement signed contained in Annexure-4 to the writ petition under the signatures of the Chairman, Nagar Panchayat to operate Theka in his favour. The petitioner has also placed a forged chart of the offers made by different tenderers in which he got his name included for Rs. 2,05,000. The respondent No. 4 has also alleged that 1/4th amount deposited by him through receipt No. 552 on 22-3-1997 was deposited in the Bank on 25-3-1997 by the Executive Officer Nagar Panchayat by the money deposited by the petitioner through receipt No. 553 on 22-3-1997 could not be deposited till 2-4-1997 for reasons best known to the Chairman and the Executive Officer. The respondent No. 4 in the above circumstances represented through his representation dated 2-4-1997 to the Commissioner, Faizabad Division, Faizabad for conducting an open enquiry regarding fraud committed by the petitioner and the Chairman, Nagar Panchayat. The Executive Officer has also submitted his report dated 2-4-1997 which is contained in Annexure-C. A. 3 in which the facts alleged by the respondent No. 4 have been affirmed and it was stated that the Chairman after calling him at his residence, got the new receipt prepared and issued to petitioner for deposit of cash. The receipts were got signed forcibly by the Executive Officer and the date 31-3-1997 was got scored and 22-3-1997 was mentioned. The Chairman also forced him to sign the Chart of bidders and the date was also changed from 31-3-1997 to 22-3- 1997. (4.) THE learned Standing Counsel was also directed to obtain instructions and file counter-affidavit. The receipts were got signed forcibly by the Executive Officer and the date 31-3-1997 was got scored and 22-3-1997 was mentioned. The Chairman also forced him to sign the Chart of bidders and the date was also changed from 31-3-1997 to 22-3- 1997. (4.) THE learned Standing Counsel was also directed to obtain instructions and file counter-affidavit. The learned Standing Counsel placed before us the instructions received under the signatures of the Additional Commissioner, Faizabad Division Faizabad, in which the allegations made by the respondent No. 4 have been reasserted that in pursuance to the advertisement dated 17-3-1997 five tenders were obtained on 22-3-1997. It was mentioned that tender of the petitioner was got included fictitious ly after manipulating the documents and approval was given by the Chairman on 31-3-1997. An enquiry was got conducted through the District Magistrate, Gonda, on the complaint made by respondent No. 4 and after the correctness was revealed and on examination of the entire documents, the Commissioner, Faizabad Division, Faizabad by order dated 21-4-1997 directed for cancellation of the contract in favour of the petitioner. The report of the Up-Ziladhikari, Tulsipur which was submitted through the District Magistrate, Gonda was also placed before us. In the report, it has been stated that the documents have been prepared by fraud in connivance with the Chairman and disputed contract was as a result of forged and fictitious documents and fraudulent acts of the petitioner and the Chairman. (5.) THE respondent No. 4 had submitted tender in accordance with law and was the highest bidder and had also deposited 1/4th money and he was liable to be given the contract. THE Executive Officer, Nagar Panchayat has both orally and through his written report has stated that the Chairman got his signatures forcibly on the documents. THE Commissioner, Faizabad Division, Faizabad on the basis of the above report and the documents was satisfied and held that the entire proceedings of allotment and execution of contract in favour of petitioner, have been done fraudulently by forged and fictitious documents and were liable to be cancelled. THE Commissioner was also satisfied that the rates offered by respondent No. 4 wore highest and in accordance with law and as such, the contract was liable to be given to respondent No. 4. THE Commissioner was also satisfied that the rates offered by respondent No. 4 wore highest and in accordance with law and as such, the contract was liable to be given to respondent No. 4. (6.) IN the rejoinder affidavit, on behalf of petitioner it has been alleged that the petitioner had no notice of the enquiry con ducted by the Additional District Magistrate, in pursuance to the directions of the Commissioner, nor he participated in any manner. The ex-parte enquiry report on the basis of which the contract has been cancelled is in utter violation of the principles of natural justice. The petitioner has also alleged that the Adhishash; Adhikari was kidnapped by respondent No. 4 and a false report has been obtained from him. The receipts issued by the Nagar Panchayat and the lease-deed executed by the Chair man are genuine and in accordance with law. The learned Counsel for the petitioner mainly submitted that the petitioner was not afforded any opportunity whatsoever before cancellation of contract nor he was called upon to explain the illegality of the proceedings, if any, as also with regard to the forged and fictitious documents alleged to have been executed by the petitioner in collusion with the Chairman. The learned Counsel submitted that a concluded contract has come into existence and the same cannot be revoked without knowledge to the petitioner. (7.) THE learned Counsel for the petitioner in support of his contention placed reliance on a case of Krishna Prasad v. Notified Areas, Obra and others, (1990) 3 UPLBEC, 1982. THE petitioner also relied upon a case of Ram and Shy am Co. v. State of Haryana, AIR 1985 SC 1147 . (8.) THE learned Counsel for the respondent No. 4 on the other hand alleged that the petitioner had obtained contract by fraud and as such, it was not necessary that any opportunity be given and by cancellation of contract, in the above circumstances, there was no violation of principles of natural justice. By commission of fraud, the most solemn proceedings are vitiated and the petitioner cannot claim any opportunity to explain his conduct before cancellation of the contract. THE learned Counsel also submitted that Commissioner, Faizabad Division, Faizabad through District Magistrate. By commission of fraud, the most solemn proceedings are vitiated and the petitioner cannot claim any opportunity to explain his conduct before cancellation of the contract. THE learned Counsel also submitted that Commissioner, Faizabad Division, Faizabad through District Magistrate. Gonda, got an open enquiry conduct and after looking to the entire record of the case was satisfied that the petitioner alongwith the Chairman had committed forgery and by practising fraud prepared the documents relating to the disputed contract. THE learned Counsel, in support of his contention relied on the case of S. P Changalvarayan v. Jagannath and others, (1994) 1 SCC 1 and U. P. Junior Doctors Action Committee v. Dr. B. Sheeial Nandwani and others, (1990) 4 SCC 633 and the case of Bharat and others v. THE Nagtirpalika, Azamgarh and others, (1994)2 UPLBEC 745. We have carefully perused the affidavits filed by the parties and the material placed on record as also the report of Up-Zila Adhikari Tulsipur, dated 8th April, 1097 submitted through Zila Adhikari, Gonda, to the Commissioner, Faizabad Division, Faizabad. We are satisfied that the Commissioner was correct in his decision by holding that the fraud was committed by the petitioner in obtaining the contract with the connivance of the Chairman Nagar Panchayat. The petitioner and the Executive Officer, Nagar Panchayat. On the basis of forged and fictitious documents executed the lease-deed in favour of the petitioner which has rightly been cancelled. The report of the Up Zila- Adhikari and the Executive Officer, Nagar Panchayat fully established the fraud practised by the petitioner. The documents executed in favour of the petitioner also do not appear to be genuine and in legal compliance of the proceedings. The deposit of cash money for the tender form and the notice inviting tenders providing for cash deposit of price of tender form, creates suspicion and doubt when all other tenders had deposited the price of the tender and earnest money by Bank draft and the receipts have been is sued in a sequence from SI. No. 547 to 551. The deposit had been made by respondent No. 4 of 1/4th amount by receipt No. 552 with the continuous serial numbers of receipts. As the petitioner could not have been issued receipt from the aforesaid receipt book for purchase of tender form it was devised that he may be allowed to make cash deposit. No. 547 to 551. The deposit had been made by respondent No. 4 of 1/4th amount by receipt No. 552 with the continuous serial numbers of receipts. As the petitioner could not have been issued receipt from the aforesaid receipt book for purchase of tender form it was devised that he may be allowed to make cash deposit. The acceptance of 1/4th deposit of respondent No. 4 established that his highest bid was accepted and thereafter there was no question of the petitioner depositing 1/4th amount through receipt No. 553. The petitioner has not been able to furnish any explanation in this regard. The connivance of the Chairman is also fully established in as much as he allowed the money to be deposited by the petitioner after the deposit of 1/4th amount by the respondent No. 4 and thereafter without furnishing any explanation, executed the lease in favour of petitioner. (9.) WE are, thus, satisfied that fraud was committed and in view of law laid down in the above case by the Hon'ble Supreme Court i.e. Junior Doctors Action Committee and S. P. Chengalvarayn, (supra) the petitioner was not entitled to be provided any opportunity as contemplated under the rules of natural justice. Where a person has practised fraud which is fully established, he is not entitled to get any opportunity as required under the principle of audi alteram-partem. The grant of opportunity in such cases would amount to abuse of process. (10.) THERE is no equity in favour of a person, who has committed fraud, which may justify interference by the Courts in exercise of its equitable extraordinary jurisdiction under Article 226 of the Constitution. The aim of equity is to promote honesty and not to frustrate the legitimate rights of the party who has acted fairly in compliance of law. A court of equity when exercising its equitable jurisdiction must so act as to prevent perpetration of fraud and the courts are obliged to do justice by promotion of good faith and fairness as far as it has within their power. Enquiry is always known to defend the law from crafty evasions and technicalities of law. It bears reiteration to say that the exclusion of principle of natural justice does not necessarily connote unfair ness in action. Enquiry is always known to defend the law from crafty evasions and technicalities of law. It bears reiteration to say that the exclusion of principle of natural justice does not necessarily connote unfair ness in action. In the exercise of equitable jurisdiction and to act fairly, moving away from insistence on the technical observance of natural justice to one that in substance satisfies the essence of the rules of natural justice, would be under the general fabric of fairness in the administration. The lease obtained by the petitioner by fraud has been rightly cancelled by the impugned orders and we decline to interfere in exercise of jurisdiction under Article 226 of the Constitution. The petition is accordingly dismissed. Petition dismissed. .