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2006 DIGILAW 357 (HP)

RAM PYARA v. STATE OF H. P.

2006-11-17

DEEPAK GUPTA, V.K.GUPTA

body2006
JUDGMENT V.K. Gupta, C.J.—With the consent of the learned Counsel for the parties, by this common judgment all these petitions are being disposed of together. 2. A very short point is involved for consideration in these cases. 3. Show cause notices were issued against the petitioners by the Divisional Forest Officer, Bilaspur Forest Division, alleging therein that the petitioners had not exported the forest produce through the land route(s) mentioned in the permits as no entries of the petitioners permits had been found in the registers maintained at the concerned check posts. The Divisional Forest Officer accordingly felt that the petitioners had pilferaged the forest produce some where by indulging in illegal trade. The operative part of the notices stated as under: "Before further action is taken against you as per rules you are given an opportunity to show cause the reasons within fifteen days for not following land route mentioned in the export permit besides authenticating the place of consignment of produce". (Emphasis supplied) 4. Our attention was drawn to the permit(s) issued in favour of the petitioners in all the cases as well as the terms and conditions governing these permits which admittedly are common to all the cases. Condition [16 of the Terms and Conditions read thus: "16 (a) If produce is not exported with proper export permit or any obstruction is caused to the Forest Officer desiring to inspect the trees or produce either in the forest in transit, the produce will be liable to be confiscated apart from recovering compensation which may amounting to Rs. 500/- for each such lapse at the discretion of D.F.O. 16 (b) Should it come to the notice of D.F.O. that produce has been exported without permit or if the D.F.O. has reasonable belief that part of it has been stealthily exported, the contractor will have to pay penalty at the rate of Rs. 150/- per quintal plus road due for this quantity as assessed. The quantity will be calculated on the basis of average yield per girth meter extracted in the Division." 5. Whether it is condition No. 16 (a) or Condition No. 16{b), it is stipulated that if the produce is not exported with a proper export permit etc. or if the produce has been stealthily exported, the contractor is liable to pay penalty at the rate of Rs. 150/- per quintal plus road taxes etc. Whether it is condition No. 16 (a) or Condition No. 16{b), it is stipulated that if the produce is not exported with a proper export permit etc. or if the produce has been stealthily exported, the contractor is liable to pay penalty at the rate of Rs. 150/- per quintal plus road taxes etc. It is also mentioned in the aforesaid Clause 16(a) that the produce itself would be also liable to be confiscated, apart from recovering compensation from the contractor which may amount to Rs. 500/- for leach lapse committed by the contractor. 6. After the aforesaid show cause notices were issued, in all the cases final orders were passed by the Divisional Forest Officer cancelling the registration of the petitioners as private sale contractors and also blacklisting the petitioners by specifically banning them for any act of purchasing and selling of forest produce within the State of Himachal Pradesh. Mr. Sharmas contention is that in the face of the aforesaid specific as well as specified penalties provided in clauses 16(a) and 16(b) it was not open to the respondents to have cancelled registration of the petitioners and also to black list them. His alternative submission is that since the notices did not indicate the intention of the respondents about the aforesaid proposed penalty it was not open to the respondents to impose the aforesaid penalty of cancelling of registration as well as black listing the petitioners. Whereas we do not agree with the first contention of Mr. Sharma, we do feel that there is considerable force and strong merit in the second contention. 7. Even though clauses 16 (a) and 16 (b) do provide for specific and specified penalties, it cannot be said that if the Divisional Forest Officer or any other authority feels and finds that the contractor had indulged in an unfair practice, has violated the permit conditions, or has done such acts which are prejudicial to the interest of the State, it is not open to the Divisional Forest Officer or other competent authority to cancel the registration of the contractor and to black list him even though for a specified and limited period. The mention of a specific or specified penalty in the permit condition does not debar or prevent the Divisional Forest Officer or any other competent authority from imposing the penalty of cancellation of registration as well as blacklisting the contractor. 8. The mention of a specific or specified penalty in the permit condition does not debar or prevent the Divisional Forest Officer or any other competent authority from imposing the penalty of cancellation of registration as well as blacklisting the contractor. 8. Having taken a definite view that the mention of a specific or a specified penalty in the conditions governing the issuance of permit does not debar or prevent the Competent Authority from imposing any other penalty (not specified or mentioned in the permit conditions), including the penalty of cancellation of permit or blacklisting, we must hasten to add that the principles of natural justice do demand that before any such penalty is actually imposed upon a contractor, it must be preceded by the issuance of a show cause notice and the show cause notice must specifically indicate that the Competent Authority proposes to inflict a particular penalty. The nature and the extent of the proposed penalty must be clearly indicated and specifically mentioned in the show cause notice. The principle of audi altertam partem undoubtedly does lay down that a person sought to be proceeded against must be informed of the grounds, the reasons as well as the proposed action. Only in such an eventuality can such a person understand and be made aware of what is in store against him. In the particular circumstances of this case since the show cause notice did not indicate the proposed penalty, the petitioners could be said to be legitimately expecting that the penalty imposed would be within the four corners of Clause 16(a) or Clause 16(b). If therefore in a given case the Competent Authority intends to impose a penalty dehorse Clause 16(a) or Clause 16(b), the show cause notice must in clear terms indicate the said proposed penalty so that the Contractor is put to notice about such penalty being proposed with a view to affording him an effective opportunity of explaining his position as well as adequately defending himself. 9. As has been noticed in the present cases, all the show cause notices issued to the petitioners stated about the Competent Authority taking of, "further action against the Contractors as per Rules". The show cause notices did not state either in so many words or specifically that the Divisional Forest Officer proposed to cancel the registration of the petitioners and to blacklist them. The show cause notices did not state either in so many words or specifically that the Divisional Forest Officer proposed to cancel the registration of the petitioners and to blacklist them. Inclusion of such a statement in the show cause notices was a sine qua non to the imposition of aforesaid penalty against the petitioners because its non inclusion clearly deprived the petitioners of their right of defending themselves, being made aware of what lay in store against them and also in the process depriving them of a fair chance of explaining their position effectively, thus violating Article 14 of the Constitution of India. On this short ground therefore, the impugned penalty orders, suffering as these do from the mischief of Article 14 of the Constitution of India as well as the violation of the principles of natural justice deserve to be quashed and set aside. 10. For the foregoing reasons therefore, the Writ Petitions are allowed. The impugned penalty orders are quashed and set aside with all the consequences. It must however, be clearly observed by us that the setting aside and quashing of the impugned penalty orders on the aforesaid technical ground shall not at all debar the respondents from initiating fresh and thereafter completing the desired action against the petitioners, if so advised, but only after issuing fresh show cause notices upon them and by taking the proceedings thus initiated to their logical conclusion. The parties are left to bear their own costs. All the applications are also disposed of. Applications disposed of.