Research › Search › Judgment

Gauhati High Court · body

2011 DIGILAW 1000 (GAU)

Namsai Lamps Ltd. v. Union of India

2011-12-19

SUBHASIS TALAPATRA

body2011
JUDGMENT S. Talapatra, J. 1. Mr. A.C. Borbora, learned senior counsel appearing for the petitioner. Also heard Mr. P.K. Roy, learned Standing counsel, FCI, appearing for the respondent Nos. 2 to 7. The petitioner, which is a co-operative society, has been appointed and awarded with the transport contract on area basis for two years from the date of submission of joining report (vide Annexure-2 to the writ petition). The said letter of appointment dated 08.07.2011 is governed by specified terms and conditions as has been laid down in the tender document/MTF. All of a sudden, the Dy. General Manager(R), Regional Office, Itanagar, by his letter dated 05.12.2011, has-terminated the said contract on the alleged ground as recited in the said letter and as extracted hereunder. Whereas a complaint was lodged by the Consultative Committee members for FCI, Arunachal Pradesh Region on 21.8.2011 that during their inspection they had found around 60(sixty) numbers of trucks carrying food grains were moved from Railhead/FCI Depot, Tinsukia to FCI Depot, Tezu by M/S. Namsai Lamps Ltd. w.e.f 1.8.2011 out of which 8(eight) trucks of rice and 3(three) trucks of wheat were missing which was confirmed by the officer in. charge, Dirak Police Check Post, located between Arunachal Pradesh and Assam border. That after getting such complaints from FCI consultative members, this office felt necessary to investigate the said complaint with a Committee of Officers of FCI, Regional Office, Arunachal Pradesh region. Whereas the investigation reports submitted by the Committee of Officers of FCI, Arunachal Pradesh Region substantiate similar gross irregularities of orchestrating/diverting/missing of trucks as well wasting of food grains of FCI which are meant for poor people to be distributed under Public Distribution System. This is regular practice for Namsai Lamps, Ltd. To commit such type of gross irregularities and commission of aforesaid M/s. Namsai Lamps Ltd. The undersigned being the competent authority invokes the clause X of MT to terminate the contract of M/S. Namsai Lamps Ltd. Hence this order of termination of contract is issued against the M/S Namsai Lamps Ltd. Learned senior counsel appearing for the petitioner emphatically submits that, at no point of time the petitioner was accorded any opportunity to have their say on the allegations and a most abrupt and arbitrary manner the contract has been terminated imposing stigma on the petitioner-cooperative society, which has been carrying on such type of operation since long without being blemished. He further submits that from convoy notes as well as from the monthly statements respectively Annexure 5 and 6 series, it would be apparent that the allegations are baseless and at the behest of some interested persons. In support of this contention he has also taken me to the Status Report (Annexure-6 to the affidavit-in-opposition by the respondent Nos. 2 to 7), as forwarded to one Sri Gora Makik of M/s. Sehee Doni Enterprises, 'B' Sector, Itanagar, wherein it has been provided: Observing all above points, after investigation, it is seen that the tender documents submitted by M/s. Namsai Lamps Ltd. Namsai was false and fabricated as the documents like Risk & cost certificate, Court comeback certificate, C.C. Certificate Etc. was not been submitted in the tender and technical bid which is insufficient and false documents which is not eligible as per the tender norms of technical bid. Whereas, the tender documents submitted by M/s. Sehee Doni Enterprise Itanagar is found to be correct and genuine and has fulfill the criteria of tender norms. Learned senior counsel for the petitioner, further submits that it is really amazing how a Sub-Inspector of Police made such communication to one individual, who might have lodged some complaint against the petitioner and recommended to the authority for awarding the contract to that individual. Learned counsel appearing for the respondent No. 2 to 7, referring to the affidavit-in-opposition would contend that it would be apparent from the letter of appointment (Annexure-B to the said affidavit-in-opposition) that a pre-condition had been appended to the letter of contract that if in that affair anything adverse emerges even without the contract; under reference would be, terminated. As such, there was no necessity of giving any show cause to the petitioner. He strenuously argued that there was no infirmity or arbitrariness as alleged in terminating the said contract of carrying and handling the materials. Learned counsel for the respondent Nos. 2 to 7 also relied on the general criteria of Annexure-C, as extracted above. He submitted with much emphasis that the action of the respondent Nos. 2 to 7 was based on such observation of the police. To buttress further, he had taken me to the Committee Report of the Regional Office Investigation Team (Annexure-C to their affidavit-in-opposition), wherein the following observations are made: 1. He submitted with much emphasis that the action of the respondent Nos. 2 to 7 was based on such observation of the police. To buttress further, he had taken me to the Committee Report of the Regional Office Investigation Team (Annexure-C to their affidavit-in-opposition), wherein the following observations are made: 1. The allegation of State Consultative Committee of Arunachal Pradesh that 11 truckloads of PDS, food grains having not reached its designated destination thus missing is found to be correct,, though the number of missing trucks is less i.e. 07 trucks only. It is noteworthy to mention that the 07 nos. of trucks found to be missing within a short span of only ten days. That some trucks used by HTC M/S. Namsai Lamps for transportation of food grains from Tinsukia to Tezu are found to be dispatched from Tinsukia continuously within a gap of twelve hours with different RMPs and stocks but shown receipt at FSD Tezu on different dates. It is impossible to reach and unload at Tezu and come back to FSD Tinsukia for reloading in a short span of twelve hours only. This clearly indicates that receipt/entry at FSD Tezu is manipulated and stocks actually don't reach Tezu after loading from Tinsukia. This clearly shows there is diversion of stocks after loading from FSD/Rly Siding Tinsukia, Assam. 2. That the FCI HTC for Tinsukia-Tezu route M/S. Namsai Lamps is also state nominee for two districts i.e. Lohit and Anjaw which is being fed by FSD Tezu. 3. That M/S Namsai Lamps taking the advantage of being FCI HTC as well State Nominee and in connivance with depot incharge FSD Tezu is issuing out stocks after loading at FSD Tinsukia without actually reaching FSD Tezu. For Example; truck No. AS 23G 2481 was loaded and dispatched from FSD Tinsukia with RMP No. 493431 on 05.08.2011 but on the same day it was unloaded twice with RMP No. 493907 and 493480 at FSD Tezu as per case No. 1, 4 and 5 of Table 2. An analysis of comparative statement reveals more similarly instances. 4. The committee found that 12 bags of levy sugar, 24 bags of wheat and 62 bags of rice are found in excess without entering in the registers and ledger books of depot according to peripheral counting carried out by committee. An analysis of comparative statement reveals more similarly instances. 4. The committee found that 12 bags of levy sugar, 24 bags of wheat and 62 bags of rice are found in excess without entering in the registers and ledger books of depot according to peripheral counting carried out by committee. Explanation provided by deport incharge FSD Tezu for excess bags four during peripheral counting is annexed as (Annexure-Q) which not convincing. It is evident from findings at Sl. No. 1 & 2 above that some trucks of food grains were unloaded midway with official records being updated later on. But it was observed that Depot incharge, FSD Tezu issues work slips for all such ghost receipt and the contractor raises bills against them. For instance the work done slips for handling works of the date 08.08.2011 shows 1715 bags of rice being handled as receipt at FSD Tezu (Annex-R) but Table 2 of Annex-I confirms that only two trucks with RMP No. 493439 and 493442 of 190 bags each totaling to 380 bags have been received at FSD Tezu on that day, but was accommodated by manipulating the gate entry register and receipt latter on in the depot The above findings confirms that the depot in charge FSD Tezu has single handedly circumvented all official procedures, manipulated official records to accommodate the improvisation effected by him i.e. issue of stocks without physically receiving at Tezu. This seems to be the reason for not delegating charter of duties to the other staff of the Depot. This clearly points to connivance of depot in charge FSD Tezu with FCI HTC cum state nominee with intent to cause financial gains to the contractor at the cost of the Corporation. Learned counsel for the respondent Nos. 2 to 7 would further contend that to root out the irregularities, misappropriation and hatching of a racket in league with some officers for siphoning of the materials, the impugned action had been taken in public interest. I have considered the averments and the documents attached to the writ petition as well as of the affidavit-in-opposition, as filed by the respondent Nos. 2 to 7 and the rival submissions. I have considered the averments and the documents attached to the writ petition as well as of the affidavit-in-opposition, as filed by the respondent Nos. 2 to 7 and the rival submissions. It appears that the ground for termination was a complaint which was lodged by the Consultative Committee members of the FCI, Arunachal Pradesh Region on 21.08.2011 alleging that during inspection they had found around sixty numbers of trucks carrying food grains were moved from Railhead/FCI Depot, Tinsukia to FCI Depot, Tezu by M/s Namsai Lamps Ltd. W.e.f. 01.08.2011 to 08.08.2011 out of which eight trucks of Rice and three trucks of Wheat were missing which was confirmed by the Officer-in-charge, Dirak. Police Check Post, located between Arunachal Pradesh and Assam border. It is further stated as ground in the letter of termination that after getting such complaint from the FCI Consultative members, the office felt it necessary to investigate the said complaint with a Committee of Officers of FCI, Regional Office, Arunachal Pradesh Region. On receipt of the investigation report and on taking into consideration that the petitioner had been regularly committing such gross irregularities, which warranted to be dealt with severity. It has been strongly contended that such act of the petitioner was to make illegal financial benefit by siphoning of the public property. Nowhere in the termination letter or in the entire affidavit-in-opposition, it has been even whispered that at any moment, or any point of time the petitioner was ever asked to have their say on the allegations or irregularities etc. as indicated. On the contrary the learned counsel for the petitioner had taken me to one averment at page-6 of the affidavit-in-opposition and there it appears that subsequently the dealing officers of the Corporation had found that the allegation of the State Consultative Committee of Arunachal Pradesh that 11 truck-loads of PDS food grains having not reached its designated destination thus missing was found to be correct, though the number of missing trucks was less i.e. seven trucks only. Learned counsel appearing for the respondent Nos. 2 to 7, had also referred to Clause-XXI of the Model Tender Form For Technical Bid, Handling, and Transport and submits that the petitioner having alternative remedy of redressal., should not have approached this Court by filing a petition under Article 226 of the Constitution to cause abuse of the process of law. Learned counsel appearing for the respondent Nos. 2 to 7, had also referred to Clause-XXI of the Model Tender Form For Technical Bid, Handling, and Transport and submits that the petitioner having alternative remedy of redressal., should not have approached this Court by filing a petition under Article 226 of the Constitution to cause abuse of the process of law. For appreciation, the said Clause-XXI is reproduced hereunder: Grievances Redressal Mechanism For Contractors. To address the grievances of the tenderers arising out of awarding of contracts, a committee of three officers viz. 1) GMCNE, 2) GMC (F&A), and 3) DGM (Legal) has been constituted in FCI, ZO(NEZ), Guwahati. Giving an anxious consideration to the rival contentions, I hold that the condition appended to the appointment letter dated 08.07.2011 is anyway relatable to the ground that has been assigned in the letter of termination. This clause is confined to certain documents specified therein. From the police report, some adverse observations are available but, be that as it may, those are not grounds for the impugned termination of the contract. As such, this cannot come as said for salvage of the respondent Nos. 2 to 7 in so far as the impugned action is concerned. The other contention of the learned counsel appearing for the respondent Nos. 2 to 7 that the petitioner having effective alternative remedy should not have approached this Court does not hold good as I find that said clause is related to the disputes of awards not to any dispute after the settlement of the tenders. Therefore, it is again of no use to the respondent Nos. 2 to 7. The impugned order terminating the contract has admittedly been passed affording no opportunity to the petitioner. The fair action demands no persons should be condemned on consideration of materials adverse collected behind their back. Without giving any observation on the merit of the allegations as levelled against the petitioner, this Court is of the opinion that the respondent Nos. 2 to 7 have acted capriciously and exercised fraud on power. As such, the impugned order of termination (Annexure-3 to the writ petition) cannot sustain in law and accordingly the same is interested with and set aside. Before parting, it is made clear that the respondent Nos. 2 to 7 have acted capriciously and exercised fraud on power. As such, the impugned order of termination (Annexure-3 to the writ petition) cannot sustain in law and accordingly the same is interested with and set aside. Before parting, it is made clear that the respondent Nos. 2 to 7 are at liberty to conduct a fair enquiry into the allegations as have been surfaced and brought against the petitioner giving them reasonable opportunity to have their say in the matter and they will be at liberty to take appropriate and consequential decision in respect of the contract thereafter. Till any decision is taken by the respondent Nos. 2 to 7 incompliance of the direction as issued hereunder, the petitioner shall be allowed to carry on the operation of transportation in terms of the letter of appointment dated 08.07.2011 (Annexure-2 to the writ petition), without prejudice to any inquiry or consequential action as stated. With the observation and direction as indicated above, the writ petition is allowed. Petition allowed.