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2012 DIGILAW 630 (GUJ)

Vinodchandra Narandas Mulchandani v. State of Gujarat Through Secretary

2012-08-31

K.M.THAKER

body2012
JUDGMENT : K.M. Thaker, J. The petitioner has preferred present petition seeking below mentioned relief: “9(a) To quash and set aside the impugned order at Annexure-K, N and R dated 31-8-2012, 31-1-2011 and 20-7-2011 respectively passed by the respondent authorities no.4, 3 and 2 respectively and be further pleased to hold that the impugned orders are bad and illegal.” 2. Mr. Unwala, learned advocate, has appeared for the petitioner and Mr. Yagnik, learned AGP, has appeared for the respondent authorities. 3. The impugned orders have been challenged by the petitioner on diverse grounds. 4. However, in view of one particular vital aspect which is involved in the proceedings and which, according to the petitioner, has vitiated the impugned proceedings as well as the impugned orders, it is not necessary to examine other grounds of challenge against the impugned order. More particularly, for the reason that the aspect on which the petitioner has placed heavy reliance is, in effect and in substance, not disputed by the concerned officer and that one ground alone is sufficient to set aside the impugned order. 5. So as to consider and appreciate the grievance made by the petitioner in present petition, it is appropriate to take into account some relevant facts. 5.1. The petitioner has claimed that the petitioner has been granted licence to run fair price shop under the Gujarat Essential Commodities (Licensing to Fair Price Shop) Order, 2004. 5.2. The petitioner has also claimed that since last more than 20 years, he has been running the said fair price shop without any default or irregularity and there has never been any allegation of any irregularity or similar nature against the petitioner. 5.3. It is further claimed that somewhere in January 2009, the respondent authorities had conducted mass raids and inquiries and the petitioner's shop was also visited. 5.4. The respondent authorities have claimed that they detected irregularities in the conduct of the business and the fair price shop. Therefore, a show cause notice was issued and inquiry proceedings were initiated. 5.5. The petitioner has also claimed that the respondent authorities had recorded several statements of the card-holders which were not supplied to the petitioner and subsequently petitioner's licence was suspended for a period of 90 days. 5.6. The petitioner has also claimed that against the order suspending licence, he had preferred appeal which was rejected vide order dated 3.3.2010. 5.7. 5.5. The petitioner has also claimed that the respondent authorities had recorded several statements of the card-holders which were not supplied to the petitioner and subsequently petitioner's licence was suspended for a period of 90 days. 5.6. The petitioner has also claimed that against the order suspending licence, he had preferred appeal which was rejected vide order dated 3.3.2010. 5.7. The petitioner has claimed that subsequently, a show cause notice dated 13.7.2010 came to be issued. 5.8. It is also claimed that even with the said show cause notice, relevant and necessary documents were not supplied. 5.9. Therefore, the petitioner, vide his letter dated 26.7.2010, requested authorities to supply the documents. 5.10. It is claimed that after the said letter, the respondent authorities supplied certain documents but, the documents, which were really relevant, necessary and crucial for his defence viz. the inquiry register and the statements, were not supplied to the petitioner. 5.11. Therefore, vide letter dated 30.7.2010, the petitioner again requested for the relevant documents. 5.12. Since the documents were not supplied, the petitioner was left with no alternative but to submit his reply to the show cause notice without examining the inquiry register and the statements. 5.13. It is claimed that in the reply also, the petitioner contended and emphasised that the relevant documents were not supplied to him. 5.14. The petitioner has further claimed that without supplying the documents asked for by the petitioner, the inquiry was concluded and the order dated 31.8.2010 came to be passed. 5.15. It is asserted and emphasised by the petitioner that even during the proceedings and until the order came to be passed, the documents were not supplied. 5.16. What is pertinent to mention at this stage is that according to the petitioner, about 9 days after the order dated 31.8.2010 came to be passed, the documents asked for by the petitioner were supplied to him on 9.9.2010. 5.17. Upon being aggrieved by the order dated 31.8.2010, the petitioner, on or around 24.9.2010, preferred appeal before the appellate authority which was registered as Appeal No.17/2011. 5.18. Subsequently, vide order dated 31.1.2011, the appeal came to be rejected. 5.19. Feeling aggrieved by the order dated 31.1.2011, the petitioner preferred revision application which was registered as Revision Application No.33/2011. 5.20. The revisional authority rejected the revision application vide order dated 20.7.2011. 5.21. 5.18. Subsequently, vide order dated 31.1.2011, the appeal came to be rejected. 5.19. Feeling aggrieved by the order dated 31.1.2011, the petitioner preferred revision application which was registered as Revision Application No.33/2011. 5.20. The revisional authority rejected the revision application vide order dated 20.7.2011. 5.21. Feeling aggrieved by the said orders, the petitioner has preferred present petition. 6. At this stage, it is pertinent to note that one of the major contentions raised by the learned advocate for the petitioner against the impugned order is that the petitioner had, at the outset, requested the authority that the documents relevant and necessary to effectively deal with the charges levelled against him may be supplied so as to enable him to make proper and effective defence. 6.1. It is also claimed and asserted by the learned advocate for the petitioner that though such request was made and reiterated also, the first adjudicating authority failed to supply “inquiry register” to the petitioner and also failed to supply the copies of the statements of various persons which were recorded by the officer/representative of the respondents. 6.2. On such allegation, the learned advocate for the petitioner has challenged the inquiry proceedings and has claimed that the proceedings are vitiated and so is the first authority's order against the petitioner. 7. It appears from the record and from the submissions, that though the said documents were necessary and relevant for the petitioner's defence and though, as it subsequently turned out, the said documents were proposed to be relied on and have been actually relied on by the authority, the said documents were not supplied to the petitioner before the stage when the petitioner was asked to lead his defence or even before the conclusion of the proceedings and/or even before the first authority's order came to be passed. 8. During the proceedings of present petition, the respondents placed on record a document dated 26.7.2010 (Annexure-R1, page 1005). On the strength of the said document, it was claimed that the documents for which the petitioner has raised grievance, were supplied to the petitioner. 8.1. The respondents have heavily relied on handwritten remarks made on the face of the said communication dated 26.7.2010. 8.2. On the strength of the said document, it was claimed that the documents for which the petitioner has raised grievance, were supplied to the petitioner. 8.1. The respondents have heavily relied on handwritten remarks made on the face of the said communication dated 26.7.2010. 8.2. Even after the petitioner was confronted with the said document, learned counsel for the petitioner asserted that the said documents were not supplied to the petitioner until the first adjudicating authority's order was passed and the relevant documents were supplied to him after 31.8.2010, i.e. after the first adjudicating authority passed the order. 8.3. Having regard to the said assertion and objection by the petitioner, this Court passed order dated 9.8.2012 and directed the concerned officer who had signed the said document dated 26.7.2010, to file an affidavit stating clearly as to whether the documents in question, i.e. “inquiry register” and the statements of the persons which were recorded before issuance of notice were supplied to the petitioner or not. 8.4. In response to the said direction, one Mr. S.N. Khalyani, who, at the relevant time, was working as District Supply Officer, Junagadh has filed an affidavit dated 30.8.2012. 8.5. Mr. Khalyani, the deponent of the affidavit dated 30.8.2012 has stated that at the relevant time, he was District Supply Officer and the said document (Annexure-R1, page 1005) dated 26.7.2010 bears his signature and particularly the remark on the said document was made by him and that also bears his signature. After having identified the said remark and his signature, the said deponent Mr. Khalyani has stated in his affidavit dated 30.8.2012 that: “3. I respectfully say and submit that, I have personally given all the documents as sought by the applicant, and for the inquiry register, I have directed the Mamlatdar, Una on 04.08.2010 to produce the said inquiry register to the applicant, as the said inquiry register was in the custody of the Mamlatdar, Una. I hereby further say that, pursuant to the application dated 26.07.2010, all documents in the record and custody of the District Supply Officer, Junagadh has been supplied to the applicant, on the very same day i.e. 26.07.2010. 4. I respectfully say and submit that, after providing all the requisite documents, as available in the custody of the District Supply Officer, Junagadh, the impugned order dated 31.08.2010 has been passed. 4. I respectfully say and submit that, after providing all the requisite documents, as available in the custody of the District Supply Officer, Junagadh, the impugned order dated 31.08.2010 has been passed. I hereby further say that, pursuant to the direction issued by the District Supply Officer, Junagadh on 26.07.2010, the Mamlatdar, Una has provided the inquiry register to the applicant i.e. the petitioner herein, on 30.09.2010.” 8.6. On consideration of the said affidavit and particularly the stipulation that: “... I hereby further say that, pursuant to the direction issued by the District Supply Officer, Junagadh on 26.07.2010, the Mamlatdar, Una has provided the inquiry register to the applicant i.e. the petitioner herein, on 30.09.2010” 8.7. It emerges that the documents in question were supplied to the petitioner on 30.9.2010 whereas, the order by the first authority was passed on 31.8.2010. 8.8. Thus, it has become clear that the documents in question were supplied to the petitioner almost one month after the date on which the impugned order dated 31.8.2010 came to be passed. 8.9. Thus, the defect which entered at initial stage of the proceedings and infected the proceedings. 8.10. Furthermore, on consideration of the documents it appears that the availability of the said documents were crucial for petitioner's defence at the relevant time inasmuch as according to the petitioner, the said material contain various corrections and interpolation and the petitioner was deprived of the opportunity to deal with the said documents and effectively defend himself by offering explanation and defence qua the said documents since the said documents were not supplied to the petitioner at the relevant time. 8.11. Thus, in light of the affidavit made by the concerned officer, it has emerged that the petitioner is right and justified in his allegation that the relevant documents were not supplied to him at relevant time and that he has been deprived of reasonable opportunity of hearing and effective defence and such denial has prejudicial affected his defence. 9. At this stage, it is pertinent to note that considering the petitioner's objection, sometime after the first adjudicating authority's order was passed, the relevant documents came to be supplied to the petitioner. 9.1. 9. At this stage, it is pertinent to note that considering the petitioner's objection, sometime after the first adjudicating authority's order was passed, the relevant documents came to be supplied to the petitioner. 9.1. Thus, the fact remains that at the time of hearing before the first adjudicating authority, the documents requested for by the petitioner were not supplied to him before the order came to be passed by the first adjudicating authority. 9.2. In view of the fact that the default in supplying every document may not vitiate the proceedings and failure to supply only those documents which are ultimately relied on by the authority and non-availability of which cause real prejudice in delinquent's defence, it was inquired as to whether the documents demanded by the petitioner were relevant and material for his defence and refusal or default in supplying the said documents actually affected his defence and whether the document in respect of which grievance is being made have been relied on by the first adjudicating authority or not, in reply the Court has been informed that the documents were relevant and vital for petitioner's defence and default in supplying the said documents caused serious handicap for the petitioner in effectively defending his case. The Court has also been informed that the said documents have been relied on by the adjudicating authority in reaching final conclusion and the order of the first adjudicating authority has been based on the said documents. 9.3. Learned AGP could not dispute or deny the fact that the documents in question have been relied on by the adjudicating authority while passing the order. 9.4. Thus, it emerges that the failure to supply the documents in question materially affected the defence of the petitioner. 9.5. The defect of not supplying relevant documents would vitiate the order on ground of denial of sufficient and effective opportunity of defence, provided prejudice is caused to the noticee. In present case, the petitioner has shown, prima facie, that his chance and opportunity of effective defence was prejudicially affected because relevant documents were not supplied. 9.6. 9.5. The defect of not supplying relevant documents would vitiate the order on ground of denial of sufficient and effective opportunity of defence, provided prejudice is caused to the noticee. In present case, the petitioner has shown, prima facie, that his chance and opportunity of effective defence was prejudicially affected because relevant documents were not supplied. 9.6. The obligation to supply relevant documents, particularly those documents on which the employer/the concerned department/the competent authority/prosecuting side intends to rely or the documents on which the charge is based and/or those which are necessary for and required by the noticee whose explanation is called-for his defence and its absence may cause prejudice to petitioner's defence, is an integral part of audi alterem partem principle and failure to comply said requirement would also amount to breach of said principle because such failure would render the concerned person handicapped in framing and formulating his defence and thereby he would be deprived of reasonable and sufficient opportunity of effective hearing and defence. The failure to supply such relevant documents to the concerned person would reduce the proceedings to mere formality and an eyewash. Therefore, the requirement to supply such relevant documents to the concerned person/noticee is considered integral and inherent part of opportunity of hearing and effective defence and inherent and integral part of principles of natural justice. 9.7. The respondents, in backdrop of such facts of this case, would contend, at the time of hearing of the appeal, that though after conclusion of hearing before the first authority, the said documents were supplied to the petitioners and that, therefore, the defect which had entered the proceedings before the first adjudicating authority was cured at the appellate stage, hence, petitioner's contention should not be accepted. 10. In this background, the question which arises is whether the curative step taken at the appellate stage would wipe out the defect which entered into the proceedings before the first adjudicating authority and whether such subsequent or belated rectification would validate, retrospectively, the order which got vitiated on account of default in supplying relevant and necessary documents at the first stage. 11. The rule audi alteram partem is the basic, minimal and primary requirement. The Court would zealously enforce the said rule and requirement, more particularly when a person is visited with an order which has civil consequences. 11. The rule audi alteram partem is the basic, minimal and primary requirement. The Court would zealously enforce the said rule and requirement, more particularly when a person is visited with an order which has civil consequences. Diligent compliance of the said principle has been emphasised by the Courts on innumerable occasions and for times without number and yet the authorities, more often than not, fail to appreciate the importance of the said rule and the requirement for diligent compliance thereof is ignored. Whereas in certain cases, the appellate authority recognises the defect and takes steps to amend the situation. 11.1. In such cases, question arise as to whether post facto rectification (e.g. granting hearing before appellate authority or supplying relevant documents after first authority concludes the hearing and/or after the order is passed by first authority) is proper and effective substitute and would it cure the vice or defect which entered into the proceedings at the nascent stage. 12. In the cases where relevant documents are not supplied to the noticee, more often than not the order by the first adjudicating authority would be passed without addressing and dealing with entire defence of the delinquent because the noticee would be compelled to submit his reply/defence without the help of relevant material and thereafter when such order is placed before the appellate authority it would not reflect correct, complete and clear picture of all facts and/or the correct and complete defence of the noticee. Though such order may not completely cloud the vision of the appellate authority but it would draw a curtain which, for the appellant, may be difficult to pierce so as to reach the uninfluenced mind of the appellate authority. 13. Therefore, relevance and importance of strict and diligent and honest compliance of said principle at first stage cannot be undermined or diluted. True it is, there are exceptions to the rule e.g. “No prejudice” or “administrative exigency or preamptive measures” are some of the exceptions, which have been accepted by the courts. However, such exceptions cannot be allowed to be used lightheartedly or casually. True it is, there are exceptions to the rule e.g. “No prejudice” or “administrative exigency or preamptive measures” are some of the exceptions, which have been accepted by the courts. However, such exceptions cannot be allowed to be used lightheartedly or casually. Besides this, when it comes to supplying relevant documents-particularly those documents which are in possession of the department - on which reliance is to be placed by the department or which are required by the concerned person who is served with notice about proposed action, ordinarily even such exceptions would not be available. 14. In this context, it would be relevant to refer to the decision in the case of H.L. Trehan v. Union of India [ (1989) 1 SCC 764 ], the Apex Court has observed that: “In our opinion, the post-decisional opportunity of hearing does not subserve the rules of natural justice. The authority who embarks upon a post-decisional hearing will naturally proceed with a closed mind and there is hardly any chance of getting a proper consideration of the representation at such a post-decisional opportunity. In this connection, we may refer to a recent decision of this Court in K.I. Shephard & Ors. v. Union of India & Ors., JT 1987 (3) 600. What happened in that case was that the Hindustan Commercial Bank, The Bank of Cochin Ltd. and Lakshmi Commercial Bank, which were private Banks, were amalgamated with Punjab National Bank, Canara Bank and State Bank of India respectively in terms of separate schemes drawn under section 45 of the Banking Regulation Act, 1949. Pursuant to the schemes, certain employees of the first mentioned three Banks were excluded from employment and their services were not taken over by the respective transferee Banks. Such exclusion was made without giving the employees, whose services were terminated, an opportunity of being heard. Ranganath Misra, J. speaking for the Court observed as follows: "We may now point out that the learned Single Judge of the Kerala High Court had proposed a post amalgamation hearing to meet the situation but that has been vacated by the Division Bench. For the reasons we have indicated, there is no justification to think of a post-decisional hearing. On the other hand, the normal rule should apply. It was also contended on behalf of the respondents that the excluded employees could now represent and their case could be examined. For the reasons we have indicated, there is no justification to think of a post-decisional hearing. On the other hand, the normal rule should apply. It was also contended on behalf of the respondents that the excluded employees could now represent and their case could be examined. We do not think that would meet the ends of justice. They have already been thrown our of employment and having been deprived of livelihood they must be facing serious difficulties. I here is no justification to throw them out of employment and then given them an opportunity of representation when the requirement is that they should have the opportunity referred to above as a condition precedent to action. It is common experience that once a decision has been taken. there is a tendency to uphold it and a representation may not really yield any fruitful purpose." 15. In the case of State of U.P. v. Mohammad Nooh [ AIR 1958 SC 86 (1)], the Apex Court has observed that vice cannot be obliterated and cured in appeal and revision. 16. In the case of Institute of Chartered Accountants of India v. L.K. Ratna [ (1986) 4 SCC 537 ], the Apex Court has observed that: “Moreover, there are cases where an order may cause serious injury as soon as it is made, an injury not capable of being entirely erased when the error is corrected on subsequent appeal, as in the present case, where a member of highly respected and publicly trusted profession is found guilty of misconduct and suffers penalty, the damage to his professional reputation can be immediate and far-reaching. In such a case, after the blow suffered by the initial decision, it is difficult to contemplate complete restitution through an appellate decision. Such a case is unlike an action for money or recovery of property, where the execution of the trial decree may be stayed pending appeal, or a successful appeal may result in refund of the money or restitution of the property, with appropriate compensation by way of interest or mesne profits for the period of deprivation. Therefore, there is manifest need to ensure that there is no breach of fundamental procedure in the original proceeding, and to avoid treating an appeal as an overall substitute for the original proceeding.” 17. Therefore, there is manifest need to ensure that there is no breach of fundamental procedure in the original proceeding, and to avoid treating an appeal as an overall substitute for the original proceeding.” 17. In 2005, in the case of Ajit Kumar Nag v. General Manager (PJ), Indian Oil Corporation Ltd., Haldia [ (2005) 7 SCC 764 ], the Apex Court has observed that: “We are aware of the normal rule that a person must have a fair trial and a fair appeal and he cannot be asked to be satisfied with an unfair trial and a fair appeal. We are also conscious of the general principle that predecisional hearing is better and should always be preferred to post-decisional hearing....” 18. Thus, though in certain cases, non-observance of the rule may be accepted by the courts as justified in view of the facts and circumstances, ordinarily post facto and subsequent rectification (i.e. at appeal or revision stage) of such defect or breach can rarely be accepted as substitute for breach of 'audi alteram partem' rule at first stage, i.e. when such breach occurs on account of not supplying relevant and necessary documents/material to the noticee. 19. In present case, there is not a single circumstance to justify the crucification of the rule by not supplying the documents, despite specific demand made by the petitioner. 20. Merely offering opportunity to the concerned person to appear before the authority without providing-supplying relevant material in view of which the allegations and charge are made and asking such person to defend his case is nothing but short of a facade and eyewash. 21. In present case, the documents on which the authority has relied to reach the conclusions, were, despite demand, not supplied to the petitioner and when the authority subsequently (i.e. after the first authority passed order against the petitioner) realised the infringement and that, therefore, took post-facto curative measure and supplied the documents after the first adjudicating authority passed the order, i.e. at the stage of the appeal. 22. 22. However, the vice of denying sufficient and effective opportunity of hearing by not supplying relevant documents which were in exclusive possession of the respondent had already entered into the proceedings at the first stage and the post-facto rectification of such defect by taking curative step after the damage is caused (i.e. after the order is passed) will not cure the defect which occurred at initial stage. 23. The inherent defect which vitiates the proceedings and the order at first-original stage order survives and keeps the order and proceedings vitiated even if it is rectified subsequently. The said failure adversely and prejudicially affected the petitioner and caused prejudice to his defence. 24. The defect which entered into and vitiated the proceedings at the original-first stage cannot be rectified at appellate stage and the subsequent (i.e. at appellate stage) correction of the error which occurred at the original-first stage would not validate the proceedings and the defect incurred at original stage cannot be cured and rectified retrospectively by taking corrective steps at appellate stage. The proceedings would remain vitiated. 25. The petitioner would claim that the appellate authority passed the order confirming the order of the first appellate authority. Aggrieved by such order, the petitioner has approached this Court. 26. In backdrop of such facts and on overall consideration of the case and rival submissions as well as the impugned order, this Court is satisfied, and the Court has no hesitation in holding, that the petitioner was denied opportunity of effective hearing and defence before the first authority and the post-facto opportunity cold not, and did not, cure the defect and the vice which entered the proceedings at initial stage and that the said defect caused prejudice to the petitioner since the authority relied on the said documents to hold the petitioner guilty and that, therefore, the impugned order dated 31.8.2010 is vitiated on account of violation of principles of natural justice. 27. Therefore, it appears necessary, appropriate and justified to set aside the order and remit the proceedings to the authority for reconsideration and fresh decision after hearing the petitioner. 28. If the said order falls, then subsequent order passed by the appellate and/or revisional authority would also not survive and consequently the said orders also fall. Under the circumstances, below mentioned order is passed. 29. 28. If the said order falls, then subsequent order passed by the appellate and/or revisional authority would also not survive and consequently the said orders also fall. Under the circumstances, below mentioned order is passed. 29. The impugned orders are set aside and the matter is remitted to the first authority. It would be open to the first authority to appoint an officer to conduct the hearing in pursuance of the notice dated 13.7.2010 and the proceedings may be commenced from the stage from which it stands vitiated. If the petitioner thinks it necessary to file further reply, the petitioner may file such reply in such time as may be allowed by the authority. The petitioner shall not ask for undue and avoidable adjournments and will extend cooperation to complete the proceedings as expeditiously as possible and preferably within three months after the proceedings are commenced. After hearing the petitioner and after considering his submissions and explanation, the authority shall pass appropriate order. 30. With the aforesaid clarification, the petition is disposed of at this stage. Notice is discharged. Rule is made absolute to the aforesaid extent. Petition allowed.