MOHD.FAIZ ALAM KHAN, P.K.JAISWAL, SHABIHUL HASNAIN
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JUDGMENT : 1. The present Full Bench came to be constituted for consideration of divided opinions given by the Division Bench on 29.10.2018, while deciding the application for grant of interim relief. 2. The petitioner No. 1 is a society registered under the Societies Registration Act, 1860 under the name and style of Awadh Gramin Vikas Sansthan. 3. The respondent No. 1-Government of India, Ministry of Women and Children Development initiated a scheme, known as Swadhar Grih, in order to caters to primary needs of women in difficult circumstances. The object of the said Scheme is to set up Swadhar Grih in every district with capacity of 30 women to cater the primary need of shelter, food, clothing, medical treatment and care of the women in distress and who are without any social and economic support and to provide them legal aid and guidance to enable them to take steps for their re-adjustment in family/society. As per the scheme, all the Swadhar Grih established under the Scheme would be monitored continuously by a monitoring committee so constituted in order to ensure their smooth functioning, identifying gaps and suggesting steps that would lead to their better functioning. 4. According to the petitioners, for the financial years 2016-17, 2017-18 and 2018-19, financial help was provided to the petitioners under the said scheme to run the Swadhar Grih. On the basis of some complaints received by Women Welfare Department, State of U.P. in respect of misuses of funds, a Committee was constituted to enquire into the matter in regard to the misuses of funds, which has been given to the Societies who are running Swadhar Shelter Home. In respect of petitioners' society, on 24.7.2017, four members' committee had submitted its report, wherein the petitioners have not been found any financial irregularities in regard to the functioning of Swadhar Shelter Home running by the petitioners' society. On 10.8.2018, the Additional Chief Secretary, Women Welfare, Government of U.P., Lucknow, issued a letter/order to the Director, Women Welfare, U.P., Lucknow to take action against the societies whose names find place in the said letter, in which, in respect of the petitioners' society, the averments have been made in sub-clause (4) of Clause 19 and certain directions have been issued to the Director (respondent No. 3) to take action against the petitioners' society. 5.
5. In pursuance of the orders dated 10.8.2018, 19.8.2018 and 24.8.2018, the District Prohibition Officer, Sultanpur issued the order dated 15.9.2018, which is impugned in the instant writ petition, by which it has been directed to recover the amount of Rs. 6,72,020/- from the petitioners' society by way of irregularities which was disbursed to the petitioners' society and for the financial year 2017-2018 blacklisted the petitioners' society vide order dated 10.8.2018. 6. On 27.9.2018, time was granted to the respondents to seek instructions in the matter. Thereafter, when the matter was listed on 4.10.2018, the case was listed for hearing in the next cause list. 7. On 29.10.2018, when the matter was listed before the Division Bench consisting of Hon'ble Anil Kumar and Hon'ble Rang Nath Pandey, JJ., it was heard on the application for interim relief. Senior Member of the Bench, after appreciating the submissions of the learned counsel for the parties and the judgments placing reliance upon by the learned counsel for the petitioners, formed an opinion that the order of black-listing dated 10.8.2018 has been passed in utter violation of principle of natural justice as no opportunity of hearing was granted to the petitioners' society prior to passing the impugned orders and, accordingly, ordered to stay the order of black-listing dated 10.8.2018 and also restrained the respondents to make any recovery from the petitioners' society in pursuance to Clause 19(3) of the order dated 10.8.2018 and 15.9.2018 passed by the respondent Nos. 2 and 3, respectively. The relevant paras 9 to 12 reads as under: "9. In the instant matter initially on 27.9.2018, time was granted to the learned State Counsel to seek instruction in the matter. Subsequently, the matter was listed on 4.10.2018. Today, the learned State Counsel submits that in spite of the information sent by him to the opposite party Nos. 2 to 5, no instruction has been received. Accordingly, after hearing the learned Counsel for the parties and going through the record and taking into consideration the averments as made in paragraph No. 5 of the writ petition, I hereby direct that till the next date of listing no recovery shall be made from the petitioner in pursuance to the Clause 19(3) of order dated 10.8.2018 and 15.9.2018 passed by opposite party Nos.-2 and 3 respectively. 10.
10. So far as the order dated 10.8.2018 (Sub-clause (4) of Clause-19) blacklisting the petitioner for one year is concerned, the position which emerges out from the perusal of records that prior to passing of the order of blacklisting no opportunity has been given to the petitioner so in view of the law which is cited by the learned Counsel for the petitioner in regard to blacklisting that prior to passing the order of blacklisting opportunity of hearing is to be given which is the requirement of principles of natural justice because blacklisting involves civil consequences. As such, the impugned order dated 10.8.2018 (Sub-clause-(4) of Clause-19) passed by the opposite party. No. 2 by which the petitioner has been blacklisted, is also stayed till the next date of listing. 11. Learned Counsel for the opposite parties prays for and is granted four weeks' time to file counter-affidavit. Thereafter, two weeks' time is granted to learned Counsel for the petitioner to file rejoinder affidavit. 12. List thereafter." 8. The second Member of the Division Bench did not agree with the aforesaid opinion and ad interim directions and passed a separate order to the prayer of the petitioners' society for grant of interim relief, by which application for interim relief was rejected inter alia on the grounds that the writ petitioners have not brought on record the report dated 7.8.2018 submitted by the Additional Chief Secretary, U.P., Lucknow, which is essential for granting or refusing the interim relief; it would not clear whether before blacklisting the petitioners society, opportunity of hearing was given or not by the District Magistrate, Sultanpur; and further looking into the nature of interim relief sought by the petitioners society, the same appears a final relief, which cannot be granted in the absence of the counter-affidavit. The relevant paras 5 to 7 reads as under:-- "5- The report dated 7.8.2018 submitted by the District Magistrate, Sultanpur is essential for granting or refusing the interim relief sought by the petitioner. The petitioner has not brought on record the report dated 7.8.2018 submitted by the Additional Chief Secretary, U.P., Lucknow. It would not clear whether before blacklisting the petitioner's society, the opportunity of hearing was given or not, by the District Magistrate Sultanpur?
The petitioner has not brought on record the report dated 7.8.2018 submitted by the Additional Chief Secretary, U.P., Lucknow. It would not clear whether before blacklisting the petitioner's society, the opportunity of hearing was given or not, by the District Magistrate Sultanpur? As far as considering the seriousness of allegations levelled against the petitioner, I find that it is not a fit case for providing interim relief and stay the proceedings without inviting counter-affidavit to be filed by the respondents. Further, looking into the nature of interim relief sought by the petitioner the same appears a final relief, hence the relief which is in the nature of final relief cannot be granted without going through the counter-affidavit which is to be filed by the respondents. Hence the application for interim relief is rejected. 6. Learned Counsel for the opposite parties prays for and is granted four weeks' time to file counter-affidavit. Thereafter, two weeks' time is granted to learned Counsel for the petitioner to file rejoinder affidavit. 7. List thereafter." 9. As there was difference of opinion between them in respect of grant of interim relief to the petitioner and, therefore, the matter was directed to be placed before the Hon'ble Chief Justice/Hon'ble Senior Judge for passing appropriate orders under Rule 3 of Chapter VIII of the Allahabad High Court Rules. 10. The Hon'ble Chief Justice, while observing that though no question is formulated to disclose the differing among the members of the Division Bench but looking the existence of differing in grant of interim relief, directed to list the matter before third Judge. The learned third Judge, vide order dated 11.12.2018, looking to the provisions of Section 3 of the Allahabad High Court Rules, 1952 and circumstances of the case, observed that it would be appropriate to get the matter adjudicated by a Larger Bench and accordingly, matter was directed to be placed before the Hon'ble Chief Justice. Thereafter, the Hon'ble Chief Justice passed an order on 17.12.2018 directed for listing of the matter before the instant Full Bench. 11. Hence the instant matter is placed before this Full Bench for hearing. 12. Heard Sri (Dr.) V.K. Singh, learned counsel for the petitioners and Sri Gopal Kumar Srivastava, learned Standing Counsel for respondent Nos. 2 to 5. 13. No one is present on behalf of respondent No. 1. 14.
11. Hence the instant matter is placed before this Full Bench for hearing. 12. Heard Sri (Dr.) V.K. Singh, learned counsel for the petitioners and Sri Gopal Kumar Srivastava, learned Standing Counsel for respondent Nos. 2 to 5. 13. No one is present on behalf of respondent No. 1. 14. Learned counsel for the petitioners' society has submitted that an ex parte order without notice and opportunity of hearing putting the blacklist and debarring the person from work by way of punishment was held to be against all notions of fairness in a democratic country. The exercise of power of "debarment" has a serious effect and has attended the civil consequences. An order of blacklisting has the effect of depriving a person of equality of opportunity in the manner of public contract and in a case where the State acts to the prejudice of a person it has to be supported by legality. The activities of the State having the public element quality must be imbued with fairness and equality. The order of blacklisting has the effect of creating a disability by preventing a person from the privilege and advantage of entering into lawful relationship with the Government therefore fundamentals of fair play would require that the concerned person should be given an opportunity to represent his case before he is put on the blacklist. A fair hearing to the party before being blacklisted thus becomes an essential pre-condition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The applicability of the principle of audi alteram partem and the necessity of issuance of show cause notice also become imperative before passing of any such order of blacklisting. 15. Elaborating his submission, learned counsel for the petitioners has submitted that in the present case, the impugned order of blacklisting having been passed on 10.8.2018 without issuing any show-cause notice to the petitioners' society; without affording opportunity of hearing; and in utter disregard to the principle of audi alteram partem. Furthermore, in respect of filing report dated 7.8.2018, which has been mentioned in the order dated 10.8.2018, he has submitted that no such report has ever been supplied to the petitioners' society nor any opportunity was afforded to the petitioners' society, therefore, the aforesaid documents could not been filed along with the writ petition. 16.
Furthermore, in respect of filing report dated 7.8.2018, which has been mentioned in the order dated 10.8.2018, he has submitted that no such report has ever been supplied to the petitioners' society nor any opportunity was afforded to the petitioners' society, therefore, the aforesaid documents could not been filed along with the writ petition. 16. He also pointed out that twice opportunity was granted to the State as well as the Union of India to take instructions in the matter but the respondents have not put forth any documents in the petition contrary to the plea of the petitioners of not providing any opportunity of hearing prior to passing the impugned orders. In such peculiar circumstances, the Presiding Member of the Division Bench, on placing the urgency by the petitioners, has considered the application for interim relief in its entirety and has rightly passed the interim order dated 29.10.2018 in favour of the petitioners. Therefore, there was no justification to take a different view by another Member of the Division Bench by passing the separate order dated 29.10.2018. 17. In respect of grant of interim relief, learned counsel for the petitioner has also submitted that interim order passed by the Presiding Member of the Division Bench was not by mere asking but the same was granted to the petitioners by considering the facts in its entirety and the fact that despite opportunity being granted, the respondents have not come out with the case that the impugned orders have been passed after complying the principles of natural justice, which shows that the impugned orders have been passed in utter disregard to the principles of natural justice. 18. On query being put to the learned Standing Counsel whether prior to passing the impugned orders, any opportunity of hearing has been provided to the petitioners' society, the learned Standing Counsel did not submit any satisfactory reply. 19. The well-established principles of grant of injunction are that: (i) irreparable injury or damage will ensue before legal right would be established, (ii) comparative hardship or mischief or inconvenience which is likely to occur from withholding the injunction, and (iii) prima facie case. 20. The Apex Court in para 17 of M/s. Kulija Industries Ltd. v. Chief General Manager W.T. Proj.
20. The Apex Court in para 17 of M/s. Kulija Industries Ltd. v. Chief General Manager W.T. Proj. BSNL & others : (Civil Appeal No. 8944 of 2013 arising out of S.L.P. (C) No. 20716 of 2011), decided on 4.10.2013 (Reported in AIR 2014 SC 9 ), has held as under: "17. That apart the power to black-list a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is in our opinion inherent in the party allotting the contract. There is no need for any such power being specifically conferred by statute or reserved by contractor. That is because 'blacklisting' simply signifies a business decision by which the party affected by the breach decides not to enter into any contractual relationship with the party committing the breach. Between two private parties the right to take any such decision is absolute and untrammelled by any constraints whatsoever. The freedom to contract or not to contract is unqualified in the case of private parties. But any such decision is subject to judicial review when the same is taken by the State or any of its instrumentalities. This implies that any such decision will be open to scrutiny not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. A fair hearing to the party being blacklisted thus becomes an essential precondition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The order itself being reasonable, fair and proportionate to the gravity of the offence is similarly examinable by a writ Court. The legal position on the subject is settled by a long line of decisions rendered by this Court starting with Erusion Equipment & Chemicals Ltd. v. State of West Bengal and Anr. (1975) 1 SCC 70 : ( AIR 1975 SC 266 ) where this Court declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the Authority passing any such order was required to give a fair hearing before passing an order black-listing a certain entity. This Court observed : "20. Black-listing has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains.
This Court observed : "20. Black-listing has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the black-list." 21. In the present case, from perusal of the impugned order of blacklisting dated 10.8.2018, we find that there is no whisper of word about providing any opportunity of hearing to the petitioners' society prior to taking action for blacklisting the petitioners' society or any show cause notice was ever issued to the petitioners society. Further, the impugned order of recovery dated 10.8.2018 has been passed on the basis of the order dated 10.8.2018, wherein also not a single word has been stated therein that before passing the impugned order, any opportunity of hearing has been provided to the petitioners society. Thus, prima facie it appears that the impugned order has been passed in utter violation of principles of natural justice. Moreso, learned Standing Counsel has also not disputed the fact that impugned orders have been passed in utter violation of principles of natural justice, despite opportunity being granted to the petitioners society. 22. So far as not bringing on record the report dated 7.8.2018 as mentioned in the order of rejection of interim order dated 29.10.2018, specific stand of the petitioners right from the Division Bench as well as before us that the report dated 7.8.2018 has not been served upon the petitioners and, therefore, there is no question to bring it on record. 23. Considering the aforesaid, we are of the considered view that prima facie material is available in granting the ad interim order, therefore, in our opinion, interim order dated 29.10.2018 passed by Anil Kumar, J. is supported by several decisions of the Court and is, therefore, well settled and, hence, cannot be found fault. Accordingly, we affirm the same. 24. However, we clarify that any observations made hereinabove shall not be influenced by the Division Bench while hearing and disposing the matter finally or any applications and the parties are at liberty to take all the pleas in support of their case.
Accordingly, we affirm the same. 24. However, we clarify that any observations made hereinabove shall not be influenced by the Division Bench while hearing and disposing the matter finally or any applications and the parties are at liberty to take all the pleas in support of their case. If any application for modification of the interim order/stay vacation application along with the counter-affidavit is Med, we hope and trust that the Division Bench shall consider the same, in accordance with law, without influencing any observations made hereinabove. 25. Let the matter be placed for hearing and disposing the matter finally before the regular Division Bench having jurisdiction.