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2020 DIGILAW 282 (GUJ)

Reliance Art Printery (Ahmedabad) Pvt. Ltd. v. State Of Gujarat

2020-02-12

BHARGAV D.KARIA, J.B.PARDIWALA

body2020
ORDER : J.B.PARDIWALA, J. 1. By this writ application under Article 226 of the Constitution of India, the writ applicants have prayed for the following reliefs; “(A) The Hon'ble Court be pleased to issue an appropriate writ, order or direction, setting aside the impugned communication dated 30.09.2019 initiated pursuant to communication dated 06.05.2019 and consequential inquiry proceedings thereof; IN THE ALTERNATIVE (B) The Hon'ble Court be pleased to issue an appropriate writ, order or direction prohibiting further process in the inquiry proceedings as provided under the communication impugned dated 30.09.2019 and initiated vide communication dated 06.05.2019 without following due process and providing the documents sought for by the petitioners; (C) Pending the hearing and final disposal of the petition, the Hon'ble Court be pleased to stay further process and finalization in the inquiry proceedings against the petitioners; (D) Pending the hearing and final disposal of the petition, the Hon'ble Court be pleased to stay further process in the inquiry proceedings pursuant to the communication impugned dated 30.09.2019; (E) ex-parte ad-interim relief in terms of para-27(C) and 27(D) above be granted.” 2. The writ applicant No.1 is a Company engaged in the business of printing. The writ applicant No.2 is one of the directors of the writ applicant No.1-Company. The Company had applied for being awarded a contract of printing work of various posters, folders, booklets, books etc. to be carried out by the Gujarat Council of Education Research & Training (for short “GCERT”) along with six other contractors. The GCERT is here before us as the respondent No.2. The technical bids of the Company and one Gujarat Offset Private Limited alone were found to be qualified. The price bid of both these contractors were opened. It was found that the price quoted by the writ applicant No.1 herein for various printing works was lower than that of the Gujarat Offset Private Limited. Ultimately, the writ applicant No.1 Company was assigned such work and it is not in dispute that the entire work contract has been executed. It also appears that the bills raised by the writ applicant No., time to time, for the work undertaken were also cleared and paid. 3. To put it briefly, thereafter, acting on the report of the CAG, the respondent No.2 thought fit to initiate appropriate proceedings against the writ applicant No.1-Company and its directors. It also appears that the bills raised by the writ applicant No., time to time, for the work undertaken were also cleared and paid. 3. To put it briefly, thereafter, acting on the report of the CAG, the respondent No.2 thought fit to initiate appropriate proceedings against the writ applicant No.1-Company and its directors. It appears that in this regard, a public interest litigation was also filed and the same came to be disposed of by this Court. According to the report of the CAG, the Company recovered an excess amount of Rs.6.90 Crore from the respondent No.2 by indulging into the alleged irregularities or illegalities. In such circumstances, the respondent No.2 thought fit to issue a show-cause notice to the writ applicant No.1-Company calling upon to show-cause as to why the Company should not be blacklisted and why an amount of Rs.6.90 Crore should not be recovered. All these developments took place way back in the year 2016. 4. It appears that Writ Petition (PIL) No.164 of 2015 was instituted in this Court. The said PIL came to be disposed of vide order dated 2nd May, 2016. The order reads thus; “[1] This petition by way of Public Interest Litigation is filed by the applicant seeking direction by way of mandamus directing the respondents to recover the amount which is paid in excess, relating to contract work of printing. [2] When the Government initiated inquiry and issued notice for initiating proceedings for recovery of amount and blacklisting 5th respondent from awarding of contract, he filed Special Civil Application No.2683 of 2016 before this Court. Copy of the order dated 15/03/2016 passed by this Court in Special Civil Application No.2683 of 2016 is produced during the course of hearing. On perusal of the order, it is clear that the Government has initiated proceedings by issuing two notices dated 12.01.2016, one calling upon the 5th respondent to show cause why he should not be blacklisted and another why recovery of sum of Rs.6.90 Crores of alleged overpayment not be recovered. In the aforesaid Special Civil Application, it was the plea of the 5th respondent that he was not supplied relevant materials which was referred in the notices. Accepting such plea, this Court vide order dated 15/03/2016 allowed the petition and remitted the matter back for fresh consideration by the respondent authorities. It is stated that the matter is pending consideration. In the aforesaid Special Civil Application, it was the plea of the 5th respondent that he was not supplied relevant materials which was referred in the notices. Accepting such plea, this Court vide order dated 15/03/2016 allowed the petition and remitted the matter back for fresh consideration by the respondent authorities. It is stated that the matter is pending consideration. We have also perused the affidavit in reply filed in Special Civil Application No.2683 of 2016 sworn by Under Secretary, Education Department. Paragraph nos.5,6 and 7 of the said affidavit reads as under :- 5. It is respectfully stated that the Accountant Genera, Rajkot has pointed out various irregularities committed in the award of the tender and payment made to the petitioner. In view of this, the Department appointed an officer in the rank of Joint Director to hold a preliminary inquiry to look into the matter. However, since the report received by the Department in this behalf was inadequate and incomplete, the preliminary inquiry officer was again asked to submit the complete report. But the same was not forwarded by the preliminary officer even after a lapse of considerable time. In view of this, a Chapter Note was prepared by the Department on the basis of the available details and records, which, in turn was forwarded to the State Vigilance Commission for obtaining its recommendation for fixing individual responsibility of the concerned officers. The recommendation of the State Vigilance Commissioner has been received by the Department recently and the same is under consideration of the Government. Simultaneously, the Education Department, on the basis of the Draft Paragraph dated 6.7.2015 of the Accountant General, Rajkot took a decision to initiate proceedings for banning the petitioner as well as for recovery of the excess payment made to the petitioner and accordingly, respondent no.2 was directed to take steps for banning the petitioner and for recovery of the excess payment to the petitioner. 6. It was under the aforesaid circumstances that the petitioner came to be issued a show cause notice on 12.1.2016 by respondent no.2 herein as to why a recovery of over payment of Rs.6.90 Crore be not effected. 6. It was under the aforesaid circumstances that the petitioner came to be issued a show cause notice on 12.1.2016 by respondent no.2 herein as to why a recovery of over payment of Rs.6.90 Crore be not effected. The said show cause notice was followed by another notice dated 12.1.2016 issued to the petitioner calling upon it to show cause within a period of 7 days as to why a ban of 5 years should not imposed upon the petitioner in the matter of awarding any printing contract to it by the respondent no.2. In response to the aforesaid two show cause notices, both dated 12.1.2016 the petitioner addressed letters, both dated 20.1.2016 to respondent no.2 by stating, inter alia as under :- .... In order to permit us to make such a response and defend ourselves against the allegation raised by you, you re requested to provide us the documents relied upon by you in carrying out the investigation and issuing the show cause notice. You are requested to also provide us with all internal correspondences which may not in your opinion be directly connected to the investigation but may nonetheless by relevant for our defence. Please note without the aforementioned document we will not be in a position to respond of your show cause notice... 7. Thereafter, respondent no.2 informed the petitioner vide communication dated 9.2.2016 by stating, inter alia that a further opportunity is given to provide explanation supported by evidence within a period of 7 days to the above referred two show cause notices. In response to this, the petitioner by its communication dated 15.2.2016 reiterated its objection to the effect that without the supply of relevant documents, it would be difficult and impossible to submit its explanation. In response to this, the petitioner by its communication dated 15.2.2016 reiterated its objection to the effect that without the supply of relevant documents, it would be difficult and impossible to submit its explanation. It appears that the petitioner challenged the said two notices by virtue of the captioned writ petition, wherein this Hon'ble Court was kind enough to pass an order on 19.2.2016 by inter alia observing to the effect that according to the petitioner, the Government has constituted a Committee to look into the Accountant General's objections to the payment made to the petitioner and that no such report from the Government is received so far by the petitioner or at least made available to the Hon'ble Court or to the petitioner in PIL and that the respondent shall not finalise the show cause notice proceedings without the leave of the Hon'ble Court. [3] In view of above initiation of proceedings for recovery of amount and blacklisting of respondent no.5, the grievance in the present petition will not survive. However, in view of the fact that the Government has initiated proceedings, we dispose of this petition with the observation that in the proceedings initiated, appropriate orders will be passed as expeditious as possible.” 5. Our attention has been drawn to one another order passed by the Coordinate Bench of this Court in the Special Civil Application No.2683 of 2016. The order, disposing of the Special Civil Application No.2683 of 2016 dated 15th March, 2016, reads thus; “The petition was filed at the time when the Government had issued two notices, both dated 12.1.2016, one calling upon the petitioner to show cause when the agency should not be blacklisted and another why recovery of sum of Rs.6.90 crores of alleged overpayment not be recovered. On 19.2.2016, we had issued notice making it returnable on 26.2.2016 and prevented the respondents from finalising the said show cause notice concerning the blacklisting. It appears that before this order was served to the respondents, an order was already passed on 20.2.2016 blacklisting the petitioner for a period of five years. Briefly stated, the facts are that the petitioner had applied for being awarded contract of printing work of various posters, folders, booklets, books, etc. to be carried out by Gujarat Council of Education Research and Training (GCERT for short) along with six other contractors. Briefly stated, the facts are that the petitioner had applied for being awarded contract of printing work of various posters, folders, booklets, books, etc. to be carried out by Gujarat Council of Education Research and Training (GCERT for short) along with six other contractors. The technical bids of the petitioner and one Gujarat Offset Private Limited alone were found to be qualified. Price bids of both these contractors were opened. It was found that the price quoted by the petitioner for various printing works was lower than that of Gujarat Offset Private Limited. The petitioner was given such work and has also executed the same. From time to time, the petitioner raised bills of such work done. Such bills were cleared and paid. The entire controversy arises in view of the issue taken up by a public interest petitioner alleging that the petitioner was made gross overpayments. According to such petitioner, the petitioner was paid double the price quoted and agreed between the parties. In short, the controversy is with respect to the rates quoted by the petitioner for printing on two sides of the same page. For example in case of multi-colour posters, folders, etc, the petitioner had quoted Rs.0.27 paise per page for 1000 copies including of cost of papers for single side whereas for the same item, if the printing was to be done on both sides of a page, the petitioner had quoted Rs.0.29 paise. The petitioner contended that such quoting of Rs. 0.29 paise is per page per side and the petitioner was entitled to remainder of Rs.0.58 paise per page when the printing is carried out on both the sides. The Government argues to the contrary and contends that even when the printing was done on two sides of the page, the petitioner was awarded contract at an agreed rate of Rs.0.29 paise per page, printing on both sides. We are not in the present petition inclined to decide this issue. This is only for a reference of central point of controversy which led to allegations and counter allegations. On 12.1.2016, the director of GCERT, issued a show cause notice to the petitioner why the petitioner having claimed and received overpayment of Rs.6.90 crores, the agency should not be blacklisted for a period of five years. This is only for a reference of central point of controversy which led to allegations and counter allegations. On 12.1.2016, the director of GCERT, issued a show cause notice to the petitioner why the petitioner having claimed and received overpayment of Rs.6.90 crores, the agency should not be blacklisted for a period of five years. In response to such notice, the petitioner wrote on 20.1.2016 and stated that in order to permit us to make such a response and defend ourselves against the allegations raised by you, you are requested to provide us the documents relied upon by you in carrying out the investigation and issuing the show cause notice. You are requested to also provide us with all internal correspondences which may not in your opinion be directly connected to the investigation but may nonetheless be relevant for our defense. Please note that without the aforementioned documents we will not be in a position to respond to your show cause notice. We undertake to pay any expenses required of us for carrying out copies of the said documents. In response to such reply, the director of GCERT, conveyed to the petitioner under letter dated 9.2.2016 that the documents are connected with WPPIL No.164/2015 pending before the High Court and, therefore, the same cannot be supplied. The petitioner was however, granted further time of seven days for filing reply, cautioning that if within such time, the reply is not filed, it would be presumed that the petitioner has no further explanation to give and steps for blacklisting the petitioner would be undertaken. In reply to such letter, the petitioner wrote to the director of GCERT on 15.2.2016 and stated as under : We have received your notice dated 12.1.2016 asking us to submitted our explanation towards so called excess payment of Rs6.90 crore made to us by the GCERT regarding printing works done by us. We regret to say that though we requested you to give us the documents based on which you have calculated the sum of RS.6.90 crore so called extra payment made to us by the GCERT by our letter dated 20.1.2016 but you have refused to give us the relevant documents without which it is difficult and impossible to submit our explanation. We here mention that no so called extra payment made to us by the GCERT. We here mention that no so called extra payment made to us by the GCERT. There is some misunderstanding about this issue and we are ready to give our explanation if you believe so. You are requested to give us details working of how calculation of RS. 6.90 crore of additional payment is reach. We also request you to give us at least two weeks period to submit our detail explanation in the matter. Thereupon GCERT without waiting for any further response from the petitioner proceeded to pass the impugned order on 20.2.2016. In such order it was noticed that the petitioner was given time for filing reply which was also extended. However, the petitioner has not filed any reply. It was not desirable to grant any extension. The authorities thereupon passed the final order of blacklisting the petitioner for a period of five years. The petitioner had produced this order and through amendment also challenged the same. Having heard learned counsel for the parties and having perused the documents on record, we find that the authorities have proceeded in somewhat hurried manner to pass the said order of blacklisting. As noted, the petitioner had asked for certain documents. Request for providing such documents was turned down on somewhat curious reason that the documents are connected with a pending public interest litigation and, therefore, cannot be granted. The question of grant or refusal of documents would have to be judged on the basis of its relevance either for the department to establish certain allegations against the petitioner or for the petitioner's defence to refute such allegations and cannot depend on being connected to a pending public interest litigation. When the petitioner asked for further documents and extension of time for filing the reply, the authorities without any further communication proceeded to pass order dated 20.2.2016 holding that it is not advisable to grant any further extension. Least that the director, GCERT could have done was to reject the petitioner's prayer for extension of time and, thereafter, proceeded to pass the order. He instead rejected the request in the same order in which he imposed the blacklisting of the petitioner. For all these reasons, we are inclined to place the matter back before the director of GCERT for reconsideration after giving a reasonable opportunity to the petitioner to defend the allegations. For such purpose impugned order dated 20.2.2016 is quashed. He instead rejected the request in the same order in which he imposed the blacklisting of the petitioner. For all these reasons, we are inclined to place the matter back before the director of GCERT for reconsideration after giving a reasonable opportunity to the petitioner to defend the allegations. For such purpose impugned order dated 20.2.2016 is quashed. The petitioner's request however, for supply of such of the documents as the director of GCERT may consider useful in the petitioner's defence is too vague and general to be accepted. In that context, we have gathered from the counsel for the petitioner as to which precise documents, the petitioner demands. He stated three sets of documents as under : (1) the computation of alleged loss of Rs.6.90 crores. (2) all those documents that the respondents seek to place reliance on for passing any order adverse to the petitioner. (3) The responses of GCERT to the queries raised by the Government. Insofar as the first two sets of documents, they pose no serious complication. GCERT would supply to the petitioner the computation of alleged loss of Rs.6.90 crores. Learned Advocate General stated that the documents that GCERT seeks to place reliance, are already on record. If there is any further document which GCERT seeks to rely, the same shall be supplied to the petitioner. Regarding last set of documents, the prayer of the petitioner is too vague and general. During the course of correspondence, in an issue as complicated as the present one, there is bound to have been detailed questions and answers between the Accountant General and the GCERT. It would not be possible to supply the whole list of such documents. Therefore, if the petitioner latest by 21.3.2016 makes a specific reference to any particular document, the authorities shall either supply the same or site reasons why the same cannot be granted. All the documents whether they fall in set no.1, 2 or 3, shall be supplied latest by 28.3.2016. The petitioner shall file reply to the show cause notice latest by 11.4.2016. It would be thereafter, open for the authorities to take a final decision in accordance with law. Petition is disposed of accordingly.” 6. All the documents whether they fall in set no.1, 2 or 3, shall be supplied latest by 28.3.2016. The petitioner shall file reply to the show cause notice latest by 11.4.2016. It would be thereafter, open for the authorities to take a final decision in accordance with law. Petition is disposed of accordingly.” 6. The Special Civil Application No.2683 of 2016 had to be preferred by the writ applicant No.1-Company as the documents demanded by them for the purpose of meeting with the show-cause notice issued by the respondent No.2 were declined. Ultimately, the Coordinate Bench, while disposing of the Special Civil Application No.2683 of 2016, directed that all the documents shall be supplied by 28th March, 2016. The Company was further directed to file its reply to the showcause notice latest by 11th April, 2016. The Bench clarified that it would be open for the authorities, thereafter, to take a final decision in accordance with law. 7. This litigation also gave rise to one more proceeding in the form of the Special Civil Suit No.231 of 2016 instituted by the writ applicant No.1-Company in the court of the Principal Senior Civil Judge at Gandhinagar against the Accountant General, State of Gujarat and the Director, GCERT. The suit was preferred for declaration and permanent injunction. It appears that the injunction, as prayed for, was declined vide order dated 24th December, 2018 passed by the 8th Addl. Senior Civil Judge, Gandhinagar. It is also brought to our notice that later, the special civil suit instituted by the writ applicant No.1- Company came to be withdrawn. Thus, the proceedings which were initiated in the Civil Court have come to an end. 8. The present writ application had to be filed in the wake of a fresh development. The development is in the form of issue of the impugned communication to each of the Directors of the Company, calling upon them to show-cause for the following; “(1) An amount of Rs.6,90,00,000/- (Rupees Six Crores Ninety Lakhs Only) shall be deposited within a period of seven days from the date of the receipt of the notice to show your bona fide. (2) In case if you fail to comply with the above, you shall explain within a period of seven days as to why action under the Indian Penal Code should not be taken against you with regard to the offence of cheating, betrayal, dishonestly tampering with the documents and the criminal conspiracy to grab the government money. (3) With regard to the details provided in the notice, you shall explain within the prescribed time limit as to why recommendation should not be made to the Government for permanently blacklisting you? (4) If the explanation will not be received within the prescribed time limit, then legal proceedings will be initiated against you by lodging the complaint in accordance with law which will be taken note of. The time limit mentioned in this letter shall be treated as final.” 9. Mr. Kavina, the learned senior counsel appearing for the writ applicant vehemently submitted that the impugned communication dated 6th May, 2019 is not tenable in law. According to the learned senior counsel, there was no good reason for the respondent No.2 to issue such notice to each of the Directors as the adjudication of the first show-cause notice is very much pending before the concerned authority. Mr. Kavina would further submit that it has been almost four years that the authority has not been able to complete the adjudication of the first show-cause notice. The learned senior counsel has one more grievance to redress that although the Coordinate Bench had directed vide order dated 15th March, 2016 to supply all the documents, yet till this date, few of the relevant documents have not been supplied. In such circumstances, referred to above, the learned senior counsel prays that there being merit in this writ application, the same be allowed and the reliefs, prayed for, be granted. 10. On the other hand, this writ application has been vehemently opposed by Mr. Oza, the learned counsel appearing for the respondent No.2 and Mr. Chintan Dave, the learned AGP appearing for the respondent No.1. Mr. Oza would clarify that the impugned communication is not a fresh show-cause notice. He would clarify that as the authority did not find favour with the stand and the reply of the writ applicant to the original show-cause notice, the impugned communication had to be passed. Mr. Chintan Dave, the learned AGP appearing for the respondent No.1. Mr. Oza would clarify that the impugned communication is not a fresh show-cause notice. He would clarify that as the authority did not find favour with the stand and the reply of the writ applicant to the original show-cause notice, the impugned communication had to be passed. Mr. Oza further submitted that the inquiry could not be completed as from 2016 till this date, many frivolous proceedings came to be initiated by the writ applicants in the form of filing of the civil suit etc. However, Mr. Oza, with his usual fairness, submitted that the inquiry pursuant to the original show-cause notice is very much pending and the same shall now be concluded with appropriate orders. Mr. Oza further submitted that all the documents relevant for the purpose of meeting with the show-cause notice have been supplied to the writ applicants. 11. In such circumstances, referred to above, Mr. Oza prays that there being no merit in this writ application, the same be rejected and the interim order passed by this Court be vacated. 12. In rejoinder, Mr. Kavina invited our attention to the letter dated 11th April, 2016 addressed to the Director, GCERT, Gandhinagar, more particularly, the averments made in paras 5.31 and 5.32, which reads thus; “5.31 Thereafter, on making application as directed by the Hon'ble Court, you have provided a number of documents although not all documents as desired and sought for. Neither have you provided the reason for refusal of the documents not provided, as was required in terms of the order of the Hon'ble Court. 5.32 On the basis of the above facts, you have provided a separate sheet showing cancellation of manner of reaching the conclusion that Rs.6,90 Crores were paid to my agency in excess of what should otherwise have been paid. To reach such a conclusion, you have relied upon the reasoning of the Accountant General, Rajkot who has in turn relied upon the reasoning provided by Shri Rajan Amin in his complaint. Such calculation without logic and reasoning is mala fide and improper. On the basis of such fact situation, my submissions are provided below.” ANALYSIS 13. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the impugned communication is tenable in law. Such calculation without logic and reasoning is mala fide and improper. On the basis of such fact situation, my submissions are provided below.” ANALYSIS 13. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the impugned communication is tenable in law. 14. The picture that emerges from the materials on record is that the adjudication as regards the original show-cause notice which came to be issued to the Company way back in the year 2016 is pending as on date with the authority concerned. Those proceedings have not attained finality. It appears that in the original show-cause notice, the Company was called upon to show-cause why it should not be blacklisted and why an amount of Rs.6.90 Crores should not be recovered from the Company. It is but obvious that the Company, being the legal entity, will be represented by its Directors. The Directors of the Company are attending those proceedings. Indisputably, those proceedings are still pending. We are not able to understand that, pending such proceedings, what was the good reason for the respondent No.2 to issue the impugned communication. For the time being, we go by the reply of Mr. Oza that the impugned communication is not in the form of a show-cause notice but it is an intimation to the Directors that the respondent No.2 is not convinced with the case put up by them. Well if that be so, then it is always open for the Authority concerned to complete the inquiry and pass an appropriate order in accordance with law. We may only say that pending the adjudication of the proceedings initiated way back in 2016, there was no good reason to issue the impugned communication. In our opinion, it is nothing but the repetition of the very same thing that has been stated in the first showcause notice. 15. It will be in the fitness of things if the inquiry is concluded at the earliest so that the authority concerned can proceed to pass an appropriate order in accordance with law. A lot has been argued with regard to non furnishing of few relevant documents. The learned senior counsel appearing for the writ applicant would say that the documents have not been furnished. A lot has been argued with regard to non furnishing of few relevant documents. The learned senior counsel appearing for the writ applicant would say that the documents have not been furnished. On the other hand, the learned counsel appearing for the respondent No.2 would say that all the relevant documents have been furnished. 16. We are not going into this issue at this stage. Failure to furnish relevant documents may entail into its own legal consequences. We may only say that the impugned communication is unnecessary and not, at all, relevant for the purpose of the adjudication of the proceedings which are pending as on date. In such circumstances, the impugned communication can be ignored. We have no hesitation in quashing and setting aside the impugned communication. The impugned notification is, accordingly, quashed and set aside. 17. We dispose of this writ application with the following directions; (I) The inquiry which has been initiated way back in the year 2016 pursuant to the show-cause notice issued by the respondent No.2 to the Company shall now be concluded in accordance with law. On conclusion of such inquiry, it shall be open for the authority concerned to pass appropriate order. If the writ applicant No.1-Company and its Directors are aggrieved in any manner by the order that may be passed by the authority concerned, it will be open for them to challenge such order before the appropriate forum in accordance with law. We may only say that the writ applicant No.1-Company and its Directors shall cooperate in the inquiry and see to it that the same is concluded one way or the other. 18. At this stage, we may clarify that quashing of the impugned communication shall not come in the way of the respondent No.2 for the purpose of initiating appropriate proceedings in accordance with law. 19. The petition stands disposed of accordingly.