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2022 DIGILAW 1428 (JHR)

Gautam Construction v. State of Jharkhand

2022-12-21

SUBHASH CHAND, SUJIT NARAYAN PRASAD

body2022
JUDGMENT : Sujit Narayan Prasad, J. 1. This intra court appeal under Clause 10 of the Letters Patent is directed against the order/judgment dated 20.01.2021 passed by learned Single Judge of this Court in W.P.(C) No. 3304 of 2015, whereby and whereunder, while dismissing the writ petition the decision taken by the Executive Engineer, Rural Works Department, Hazaribagh as contained in Letter dated 17.02.2014 appended as Annexure-5 to the writ petition by which the contract entered in between the parties has been rescinded with a recommendation to blacklist the writ petitioner firm, has refused to interfere with the impugned order. 2. The brief facts of the case as per the pleading made in the writ petition required to be enumerated, read as under: The Rural Works Department invited a tender for construction of road from Sukul Katha to Dudhi Garha in which the writ petitioner along with other bidders have participated in which the writ petitioner has been found successful and an agreement No. 36F2 of 2011-12 has been executed in between the writ petitioner and the Rural Works Department on 17.10.2011. It is the case of the writ petitioner that although the agreement was executed on 17.10.2011 but the work order was issued in the month of November, 2011 and immediately thereafter, the writ petitioner company started the construction work. The writ petitioner firm, although had to face difficulties in completion of the construction of the work, has completed 70% of the work. Thereafter, for construction of road, bitumen was required which was to be purchased from the government company like Indian Oil Limited or Hindustan Petroleum etc. for which a permit was required to be issued by the government department but the respondent did not issued permit due to which the rest of the work was not completed. The respondent no.3 vide letter dated 04.01.2014 directed the writ petitioner to appear before him by 15.01.2014 for signing final bill as the department has already published notice in daily newspaper Hindustan dated 30.11.2013 whereby the writ petitioner was informed to sign the final bill on 04.12.2013. It was further informed that if the writ petitioner does not sign the final bill, it will be presumed that it has accepted the measurement and the department will recommend for its blacklisting. It was further informed that if the writ petitioner does not sign the final bill, it will be presumed that it has accepted the measurement and the department will recommend for its blacklisting. It is the case of the writ petitioner that several letter were issued to the respondents to provide permit to enable it to obtain bitumen from the government company and also requested to protect the partners and the employees from the hand of extremist with a further request to provide land in between 4th to 5th km which is Raiyati land and raiyats are obstructing the writ petitioner from connecting the construction over the said land, but, the respondents did not provide with any permit and security. The respondents vide letter dated 04.01.2014 informed the writ petitioner that the agreement shall be rescinded and the writ petitioner would be black listed if it failed to sign the final bill. The writ petitioner vide letter dated 17.10.2014 requested the respondent no.2 to extend the period for completing the work for three months which was duly extended. Thereafter, the respondent no.3 took steps for cancellation of the agreement and directed the writ petitioner to sign the final bill by 04.12.2013 and vide order dated 17.02.2014 has rescinded the agreement and also forfeited the security deposit and also recommended for its black listing without giving the writ petitioner with any opportunity of hearing. 3. It is the grievance of the writ petitioner that even though there is latches on the part of the respondent for not providing bitumen and other infrastructure but without taking into consideration the fact that the work has been initiated and 70% of the work has been completed, bill has been submitted periodically, the money has been disbursed but due to the non-supply of the bitumen, the work could not have been completed in entirety. 4. The writ petitioner has made several requests but instead of resolving the issue the decision was taken by the concerned Executive Engineer vide letter dated 17.02.2014 by which the contract entered in between the parties, has been rescinded with a recommendation to the higher authority to black list the writ petitioner firm. 5. 4. The writ petitioner has made several requests but instead of resolving the issue the decision was taken by the concerned Executive Engineer vide letter dated 17.02.2014 by which the contract entered in between the parties, has been rescinded with a recommendation to the higher authority to black list the writ petitioner firm. 5. The said order has been challenged by the writ petitioner by filing writ petition being W.P.(C) No. 3304 of 2015 and the learned Single Judge has dismissed the writ petition declining to interfere with the impugned order pertaining to rescinding of the contract. However, the action for black listing of the writ petitioner firm is concerned, the same has not been interfere with on the ground that the action was only under contemplation and notice for the said action has already been given to the writ petitioner which the writ petitioner may reply and satisfy the concerned authorities taking the final decision. The legality and propriety of the said order is the subject matter of the instant intra-court appeal. 6. Mr. Kalyan Roy, learned counsel for the appellant-writ petitioner has submitted that the learned Single Judge while refusing to interfere with the rescinding of the contract has not appreciated the following facts : (i) The hindrance which the writ petitioner has suffered due to non-co-operation on the part of the respondents pertaining to supply of bitumen and other infrastructure has not properly been appreciated even though the same was specifically taken as a ground for non-execution of the work in entirety; (ii) The writ petitioner, although was called upon to participate in the measurement, however, he failed to appear and taking it as a ground, the contract has been rescinded but before doing that the writ petitioner has not been provided with an opportunity of hearing as would appear from the bare reading of the impugned order contained in letter dated 17.02.2014. 7. Mr. Roy, learned counsel for the writ petitioner, in the aforesaid backdrop, has submitted that the order passed by the learned Single Judge suffers from infirmity, as such, the same may be quashed and set aside. 8. Per contra, Mr. 7. Mr. Roy, learned counsel for the writ petitioner, in the aforesaid backdrop, has submitted that the order passed by the learned Single Judge suffers from infirmity, as such, the same may be quashed and set aside. 8. Per contra, Mr. P.A.S. Pati, learned counsel for the respondent-State of Jharkhand has submitted by referring to the stand inter alia taken in the counter affidavit that it is incorrect on the part of the writ petitioner to take the ground that there is non-co-operation on the part of the State authority rather the concerned department of the State of Jharkhand has given full co-operation but it is the slackness on the part of the writ petitioner the work in entirety could not have been completed. It has been contended that the writ petitioner has also not co-operated in the measurement of the work since on repeated request made to participate in the measurement of the work so that the money can be cleared, it is the writ petitioner who has chosen not to appear in the measurement which itself suggest that the writ petitioner was not at all sincere in execution of the work in entirety. It has further been contended that even his appearance for the measurement has been notified in the newspaper even though the writ petitioner has chosen not to appear. The authority in the backdrop of the non-co-operation on the part of the writ petitioner has taken decision vide letter dated 17.02.2014 to rescind the contract entered in between the parties. The recommendation has also been made to the higher authority to black list the writ petitioner firm. The administrative authority while taking such decision has taken into consideration the conduct of the writ petitioner who has failed to discharge his duties in completion of the work since the issue involved herein is of construction/repairing of the road. 9. Mr. Pati, learned counsel for the respondent has submitted that since there is non-co-operation on the part of the writ petitioner and if on that account, the decision has been taken by the authority to rescind the contract so as to allot the work in favour of other bidder for the purpose of completion of the work so that the people at large may not suffer, the decision cannot be said to suffer from error. The learned Single Judge after taking into consideration these aspects of the matter if not interfered with the impugned order, the same cannot be said to suffer from error. 10. In response, Mr. Roy, learned counsel for the writ petitioner has submitted that even accepting the fact which has been raised by the respondent to be true, but from bare reading of the impugned decision, there is no reference of what has been orally argued by the learned State counsel before this Court. It has been submitted that if that be so, it should have been referred in the impugned decision but in absence thereof, the same cannot be allowed to improve the decision which has been taken by the authority. It has further been submitted that there is no response on the part of the State either in the counter affidavit or there is no oral response as to whether before rescinding the contract, the writ petitioner has been issued with the show cause notice and in absence if there is no show cause, the rescinding of the contract will be said to be absolutely improper and unjustified decision of the authority but the learned Single Judge has not appreciated these aspects of the matter, therefore, the order requires interference. 11. We have heard the learned counsel for the parties, perused the documents available on record as also the finding recorded by the learned Single Judge. 12. The fact which is not in dispute in this case is that in pursuance of the notice inviting tender, the work has been allotted in favour of the writ petitioner for the purpose of construction of road from Sukul Katha to Dudhi Garha. The writ petitioner has been awarded with the work on being found L-I bidder and thereafter, the work has been commenced since it is the case of the parties that 70% of the work has been executed. The dispute arose after completion of 70% of the work since the ground has been taken by the writ petitioner that there was no supply of bitumen and other infrastructure and even the permit was not issued to carry out the bitumen from the Oil Refinery by the concerned authority. 13. The dispute arose after completion of 70% of the work since the ground has been taken by the writ petitioner that there was no supply of bitumen and other infrastructure and even the permit was not issued to carry out the bitumen from the Oil Refinery by the concerned authority. 13. While, on the other hand, the said aspect of the matter has been disputed by the learned State counsel and submission has been made that the writ petitioner has been called upon to participate in the measurement, however, the writ petitioner has not participated at the time of measurement for preparation of final bill. 14. It is the grievance of the respondents that the writ petitioner has been called upon to participate in the measurement time and again but he has chosen not to appear which compelled the concerned department of the State of Jharkhand to publish in the newspaper for securing his appearance in the measurement of the work already executed. The respondent-authority, thereafter, came out with the decision taken as contained in letter dated 17.02.2014 by which the contract has been rescinded and the recommendation has been made to black list the writ petitioner firm. The said order has been challenged by the writ petitioner filing writ petition being W.P.(C) No. 3304 of 2015 and the same having been dismissed, the instant intra-court appeal has been preferred. 15. The writ petitioner has vehemently raised the issue of no-observance of principles of natural justice by making reference of paragraph-26 of the writ petition wherein it has been pleaded that the decision has been taken by the authority while rescinding the contract without giving due opportunity of hearing. 16. Counter affidavit has been filed in the writ petition by giving para-wise reply. In the counter affidavit, at paragraph-51, statement has been made disputing the statement made at paragraph-26 of the writ petition by the writ petitioner. 17. This is the main argument of the learned State counsel that the aforesaid statement has been denied, therefore, the ground has been taken that it cannot presumed that the decision to rescind the contract has been taken without following the principles of natural justice. 18. 17. This is the main argument of the learned State counsel that the aforesaid statement has been denied, therefore, the ground has been taken that it cannot presumed that the decision to rescind the contract has been taken without following the principles of natural justice. 18. This Court, after hearing the learned counsel for the parties on this issue, is of the view that even accepting what has been contended on behalf of the State by placing reliance upon the statement made at paragraph-51 of the counter affidavit to be true, the question would be that such stand has been taken in the counter affidavit but is not available in the impugned order, can it be allowed to be made part of the impugned decision. 19. The position of law is well settled right from the judgment pronouncement by the Hon'ble Apex Court in Mohinder Singh Gill and another vs. The Chief Election Commissioner, New Delhi and others, (1978) 1 SCC 405 in paragraph 8 as under : “8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji: “Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.” Orders are not like old wine becoming better as they grow older.” In the case of East Coast Railway vs. Mahadev Appa Rao, (2010) 7 SCC 678 : (2010) 2 SCC (L&S) 483, at page 682, it has been held as under : “9. There is no quarrel with the well-settled proposition of law that an order passed by a public authority exercising administrative/executive or statutory powers must be judged by the reasons stated in the order or any record or file contemporaneously maintained. It follows that the infirmity arising out of the absence of reasons cannot be cured by the authority passing the order stating such reasons in an affidavit filed before the court where the validity of any such order is under challenge. The legal position in this regard is settled by the decision of this Court in Commr. of Police v. Gordhandas Bhanji wherein this Court observed: (AIR p. 18, para 9) “9. … public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.” In the case of United Air Travel Services vs. Union of India, (2018) 8 SCC 141 , at page 146 it has been held as under : “11. The learned counsel for the petitioner has, thus, rightly drawn our attention to the Constitution Bench judgment of this Court in Mohinder Singh Gill v. Chief Election Commr., to submit that such a plea cannot be accepted. We may note that this is a well-settled legal position in many judicial pronouncements of this Court, but it is not necessary to revert to the same. In para 8 of the aforesaid judgment, V.R. Krishna Iyer, J., in his inimitable style states as under: “8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji4: (AIR p. 18, para 9) 9. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji4: (AIR p. 18, para 9) 9. …public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.’ Orders are not like old wine becoming better as they grow older.” It is evident from the proposition laid down by the Hon'ble Apex Court in the judgments referred hereinabove that the reason which has not been assigned in the impugned order by the authority cannot be allowed to be supplemented by way of affidavit. 20. Here, in the given facts of the case, the learned State counsel is trying to impress upon the Court that the statement made at paragraph-51 of the counter affidavit be treated to be a part of the impugned decision, which according to the considered view of this Court and as per the proposition laid down by the Hon'ble Apex Court in the judgments referred hereinabove, is not permissible. This Court, has considered the impugned decision wherefrom it is evident that the contract has been rescinded on the ground that the writ petitioner has failed to participate in the measurement of the work already executed which admittedly the writ petitioner has not participated, which led the authority to rescind the contract. The question herein is that when the parties have entered into a contract by which the right has been accrued to the party concerned, either to the writ petitioner litigant or the respondent, if the right has been accrued to the parties and it is being recalled or rescinded or terminated, it is the bounded duty of the authority to provide opportunity of hearing before taking such decision. It is also bounded duty of the concerned authority that if the show cause notice is being issued, the same be referred irrespective of the fact that whether the reply has been filed or not. If the reply has not been filed then there must be reference of the show cause in the impugned decision thereafter the concerned authority is to proceed further by taking note that in spite of the opportunity having been provided to the concerned party, he has chosen not to appear. And if the reply has been filed in pursuance of the show cause notice, then there must be consideration for the purpose of taking decision either way, i.e., in favour of the litigant or against the litigant, then only, it will be said to be proper consideration of the reply but from bare perusal of the impugned order, there is no reference of any show cause, save and except, the reference of the paper publication for securing the appearance of the writ petitioner for measurement of the work executed. 21. It further appear from the impugned decision that the respondent authorities have come to conclusion that the work has not been completed, thereafter, the earnest money has been forfeited and in furtherance to the same, the contract has been rescinded. 22. This Court has posed a pin pointed question upon Mr. Pati, learned counsel for the respondents to demonstrate as to whether any show cause has been given to the writ petitioner or not. Mr. Pati, learned counsel with all fairness has submitted by referring to the impugned order that since there is no reference of any show cause notice in the impugned order, it cannot be said that the show cause notice was issued prior to issuance of the order of rescinding of the contract. Thus, it is evident, that before rescinding the contract no show cause notice has been issued 23. Thus, it is evident, that before rescinding the contract no show cause notice has been issued 23. This Court, after having discussed the fact in entirety, has considered the order passed by the learned Single Judge and has found therefrom that the learned Single Judge has not considered this aspect of the matter even there was specific pleading to that effect as would appear from paragraph-9 to the impugned order wherein it has been stated that the writ petitioner firm themselves did not complete the work within the prescribed time and he also avoided the letters and press notices given by the respondent authorities. The writ petitioner firm was also given opportunities to appear for signing the final bills, but the same were also avoided and the writ petitioner did not appear in spite of the notices, which led the learned Single Judge to come to the conclusion that the impugned decision of the respondent-authority requires no interference. But the learned Single Judge has failed to appreciate that the reference of the show cause notice as has been incorporated in the impugned letter is for the purpose of securing the appearance of the writ petitioner for measurement of the work already executed. 24. Even accepting that the writ petitioner has not participated in the measurement of the work, in that circumstances, authority could have made up its mind to rescind the contract and thereafter to issue show cause notice to the writ petitioner but this aspect of the matter has not been considered, therefore, according to the considered view of this Court, the learned Single Judge while passing such order has not appreciated the requirement of principles of natural justice. 25. So far as the finding recorded by the learned Single Judge to the effect that the order of black listing has not yet reached to the final stage since there is recommendation before the higher authority to black list the writ petitioner firm, as such, the same has been held to be pre-mature. The said part of the order, according to the considered view of this Court, suffers from no error. However, the part of the order by which the learned Single Judge has refused to interfere with the impugned order, the same requires interference. 26. Accordingly, the order passed by the learned Single Judge dated 20.01.2021 is quashed and set aside. The said part of the order, according to the considered view of this Court, suffers from no error. However, the part of the order by which the learned Single Judge has refused to interfere with the impugned order, the same requires interference. 26. Accordingly, the order passed by the learned Single Judge dated 20.01.2021 is quashed and set aside. In consequence thereof, the decision of the authority as contained in letter dated 17.02.2014 appended as Annexure-7 to the writ petition is quashed and set aside, as such, the writ petition stands allowed. 27. It requires to refer herein that since this Court has interfered with the impugned decision on the ground of violation of principles of natural justice, therefore, if there is any allegation upon the writ petitioner, the same is to be given a logical end and the logical end can only be given if there will be a decision to that effect by the authority. The decision to be taken on that ground requires appreciation of the reply to be filed by the writ petitioner for which a show cause notice is necessary. 28. It is settled position of law that on technicality, no one can be allowed to take advantage, therefore, the matter is required to be remitted before the authority. 29. Accordingly, the matter is remitted before the respondent no.3-Executive Engineer. The concerned authority will issue show cause notice to the writ petitioner within a period of two weeks from the date of receipt/production of the copy of this order. The writ petitioner, immediately on receipt of the notice, will furnish his reply within a further period of three weeks and the concerned authority will take decision within a further period of two weeks strictly in accordance with law. 30. Needless to say that if the reply will not be furnished by the writ petitioner, it is left open upon the respondents to take decision in accordance with law. 31. With this observations and directions, the instant appeal stands allowed, accordingly disposed of.