Atts Associates v. Bharat Petroleum Corporation Ltd.
2022-10-11
MANOJ MISRA, VIKAS BUDHWAR
body2022
DigiLaw.ai
JUDGMENT : 1. We have heard Sri Udit Chandra for the petitioner and Sri Puneet Agarwal for the respondents 1 to 5. 2. At the outset, the learned counsel for the petitioner invited our attention to paragraph no.1 of the writ petition to indicate that first petition on the present cause of action was withdrawn with liberty to file a fresh petition therefore, the second petition is maintainable. It be observed that the first petition i.e. Writ C No. 34659 of 2021 was pending when this second petition was filed, however, by the time this second petition was filed, an application had already been filed to withdraw the previous petition and this fact was disclosed in this petition. In these circumstances, we deem it appropriate to address this petition on merit as any view to the contrary may render the petitioner remediless. 3. The relevant facts of the case are as follows: The petitioner is a firm engaged in the business of transportation of petroleum products. On an invite by Bharat Petroleum Corporation Ltd (for short the Corporation) to settle a contract for transportation of its products, the petitioner submitted a bid and was declared successful. Pursuant to which, an agreement was entered into between the petitioner and the Corporation on 16.01.2018, initially, in respect of engagement of 5 vehicles, which was subsequently enhanced to 14, for a period of 5 years. During the period of engagement, on 03.10.2021 a vehicle (Tank Lorry No. UP 85 BT 6975) was seized by the police on charge of pilferage of petroleum products. An FIR was also lodged, followed by impugned notices dated 3.10.2021 (Annexure no.1 to the petition) and 6.10.2021 (Annexure no.2 to the petition), which culminated in passing the impugned order dated 9.12.2021 (Annexure 3 to the petition). The petitioner seeks quashing of the notices dated 03.10.2021 and 06.10.2021; and the order dated 09.12.2021 by which, for breach of the terms and conditions of the agreement between the petitioner and the corporation, the petitioner has been visited with penal action as enumerated below:- "1. Damages of Rs. 1 lac. 2. Forfeiture of Security deposit of all tank lorries amounting to Rs. 5 lacs. 3. Termination of Transport Agreement BPCL/ NR/ POL/BULK/ 2016-21/ Mathura dated 16.01.2018, with immediate effect, including blacklisting the entire fleet along with crew of following 14 tank lorries on Industry basis for a period of 5 years.
Damages of Rs. 1 lac. 2. Forfeiture of Security deposit of all tank lorries amounting to Rs. 5 lacs. 3. Termination of Transport Agreement BPCL/ NR/ POL/BULK/ 2016-21/ Mathura dated 16.01.2018, with immediate effect, including blacklisting the entire fleet along with crew of following 14 tank lorries on Industry basis for a period of 5 years. The period of blacklisting shall be effective from 03.10.2021 to 02.10.2026. SL TL Regn No. TL Cap (KL) Engine No. Chasis No. 1. UP85BT5985 20.00 41K84186239 MAT448022EAN1039 1 2. UP85BT5432 20.00 591803111L84027599 MAT448030B7N53211 3. UP85BT5986 20.00 41K84188654 MAT448022E5N12567 4. UP85BT6455 20.00 41K84187223 MAT448022EAN1033 5 5. UP85BT6155 20.00 41K84187367 MAT448022EAN1033 9 6. UP85BT6975 20.00 11C63106431 MAT448050B0C05536 7. UP85BT8535 20.00 91F84890128 MAT44861K0G09311 8. UP30A8585 20.00 697TC5MSZ155320 444026MSZ021199 9. UP86T0831 20.00 ZFH376636 ZFE80601 10. UP85U9216 20.00 697TC57DRZ121618 444026DRZ008569 11. UP14CT2647 20.00 11D84003889 MAT448050BOE09293 12. UP85U9996 20.00 697C58BQZ106256 46910191D08923 13. UP85V9036 20.00 697TC58BQZ102603 46910BQZ104177 14. NL01N4181 24.00 BEFZL14675 MA1PFALBCF6L48523 4. A preliminary objection has been raised by the learned counsel for the corporation with regard to maintainability of the writ petition as there exists an alternate dispute resolution mechanism (ADR mechanism) in the agreement between the parties. In response thereto, the learned counsel for the petitioner submitted that the order of blacklisting affects the fundamental right of the petitioner guaranteed under Article 19(1) (g) of the Constitution of India and is in violation of the principles of natural justice, inasmuch as, the notices that form the basis of the order do not conform to the requirement of law, both in content and form, as they fail to put the petitioner on guard that an order of blacklisting is contemplated against it. In such circumstances, it is contended, existence of an alternative remedy is no bar to the exercise of writ jurisdiction. 5.
In such circumstances, it is contended, existence of an alternative remedy is no bar to the exercise of writ jurisdiction. 5. With regard to the preliminary objection, we are of the view that since the order of blacklisting the entire fleet of the petitioner firm affects the fundamental right of the petitioner guaranteed under Article 19(1)(g) of the Constitution of India and it is claimed to have been passed in violation of the principles of natural justice, in light of the law laid down by the Supreme Court in Whirlpool Corporation v. Registrar of Trade Marks, (1998) 8 SCC 1 (followed in Radha Krishan Industries v. State of H.P., (2021) 6 SCC 771 , paragraph 27.3), we overrule the preliminary objection as regards maintainability of the writ petition to the extent it questions the order of blacklisting. However, in respect of other penalties, the petitioner may take recourse to the ADR mechanism available under the agreement. We, therefore, propose to address only the issue of blacklisting. For rest of the issues, the petitioner may take recourse to other alternative remedies. 6. On the issue of blacklisting, Sri Udit Chandra, learned counsel for the petitioner, invited our attention to the impugned notices dated 03.10.2021 and 06.10.2021 to demonstrate that neither of the two notices unequivocally inform the petitioner that if the explanation submitted by the petitioner on the allegations made therein is found not satisfactory, the entire fleet of vehicles of petitioner’s firm shall be blacklisted on industry basis. On that basis, it is urged, the order of blacklisting is bad in law. 7. To test the aforesaid submission it would be apposite to notice the contents of the two notices. The relevant portion of the notice dated 03.10.2021 is reproduced below:- “Sub: Tank Lorry no. UP85BT 6975 caught by police while pilfering the product. Your tank lorry no. UP85BT 6975 which is in transport contract with BPCL Mathura. This tank lorry was despatched vide invoice no. 1100883752 dated 03.10.2021 to M/s Sunil Yogesh filling stn. with 5 kl MS & 15 KL HSD A phone call received from mob no. 918077105018 from police station IOCL refinery that the subject tank lorry caught by police while pilfering the product from the tank lorry.
This tank lorry was despatched vide invoice no. 1100883752 dated 03.10.2021 to M/s Sunil Yogesh filling stn. with 5 kl MS & 15 KL HSD A phone call received from mob no. 918077105018 from police station IOCL refinery that the subject tank lorry caught by police while pilfering the product from the tank lorry. If this information is correct then it is a violation of transport agreement and ITDG which you had signed with the corporation and company may take action against the tank lorry as well as your transport. As per the following clauses of ITDG ITDG Clause No Description Penal action as per ITDG 8.2.2.8 Established case of pilferage/non-delivery of product TT shall be blacklisted 8.2.2.16 Any act of the carrier/carrier’s representative that may be harmful to the good name/ image of the oil company, its product or its services As decided by the company Provide your explanation for violation of your subject tank lorry.” 8. The relevant portion of the second notice dated 06.10.2021 is extracted below:- “Subject: Show Cause Notice- Established Malpractrice in your Tank Lorry no. UP 85BT 6975” Reference: Tender Ref: BPCL /NR /POL /BULK /2016-21/ MATHURA AND OIL INDUSTRY TRANSPORT DISCIPLINE GUIDELINES (VER 4.0) Dear Sir/Madam In continuation of our mail dated 03.10.2021, when it was informed to you that your tank lorry number UP 85 BT 6975 was caught by police wherein crew of the tank lorry Sri Bhagwan Singh S/o Sri Raja Ram was pilfering product at an unauthorised stoppage. Police reported that duplicate key also recovered from him. This tank lorry was loaded from Mathura installation with 5 kl MS & 15 KL HSD on 03.10.2021 to M/s Sunil Yogesh filling station, Bajna, District Mathura (cc number 171590) vide invoice no. 1100883752. The following clauses of Oil Industry Transport Discipline Guidelines (Ver 4.0) have been violated inter alia:- 8.2.2.2 (a) Established unauthorized stoppage en-route 8.2.2.8 Established case of pilferage/non-delivery of product 8.2.2.11 Tampering with the standard fittings of TT including the sealing, security Locks, security locking system. 8.2.2.16 Any act of the carrier/carrier’s representative that may be harmful to the good Name/image of the oil company, its products or its services. 8.2.
8.2.2.16 Any act of the carrier/carrier’s representative that may be harmful to the good Name/image of the oil company, its products or its services. 8.2. 2: llegal/ unauthorized duplicate keys of security locks” FIR is also lodged having the number 0386 dated 03.10.2021 under IPC 1860, section 379, 411 and 120-B. It is clearly mentioned in the FIR that tank lorry was caught near gate no. 9 of IOCL refinery and TT crew Shri Bhagwan Singh S/o Shri Raja Ram is one of the main accused in this case. A video also shared by the police about this incident Viewing above, it is clear that you have failed to keep your obligations under the aforesaid OITD Guidelines/Agreement entered by in between us inter alia causing breach of the same. You are required to submit your reply in writing within 7 days as to why action against you should not be taken for the violations as per Oil Industry Transport Discipline Guidelines under Clause 8.2.2.2 (a), 8.2.2.8, 8.2.2.11and 8.2.2.16and 8.2(PointNo.2).” 9. The contention of the learned counsel for the petitioner is that admittedly it was the first violation alleged; that according to Clause 8.2.2.2(a) of Oil Industry Transport Discipline Guidelines (OITDG) in respect of first violation, penalty prescribed is suspension of TT for three months (Note: The term ‘TT’ stands for Tank Truck/Tank Lorry vide Clause 1.1 of OITDG). Clause 8.2.2.8 of OITDG, in case of first violation, provides for blacklisting of TT; Clause 8.2.2.11, in respect of first violation, provides for blacklisting of TT; Clause 8.2.2.16 does not specify any penalty but declares that the penalty may be as decided by the Corporation; and Clause 8.2.2 is non specific in the sense that it is a general provision describing various penalties for malpractices/irregularities. Consequently, the notices did not specifically speak of blacklisting and neither Clause 8.2.2.2 (a) nor Clause 8.2.2.8 or Clause 8.2.2.11 or Clause 8.2.2.16, recited in the notice, provides for blacklisting the entire fleet of the transporter, hence the order of blacklisting is in violation of the principles of natural justice and does not meet the requirement of a valid notice as per the law laid down by the Apex Court in Gorkha Security Services v. Government (NCT of Delhi), (2014) 9 SCC 105 followed in UMC Technologies Private Limited v. Food Corporation of India and another,2021(2) SCC551. 10.
10. Per contra, Sri Puneet Agarwal, who appears for the respondent-corporation, submitted that since the relevant provisions under which penalty of blacklisting can be imposed have been recited in the notice and the malpractices mentioned in the notice are such where penalty of blacklisting the entire fleet can be imposed, the petitioner being privy to the contract and aware of applicability of the Oil Industry Transport Discipline Guidelines (OITDG), no prejudice has been caused to the petitioner for mere omission to state in the notice that if the reply of the petitioner is not satisfactory, the petitioner would be blacklisted. In support of his submission, the learned counsel for the respondent-corporation has invited our attention to Clause 8.2 of the OITDG which specifies the penalties for malpractices/irregularities. Clause 8.2 of OITDG is extracted below:- “8.2. Penalties for malpractices/irregularities 8.2.1 Malpractices/irregularities will cover any of the following: a. Unauthorized deviation from specified route/unauthorized delay/unauthorized en-route stoppage/not reaching destination/over speeding/ en-route switching off VMU/unauthorized removal of VMU/use of VMU on other vehicles. b. TT crew found in intoxicated state while on duty. c. Irregular reporting of TT at loading location without permission of the location. d. Refusal to carry loads allocated by the location. e. Reported case of non-wearing of retractable seat belt while driving. f. Driving vehicle without cleaner/helper. g. Non-functioning of Fire Extinguisher carried by TT. h. Polluting environment due to product spillage from tilting or leaky vehicles on road, in case of accident/unsafe driving. I. Accident involving injury or damages to the facilities at the work place. j. Fatal accident at the work place. k. Tampering with standard fittings of TT including the sealing, security locks, security locking system, calibration, Vehicle Mounted Unit or its fittings/fixtures. l. Unauthorized use of TT for products other than the petroleum products for which it has been engaged. m. Entering into contract based on forged documents/false information. n. Entering into an agreement for the same TT with other oil companies. o. Irregularities under W & M Act. p. Not lodging FIR with the Police in case of accident, not informing/submitting accident report to the Oil Company about the accident. q. Pilferage/short delivery of product. r. Any act of the carrier/carrier’s representative that may be harmful to the good name/image of the Oil Company, its’ products or its services.
o. Irregularities under W & M Act. p. Not lodging FIR with the Police in case of accident, not informing/submitting accident report to the Oil Company about the accident. q. Pilferage/short delivery of product. r. Any act of the carrier/carrier’s representative that may be harmful to the good name/image of the Oil Company, its’ products or its services. 8.2.2 Penalties upon detection of malpractice/irregularities The carrier shall attract penalties for the malpractice/irregularities as given below and the TT mentioned in the following instances shall be suspended/blacklisted along with TT crew. However, an investigation, wherever required, shall be conducted and if the malpractice/irregularity is established then penal actions stipulated as under shall be taken, including blacklisting: Clause No. Type of malpractice/ irregularity Penalty against number of instance First Second Third 8.2.2.1 (a) Reported non-wearing of retractable seat belt while driving. (b) Repetitive/Habitual Over speeding. (c) Driving vehicle without cleaner/helper. TT shall be suspended for one week TT shall be suspended for 3 months. TT shall be blacklisted. 8.2.2.2 (a) Established repetitive un-authorized stoppage en-route. (b) Established repetitive unauthorized diversion from specified route. (c) Refusal to carry loads allocated by the location. (d) Irregular reporting of TT at loading location without permission of the location TT shall be suspended for 3 months. TT shall be blacklisted. 8.2.2.3 Short delivery of product for established malpractice. TT shall be blacklisted 8.2.2.4 (a)Non-availability/nonfunctioning of TT fire extinguisher (b)TT crew found in intoxicated state while on duty. (c) Not wearing uniform. (d) Not wearing PPEs at loading/un-loading locations. TT shall be suspended for one week. TT shall be suspended for 3 months TT shall be blacklisted. 8.2.2.5 (a) Established tampering/damaging of VMU. (b) Established disconnection of power/ cable of VMU enroute. (c) Removal of VMU from original mounting TT shall be blacklisted. 8.2.2.6 Accident at the location leading to injury of persons or damages to the facilities. TT shall be suspended for 3 months. TT shall be blacklisted. 8.2.2.7 Polluting environment due to product spillage from TT TT shall be suspended for 3 months TT shall be blacklisted. 8.2.2.8 Established case of pilferage/non-delivery of product TT shall be blacklisted. 8.2.2.9 Fatal accident at the work place. TT shall be blacklisted 8.2.2.10 Irregularities under W&M Act. TT shall be blacklisted. 8.2.2.11 Tampering with standard fittings of TT including the sealing, security locks, security locking system, Calibration. TT shall be blacklisted.
8.2.2.8 Established case of pilferage/non-delivery of product TT shall be blacklisted. 8.2.2.9 Fatal accident at the work place. TT shall be blacklisted 8.2.2.10 Irregularities under W&M Act. TT shall be blacklisted. 8.2.2.11 Tampering with standard fittings of TT including the sealing, security locks, security locking system, Calibration. TT shall be blacklisted. 8.2.2.12 Unauthorized use of TT outside the contract. TT shall be blacklisted. 8.2.2.13 Entering into contract based on forged documents/false information. TT shall be blacklisted. 8.2.2.14 Entering into an agreement for the same TT with other oil companies. TT shall be blacklisted. 8.2.2.15 5 Not lodging FIR with the Police in case of accident, not informing/ submitting accident report to the Oil Company about the accident. TT shall be blacklisted. 8.2.2.16 Any act of the carrier/carrier’s representative that may be harmful to the good name/image of the Oil Company, its’ products or its services. As decided by the company During the validity of transportation contract, in the first instance of blacklisting for a transporter, as per the above provisions, damage of Rs. 1 lakh will be imposed on the Transporter apart from blacklisting of the involved TT. In second instance of blacklisting, a damage of Rs. 3 lakhs will be imposed and the involved TT will be blacklisted. In third instance of blacklisting, a damage of Rs. 5 lakhs will be imposed and 25% of the remaining TTs will be blacklisted along with the involved TT. In fourth instance, a penalty of Rs. 8 lakhs will be imposed and 50% of remaining TTs will be blacklisted along with involved TT. In case of any further incident of malpractice, the entire fleet will be blacklisted and the SD will be forfeited and the transportation contract will be terminated. The percentage of TT blacklisted will be in proportion of own and attached offered and will be rounded off to the higher numerical. Above damages imposed are in addition to the recovery of the product quantity found short or recovery due to contaminated product involving the cost of product, expenses and losses incurred as determined by the company. However, in case, complicity of the transporter is established even in the first instance of malpractice, the entire fleet will be blacklisted, contract terminated & carrier blacklisted along with forfeiture of SD. The blacklisting of TTs shall be on industry basis.
However, in case, complicity of the transporter is established even in the first instance of malpractice, the entire fleet will be blacklisted, contract terminated & carrier blacklisted along with forfeiture of SD. The blacklisting of TTs shall be on industry basis. In the following irregularities, the complicity of the carrier shall be deemed to be existent and the whole contract comprising of all the TTs belonging to the concerned carrier shall be terminated, security deposit forfeited and the concerned carrier & their all TTs shall be blacklisted on industry basis: 1. False/hidden compartment, unauthorised fittings or alteration in standard fittings affecting quality and quantity 2. Illegal unauthorised duplicate keys of security locks. 3. Duplicate dip rod/ calibration chart” 11. Relying on the aforesaid clauses, the learned counsel for the respondent-corporation submitted that it is clearly mentioned in the notice that penalty provided in Clause 8.2.2 can be imposed and when all the penalties specified therein are taken into account, one would notice that it includes the penalty of blacklisting of TTs on industries basis. Therefore, it cannot be said that the petitioner was not aware of the consequences that would ensue if its reply was found non-satisfactory. It has also been argued by the learned counsel for the corporation that in Gorkha Security Services v. Government (NCT of Delhi) (supra) it has been clarified by the Apex Court that even if it is not specifically mentioned in the show cause notice yet, if it can be clearly and safely discerned that such penalty could be imposed, it would be sufficient compliance of the principles of natural justice. It has, therefore, been urged that as the petitioner was aware of the penalties which could be imposed under various clauses of clause 8.2.2, there was sufficient compliance of the principles of natural justice. More so, when penalty for having a duplicate key is blacklisting of TTs on industry basis. It was therefore prayed that the petition be dismissed with liberty to the petitioner to avail the alternative remedy available under the contract. 12.
More so, when penalty for having a duplicate key is blacklisting of TTs on industry basis. It was therefore prayed that the petition be dismissed with liberty to the petitioner to avail the alternative remedy available under the contract. 12. Having noticed the rival submissions, the contents of the notices and the relevant clauses of OITDG, before we proceed to examine the weight of the respective submissions, it would be pertinent to observe that it is trite law that where an order having penal consequences is passed in violation of the principles of natural justice then existence of an alternative remedy is not an impediment in exercise of the writ jurisdiction. Therefore, what we have to examine is whether the order blacklisting the entire fleet of the petitioner is in violation of the principles of natural justice. To test whether the order complies with the principles of natural justice we would have to ascertain whether the notices issued to the petitioner unequivocally informs the petitioner that an order blacklisting his entire fleet of TTs is contemplated and might be passed if petitioner’s reply is found not satisfactory. In Gorkha Security Services v. Government (NCT of Delhi) (supra), the Supreme Court while expounding the law as to what are the requirements of a valid show cause notice preceding an order of blacklisting, in paragraphs 21 and 22, observed as follows:- “21) The Central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of Show Cause Notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/ breaches complained of are not satisfactorily explained. When it comes to black listing, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action.
That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/ breaches complained of are not satisfactorily explained. When it comes to black listing, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action. 22) The High Court has simply stated that the purpose of show cause notice is primarily to enable the noticee to meet the grounds on which the action is proposed against him. No doubt, the High Court is justified to this extent. However, it is equally important to mention as to what would be the consequence if the noticee does not satisfactorily meet the grounds on which an action is proposed. To put it otherwise, we are of the opinion that in order to fulfil the requirements of principles of natural justice, a show cause notice should meet the following two requirements viz: i) The material/ grounds to be stated on which according to the Department necessitates an action; ii) Particular penalty/action which is proposed to be taken. It is this second requirement which the High Court has failed to omit. We may hasten to add that even if it is not specifically mentioned in the show cause notice but it can be clearly and safely be discerned from the reading thereof, that would be sufficient to meet this requirement.” 13. From the observations of the Apex Court what is clear is that in the context of blacklisting to fulfil the requirements of principles of natural justice, the show cause notice should meet the following two requirements:- (i) It must state the material/grounds on which action is necessitated; and (ii) It must state the particular penalty/action which is proposed to be taken. The purpose of fulfilling the first requirement is to enable the noticee to meet the grounds on which the action is proposed against him; whereas, the second part enables the noticee to point out that the proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. 14. On a careful reading of the notices dated 03.10.2021 and 06.10.2021, what we observe is that there is no clear disclosure that if the reply of the petitioner’s firm is found unsatisfactory, the order blacklisting its entire fleet may be passed.
14. On a careful reading of the notices dated 03.10.2021 and 06.10.2021, what we observe is that there is no clear disclosure that if the reply of the petitioner’s firm is found unsatisfactory, the order blacklisting its entire fleet may be passed. In the first notice dated 03.10.2021 what is mentioned is that if the information with regard to pilferage from the Tank Lorry is found correct then it is a violation of transport agreement and OITDG which has been signed by the petitioner with the Corporation and therefore, the Company may take action against the Tank Lorry as well as transporter as per clause mentioned therein which we have already extracted above. There is no clear indication in the notice that if the allegations against the petitioner were found substantiated then an action to blacklist the entire fleet of petitioner’s firm might be taken. In view whereof, we are of the considered opinion that the notice dated 03.10.2021 cannot form the basis of the order of blacklisting the entire fleet of the petitioner. 15. In respect of the second notice dated 06.10.2021, it is mentioned in the notice that certain clauses of Oil Industry Transport Discipline Guidelines recited therein have been violated. Learned counsel for the petitioner has challenged the notice dated 06.10.2021 on the ground that it fails to meet the second requirement, which is, that it fails to state the particular penalty/action contemplated against the noticee. On the other hand, the learned counsel for the corporation contended that the notice recites those clauses under which the order of blacklisting the entire fleet of TTs on industry basis could be passed therefore, there is substantial compliance of the principles of natural justice and no prejudice has thus been caused to the petitioner. 16. At this stage, it would be useful to extract the relevant part of the notice dated 06.10.2021 by which, according to the corporation’s counsel, the second requirement of a proper show cause notice has been met. The same is extracted below:- “Viewing above, it is clear that you have failed to keep your obligations under the aforesaid OITD Guidelines/Agreement entered by in between us inter alia causing breach of the same.
The same is extracted below:- “Viewing above, it is clear that you have failed to keep your obligations under the aforesaid OITD Guidelines/Agreement entered by in between us inter alia causing breach of the same. You are required to submit your reply in writing within 7 days as to why action against you should not be taken for the violations as per Oil Industry Transport Discipline Guidelines under Clause 8.2.2.2 (a), 8.2.2.8, 8.2.2.11 and 8.2.2.16 and 8.2 (Point No. 2).” 17. The issue that falls for our consideration is whether the disclosure in the notice extracted above could be treated as sufficient compliance of the second requirement of a valid show cause notice for imposing the penalty of blacklisting the entire fleet of TTs. Notably, the notice speaks of action that might be taken under five specified clauses of OITDG. As to what penalty each clause provides for is thus relevant. We shall address it clause-wise. In so far as clause 8.2.2.2 (a) is concerned it relates to suspension of TT for three months on first violation. In the instant case, it is not the suspension of Tank Lorry for three months but it is a case where the entire fleet of TTs have been blacklisted for five years. Thus, the penalty awarded is not relatable to clause 8.2.2.2 (a). In so far as clause 8.2.2.8 is concerned it relates to blacklisting of TT. It also does not relate to blacklisting the entire fleet. Accordingly, clause 8.2.2.8 is also not relatable to the penalty awarded. Similarly, Clause 8.2.2.11 is not relatable to the penalty awarded as it relates to blacklisting of TT and not the entire fleet. In so far as clause 8.2.2.16 is concerned it is ambiguous as it does not specify any penalty. It only leaves it to the discretion of the corporation. Hence, mere mention of clause 8.2.16 would not satisfy the second requirement of a valid show cause notice. In so far as Clause 8.2 (Point No.2) is concerned, the same is an omnibus clause which enumerates multiple penalties upon detection of malpractices/ irregularities and not just the penalty of blacklisting the entire fleet of TTs.
Hence, mere mention of clause 8.2.16 would not satisfy the second requirement of a valid show cause notice. In so far as Clause 8.2 (Point No.2) is concerned, the same is an omnibus clause which enumerates multiple penalties upon detection of malpractices/ irregularities and not just the penalty of blacklisting the entire fleet of TTs. No doubt, under clause 8.2.2 there can be blacklisting of TTs on industries basis but since there are several other penalties specified therein mere mention of clause 8.2.2 in the notice would not satisfy the second requirement of a valid show cause notice as noticed above because, from it, it cannot be clearly and safely inferred that the action proposed is of blacklisting the entire fleet of TTs on industries basis. We are therefore of the considered view that the notice fails to fulfil the second requirement of a valid show cause notice as held by the Apex Court in Gorkha Security Services v. Government (NCT of Delhi) (supra). 18. The question that now arises for our consideration is whether omission to fulfil the second requirement of the notice has caused prejudice to the petitioner. In this context it would be apposite for us to notice certain observations of the Apex Court in Gorkha Security Services case (supra) in the context of the submission that the noticee suffered no prejudice even if the proposed penalty of blacklisting had not been specifically proposed in the show cause notice. The Supreme Court in paragraph 33 of its judgment, as reported, negativing the submission so made, observed :- “Had the action of blacklisting being specifically proposed in the show-cause notice, the appellant could have mentioned as to why such extreme penalty is not justified. It could have come out with extenuating circumstances defending such an action even if the defaults were there and the Department was not satisfied with the explanation qua the defaults. It could have even pleaded with the Department not to blacklist the appellant or do it for a lesser period in case the Department still wanted to black list the appellant. Therefore, it is not at all acceptable that non mentioning of proposed blacklisting in the show cause notice has not caused any prejudice to the appellant. This apart, the extreme nature of such a harsh penalty like blacklisting with severe consequences, would itself amount to causing prejudice to the appellant.” 19.
Therefore, it is not at all acceptable that non mentioning of proposed blacklisting in the show cause notice has not caused any prejudice to the appellant. This apart, the extreme nature of such a harsh penalty like blacklisting with severe consequences, would itself amount to causing prejudice to the appellant.” 19. The above quoted observations squarely apply on the facts of the instant case. Consequently, the writ petition is allowed. The order dated 09.12.2021 to the extent it seeks to blacklist the entire fleet of TTs of the petitioner’s firm is set aside. In so far as other penalties imposed by the order dated 09.12.2021 are concerned, we leave it open to the petitioner to take recourse to other alternative remedies including the alternate dispute resolution mechanism which exists in the contract. We, accordingly, do not express any opinion in respect of those other penalties. It is also clarified that quashing of the order dated 09.12.2021 to the extent indicated above will not come in the way of the respondent-corporation to issue a fresh show cause notice and pass a fresh order in respect thereof, in accordance with law.