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2022 DIGILAW 190 (JK)

Vaishno Fruit Co. v. Union of India

2022-04-25

DHIRAJ SINGH THAKUR, RAHUL BHARTI

body2022
ORDER : (Dhiraj Singh Thakur, J.) 1. The present Letters Patent Appeal has been preferred against the judgment and order dated 26.02.2018. Briefly stated the material facts are as under:- 2. The appellant No. 1 (hereinafter referred to as the “appellant-firm”) is a contractor, which is registered with the official respondents. It is stated that the said registration was to remain valid up till May, 2013. The appellant-firm based upon the fact that it was registered with the official respondents, was allotted a contract for supply of fresh fruits and vegetables to the respondents, as also some other items. 3. During the course of the contract period, the registration of the appellant-firm expired. The stand of the appellants/writ petitioners before the writ Court was that steps were initiated by the appellant-firm to have the firm re-registered. However, before this could be done, a show cause notice was issued to the appellants with a view to show cause as to why the appellant-firm be not removed from the list of approved ASC contractors. Finally, the name of the appellant-firm was struck off. An appeal was preferred before the competent authority, which too was rejected. Based upon the action so taken, an amount of Rs. 1.92 lacs, which was lying with the official respondents in the shape of an FDRs, was forfeited. This was done in terms of para-6 of the Circular dated 26.09.2006. For facility of reference, the said clause is reproduced as under:- “6. All applicants desirous of being registered as ASC Contractors will be required to pledge an FDR in favour of the concerned MGASC Command as a refundable fee for the purpose of registration. The value of such FDR will be 0.2 percent of the contract carrying capacity for which the applicant wishes to be registered as ASC Contractor and must be valid for minimum 06 years from the date of application. The said FDR will be renewed again at time of re-verification of the contractor. This FDR can be utilized by the MGASC for recovery of any dues outstanding against the contractor on behalf of the Government, in case the contractor continually refuses to pay those dues despite intimations. This FDR will be returned to the Contractors, after clearing all his dues towards the Government. However, in case of removal/suspension banning of the applicant due to his default, this amount will be forfeited to the Government.” 4. This FDR will be returned to the Contractors, after clearing all his dues towards the Government. However, in case of removal/suspension banning of the applicant due to his default, this amount will be forfeited to the Government.” 4. Being aggrieved of the deduction so made, the appellants filed a petition bearing OWP No. 1846/2016, which came to be dismissed vide judgment and order dated 26.02.2018. Hence, the present Letters Patent Appeal. 5. Briefly stated, the dismissal of the writ petition was based on the premise that the deduction could have been made in terms of para-6 of the Circular reproduced hereinabove. However, having gone through the said clause-6, we are of the opinion that the writ Court committed an error in understanding the true intent and purport of the said clause, which only authorized and permitted the official respondents to deduct such an amount from the FDRs furnished by the contractor, which was otherwise outstanding, due and payable to the official respondents. In fact, clause-6 specifically envisages that the FDRs furnished by the ASC contractors would be returned to the contractor, if he otherwise wishes to get de-registered from the list of ASC contractors after clearing its dues towards the government. 6. In the present case, whether de-registration occurs on account of the request made by the contractor or the contractors’ registration expires in due course, the FDRs ought to have been returned to the said contractor without any demur. Right to deduct could have been exercised only on account of non-payment of balance dues, which is not the case in the present scenario. 7. Be that as it may. We are unable to accept the view taken by the learned Single Judge in the impugned judgment and order. The same is untenable and is, accordingly, set aside. 8. The appeal is, accordingly, allowed. 9. The appellants are held entitled to the refund of the withheld amount of Rs. 1.92 lacs along with interest @ 6% from the date of forfeiture, i.e., 20.06.2015 till actual payment is made to the appellants.