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2023 DIGILAW 116 (GUJ)

Royal Transport Contractor v. State of Gujarat

2023-01-12

ARAVIND KUMAR, ASHUTOSH SHASTRI

body2023
JUDGMENT : Aravind Kumar, J. 1. Heard Shri Nisarg P. Raval, learned counsel appearing for petitioner, Shri Jal Soli Unwalla, learned Senior Counsel appearing for respondent No. 2 and Ms. Shrunjal Shah, learned AGP appearing for respondent No. 2. 2. Respondent No. 2 invited a tender on 28.05.2020 for supply of essential commodities by transporters namely to supply the essential commodities to Fair Price Shops at Panchmahal under doorstep delivery scheme. Petitioner participated in the said bid process and was declared as L-1 bidder, or in other words, the bid offered by petitioner was accepted for Panchmahal District and work order came to be issued on 07.08.2020. Pursuant to same, agreement came to be entered into between petitioner and respondent on the same date. On a surprise check to the godown made by inspecting authorities, resulting in said team finding deficit stock in the godown which was huge quantity and as such a police complaint came to be lodged resulting in FIR No. 11207061210114 being registered for the offence punishable under 406, 420, 409, 120-B of IPC, read with Section 3 and 7 of the Essential Commodities Act and Section 13(1)(c) of the Prevention of Corruption Act. On investigation being completed, chargesheet came to be filed for the said offences before the Jurisdictional Court and it has been registered as Criminal Case. 3. Since petitioner was the Transport Contractor and attributing the stock deficit to the petitioner, show-cause notice came to be issued on 02.03.2021. It would be necessary to note at this juncture itself the content of said show-cause notice which reads :- “This is to further state that the inspection was undertaken by the Mamlatdar, Shahera at Shahera Godown of Panchmahal District. During the said inspection, quantitative deficit of 13127 bag of wheat and 1298 bag of rice was found. In that connection, a police complaint, being FIR No. 11207061121011, has been lodged by the Mamlatdar, Shahera at Shahera Police Station on 20.02.2020. As per the Government Resolution, market price of said quantity of wheat and rice comes to Rs. 1.83 crore and the recovery amount thereof at double rate comes to Rs. 3.67 crore. Thus, the said irregularity is very serious in nature and due to fraud committed in quantity distributed under the Public Distribution System, huge financial loss is caused to the Government. 1.83 crore and the recovery amount thereof at double rate comes to Rs. 3.67 crore. Thus, the said irregularity is very serious in nature and due to fraud committed in quantity distributed under the Public Distribution System, huge financial loss is caused to the Government. In view of the above fats, you are recognized contractor for the work of door step delivery in Panchmahal District and by providing truck / vehicles at Godown of Supply Corporation, you are doing work of distribution of quantity of goods from Godowns to the fair price shops. In above facts, you are informed to show cause as to why you would not be held responsible for extraordinary deficit found in quantity of wheat and rice at Shahera Godown / Financial irregularities committed by you and therefore, why penultimate / recovery proceedings / police case would not be initiated / filed against you for financial loss caused to the Corporation and submit explanation thereof to this Branch within 3 days. If satisfactory explanation is not submitted by you within time limit, it would be deemed that you do not want to say anything in this regard and ex parte criminal proceedings including penultimate / recovery proceedings will be initiated against you, which may kindly be noted.” 4. On receipt of the show-cause notice, petitioner replied to the same by reply dated 05.03.2021 denying every allegation made against it. In the meanwhile, the work of the petitioner was suspended and was proposed to be allotted to a third party which triggered the petitioner to file a Special Civil Application No. 4155 of 2021 challenging the decision / communication dated 22.02.2021. Said petition came to be disposed of on 19.04.2021 reserving liberty to the respondent to pass fresh order after giving opportunity to the petitioner. On matter being remitted, further opportunity was extended to the petitioner by issuing further notice on 21.06.2021, 08.09.2021 and 20.09.2021 (collectively marked as Annexure-F). This was also followed by further notices dated 18.09.2021 and 03.11.2021 (collectively marked as Annexure – G). On matter being remitted, further opportunity was extended to the petitioner by issuing further notice on 21.06.2021, 08.09.2021 and 20.09.2021 (collectively marked as Annexure-F). This was also followed by further notices dated 18.09.2021 and 03.11.2021 (collectively marked as Annexure – G). It is thereafter impugned order dated 12.11.2021 came to be passed, whereunder it was ordered as follows ; “(i) Forfeiting the security deposit; (ii) Excluded the petitioner from participating in any work sought for by Gujarat State Civil Supplies Corporation Limited for a period of two years, in other words, the petitioner was black-listed for two years.” Hence, challenging the same, petitioner is before this Court. 5. Though, learned counsel appearing for petitioner has tried to persuade this Court by relying upon the reply given to the show-cause notice and other documents including FIR, chargesheet, chargesheet material to contend that no motives have been attributed to petitioner for deficit stock found in the godown and only on the ground of vicarious liability, petitioner cannot be visited with an order of black-listing and as such he has sought for impugned order being quashed, we have noticed that under the impugned order, though petitioner has been black-listed and the amount of security deposit has been forfeited, this aspect surprisingly does not find a place in the show-cause notice dated 02.03.2021 issued to petitioner. To put it differently, the show-cause notice is silent on the issue of petitioner being notified of the probable and possible imposition of black-listing, penalty for deficit stock found in godown, as provided under the agreement dated 07.08.2020 or forfeiture of the security deposit. When the impugned order speaks of black-listing petitioner for a period of two years from 12.11.2021 to 11.11.2023 by disqualifying the petitioner from doing any kind of work relating to doorstep delivery or transportation of goods on behalf of Corporation, the least that was expected of by the respondent Authority was to notify the petitioner of proposed action. In the absence of such proposed action being notified to petitioner necessarily it will have to be held that action of respondent is in violation of principles of natural justice. 6. The principle of natural justice protects a citizen from arbitrary administrative actions whenever his/her right to person or property is jeopardized. In the absence of such proposed action being notified to petitioner necessarily it will have to be held that action of respondent is in violation of principles of natural justice. 6. The principle of natural justice protects a citizen from arbitrary administrative actions whenever his/her right to person or property is jeopardized. One of the objectives of giving a hearing in application of principles of natural justice is to see that any illegal action or decision does not take place. Any wrong order may adversely affect a person and it is essentially for this reason that a reasonable opportunity requires to be granted before passing an administrative order. The principles of audi alteram partem is the basic concept of the principles of natural justice. However, if the legislature specifically authorizes an administrative action without hearing, then except in cases of recognized exception, such action would be violative of principles of fair hearing and it has to be read into Articles 14 and 21 of the Constitution of India. The Hon’ble Apex Court in the case of State of U.P. vs. Vijay Kumar Tripathi, reported in 1995 Supp. (I) SCC 552 has held that though the rules permit award of censure entry without notice and hearing, yet the principles of natural justice should be read into such rules and no censure entry can be awarded without any notice and hearing. The principles of audi alteram partem is sine qua non of every civilized society. Corollary deduced from this rule is qui aliquid statuerit parte inaudita altera, aequum licet dixerit, haud aequum facerit (he who shall decide anything without the other side having been heard, although he may have said what is right, will not have done what is right). 7. As has been frequently observed, the benefit of audi alteram partem principle was even extended to Adam and Eve, even by God before they were punished for disobeying His command. This signifies that even if the authority already knows everything and the person has nothing more to tell, even then this rule of natural justice is attracted, unless application of this rule would be a mere empty formality. This signifies that even if the authority already knows everything and the person has nothing more to tell, even then this rule of natural justice is attracted, unless application of this rule would be a mere empty formality. The exception to this rule is the applicability of doctrine of useless formality theory which has been reiterated by the Hon’ble Apex Court in the case of Aligarh Muslim University and others vs. Mansoor Ali Khan, reported in AIR 2000 SC 2783 , vide paragraphs 28, 32 and 34 as under : “28. On the above facts, the absence of a notice to show cause does not make any difference for the employee has already been told that if his further overstay is for continuing in the job in Libya, it is bound to be refused. 32. Another important aspect of the matter is that no new reason has been projected in the Writ petition of Mr. Khan for his seeking further extension earlier while in Libya. The only reason stated is that he had obtained further extension in job. It is not a case where there is a plea in the Court that there were different grounds or reasons which he could have put in his explanation, if called for, such as ill health etc. Indeed, if the reasons could have been somewhat different, - as may perhaps be disclosed or proved in subsequent writ petition - such as his own failing health, one can understand. But so far as leave for purposes of job continuance in Libya, is concerned, he has been fully put on advance notice that no further extension will be given. It must be held that no prejudice has been caused even though no notice is given under Rule 5(8)(i). 34. Thus, in our view, in the above peculiar circumstances, the only conclusion that can be drawn is that even if Mr. Mansoor Ali Khan had been given notice and he had mentioned this fact of job continuance in Libya as a reason, that would not have made any difference and would not have been treated as a satisfactory explanation under Rule 5(8)(i). Thus, on the admitted or undisputed facts, only one view was possible. The case would fall within the exception noted in S.L. Kapoor's case. We, therefore, hold that no prejudice has been caused to the officer for want of notice under Rule 5(8)(i). Thus, on the admitted or undisputed facts, only one view was possible. The case would fall within the exception noted in S.L. Kapoor's case. We, therefore, hold that no prejudice has been caused to the officer for want of notice under Rule 5(8)(i). We hold against Mr. Mansoor Ali Khan under Point 5.” 8. Keeping the aforesaid principles in mind, when we turn our attention to the facts on hand, it requires to be noticed at the cost of repetition that show-cause notice preceding the impugned order, does not indicate of petitioner having been notified of the probable act of black-listing or the forfeiture of the security deposit. On the other hand, it travels mainly on the criminal prosecution which has been launched against the Godown Manager of the Corporation as well as the employee (Driver) of the petitioner – Firm. Said show-cause notice does not indicate that respondent even contemplated of either forfeiting the security deposit or black-listing the petitioner. The Hon’ble Apex Court in the case of Vetindia Pharmaceuticals Limited vs. State of Uttar Pradesh and another, reported in (2021) 1 SCC 804 has clearly held that it would be incumbent on the part of an authority to state in show-cause notice that competent authority intended to impose a penalty of black-listing so as to provide adequate and meaningful opportunity to the aggrieved person to show cause against the same. In the absence of such procedure having been undertaken, it would call for exercise of jurisdiction by this Court under Article 226 of the Constitution of India by way of judicial review of administrative order. Keeping this in mind, when the show-cause notice preceding the impugned order is perused again, it would clearly indicate that it does not even remotely indicate of the proposed action of forfeiture of security deposit and imposition of blacklisting being there. On this short ground itself, petitioner has to succeed. It does not stop at it, inasmuch as, the issue involved in the present facts on hand would indicate that respondent no. 2 has tried to rely very heavily on the criminal prosecution launched against Driver of petitioner to hold the petitioner as vicariously liable, as such, we are of the considered view that matter requires to be remitted back to respondent No. 2 for adjudication afresh by notifying the petitioner of the proposed action. 2 has tried to rely very heavily on the criminal prosecution launched against Driver of petitioner to hold the petitioner as vicariously liable, as such, we are of the considered view that matter requires to be remitted back to respondent No. 2 for adjudication afresh by notifying the petitioner of the proposed action. Hence, following : ORDER (i) Special Civil Application is ALLOWED. (ii) The order dated 12.11.2021 is hereby quashed and matter is remitted back to respondent no. 2 to re-do the matter by keeping in mind the observations made hereinabove. (iii) Petitioner would be at liberty to submit additional material, if it chooses to do so, which shall necessarily be considered by respondent no. 2 by affording an opportunity of personal hearing, if sought for. (iv) Since this issue has been pending before respondent no. 2 authority since quite long, we deem it proper to fix the time schedule for conclusion of entire exercise and as such, call upon the petitioner to appear before respondent no. 2 on 23.01.2023 without waiting for any notice from respondent no. 2 and respondent no. 2 shall conclude the proceedings within four weeks from the date of first appearance of the petitioner. (v) All contentions of both the parties are kept open to be urged before the respondent no. 2 and no opinion is expressed on merits. (vi) No order as to costs.