JUDGMENT : (PER : HONOURABLE MR. JUSTICE A.Y. KOGJE) 1. This petition is filed under Article 226 of the Constitution of India for quashing and setting aside a communication dated 7th February 2013 by the respondent no.2 (Annexure-A). By the impugned communication, the recovery was ordered from the petitioner for an amount to the tune of Rs. 5,23,868/- and the same was ordered to be recovered from the security deposit and earnest money which was lying with the department towards the subsequent contract entered into by the petitioner with the respondent. 1.1 It is a case where the petitioner was a successful bidder in supplying the stationary for the purpose of ICDS project being conducted under the respondent no.2. 2. Learned advocate for the petitioner submitted that the petitioner after succeeding in the tender process, work order was issued to the petitioner and an agreement was also entered between the petitioner and the respondents. The petitioner had successfully supplied the stationary items as specified and towards such supply, the entire amount was paid by the respondent without there being any grievance. The security deposit was also duly returned, and therefore, the petitioner had completed the contract to the satisfaction of the respondent authorities. 3. It is submitted that, however, a third party, who was a competitor in the same business, had made an application belatedly after period of 11 months of conclusion of contract raising grievance about the quality of material supplied and based on such frivolous application, the respondent authority, unilaterally and without there being any provision, appointed a fact finding person, who after making preliminary inquiry, gave a report that there was some discrepancy in quality of the material supplied. 3.1 Learned advocate argues that not only the procedure of appointing a fact finding person was not in accordance with the terms of contract but the fact finding person also gave a very tentative report which could not be the basis of taking drastic action against the petitioner for the recovery. 4. It is submitted that as per the agreement entered between the parties, at the time of taking delivery, it was the duty of the representatives of the respondents that the quality and quantity of the article supplied were to be verified and only thereafter, the same were to be accepted. 4. It is submitted that as per the agreement entered between the parties, at the time of taking delivery, it was the duty of the representatives of the respondents that the quality and quantity of the article supplied were to be verified and only thereafter, the same were to be accepted. The fact that no grievance has been raised with regards to the quality and quantity of the articles supplied till the date of the complaint filed by the third party would not therefore justify the initiation of action of the respondent in holding that the petitioner has committed breach of any terms of contract. 5. Learned advocate has, therefore, drawn attention of this court to the documents indicating the final payment made and the security deposit being released in the year 2010 much prior to the complaint made by the third person. 6. As against this, learned advocate for the respondent submitted that the action of the respondent was justified and in terms of the contract entered into between the parties as it has come on record as a matter of fact through the fact finding committee that the articles supplied was of sub standard, and therefore, the authority had no option but to take the action for making good the losses suffered by the respondents. 6.1 It is submitted that though the delivery of the articles was to be taken by ascertaining the nature and quality and quantity of the article, which was on the shoulder of the representatives of the respondent and those representatives having failed to discharge their part of duty, the department had issued necessary notice against such erring persons. 7. Learned advocate for the respondent has lastly submitted that as the respondents had to suffer a monetary loss to the tune of Rs. 5,23,868/- which was quantified by the office of the Accounts on the basis of whose objection, the entire action was required to be initiated, and therefore, the impugned order is justified. Learned advocate, thereafter, submitted that the respondent had taken all the necessary steps by informing the petitioner about all the aspects against him, and therefore, have complied with the principle of natural justice. 8. Learned advocate, thereafter, submitted that the respondent had taken all the necessary steps by informing the petitioner about all the aspects against him, and therefore, have complied with the principle of natural justice. 8. In rejoinder, learned advocate submits that except for the report issued by the fact finding committee, which was also tentative in nature there is no other action which is initiated to arrive at a definite conclusion with regards to the quality of the articles supplied by the petitioner. 9. Having heard learned advocates for the parties and having perused the documents on record, the petitioner is engaged in the business of printing and in response to the tender, which were invited in the year 2009-2010, the petitioner had bidded and was a successful bidder, and therefore, was issued work order. Pursuant to which, the petitioner was required to supply the printed material and other articles of stationary to the various project offices under the ICDS project. 10. It is coming out on record that on 21.04.2010, the petitioner had completed the delivery of the printed material and on 24.05.2010, the petitioner had submitted the bill to the respondents with regards to the work undertaken. On 28th June 2010, the pre-audited certificate for payment of the final bill was also submitted by the petitioner and pursuant thereto, the petitioner has received the full and final payment. It is also coming on record that on 18.10.2010, the respondent had refunded the deposit of the tender amount of Rs. 50,000/-, and therefore, these two contingencies would indicate that the contract between the petitioner and the respondents for the supply of printing materials as per the tender condition was concluded. 11. It appears that on 25.05.2011 ie., after almost period of 11 months of the contract having been concluded one Amrutlal Joitaram Patel made a written application wherein it was alleged that the petitioner had supplied the materials which are substandard in quality. Pursuant to such application being made, the preliminary inquiry was undertaken by appointing one Ex. Accounts Officer Shri N. B. Gohil to submit the report and on 14.06.2011, Shri N. B. Gohil submitted the report. Pursuant to such application being made, the preliminary inquiry was undertaken by appointing one Ex. Accounts Officer Shri N. B. Gohil to submit the report and on 14.06.2011, Shri N. B. Gohil submitted the report. The report dated 14.06.2011 is the part of the paper book at page 296, wherein the report would indicate the statement being recorded of the very complainant and one of the point which was recorded by Shri Gohil is that the complainant Amrutlal Joitaram Patel himself was in the same business for almost 10 years and on that particular year, he was not successful in getting the work. The court may also record that in the fact finding report, a tentative observation is made indicating a corrupt practice having been made and for that purpose, a detailed inquiry with regards to the nature of supply and damage caused to the respondent is required to be undertaken. Though learned advocate for respondent - D.D.O. submitted that the complainant had not participated in process, however, court has observed only on the basis of the point noted by fact finding person. 12. The court is of the view that when the initiation of the inquiry is based on a complaint which is by the unsuccessful competitor to the petitioner and that too, after a period one year would be a weak ground to initiate any inquiry. 12.1 Over and above, the court also finds that the inquiry report which is the foundation for the action against the petitioner is only a report which is tentative in nature and no specific conclusion can be based that the petitioner has flouted any of the terms of the contract by supplying the material which was substandard in nature. The report does not indicate any physical examination of any of the material which was supplied by the petitioner as per the terms of contract. In absence of any of the above, the said report could not have been the basis for initiating any action against the petitioner. 12.2 The Court may also observe that the terms of contract, which are on record, does not provide for any of the procedure like appointing of a fact finding committee without there being any appropriate notice of the action contemplated against the petitioner. 13. 12.2 The Court may also observe that the terms of contract, which are on record, does not provide for any of the procedure like appointing of a fact finding committee without there being any appropriate notice of the action contemplated against the petitioner. 13. The court, thereafter on its own, may examine whether the petitioner has acted in accordance with the requirement of the contract that is to say supply of the printed material for the ICDS project wherein the terms of contract itself provide that; 14. The terms of contract, therefore, make it incumbent upon the representative of the respondents to verify the material which has been supplied as per the contract, and therefore, that was the only occasion for the respondent authority to raise any grievance with regards to the breach of any condition or deficiency or substandard nature of the material supplied. It is coming on record that after the supply of the material, the same was already utilized in the project and till the complaint made by the third person, nobody in the department of the respondent had raised any grievance with regards to the deficit or substandard material. 15. The Delhi High Court in the case of M/S LOHMANN RAUSHER GMBH VERSUS M/S MEDISPHERE MARKETING reported in ILR (2005) 1 Delhi 38, the decision has categorically held in para-21 as under:- “21. As per the mandate of Section 41 of the Sale of Goods Act, the defendant not having inspected the goods in question prior to delivery, had a right to inspect the case on delivery and report defects within a reasonable time of delivery. If not rejected within a reasonable time, mandate of Section 42 stipulates that the defendant would be deemed to have accepted the goods..” 16. Lastly, court may also observe that the contention raised by the respondent in defence that the concerned officer, who had received the delivery of goods which were later on identified to be substandard to then the notice has been issued way back in the year 2013, as is reported to the specific query of the court pursuant to the issuance of notice to the erring officer, no further action is reportedly taken against such erring officer. 17. 17. In view of the aforesaid, the court finds that the impugned order is passed dehors the requirement of the terms of contract and that is not based on any conclusive finding that the supply made by the petitioner pursuant to the contact was in any manner deficit or of substandard, and therefore, communication dated 07.02.2013, which was amended by subsequent order dated 12.02.2013, is hereby quashed and set aside. Resultantaly, the petitioner would be entitled to the refund of the amount which is mentioned in the order dated 12.02.2013 at Annexure-“G”. Such refund, if any, to take place by 5th of August 2024, failing which, the petitioner would be entitled to the amount with interest at the rate of 9% per annum to be borne by the erring officer, responsible for delay after 05.08.2024. Rule is made absolute. Direct service is permitted.