AI Structured Summary
Not yet generated for this judgment
Judgment
Dhirendra Mishra, J.—The petitioner by the instant petition has prayed for following reliefs:
10.1 That, this Hon''ble Court may kindly be pleased to set aside/quash the impugned order Annexure P-1 dated 04.12.2008 passed by respondent No. 3.
10.2. That, this Hon''ble Court may further be pleased to direct the respondent authorities to restore the contracts entered between the Corporation and the petitioner and to permit the petitioner to carry out the transportation work already allotted to him.
10.3. That, this Hon''ble Court may be pleased to direct the respondent Corporation to release the earnest money that has been forfeited and further direct the respondents to clear all payments due to the petitioner.
Briefly stated, case of the petitioner is that he is engaged in the transportation business. The petitioner entered into an agreement with the respondent-C.G. State Civil Supplies Corporation (for short `Corporation'') in the year 2007 for transportation of food articles from Base Depot Mahasamund to different parts of the State of Chhattisgarh within a radius of 500 kms. The Corporation additionally engaged one more transporter namely Chandresh Thakkar for the long route transportation work in the same lead in which the petitioner was transporting under the agreement. Between December and January said Chandresh Thakkar misappropriated about 10 trucks of rice consequently criminal proceedings were initiated against him and other officials of the corporation. In order to save the officials of the corporation from criminal prosecution, the allegations have now been made against the petitioner that he sub-let the contract work to said Chandresh Thakkar and therefore, responsible for the loss suffered by the corporation. By the impugned order agreements between the petitioner and the corporation including the agreements of the year 2008-09 have been unilaterally cancelled, earnest money/security deposits have been forfeited and the petitioner has been blacklisted for a period of ten years though the petitioner is in no way responsible for engaging said Chandresh Thakkar in transportation work and he was engaged by the Corporation and an independent agreement was entered into between the corporation and the said Chandresh Thakkar.
Respondents in their reply have raised a preliminary objection regarding maintainability of the writ petition on the ground that Clause 14 of the NIT provides for resolution of dispute between the parties to the agreement through arbitration. The petitioner without exhausting the alternative remedy of arbitration could not file the instant petition and therefore, the petition is liable for dismissal on the ground of availability of alternative remedy. It has been further submitted that before taking action against the petitioner, he was served with a show-cause notice of Annexure P-13 dated 2.9.2008 and after considering the reply of the petitioner dated 9.9.2008 of Annexure P-14, the order impugned has been passed. It has been further averred that the petitioner had himself vide his letter dated 7.12.2007 given no objection for engaging the said Chandresh Thakkar as contractor for the work which was assigned to the petitioner though Clause-7 of the NIT imposes absolute bar on sub-letting. Chandresh Thakkar, some officers of the corporation and one contractor have misappropriated the rice to the tune of Rs. 2 Crore and therefore, report was lodged against them and criminal case has been registered. The petitioner is also involved in misappropriation as transportation work was assigned to Chandresh Thakkar only on the basis of no objection given by the petitioner. Clause 13.7 of the NIT empowers the corporation to confiscate the vehicle, movable & immovable property of the transporter who is engaged in any type of misappropriation in the transportation work. It also empowers to initiate criminal prosecution by lodging report in the police and blacklisting the transporter for a period of ten years. It has been further submitted that the application of the said Chandresh Thakkar for allotment of transportation work of rice was illegally accepted by the officers of the corporation. Proposal for granting work to the said Chandresh Thakkar was forwarded to the Managing Director and by keeping the Managing Director in dark, the officers managed to get the proposal approved and finally contract was awarded to said Chandresh Thakkar and 300 metric ton of rice was entrusted to him for transportation but the rice did not reach to the destination. Huge loss has been caused to the corporation due to sub-letting of work of transportation by the petitioner to the said Chandresh Thakkar and therefore, action has been initiated against the petitioner.
We have heard learned Counsel for the parties. We have perused pleadings of the respective parties and documents annexed with the pleadings.
Indisputably, the respondent-Corporation entered into an agreement (Annexure P-3) with the petitioner for long distance transportation from Base Depot Mahasamund to various destinations of the State for the year 2007-08. The contract was governed by the terms and conditions of the NIT of Annexure P-2. One Chandresh Thakkar expressed his willingness to undertake long distance transportation work from Mahasamund base depot vide his application dated 05.12.2007 (Annexure P-4), addressed to the Managing Director of the corporation. His application was forwarded by the Sub Accounts Officer (Procurement) vide Annexure P-5 dated 6.12.2007 to the Manager, Procurement, who forwarded it on the same day to the Managing Director with an office note that proposal is submitted keeping in view the direction issued by the Secretary, Food in the meeting dated 5.12.2007 held for review of PDS to complete the stock transportation within the time frame. The proposal was accepted by the Managing Director on the same day. The Manager (Procurement) forwarded the application received from the Head Office vide his memo dated 6.12.2007 (Annexure P-6) to the District Manager, Mahasamund with a direction to make alternative transport arrangement and the District Manager issued work order for transportation of rice in favour of the said Chandresh Thakkar on 6.12.2007 (Annexure P-7). Thereafter, the respondent-Corporation vide Annexure P-8 entered into an agreement with the said Chandresh Thakkar on 6.12.2007 for long distance transportation work from Mahasamund base depot. The said agreement was valid for a period from 7.12.2007 to 31.3.2008.
From the documents filed by the petitioner it also appears that the corporation has entered into two separate agreements with the petitioner for transportation work from base depot Bilaspur and Charama to various destinations for the year 2008-09. From perusal of Annexure P-11 it is also seen that Police Station Mahasamund has filed the charge sheet against the said Chandresh Thakkar and other officers of the corporation and in the charge sheet the petitioner is cited as witness. The petitioner was served with the show- cause notice of Annexure P-13 dated 2.9.2008 and he submitted his reply of Annexure P-14 on 9.9.2008 detailing the circumstances in which the agreement was entered with the said Chandresh Thakkar by the Corporation in hot haste on 6.12.2007 itself. However, the impugned order was passed canceling his contract work for Base Depot Mahasamund, Bilaspur, Charama (general) & Balod (Durg) for the year 2008- 09; forfeited the earnest money/security deposit for the work of Base Depot Mahasamund for the year 2007/08; withhold the earnest money/security deposit deposited by the petitioner for the year 2008-09 against the work entrusted to him in various base depots like Raipur, Rajim, Mandirhasoud, Abhanpur, Balod, Bilaspur, Keshkal (General) & Balod (Dhamtari) for the year 2008-09 till the pendency of cases in the various courts. The petitioner has also been blacklisted for a period of ten years under Clauses 9.5 & 13.7 of the Schedule-II of the NIT.
None of the documents filed by the petitioner has been specifically controverted by the respondents in their return. The stand of the respondents is that the additional agreement was entered into with the said Chandresh Thakkar only because the petitioner gave no objection for the same on 7.12.2007. From the documents filed by the petitioner it is manifestly clear that on receiving application from Chandresh Thakkar on 5.12.2007, the same was processed and forwarded to the Manager (Procurement) on 6.12.2007, who in turn forwarded the same to the Managing Director on the same date. The Managing Director approved the proposal and awarded contract to the said Chandresh Thakkar on 6.12.2007 itself. Accordingly, the work order was issued and agreement entered into.
From the documents available on record an irresistible conclusion can be drawn that right from the authorities in the lower level to the Managing Director of the Corporation are actively involved in processing the application of said Chandresh Thakkar for awarding him transport work from Mahasamund Base Depot as transporter in addition to the petitioner who is also entrusted the work for the same base depot. The manner in which the application of additional contractor was processed within two days at various levels of the corporation speaks volumes about the role played by all the officers of the corporation who are involved in decision making and it appears that the action against the petitioner has been initiated to protect the highly placed officers, who are involved in the decision making process.
So far as the argument advanced by the learned Counsel for the respondents that the action was taken against the petitioner after serving show cause notice on him and after considering his reply is concerned, after going through the show cause notice and the reply submitted by the petitioner, we are of the opinion that the order impugned has been passed without application of mind and without considering the reply submitted by the petitioner. By the impugned order the respondents have not only cancelled the agreement of transport work of Mahasamund Base Depot but also cancelled other agreements entered between the petitioner and the corporation for various other base depots for the year 2008-09 and earnest money/security deposit and other dues deposited by the petitioner has been withheld till the pendency of the case in the courts. However, the respondents have not stated in their reply or oral arguments before this Court that any case is pending against the petitioner anywhere in the court of law.
The respondents have also taken a preliminary objection regarding maintainability of the writ petition on the ground that Clause 14 of the NIT provides for resolution of dispute through arbitration and therefore, the instant petition is liable for dismissal on the ground of availability of alternative remedy.
It is settled law that rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In appropriate case, in spite of availability of alternative remedy, the High Court may still exercise its writ jurisdiction in at least three contingencies; (i) where the writ petition seeks enforcement of any of the fundamental rights; (ii) where there is failure of principles of natural justice; or (iii) where the orders or proceedings are wholly without jurisdiction or the vires of an Act is challenged. (See Whirlpool Corporation v. Registrar of Trade Marks; ABL International Ltd. and Anr. v. Export Credit Guarantee Corporation of India Ltd. and Ors. & Harbanslal Sahnia and Anr. v. Indian Oil Corporation Ltd. and Ors.)
In the matter of Jagdish Mandal v. State of Orissa and Ors.4 the Hon''ble Supreme Court while dealing with the scope of judicial review of administrative action in the matters relating to tender or award of contract observed in Paragraph No. 22 thus:
...a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;
OR
Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";
(ii) Whether public interest is affected.
If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.
We have already detailed the manner in which the corporation entered into an agreement with the said Chandresh Thakkar for additional work of transportation already allotted to the petitioner; the background in which show-cause notice was issued to the petitioner and the impugned order was passed canceling the contract work of the petitioner not only for the relevant year but also for the subsequent year without adverting to the reply submitted by the petitioner to show cause notice. The decision made by the respondent-Corporation is on the face of it arbitrary & irrational and therefore, we find substance in the arguments of learned Counsel for the petitioner that the action has been taken against the petitioner only to save the higher officers of the corporation who may be otherwise held responsible for awarding contract to the said Chandresh Thakkar in hot haste as a result of which the corporation suffered huge loss.
On the basis of aforesaid discussions, we are of the opinion that despite availability of alternative remedy under Clause 14 of the NIT, the instant writ petition is maintainable.
In the result, the petition is allowed and the impugned order dated 4.12.2008 (Annexure P-1) is hereby quashed.
No order as to costs.