Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Guj) 278

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SONIA GOKANI, VAIBHAVI D. NANAVATI, JJ.
M/S. ROYAL TRANSPORT CONTRACTOR THROUGH PROPRIETARY CONCERN OF VASIM FARUK DOLTI – Appellant
Versus
GUJARAT STATE CIVIL SUPPLIES CORPORATION LTD – Respondents
SPECIAL CIVIL APPLICATION NO. 4155 of 2021
Decided On : 19-04-2021

Advocates Appeared:
For the Petitioner: MR BHARAT T RAO
For the Respondent: MR. BHARGAV V PANDYA, MR TIRTHRAJ PANDYA, AGP

Point of Law: Cancellation of contract – Writ - there are various factual issues which will need to be addressed by the authority concerned and it would be next to impossible to adjudicate them in the writ jurisdiction under Article 226 of the Constitution of India.

Headnote:
Constitution of India- Articles 14, 19 and 226- seeking to challenge the action of the respondent authority cancelling the contract of the petitioner for the door step delivery of essential commodities for Panchmahal District and withholding the security deposit of the petitioner essentially on the ground of gross violation of principles of natural justice for having acted without issuance of the show cause notice to the petitioner and without affording opportunity of hearing, such order dated 22.2.2021 is under challenge.
Finding of the Court : FIR reflects the suspects; one of them, according to the petitioner, is absconding. In any case, the Police is required to investigate and file a charge-sheet within ninety days in such matters and therefore, abscondence of one of the accused shall not in any manner hamper the course of investigation and the outcome of which shall need to be regarded by both the sides, as legal recourse will be open to the parties in respect of culmination; either in the form of charge-sheet or filing of any of the summaries by the Investigating Officer. Without deciding anything on the aspect of merit, presently, predominantly on account of issuance of show cause notice, pending this petition on 2.3.2021, this petition is being disposed of by relegating the parties to the alternative efficacious remedy. Let the respondent decides the matter with requisite openeness and in accordance with law, without prejudging the issue in any manner. This disposal shall not come in the way of petitioner, and the authority concerned shall decide the matter on merit purely. If the outcome of the show cause notice in any manner prejudices the petitioner, the legal recourse open to it shall be resorted to. This Court has not expressed any opinion on merit. All contentions raised here are kept open to be decided by the appropriate authority.
Result: Petition disposed of

ORDER :

SONIA GOKANI, J.

1. This is a petition preferred under Articles 14, 19 and 226 of the Constitution of India seeking to challenge the action of the respondent authority cancelling the contract of the petitioner for the door step delivery of essential commodities for Panchmahal District and withholding the security deposit of the petitioner essentially on the ground of gross violation of principles of natural justice for having acted without issuance of the show cause notice to the petitioner and without affording opportunity of hearing, such order dated 22.2.2021 is under challenge.

2. The respondent No.1 published tender notice on 28.5.2020 inviting rates for supply of essential commodities by transporting into the Fair Price shops, Anganwadis and MidDay Meal Centers known as door step delivery scheme for all districts of Gujarat State for the year 202021. The petitioner participated in the tender and was declared successful for the purpose of Panchmahal district. Accordingly the process was completed and finalized on 27.7.2020. The tender came into force with effect from 1.8.2020. The work order was issued in favour of the petitioner and he entered into an agreement with the Collector, Panchmahal on 7.8.2020 for the contract for the period with effect from 1.8.2020 to 31.3.2021.

3. It is the say of the petitioner that the respondent appointed M/s. Vijay Tevar & Co., Chartered Accountant as Auditor to carry out the checking of godown and to certify and tally the stock register being maintained by the Godown Manager. After the inspection the respondent No.1 suspected malpractices. The physical stocks of wheat and rice had also been verified in the presence of panchas and later on, the Gujarat State Civil Supplies Corporation Ltd., respondent herein lodged the complaint being C.R.No.11207061210114 with Shahera police station on 20.2.2021 for the offences punishable under Sections 406, 420, 409, 120(B) of the Indian Penal Code read with Sections 3 and 7 of the Essential Commodities Act. The FIR has shown as suspects, Arif Nurulamin Shaikh for and on behalf of the Royal Transport, M/s. Vijay Tevar & Co., Vishal Shah as a representative of the CA Team and Kanaiyalal Nagjibhai Rot. The FIR quantifies the possible damage to the Government to the tune of Rs.3,67,72,900/.

4. It is alleged by the petitioner that soon after the filing of the FIR, the respondent No.1 sent a communication to the District Manager (Grade1) and District Supply Officer, Dist.Panchmahal on 22.2.2021 informing that the work of door step delivery contractor is doubtful and an FIR is already filed with the Shahera police station. The respondent No.2 was instructed to forthwith stop the work of door step delivery awarded to the petitioner and make an alternative arrangement from other interested transporters at the rate given to the petitioner with the further directions that till the investigation is completed or till any clear instruction is issued, no payment of any outstanding bills of the petitioner shall be made and the security deposit be withheld. This order dated 22.2.2021 is challenged in the petition for having been passed without issuance of show cause notice or affording opportunity of hearing. Clause point No.3.3 has been referred to of the general terms and conditions for the cost of delivery tender which provide that before expiry of the terms of the contract, the Corporation for any reason by issuing legal notice can cancel the contract. Essentially aggrieved by the fact that no notice has been issued and the action taken is arbitrary and in fragrant violation of principles of natural justice, the petitioner has approached this Court and requested for following prayers :

“(A) To admit and allow this petition.

(B) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, quashing and setting aside the impugned order dated 22.2.2021 passed by respondent no.1 cancelling the contract of the pe

Click Here to Read the rest of this document