Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2021 Supreme(Guj) 732

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B.PARDIWALA, VAIBHAVI D. NANAVATI, JJ.
JP ISCON PVT LTDTHROUGH JATIN MADANLAL GUPTA - Appellant
Versus
STATE OF GUJARAT - Respondent
SPECIAL CIVIL APPLICATION NO. 9151 of 2020
Decided On : 18-10-2021

Advocates Appeared:
For The Appellant : MR MIHIR JOSHI SENIOR COUNSEL WITH MR RUTUL P DESAI
For The Respondent: MR CHINTAN DAVE, AGP, MR DEVANG VYAS, MR KAUSHAL D PANDYA, MR MUKESH A PATEL, MR.NANDISH H THACKAR

Point of Law: Every case in which a citizen/person knocks at the doors of the writ court for breach of his or its fundamental rights is a matter which contains a “public law element”, as opposed to a case which is concerned only with breach of contract and damages flowing therefrom. Whenever a plea of breach of natural justice is made against the State, the said plea, if found sustainable, sounds in constitutional law as arbitrary State action, which attracts the provisions of Article 14 of the Constitution of India.

Headnote:
Constitution of India,1950 – Article 12,14,19(1)(g) and 226 - Ancient Monument and Archaeological Sites and Remains Act, 1958 – Section 20(B) and 20C(2) – Contract - Termination contract - Pragmatic approach - Tussle between writ applicant and Surat Municipal Corporation leading to present litigation has rendered 1,304 poor families homeless - These 1,304 families court are talking about hail from a very poor and downtrodden strata of society - These 1,304 families, as on date, are without any proper and adequate shelter - This litigation could have been easily avoided by Surat Municipal Corporation by taking a practical view of entire dispute and adopting a pragmatic approach - Obstinate and adamant attitude on part of Corporation, not only has put writ applicant in difficulty having already invested almost Crore by now in project, but has also rendered 1,304 families without any shelter - Over a period of time, court have gathered an impression that someone has an eye on the project in question, having noticed that stage is set and decks are cleared - Whether a contracting party finds it prudent to abide by terms of contract.
Finding of the Court:
Court hasten to add that there could be a situation wherein inherent power of blacklisting or placing contractor on Holiday-list can be exercised and stipulations or the terms of contract may not restrict or fetter exercise of such power - Equally, mere pendency of legal proceedings cannot be a absolute bar for invoking this inherent power or exercising it - Thus, having regard to aforesaid discussion, court have reached to the conclusion that the decision of Corporation to blacklist writ applicant does not appear to be just, proper or reasonable, more particularly, applying the doctrine of proportionality, as discussed- Court are also of view that action on the part of Corporation to terminate contract and forfeit the entire security deposit could also be said to be arbitrary and unfair having regard to the materials on record.
Result: Petition allowed

JUDGMENT :

J.B.PARDIWALA, J.

1. The tussle between the writ applicant and Surat Municipal Corporation leading to the present litigation has rendered 1,304 poor families homeless. These 1,304 families we are talking about hail from a very poor and downtrodden strata of society. These 1,304 families, as on date, are without any proper and adequate shelter. This litigation could have been easily avoided by the Surat Municipal Corporation (for short, “the Corporation”) by taking a practical view of the entire dispute and adopting a pragmatic approach. The obstinate and adamant attitude on the part of the Corporation, not only has put the writ applicant in difficulty having already invested almost Rs.30 Crore by now in the project, but has also rendered the 1,304 families without any shelter. Over a period of time, we have gathered an impression that someone has an eye on the project in question, having noticed that the stage is set and the decks are cleared.

For the convenience of exposition, this judgement is divided into the following parts:

Sr. No.	Description	Paras
1.	Prayers	2
2.	Facts giving rise to this litigation	3 to 33
3.	Submissions on behalf of the writ applicant	34 to 36
4.	Submissions on behalf of the Corporation	37 to 39
5.	Submissions on behalf of the National Monuments Authority, Government of India	40
6.	Submissions on behalf of the displaced families	41 to 43
7.	Analysis	44 to 47
8.	Maintainability of the writ application under Article 226 of the Constitution	48 to 53
9.	Blacklisting the writ applicant	54 to 63
10.	Doctrine of proportionality	64 to 75
11.	Meaning and true import of arbitrariness	76 to 82
12.	Final analysis	83 to 103

2. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs:

“(a) This Honourable Court may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction quashing and setting aside the Standing Committee resolution no.510/2020 dated 30.7.2020 (received copy on 31.7.2020) (Annexure A coly), passed by the Standing Committee of the Respondent – Surat Municipal Corporation, being arbitrary illegal and violative of Article 14 & 19(1) (g) of the Constitution of India;

(b) This Honourable Court may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction, quashing and setting aside the order passed by the Resp.-Corporation dated 31.7.2020 (Annexure A coly) pursuant to the show cause notice dated 17.7.2020 and 24.7.2020 (Annexure-AO & AQ), wherein the Resp.-Corporation has black listed the petitioner company for 3 years as well as terminated the work order and issued direction for forfeiting the Security Deposit of the petitioner company, being arbitrary, illegal and violative of Article 14 of the Constitution of India.

(c) This Honourable Court may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction, quashing and setting aside the communication dated 31.7.2020 (Annexure “AS”), sent by the Respondent – Corporation to the Resp.-SBI Bank, for invoking the Bank Guarantee/security deposit of Rs.6.30 Crores of the petitioner deposited with the Resp.-SBI Bank and further may be please to issue writ or mandamus restraining the respondent Corporation from invoking the Bank Guarantee / Security deposit of the petitioner – company being arbitrary, illegal and violative of Article 14 of the Constitution of India.

(d) Pending admission, hearing and final disposal of this petition, this Honourable Court may be pleased to stay the implementation, operation and execution of the Standing Committee resolution No.310/2020, dated 30.7.2020 (received on 31.7.2020), as well as also stay the implementation, operation and execution of the order pass

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2021 Supreme(Guj) 732

IN THE HIGH COURT OF GUJARAT AT AHMEDABADJ.B.PARDIWALA, VAIBHAVI D. NANAVATI, JJ.JP ISCON PVT LTDTHROUGH JATIN MADANLAL GUPTA - AppellantVersusSTATE OF GUJARAT - RespondentSPECIAL CIVIL APPLICATION NO. 9151 of 2020Decided On : 18-10-2021

Cases Referred (51)

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
J.B.PARDIWALA, VAIBHAVI D. NANAVATI, JJ.
JP ISCON PVT LTDTHROUGH JATIN MADANLAL GUPTA - Appellant
Versus
STATE OF GUJARAT - Respondent
SPECIAL CIVIL APPLICATION NO. 9151 of 2020
Decided On : 18-10-2021