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2021 Supreme(All) 1442

IN THE HIGH COURT OF ALLAHABAD
MANOJ MISRA, JAYANT BANERJI, JJ.
Devnath Singh and Others - Petitioners
Versus
State of U.P. and Others - Respondents
Writ - C No. 12775 of 2021
Decided On : 15-09-2021

Advocates:
Advocate Appeared:
For the Petitioner: Kunal Shah.

Headnote:

Order of cancellation of character certificates – Challenged - Award of a work contract or for registration of a work contractor - Business firms/company - Petitioners were issued character certificates that enabled their business firms/company to be registered as approved contractors to bid for work contracts floated by the State Government - Petitioners were issued character certificates that enabled their business firms/company to be registered as approved contractors to bid for work contracts floated by the State Government – Held, order impugned, passed by the District Magistrate, Mau, cancelling the character certificate is quashed. This order shall not preclude the respondents from cancelling the registration of the petitioners as contractor or their work contract on grounds legally permissible, and in accordance with the law - Petition is allowed.

JUDGMENT :

1. Heard Sri Kunal Shah for the petitioners; the learned Standing Counsel for the respondents; and have perused the record.

2. In brief the facts giving rise to this petition are as follows:

2a. The petitioners were issued character certificates on 04.02.2019 that enabled their business firms/company to be registered as approved contractors to bid for work contracts floated by the State Government. On a complaint made by one Santosh Kumar Singh, by order dated 4th June, 2020, the District Magistrate, Mau cancelled the character certificates of the petitioners on the ground that Rajnath Singh, the brother of the petitioner no.1, the brother-in-law of the petitioner no.2 and paternal uncle of the petitioners no.3 and 4, is a person with criminal antecedents and that the petitioners' firms were being used just as a facade to enable Rajnath Singh to bag Government contracts as he himself would not have otherwise been eligible, being a person with criminal antecedents. It was also stated in the cancellation order that the petitioners had obtained character certificates by suppressing material facts.

2b. Challenging the order of cancellation of character certificates, Writ-C No.10041 of 2020 was filed by the petitioners. Before the writ Court it was urged that the petitioners by themselves had no criminal antecedents; their firms had no concern with Rajnath Singh; they suppressed no information and, therefore, cancellation of the character certificates by taking into consideration the criminal antecedents of their relative was not justified. In addition to above, it was urged that the objection taken by the petitioners to the show cause notice to demonstrate that in none of their firms or company Rajnath Singh had any interest was not dealt with properly.

2c. The Court found substance in the submissions made on behalf of the petitioners and, vide order dated 7th December, 2020, it quashed the order dated 4th June, 2020 and remitted the matter to the District Magistrate, Mau to pass a fresh order after affording opportunity of hearing to the petitioners and after dealing with their explanation filed in response to the show cause notice.

2d. Consequent to the order dated 7th December, 2020 passed in Writ-C No.10041 of 2020, by the impugned order dated 11th February, 2021, the District Magistrate, Mau again cancelled the character certificate issued to the petitioners by observing as follows: (i) that the records reveal that by a resolution of the Board of Directors, in one of the companies of the petitioners, Rajnath Singh had been removed from the Company which is suggestive of the fact that Rajnath Singh was earlier a part of the Company; (ii) that paragraph 2 of the G.O. No.6738/23-7-2006, dated 05.01.2007, provided that public works department shall not award contract to any person with criminal antecedents; (iii) that paragraph 2 of G.O. No.3503/23-7-2002-41 MS/54, dated 12.09.2007, provided that if it is found that the contract awarded is actually being performed by a person with criminal antecedents, the contract would be rescinded; (iv) that paragraph 12 of G.O. No.2466/92-1-2018-65 M/2014, dated 30..07.2018, provided that if, after award of contract, it is found that the contractor is involved in mafia like activity or in anti-social activities or organised criminal activity, his contract would be cancelled; (v) that from the report of Superintendent of Police, Mau, dated 03.08.2020, and the report of Circle Officer, City, Mau, dated 02.08.2020, on the basis of a confidential inquiry, it appeared that the petitioners and Rajnath Singh are members of a joint family and have a common mess and that the petitioners provide a facade behind which, Rajnath Singh, the man with criminal antecedents, operates and, therefore, the character certificate of the petitioners is liable to be cancelled.

3. Assailing the cancellation order, the learned counsel for the petitioners contended that the grounds cited in the impugned order might

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