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2020 Supreme(Telangana) 735
IN THE HIGH COURT OF FOR THE STATE OF TELANGANA
A. Abhishek Reddy, J.
M. Devadas – Appellant
Versus
The TSRTC and Ors. – Respondents
Writ Petition No. 21609 of 2020
Decided On : 21-12-2020
Advocate Appeared:
For the Appellant :D.V. Chalapathi Rao, Advocate
The imposition of penalties must be in accordance with the terms of the original contract and communicated to the parties involved. Failure to do so may render the imposition of penalties arbitrary and opposed to principles of natural justice.
Headnote:
Penalty - Tender Allotment - Circular No. 26/2019-OPD (Plg) - The court held that the imposition of the penalty and insistence on payment as a condition precedent for induction into the fleet is an arbitrary exercise of power, illegal, bad, opposed to principles of natural justice and set aside the penalty. The respondents are directed to permit the operation of the petitioner's hire bus without insisting for payment of penalty.
Fact of the Case:
The petitioner participated in a tender for supplying a bus and was allotted a route with a 90-day deadline to produce the bus. Due to various delays, the bus was produced after the deadline, and a penalty was imposed. The petitioner sought exemption citing circumstances beyond their control, but the request was rejected.
Finding of the Court:
The court found that the imposition of the penalty was arbitrary, illegal, and opposed to principles of natural justice as the circular imposing the penalty was not communicated to the petitioner and was not part of the original tender terms. The court set aside the penalty and directed the respondents to permit the operation of the petitioner's hire bus without insisting for payment of penalty.
Issues: The issues involved the imposition of a penalty for late production of the bus, the petitioner's request for exemption, and the validity of the circular imposing the penalty.
Ratio Decidendi: The court held that the imposition of the penalty was arbitrary, illegal, and opposed to principles of natural justice as the circular imposing the penalty was not communicated to the petitioner and was not part of the original tender terms. The court set aside the penalty and directed the respondents to permit the operation of the petitioner's hire bus without insisting for payment of penalty.
Final Decision: The writ petition was allowed, setting aside the penalty and directing the respondents to permit the operation of the petitioner's hire bus without insisting for payment of penalty.
ORDER :
A. Abhishek Reddy, J.
1. Heard the learned counsel for the petitioner and Sri B. Mayur Reddy, the learned Standing Counsel for TSRTC, appearing for the respondents. With their consent, the Writ Petition is disposed of at the stage of admission itself.
2. This writ petition is filed seeking a writ of mandamus declaring the proceedings vide No. 01/259(1)/2019-RM/MBNR, dated 14.10.2020, issued by respondent No. 3-the Personnel Officer, TSRTC, Mahabubnagar Region, imposing penalty of Rs. 1,87,000/- on the petitioner for operating the bus bearing No. TS-32-T-5798 on hire basis as per the allotment letter dated 26.10.2019.
3. The case of the petitioner is that pursuant to the Tender Notification dated 24.10.2019 issued by the respondent Corporation for the supply of passenger buses to be operated on a hire basis, the petitioner has submitted his tender application and was declared as successful bidder. The Executive Director, Hyderabad Zone of the respondent Corporation vide letter dated 26.10.2019 has allotted the route to the petitioner and directed him to produce the passenger bus within 90 days from the date of the said allotment letter. Accordingly, the petitioner has placed an order for the chassis with Ashok Leyland and after receiving the chassis on 24.01.2020, he has handed over the same to Hyderabad Coach Builders and Fabricators for fabrication of express bus body as per the specifications of the respondent Corporation. But, due to huge workload, the said Hyderabad Coach Builders and Fabricators, which is one of the authorized coach builders of the respondent Corporation, has delivered the bus only on 05.03.2020. Immediately, the petitioner has applied for registration of the vehicle with the Transport Department, and in the meanwhile, the Government has declared lockdown due to COVID-19. Therefore, after receiving the Registration Certificate and the Fitness Certificate, he has produced the passenger bus before respondent No. 2 for inspection. But, however, respondent No. 2, instead of allowing the petitioner to operate the bus by entering into a hire agreement, has issued the impugned proceedings imposing penalty of Rs. 1,87,000/- on the petitioner on the ground that the bus was not produced within 90 days. Hence, this writ petition.
4. The respondent-Corporation has filed a counter affidavit stating that as there is no legal right of the writ petitioner and the corresponding statutory obligation on the part of the Corporation, no Mandamus can be issued. Pursuant to the tender notification, dated 24.10.2019, the petitioner had participated in the tenders and was the successful tenderer to operate the Express type bus on route Wanaparthy-Kurnool (462 KMs) from Wanaparthy Depot and the Corporation also issued an allotment letter, dated 26.10.2019, on an agreed rate of Rs. 7.97/- per KM and advised him to produce the bus within a period of 90 days from the date of allotment, which expired by 23.01.2020. However, the petitioner produced the bus before the Inspection Committee on 04.07.2020. As such, the penalty amount of Rs. 2,34,000/- was imposed, as per the guidelines vide Circular No. 26/2019. However, considering the Covid-19 situation, the Corporation reduced an amount of Rs. 47,000/- (for the lockdown period waived off) from the actual penalty and also advised the petitioner to pay only Rs. 1,87,000/-. Further, the contention of the petitioner that due to Covid-19 situation he could not produce the bus is incorrect for the reason that the period of 90 days granted to the petitioner for producing the bus was expired by 23.01.2020 whereas the lockdown was imposed w.e.f. 22.03.2020 and the petitioner has produced the bus before the Inspection Committee on 04.07.2020 and therefore the Corporation has rightly imposed the penalty on the petitioner as per the terms and conditions of the tender and the Circular No. 26/
