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High Court Of Delhi
MEKASTER TRADING CORPORATION - Appellant
Versus
UNION OF INDIA - Respondent
CIV.WRIT PETITION 2486 of 2002
Decided On : 08/29/2003
Held:
Perusal of the impugned order shows that after making recital of the events which transpired after the show cause notice, i.e. filing of replies by the petitioner, giving of hearings to both parties who explained their respective cases, the penultimate para records that case has been examined and heard and the sum and substance of the allegation made against the petitioner was that petitioner could not fulfill its contractual obligation as Indian agent and replies submitted by the petitioner as well as oral representation made by them during hearing of the case have not been found convincing. All the arguments of the petitioners are brushed aside by the following utterances "the reply submitted by them; vide their letters dated 18.8.2001 and 6.2.2002 and oral representation by them during hearing of the case on 4.3.2002 have not been found convincing. The available evidence does not reveal that the firm has fulfilled its contractual obligations.
Passing the order in such a slip shod manner which has the serious effect of blacklisting the petitioner for a long period of 5 years is certainly not act of good administration.
It is abundantly clear that the aforesaid summation cannot be called as "reasons" in support of the order. It can, at best, be termed as conclusion. Apart from this conclusion there is nothing in the order to indicate any supportive reason. Thus, there is no indication in the order us to what are the elements which persuaded the competent authority to reject the contentions of the petitioner. The requirement that the reasons must meet the substance of the principle argument that the competent authority was required to consider is clearly lacking. No link between the material on which conclusions are based and the actual conclusion drawn is based, is found. If that has remained at the back of the mind of the authority passing the order, and has not surfaced on the records of the case, the ingredients of a reasoned order are not met. Reading of such an order would naturally not satisfy the aggrieved partys desire to know as to why decision was reached and what was the justification in rejecting his point of view. It would harbour the feeling that the. authority proceeded with the matter with closed mind, whatever is stated in the show cause notice is final and giving of opportunity to show cause was empty formality as the defense was rejected summarily by labelling the same as not convincing. It has to be emphasised that reasons for a decision are distinct from the conclusions recorded in the order. Apart from repeating that the petitioner had not fulfilled its contractual obligation as Indian Agent which was stated in the show cause notice (may be in detail), what was required was to at least indicate in a concise manner as to why the defense of the petitioner was unconvincing.
When authority has omitted to give reasons in the impugned order such a deficiency cannot be supplied by the State by adducing sufficient ground thereforee when the validity of the order is challenged
The competent authority has not given any reason for his conclusion, namely, as to why the reply and submissions of the petitioner were unconvincing. Such an order cannot stand judicially scrutiny. This order is accordingly set aside.
However, it would not preclude the respondents to pass fresh order in consonance with law and after giving reasons in support of its order.
( 1 ) VIDE order dated 19th March, 2002 petitioner has been blacklisted. Order has been passed by the Government of India, Ministry of Commerce and Industry, Department of Commerce to the effect that all departments/ministries/ offices of the Government of India are forbidden to have commercial/business dealings with the petitioner and its subsidiaries, if any, for a period of five years with effect from the date of the order, i. e. 19th March, 2002. Petitioner has impugned this order in the present writ petition and the prayer is for issuance of writ of certiorari and any other writ quashing the said order.
( 2 ) THE factual matrix of the matter may be summarised first, before taking note of the legal challenge to the impugned order Department of Commerce in the ministry of Commerce and Industry, Supply Division (respondent No. 2) sent an indent to Director General of Supply and Disposal (DGSandd) (respondent No. 3) vide memorandum dated 16. 8. 1993 for procurement of four numbers of Mobile bridge Inspection Units (in short mbiu ). It was under the World Bank assisted state Road Project for four States of Maharashtra, Rajasthan, Bihar and Uttar pradesh. Bids were invited for procurement of MBIU. Two parties submitted their bids M/s. Barin Spa, Italy (hereinafter referred to as M/s. Barin) and M/s. Moog, germany. Petitioner was Indian representative of M/s. Barin. After undergoing the necessary process of scrutinising these bids, bid of M/s. Barin was accepted and the contract was awarded to it vide award dated 11. 7. 1995. It was followed by signing of formal contract dated 20. 9. 1995. Petitioner, as an agent of M/s. Barin, was to act for the purpose of liaisoning and coordination between M/s. Barin and the respondent No. 2 for which M/s. Barin was to pay the petitioner agency commission. The MBIU were to be supplied by M/s. Barin to respondents as per specifications contained in the contract. The contract consisted of the "other terms", "special conditions of contract" and the "general conditions". We are not concerned with all these conditions. Those conditions of the contract, which may be relevant for our purposes may only need to be pointed out which are as follows: (i) The MBIU were subject to pre-despatch inspection at the works of m/s. Barin SPA in Italy and the nominated Inspection Authority is the additional Director General (Quality Assurance) DGSandd and the inspecting Officer is Director (Quality Assurance), Delhi Circle. (ii) The payment in respect of the four MBIU was to be made against a letter of Credit which was to be opened by the Chief Controller of accounts, Department of Supply, New Delhi with the State Bank of india, London Branch. (iii) Further, as per Clause 7, Section Ill-Special Conditions of Contract, one of the essential document required to be submitted for claiming 90% payment was the inspection certificate. (iv) Technical specification with respect to pressure of bridge deck was as under:
". . . THE maximum pressure on the bridge deck under any tyre of the mbiu, both translating and stabilizing in severe conditions of operation shall not exceed 5 kgs. /sq. cm" (v) In the contract there was provision for payment of agency commission to the petitioner as per which, commission was to be paid to the petitioner in Indian rupees at TT buying rate of exchange in a particular manner.
( 3 ) VIDE letter dated 19. 2. 1996 M/s. Barin advised DGSandd to arrange for inspection of equipment stating that it would be ready for inspection by 1. 4. 1996. Letter of credit was accordingly opened on 1. 3. 1996 SBI informed DGSandd in this behalf. Thereafter inspection team of the respondent No. 3 carried out inspection at works of M/s. Barin, Italy from 17. 6. 1996 to 21. 6. 1996 and issued Inspection Advice dated 20. 6. 1996, inter alia, observing as follows:
"the equipment are technically acceptable from TE parameters and performance/working point of view. It is confirmed that stabilizers being su
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