IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION No 6458 of 2001
For Approval and Signature:
Hon'ble MR.JUSTICE KUNDAN SINGH
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1. Whether Reporters of Local Papers may be allowed : YES
to see the judgements?
2. To be referred to the Reporter or not? : YES
3. Whether Their Lordships wish to see the fair copy : NO
of the judgement?
4. Whether this case involves a substantial question : NO
of law as to the interpretation of the Constitution
of India, 1950 of any Order made thereunder?
5. Whether it is to be circulated to the Civil Judge? : NO
————————————————————–
ASIF ENTERPRISES
Versus
O.N.G.C. LIMITED
————————————————————–
Appearance:
Mr. Y.N.Oza, Sr. Advocate for MR KRISHNA G PILLAI
for Petitioner.
Mr. S.B.Vakil, Sr. Advocate with MR RAJNI H MEHTA
for Respondents No. 1-5
————————————————————–
CORAM : MR.JUSTICE KUNDAN SINGH
Date of decision:11/01/2002
CAV JUDGEMENT
This petition has been filed for quashing
and setting aside the impugned order dated 23rd January,
2001 passed by the respondent no. 5 at Annexure “A” and
for a direction to the respondent Corporation to accept
the tenders submitted by the petitioner for contracts as
mentioned in para-8 of the petition and to award the said
contract to the petitioner in accordance with law as if
impugned order dated 23rd January, 2000 was not passed
and to issue new tender forms to the petitioner for
future cotnracts and accept and process the said tenders
for future contracts in accordance with law.
2.The petitioner is an approved contractor
of the respondent Corporation since 1990 and various
contracts have been completed by the petitioner and it
was awarded on average about 40 contracts per year from
1992 to 1997 and they were completed to the satisfction
of the Corporation. The dispute relates in respect of
the contracts awarded in the year 1997 which are as
follows:
(a) For laying of 8″ dia effluent pipe from SND GGST
to ETP Jhalora was awarded by agreement no.
BDA/CMD/TL/CA/23/96 dated 29.11.1996.
(b) For laying of 8″ dia effluent pipe from EPP to
Sanand Plymer Plant was by agreement No.
BDA/CMD/CA/24/97 dated 1.1.1997.
The petitioner submitted two bank guarantees bearing nos.
173-1 for Rs. 2,38,780/- and 169-1 for Rs. 3,41,743/-.
As the contracts could not be completed within prescribed
time limit, the bank guaratees were required to be
renewed. At that time, it was found that those bank
guarantees were fake and they were furnished by the
petitioner due to some mistake of the employee of the
petitioner. Hence, the petitioner submitted two fresh
bank guarantees which were accepted by the respondent
Corporation on the recommendation of the committee.
After completion of the contract to the satisfaction of
the Corporation, both the bank guarantees were returned
to the petitioner. As furnishing of fake bank guarantees
by an employee of the petitioner amounts to misconduct,
that employee was terminated from service of the
petitioner. Thereafter, the petitioner was also awarded
the contract by an agreement dated 15/16.9.1997 for Rs.
28,92,689.18 ps. and dated 10/17.7.1998 for Rs.
58,56,450/-. The respondent Corporation also awarded to
the petitioner 45 contracts for Ahmedabad project and 32
contracts for Mahesana project and those contracts were
successfully completed by the petitioner to the
satisfaction of the respondent Corporation. The letter
dated 16th May, 2000 was issued to the petitioner. One
Mr. G.L.Gupta was the General Manager of the Western
Region business centre of the respondent Corporation and
Mr. G.L.Gupta had taken voluntary retirement and in his
place Mr. Prakash Mehta came as General Manager (TPL) E
& C. After taking of the charge, Mr. Prakash Mehta
started harassing the petitioner and reopened old issue
of the year 1997 pertaining to the bank guarantees
bearing nos. 173/1 and 169/1. Mr. Prakash Mehta sent a
letter on 16.5.2000 stating therein that the bank
guarantees which were submitted by the petitioner were
fake. On the basis of the intimation received from the
State Bank of Saurashtra, Kalol branch, the respondent
Corporation had already been informed by the bank
regarding the said two bank guarantees in the year 1998
itselfand therefore, there was no reason for the bank
to inform the respondent Corporation again. The letter
of the bank dated 5.4.2000 shows tht thebank had already
intimted by telegrams and letters to the respondent
Corporation. Thus, the respondent Corporation was aware
of the said issue and that issue was already resolved and
more than 80 contracts were awarded by the respondent
Corporation to the petitioner and those contracts were
completed by the petitioner to the satisfaction of the
Corporation. Therefore, issuance of the said letter was
totally out of consideration and unnecessary and only
with view to harass the petitioner and with a malafide
object and to extort money from the petitioner. Mr.
Prakash Mehta asked the petitioner to give an amount of
Rs. 7 lacs for obliging the petitioner with two
contracts and not to initiate any proceedings or inquiry
regarding the above mentioned two bank guarantees. As
the petitioner had not committed any mistake or fault, it
was the bonafide mistake on the part of the petitioner.
The petitioner did not incline to give any illegal
gratification to Mr. Mehta. Hence, he filed a complaint
before CBI against Mr. Mehta and CBI had laid a trap and
Mr. Prakash Mehta was caught red handed while he was
accepting Rs.50,000/- towards part payment of Rs. 7
lacs. He was arrested and proceedings were initiated
against him. The petitioner replied the letter dated
16.5.2000 of Mr. Prakash Mehta on 28th May, 2000.
Thereafter, on 8.12.2000, a notice was issued by the
respondent no. 3 asking the petitioner to show cause as
to why the respondent Corporation should not ban future
business dealings with the petitioner. That show cause
notice was replied by the petitioner through its advocate
on 14.12.2000. The petitioner again sent a letter dated
5th January, 2001 to the Deputy General Manager and
Inquiry Officer requesting him to give an opportunity of
personal hearing by way of personal meeting. But no such
personal hearing or meeting was given to the petitioner
and the impugned order was passed on 23.1.2001 by the
respondent Corporation informing the petitioner that the
Corporation has decided to ban any fresh business dealing
with the petitioner for a period of 10 years from the
date of issue of the letter. The petitioner has filled
up the tender forms for two contracts. The bid for the
work at Sr. No.2 was opened on 27th January, 2000 and
the price bid was to be opened on 24th April, 2000. The
petitioner was directed by a letter dated 21st April,
2000 to remain present at the time of opening of the
price bid. On 24th April, 2000 the price bid was opened
and the respondent Corporation has given offer by a
letter dated 29th April, 2000. The petitioner accepted
the counter offer made by the Corporation and sent
acceptance by a fax message dated 21st May, 2000. The
petitioner has given a notice dated 4.7.2000 to the
respondent Corporation requesting to issue a letter of
intent to the petitioner but the respondent Corporation
has not issued the letter of intent and nor has replied
to the sid notice. The petitioner therefore, filed a
writ petition being SCA No. 7899 of 2000 which was
dismissed by this Court on 19th July, 2000 on the ground
that no adverse decision has been taken against the
petitioner and hence the writ petition was premture and
liberty was granted to file a fresh petition, if any
adverse decision is taken. Another tender was issued by
the respondent Corporation. The petitioner also
submitted its tender on 4.4.2001. The said tender was
opened on the same day. The petitioner’s tender was
found 27% below the estimated rate of the respondent
Corporation, but the work of the tender was not awarded
to the petitioner. Another tender for construction of
fighting system was submitted by the petitioner on 13th
October, 2000 and that was also lowest 20% below the
estimated rate of the respondent Corporation. Still
however, the aforesaid contract was not awarded to the
petitioner due to impugned order. One rate contract for
the work of trunk feeder was submitted in April 2000, but
the same has not been considered by the respondent
Corporation because of the impugned order. The above
said contracts are still not awarded to any person though
the tender given by the petitioners is lowest, yet due to
impugned order, the petitioner has not been awarded the
above contracts. The petitioner filed Regular Civil Suit
no.31 of 2001 in the Court of Civil Judge (S.D.),
Gandhinagar. It also filed application exh. 5 for
interim injunction. The learned Civil Judge (S.D.),
Gandhinagar granted ad-interim injunction which was made
absolute by an order dated 8th March, 2001. Being
aggrieved by the order of 8th March 2001 of the Civil
Judge (S.D.), Gandhinagar, the respondent Corporation
filed Appeal from Order no. 30 of 2001 in the Court of
the Assistant Judge, Ahmedabad (Rural) at Gandhinagar.
The learned Assistant Judge, Gandhinagar allowed Appeal
from Order no. 30 of 2001 by his order dated 31st July,
2001 and set aside the order dated 8th March, 2001 on the
ground of jurisdiction only. According to the
petitioner, the learned Assistant Judge, has, without
going into the merits and details, allowed the appeal
filed by the respondent Corporation on the ground that
the cause of action has arisen within the jurisdiction of
the Gandhinagar Court. Being aggrieved by the impugned
order passed by the respondent Corporation, the
petitioner has therefore, filed the present petition
inter alia on the ground that the impugned action of the
respondent Corporation in black-listing the petitioner
firm is prima facie bad, illegal and against well settled
principles of law and fair-play. A show cause notice was
issued on 8.12.2000 and that was replied by the
petitioner on 14.12.2000. By another letter dated
5.1.2001, the petitioner requested the Deputy General
Manager (MMT) Enquiry Officer to give an opportunity of
personal hearing, but in absence of the opportunity of
personal hearing in which the petitioner could be able to
explain its case in detail, is against principles of
natural justice, arbitrary, ultra vires, illegal and
violative of Articles 14 and 19 of the Constitution of
India. The incident took place in the year 1997 and the
respondent Corporation had not taken action. The State
Bank of Saurashtra had already informed the respondent
Corporation in the year 1998. Fresh bank guarantees had
already been furnished by the petitioner and the same
were accepted by the respondent Corporation. The inquiry
initiated by the Corporation and the impugned order
suffers from the vice of delay, laches and acquiescence
and also hit by the principle of estoppel. Once the
respondent Corporation had accepted fresh bank gurantees,
there was no reason for initiating the inquiry or taking
any action against the petitioner after lapse of three
years and hence the impugned order is not sustainable in
the eye of law. Moreover, the impugned order is a
non-speaking order and has been passed in mechanical
exercise of power. The inquiry against the petitioner
was initiated with malafide motive by the General Manager
Mr. Prakash Mehta who had taken over the charge of the
said post and the petitioner has made a specific
allegation against Mr. Prakash Mehta. He demanded Rs.
7 lacs as illegal gratification and as the petitioner
could not satisfy the demand, he specifically threatened
to black-list the petitioner. At the instance of the
petitioner, Mr. Mehta was caught red handed while
accepting Rs. 50,000/- as part payment towards the
amount of Rs. 7 lacs. Hence, proceedings were initiated
against the petitioner at the instance of Mr. Prakash
Mehta. Thus, the action against the petitioner is with a
malafide motive and deserves to be quashed and set aside.
The impugned order is vindictive in nature just to take
revenge against the petitioner. The inquiry has
proceeded and the impugned order has been passed without
following principles of natural justice and without
considering the case of the petitioner in its proper
perspective. The whole action on the ground of bank
guarantees given by the petitioner is vague. That was
due to mistake on the part of the employee of the
petitioner and that was corrected by furnishing fresh
bank guarantees. There was no intention on the part of
the petitioner to commit any fraud or cheating the
respondent Corporation. The punishment of black-listing
is disproportionate to the allegations made against the
petitioner. As the petitioner has worked for about 11
years to the satisfaction of the Corporation and that
amounts to stigma on the career of the petitioner firm.
3.Affidavit-in-reply has been filed on
behalf of the respondent Corporation wherein a
preliminary objection has been raised that the
plaintiff-petitioner filed application exh. 5 for
interim injunction in the civil suit. The trial court
granted ad-interim injunction against the respondents as
prayed for vide its order dated 2.2.2001. The respondent
Corporation therefore, preferred Appeal from Order no.30
of 2001 in the District Court, Ahmedabad (Rural) at
Gandhinagar. That appeal has been allowed and the
interim order dated 8.3.2001 of the trial court has been
directed to be vacated. However, the respondents filed a
caveat in Revision Application in this Court which the
petitioner could have filed against the order dated 31st
July, 2001 of the District Court. The petitioner has not
filed any Revision Application till this date in this
Court. When the petitioner failed to obtain interim
relief in the pending suit, it has filed this petition
which is an abuse of process of Court. The petition was
filed on 7.8.2001 challenging the order dated 23rd
January, 2001. As such, the petition is liable to be
dismissed on the ground of undue delay and laches and
this petition has been filed when the suit was already
pending in the trial court. It is an uncontroverted fact
and there is no attempt on the part of the petitioner to
controvert that two bank guarantee nos. 173/1 for Rs.
2,38,780/- and 169/1 for Rs.3,41,743/- were forged and
fake. It is asserted in the petition that some mistake
was found by ONGC regarding the said bank guarantees and
admitted to explain the forgery as mistake or lapse
committed by the employee of the petitioner. In the
judgment of the District Court, the act committed by the
respondent-petitioner was never considered to be legal
and fair and the petitioner has nowhere denied that the
above said two bank guarantees produced by it were not
forged or fake. It was admitted that it happened due to
mistake of some of its employees. The respondent did not
produce forged and fake bank guarantees as alleged by the
appellant. Describing the submission of forged or fake
bank guarantees as mistake by an employee, is a sheer
misrepresentation. Another bank guarantee was also filed
which was a forged or fake bank guarantee. That fact has
been suppressed. There was no question of giving any
personal hearing to the petitioner. It was given a
notice to explain and substanatiate genuineness and
correctness of the bank guarantees dated 30th December,
1996 and 21st February, 1997. The show cause notice
dated 8.12.2000 was given to the petitioner as to why
business dealing with the petitioner should not be
banned. The petitioner filed a reply dated 14.12.2000
through its advocate admitting that due to its employee,
there was a mistake in furnishing the bank guarantees.
In the reply, no personal hearing was sought for. Even
in the letter dated 5.1.2001, the petitioner had not
sought for personal hearing but stated that it would like
to explain the facts which could be possible by personal
discussion. Hence, there was no violation of principles
of natural justice. It is also stated that when the bank
guarantees were subsequently discovered forged and fake,
were accepted by ONGC as the petitioner was not aware of
their forged and fake nature. Soon after the bank which
has not issued the bank guarantees confirmed that the
bank guarantees were forged, action was taken against the
petitioner. Furnishing of forged and fake bank
guarantees even by mistake of employee which in reality
is beyond anybody’s imagination, cannot provide any
excuse to the petitioner. The impugned order has not
been passed by Mr. Prakash Mehta. The impugned order
has been passed to protect the interest of ONGC and has
nothing to do with what might have transpired between the
petitioner and Mr. Prakash Mehta. The action was
initiated on the ground that the bank guarantees which
were given by the petitioner were fake. By the letter
dated 16.5.2000, the petitioner was informed that State
Bank of Saurashtra had intimated that the said bank
guarantees were not issued by the said bank. The
petitioner’s explanation was sought about genuineness and
correctness of the said bank guarantees. From the reply
dated 28th May, 2000 it appears that the petitioner knew
that its explanation was not sought merely with reference
to the fakeness of any bank guarantee. Even in the show
cause notice dated 8.12.2000, it was specifically pointed
out that it was found that the bank guarantees were fake
and not issued by the State Bank of Saurashtra. The
facts mentioned in the show cause notice as well as the
contents of the petitioner’s reply were considered and
then the impugned order has been passed as mentioned
therein. The impugned order is not arbitrarily passed as
a result of non-application of mind or based on
extraneous or irrelevant considerations made in disregard
of any irrelevant considerations, biased or violative of
Articles 14 and 19 of the Constitution of India.
4.A further affidavit in reply has also
been filed by the respondents regarding the question of
bias against the petitioner as argued on 24th August,
2001. The allegations of the petitioner that the
impugned order was vindictive in nature or to take
revenge against the petitioner complaining the ACB about
the demand of illegal gratification by Mr. Prakash Mehta
are denied. Mr. Prakash Mehta, General Manager on
information from the State Bank of Saurashtra on 28th
March, 2000 called for information on and passed some
order on 13.4.2000 for inquiry in the matter and he found
that on expiry of bank guarantees, a letter was written
to the contractor on 2.6.1998 extending the validity of
the bank guarantee dated 19.8.1999 to which the
petitioner did not respond. Another letter was written
to the contractor/petitioner on 3.7.1998 with a copy of
the letter of the Branch Manager, State Bank of
Saurashtra asking the contractor to extend the bank
guarantee by 10.7.1998 and warning the contractor that
otherwise ONGC will be compelled to ask the bank to
encash the bank guarantee. In case of bank guarantee
no.173-1, a letter was sent to the contractor on
10.7.1998 asking it to extend the validity of the bank
guarantee dated 10.4.1997, otherwise, ONGC would be
compelled to ask the bank to encash the above bank
guarantee. In July and August, 1998, ONGC official came
to know that these bank guarantees were fraudulent. A
report was submitted on 26th April, 2000 recommending
suitable action against the petitioner. Mr. Prakash
Mehta submitted a proposal to write a letter to the
petitioner according to the draft submitted and sought
confirmation whether ONGC was justified in keeping the
bid of the petitioner in abeyance in various tenders.
The communication had already taken place prior to the
arrest of Mr. Prakash Mehta on 11.8.2000. In fact, on
11.8.2000, Mr. Prakash Mehta had directed to process
banning of case against the petitioner and his arrest was
made lateron. The contentions taken by the petitioner in
its advocate’s letter dated 14.12.2000 were denied that
the committee was formed as alleged to resolve the issue
of bank guarantee. Mr. G.L.Gupta, General Manager has
retired and it was confirmed by Mr. K.C.Arora. Mr.
G.C. Gupta, Deputy S[uperintending Engineer, now
Superintending Engineer and Mr. Satishkumar, Executive
Engineer (C and M) now Deputy Superintending Engineer.
5.Heard the learned Senior advocates for
the parties and perused the relevant papers on record.
6.The contention of the learned Sr. Advocate Mr. Y.N.Oza for the petitioner is that the
impugned order of black-listing the petitioner affects
the civil rights of the petitioner and that order can
only be passed after giving an opportunity of making a
representation or explanation to show cause and
opportunity of personal hearing is afforded. Otherwise,
it will vitiate and will be in breach of principles of
natural justice. He relied on the following case laws.
1. M/s. Erusian Equipment and Chemicals Ltd. vs. State of
West Bengal and another reported in AIR 1975, SC, 266.
The relevant portion reads as under:
“14. The State can enter into contract with any
person it chooses. No person has a fundamental
right to insist that the Government must enter
into a contract with him. A citizen has a right
to earn livelihood and to pursue any trade. A
citizen has a right to claim equal treatment to
enter into a contract which may be proper,
necessary and essential to his lawful calling.
15.The blacklisting order does not pertain
to any particular contract. The blacklisting
order involves civil consequences. It casts a
slur. It creates a barrier between the persons
blacklisted and the Government in the matter of
transactions. The blacklists are “instruments of
coercion.”
20.Blacklisting has the effect of preventing
a person from the privilege and advantage of
entering into a lawful relationship with the
Government for the purposes of gains. The fact
that a disability is created by the order of
blacklisting indicates that the relevant
authority is to have an objective satisfaction.
Fundamentals of fair play require that the person
concerned should be given an opportunity to
represent his case before he is put on the
blacklist.”
2.Joseph Vilangandan vs. The Executive Engineer
(P.W.D.), Ernakulam and others reported in AIR 1978, SC
930. The relevant portion reads as under:
“18. This being the position, the rule in
Erusian Equipment’s case (ibid) (AIR 1975 SC 266)
will be attracted with full force. While
conceding that the State can enter into contract
with any person it chooses and no person has a
fundamental right to insist that the Government
must enter into a contract with him, this Court
observed (in the said case) ( at page 269):
“black-listing has the effect of preventing a
person from the privilege and advantrage of
entering into lawful relationship with the
Government for purposes of gains. The fact that
a disability is created by the order of
blacklisting indicates that the relevant
authority is to have an objective satisfaction.
Fundamentals of fair-play require that the person
concerned should be given an opportunity to
represent his case before he is put on the
black-list.”
3.Raghunath Thakur vs. State of Bihar and others
reported in AIR 1989, SC, 620. It is held as under:
“4. Undisputably, no notice had been given to
the appellant of the proposal of blacklisting the
appellant. It was contended on behalf of the
State Government that there was no requirement in
the rule of giving any prior notice before
blacklisting any person. In so far as the
contention that there is no requirement
specifically of giving any notice is concerned,
the respondent is right. But it is an implied
principle of the rule of law that any order
having civil consequences should be passed only
after following the principles of natural
justice. It has to be realised that blacklisting
any person in respect of business ventures has
civil consequences for the future business of the
person concerned in any event. Even if the rules
do not express so, it is an elementary principle
of natural justice that parties affected by any
order should have right of being heard and making
representations against the order. In that view
of the matter, the last portion of the order in
so far as it directs black-listing of the
appellant in respect of future contracts, cannot
be sustained in law……”
4.M/s. Southern Painters vs. Fertilizers
and Chemicals Travencore Ltd. and another reported in AIR
1994, SC, 1277 in which rule laid down in AIR 1989, SC
620 has been relied on. The relevant portion of the said
judgment reads as under:
“8. Again in Raghunath Thakur vs. State of Bihar
(1989) 1 SCC 229 at 230 :(AIR 1989 SC 620 para
4), this Court observed :
“Indisputably, no notice had been given to the
appellant of the proposal of blacklisting the
appellant. It was contended on behalf of the
State Government that there was no requirement in
the rule of giving any prior notice before
blacklisting any person. Insofar as the
contention that there is no requirement
specifically of giving any notice is concerned,
the respondent is right. But it is an implied
principle of the rule of law that any order
having civil consequences should be passed only
after following theprinciples of natural justice.
It has to be realised that blacklisting any
person in respect of business ventures has civil
consequence for the future business of the person
concerned in any event. Even if the rules do not
express so, it is an elementary principle of
natural justice that parties affected by any
order should have right of being heard and making
representation against the order.”
9. The deletion of the appellant’s name from the
list of approved contractors on the ground that
there were some vigilance report against it,
could only be done consistent with and after the
compliance of the principles of natural justice.
That not having been done, it requires to be held
that withholding of the tender form from the
appellant was not justified. It our opinion, the
High Court was not justified in dismissing the
writ petition.”
5.Dandapani Roula vs. State of Orissa reported in
AIR 1986 Orissa, 220.
“4. Law is well settled that nobody should be
blacklisted without giving an opportunity of
being heard. An order of blacklisting a person
results in civil consequences. It affects the
reputation of the person blacklisted not only in
his dealings with the Government but in his
dealing with private firm. It affects his
business prospects. These principles have been
enunciated in the decisions reported in (1971) 1
Cut WR 147 (Puranchandra Das vs. Director of
Public Instruction, Orissa) AIR 1975 SC, 266
(Erusian Equipment and Chemicals Ltd. vs. State
of West Bengal) and AIR 19789 SC 930 (Joseph
Vilangandan vs. Executive Engineer (PWD),
Ernakulam.)”
7.On the other hand, learned Senior Counsel
Mr. S.B.Vakil for the respondents contended that
affording an opportunity of being heard before passing
the order of punishment or an order adversely affecting a
person is not an absolute rule of law. Observance of
principles of natural justice depends on various factors
i.e. when all the facts of misconduct are admitted by
the accused/delinquent/defaultor the facts of charge are
not disputed, then only one conclusion is possible and
permissible. An opportunity of being heard to the
petitioner concerned is not required to be given. Even
some time an opportunity of representation/explanation to
any show cause notice is not required to be given to the
person concerned where some direction was given for doing
a particular act and that direction has not been followed
or complied with or if where an order in violation of
principles of natural justice is set aside, it restores
other illegal order. Reliance has been placed on the
following judgments.
1.F.N.Roy s. Collector of Customs, Calcutta and
others reported in AIR 1957, SC, 648.
M/s. Shrikrishnadas Tikara s. State of M.P. and others
reported in AIR 1977, SC, 1691. The relevant portion
reads as under:
“8. Nor are we impressed with the contention
that natural justice has been breached. Here is
a case where admittedly, the conditions of the
contract had been broken and the obligations
under the rules had been violated. The reply to
the show cause notice has set out all that need
be set out. The facts are simple. The
explanation is non-exculpatory. The only plea is
for condonation. The lessee having been heard,
natural justice has been complied with. The fact
that in the second notice by the Collector a
personal hearing was offered, does not mean that
the failure prsonally to hear the petitioner was
a contravention of the cannon of natural justice
in the first case. It is well established that
the principles of natural justice cannot be
petrified or fitted into rigid moulds. They are
flexible and turn on the facts and circumstances
of each case. Has there been any unfair deal by
the authority ? Has the party affected been hit
below the belt ? Has he had a just opportunity
to state his plea ? Having regard to the
features of the present case, we are hardly
satisfied that the order is bad on this score.”
2.State Bank of Patiala s. Mahendra Kumar Singhal
reported in 1994 Supplement (2) Supreme Court Cases, 463.
The relevant paragraph reads as under:
“3. No rule has been brought to our attention
which requires the appellate authority to grant a
personal hearing. The rule of natural justice
does not necessarily in all cases confer a right
of audience at the appellate stage. That is what
this Court observed in F.N.Roy vs. Collector of
Customs, Calcutta. We, therefore, think that the
impugned order is not valid. Our attention was,
however, drawn to the decision in Mohinder Singh
Gill vs. Chief Election Commissioner, New Delhi
wherein obseration is made in regard to the right
of hearing. But that was not a caseof a
departmental inquiry, it was one emanating from
Article 324 of the Constitution. In our view,
therefore, those observations are not pertinent
to the facts of this case.”
3.Cantonment Board and another vs.
Mohanlal and another reported in (1996) 2 Supreme Court
cases, 23 in which the Supreme Court has observed as
under:
“2. The only question in this case is whether
the view taken by the High Court is good in law.
It is seen that the respondent in his reply had
admitted that they constructed, as pointed out by
the Cantonment Board in its notice dated
13.9.1974, and the previous notice. But he
stated that he had done it bona fide and as he
would not demolish it but requested the authority
to reconsider the matter and withdraw the notice.
In other words, he admitted that he had carried
on illegal construction without compliance with
law. So the question is whether enquiry in that
behalf is required to be conducted. We are of
the considered view that the High Court was not
right in its conclusion that an indepenmdent
enquiry requires to be held after the notice was
issued and the reply thereof was given by the
respondent.”
4.Shiv Sagar Tiwari vs. Union of India and
others reported in (1997) 1 Supreme Court cases, 444. In
the said ruling, the Supreme Court has observed as under:
“May it also be stated that it is well settled
that requirements of natural justice can be
moulted insuch a way as to take care of two basic
facts of this principle : (1) to make known the
nature of accusation; and (2) to give opportunity
to state the case, as accepted by this Court in
Hira Nath Mishra vs. Principal, Rajendra Medical
College. In Subhas Chandra case it has been even
held that no hearing is required to be given to
the candidates before cancelling the examination
where mass-copying was indulged, if a case for
the same was otherwise made out. Present is also
a case of large-scale out of turn allotments, and
so, on principle no hearing at all might have
been given. But we did not go to that extent and
gave even personal hearing to many among those
who chose to appear pursuant to the notice
published in the newspaper, which alone was
feasible. All the allottes liable to be
adversely affected being in Delhi and being well
educated, newspaper publication was definitely
sufficient to enable them to know that they must
have been informed. Indeed, the employees
concerned were knowing much aliunde also.
49.Natural justice is after all “no unruly
horse, no lurking land mine” as
characteristically stated by Krishna Iyer, J in
Chairman, Board of Mining Examination and Chief
Inspector of Mines vs. Ramjee. Its unnatural
expansion without reference to these realities
can be “exasperating” as observed by the learned
Judge. It is also worthwhile to remember, as
stated in para 24 of S.L. Kapoor vs. Jagmohan
that where on admitted or indisputable facts only
one conclusion is possible, the Court may not
compel the obserance of natural justice, as it
would be futile to do so. The real point for
determination for us has been whether the
incumbent got the allotment as per his turn or he
jumped the queue, on the face of our rejection to
depart from the existing policy requiring
eviction of those also included in Categories I
and X. This we got examined well and have felt
satisfied at the work undertaken by the Committee
in this regard.”
5.Dharmarthmakara Raibahadue Arcot Ramaswamy
Mudaliar Educational Institution vs. Educational
Appellate Tribunal and another reported in (1999) 7
Supreme Court cases, 332. The Supreme Court has observed
as under:
“…..In view of this, it cannot be said on the
facts and circumstances of this case that there
was any violation of any principle of natural
justice as sufficient opportunity was given to
her. The said matrix of facts reel, on the
contrary, which is also not in dispute that
respondent no. 2 inspite of her earlier
application for leave for seeking permission for
doing Ph.D. course which is for three years
being rejected, she inspite of this under the
garb of leave for doing M.Phil course for one
year and on such leave, without seeking any fresh
permission from the appellant got herself
registered for Ph.D. course. This apart,
admittedly, she even violated the conditions of
her leave for which she filed an affidavit i.e.
if she does not get admission in M.Phil course by
31.7.1978, she would rejoin the service which she
did not do. The facts speak for themselves. It
is also clear from the record that the appellant
gave opportunity to her. On these facts, the
order of termination passed by the appellant
cannot be said to be illegal. We find that both
the Tribunal and the High Court did not revert
(sic advert to) or scrutinise these basic facts
which are so apparent and revealing that no other
inference is possible and that is why we do not
find on record even from her reply any
sustainable defence taken by her.
8.The contention of the learned counsel for the
respondent is confined that there was no enquiry
in terms of section 6 of the said Act. There is
no submission of any defence on merit. Even
before us when we granted learned counsel an
opportunity to give any prima facie or plausible
explanations on record to defend her actions,
nothing could be placed before us. Giving of
opportunity or an enquiry of course is a check
and balance concept that no one’s right be taken
away without giving him/her opportunity or
without enquiry in a given case or where the
statute requires. But this cannot be in a case
where allegation and charges are admitted and no
possible defence is placed before the authority
concerned. What enquiry is to be made when one
admits violations ? When she admitted she did
not join M.Phil course, she did not report back
to her duty which is against her condition of
leave and contrary to her affidavit which is
against her condition of leave and contrary to
her affdiavit which is the charge, what enquiry
was to be made ? In a case where the facts are
almost admitted, the case reveals itself and is
apparent on the face of the record, and inspite
of opportunity no worthwhile explanation is
forthcoming as in the present case, it would not
be a fit case to interfere with the termination
order.”
6.K.L.Tripathi vs. State Bank of India and
others reported in 1984(1) SCC,43. Relevant portion is
reproduced as under:
“31.Wade in his Administrative Law, Fifth
Edication at pages 472-475 has observed that it
is not possible to lay down rigid rules as to
when the principles of natural justice are to
apply: nor as to their scope and extent.
Everything depends on the subject matter, the
application of principles of natural justice,
resting as it does upon statutory implication,
must always be in conformithy with the scheme of
the Act and with the subject matter of the case.
In the application of the concept of fair play
there must be real flexibility. There must also
have been some real prejudice to the complainant;
there is no such thing as a merely technical
infringement of natural justice. The
requirements of natural justice must depend on
the facts and the circumstances of the case, the
nature of the inquiry, the rules under which the
tribunal is acting, the subject matter to be
dealt with and so forth.
32.The basic concept is fair play in action
administrative judicial or quasi-judicial. The
concept of fair play in action must depend upon
the particular lis, if there be any, between the
parties. If the credibility of a person who has
testified or given some information is in doubt,
or if the version of the statement of the person
who has testified, is, in dispute, right of
cross-examination must inevitable form part of
fair play in action but where there is no lis
regarding the facts but certain explanation of
the circumstances there is no requirement of
cross-examination to be fulfilled to justify fair
play in action. When on the question of facts
there was no dispute, no real prejudice has been
caused to a party aggrieved by an order, by
absence of any formal opportunity of
cross-examination per se does not invalidate or
vitiate the decision arrived at fairly. This is
more so when the party against whom an order has
been passed does not dispute the facts and does
not demand to test the veracity of the version or
the credibility of the statement.
34.The principles of natural justice will,
therefore, depend upon the facts and
circumstances of each particular case. We have
set out hereinbefore the actual facts and
circumstances of the case. The appellant was
associated with the preliminary investigation
that was conducted against him. He does not deny
or dispute that. Information and materials
undoubtedly were gathered not in his presence but
whatever information was there and gathered
namely, the version of the persons, the
particular entries which required examination
were shown to him. He was conveyed the
information given and his explanation was asked
for. He participated in that investigation. He
gave his explanation but he did not dispute any
of the facts nor did he ask for any opportunity
to call any evidence to rebut these facts. He
did ask for a personal hearing, as we have
mentioned hereinbefore and he was given such
opportunity of personal hearing. His
explanations were duly recorded. He does not
allege that his version has been improperly
recorded nor did he question the veracity of the
witnesses or the entries or the letters or
documents shown to him upon which the charges
were framed and upon which he was found guilty.
Indeed it may be mentioned that he was really
consulted at every stage of preliminary
investigation upon which the charges were based
and upon which proposed action against him has
been taken. In that view of the matter, we are
of the opinion that it cannot be said that in
conducting the enquiry or framing of the charges
or arriving at the decision, the authorities
concerned have acted in violation of the
principles of natural justice merely because the
evidence was not recorded in his presence or that
the materials, the gist of which was communicated
to him, were not gathered in his presence. As we
have set out hereinbefore, indeed he had accepted
the factual basis of the allegations. We have
set out hereinbefore in extenso the portions
where he had actually admitted the factual basis
of these allegations against him, where he has
not questioned the veracity of the witness or the
facts or credibility of the witnesses or
credibility of the entries on records. Indeed he
has given explanation, namely he was overworked,
he had consulted his superiors and sought their
guidance, his conduct has not actually, according
to him caused any financial risk or damage to the
bank concerned. Therefore, in our opinion, in
the manner in which the investigation was carried
out as a result of which action has been taken
against him cannot be condemned as bad being in
violation of the principles of natural justice.
Had he, however denied any of the facts or had
questioned the credibility of the persons who had
given information against him, then different
considerations would have applied and in those
circumstances, refusal to give an opportunity to
cross-examine the persons giving information
against him or to lead evidence on his own part
to rebut the facts would have been necessary and
denial of such opportunity would have been fatal.
But such is not the case here as we have
mentioned hereinbefore.”
7.Aligarh Muslim University and others Vs.
Mansoor Alikhan reported in (2000) 7 Supreme Court cases
529. The relevant portion of the judgment reads as
under:
“23.Chinnappa Reddy, J in S.L. Kapoor case
laid down two exceptions (at SCC p 395) namely,
if upon admitted or indisputable facts only one
conclusion was possible, then in such a case the
principle that breach of natural justice was in
itself prejudice would not apply. In other
words, if no other conclusion was possible on
admitted or indisputable facts, it is not
necessary to quash the order which was passed in
violation of natural justice. Of course, this
being an exception, great care must be taken in
applying this exception.
24.The principle that in addition to breach
of natural justice, prejudice must also be proved
has been developed in several cases. In
K.L.Tripathi Vs. State Bank of India Sabyasachi
Mukharji, J (as he then was) also laid down the
principle that not mere violation of natural
justice be de facto prejudice (other than
non-issue of notice) had to be proved. It was
observed, quoting Wade’s Administrative Law (5th
Edication, pp 472-75) as follows: (SCC p 58,
para 31).
“It is not possible to lay down rigid rules as to
when the principles of natural justice are to
apply, nor as to their scope and extent…There
must also have been some real prejudice to the
complainant; there is no such thing as a merely
technical infringement of natural justice. The
requirements of natural justice must depend on
the facts and circumstances of the case, the
nature of inquiry, the rules under which the
tribunal is acting, the subject matter to be
dealt with, and so forth.”
Since then, this Court has consistently applied
the principles of prejudice in several cases.
The above ruling and various other rulings taking
the same view have been exhaustively referred to
in State Bank of Patiala vs. S.K.Sharma. In
that case, the principle of “prejudice” has been
further elaborated. The same principle has been
reiterated again in Rajendra Singh vs. State of
M.P.”
8.M.C.Mehta vs. Union of India and others (1999) 6
SCC 237. The relevant portion is extracted as under:
“The above case is a clear authority for the
proposition that it is not always necessary for
the court to strike down an order merely because
the order has been passed against the petitioner
in breach of natural justice. The court can
under Articles 32 or 226 refuse to exercise its
discretion of striking down the order if such
striking down will result in restoration of
another order passed earlier in favour of the
petitioner and against opposite party in
violation of the principles of natural justice or
is otherwise not in accordance with law.”
8.I have considered the rival contentions
raised by the learned counsel for the parties.
Initially, the trend of decisions of the Supreme Court
was that rule of natural justice was not required to be
stictly followed. Thereafter, principles of natural
justice by affording an opportunity of hearing to make a
representation/explanation for a show cause notice was
made mandatory. Lateron, personal hearing was also
added, but the trend has been moulded by recent decisions
of the Supreme Court that observance of principles of
natural justice depends upon the facts and circumstances
of each case in which various factors may require
mandatory compliance of principles of natural justice not
necessary. Even in some cases, show cause notice and
inquiry is not required to be given for compliance of
principles of natural justice. Moreover, for the
availability of natural of principle justice if rule is
breached is not necessary and where the facts are
admitted and/or not in dispute and only one conclusion is
possible.
9.Now, let us examine on the facts of the
present case, whether the petitioner was entitled for
personal hearing to follow the principles of natural
justice and what prejudice was caused to it in absence of
the opportunity of personal hearing being not given. It
is not disputed that the respondent Corporation issued a
show cause notice dated 8.12.2000 to the petitioner as to
why ONGC should not ban future business dealings with the
petitioner, requiring written reply with documents in
support thereof within 15 days. It is also not disputed
that the petitioner has sent the reply dated 14.12.2000
through its advocate to the respondent Corporation. It
is also not in disputed that the petitioner sent a letter
to the respondent Corporation requesting for personal
meeting to present certain facts for personal discussion.
The petitioner was not allowed personal meeting as
requested by it.The respondent Corporation passed the
impugned order dated 23.1.2001 banning fresh business
dealing of the petitioner with respondent Corporation for
a period of 10 years. It is also not disputed that an
opportunity to represent its case/explain its conduct was
affrorded to the petitioner and in fact that opportunity
of explaining its conduct has been availed by sending
reply dated 14.12.2000 through its advocate. Now, the
question which remains for consideration is as to whether
not providing personal hearing by way of personal meeting
would amount to violation of principle of natural justice
and whether non-providing of personal hearing has caused
any prejudice to it ? If it has not caused any prejudice
to the petitioner, then it would not be entitled for
personal hearing. Para-4 of the show cause notice dated
8.12.2000 describes as under :
“4. Whereas on inquiry, it was found that Bank
guarantees No. 169-I and 173-I referred above,
were fake and not issued by State Bank of
Saurashtra. These facts were communicated to you
vide letter No. BDA/E&C/TPL/Conf/2000 dated
16.5.2000 (copy enclosed at Annexure -4).”
As per the reply dated 14.12.2000 to the show cause
notice, the petitioner stated “Due to the employees,
there was a mistake in the bank guarantee which was
rectified by furnishing a new bank guarantee no. 82 for
Rs.3,41,743/- and no.101/98 for Rs. 2,38,780/- in lieu
of the old bank guarantee. ” Thus, it is not in dispute
that two fake bank guarantees were furnished by the
petitioner. Can it be acceptable to this Court that an
employee submitted two fake guarantees worth Rs.
5,80,000/- without collusion or permission of the
employer ? What was the gain of the employee in
furnishing two fake bank guarantees onbehalf of the
employer ? The answer is in the negative. It appears
from the allegations made in para-3 of the show cause
notice dated 8.12.2000 that the petitioner had no account
in the State Bank of Saurashtra and submitted the bank
guarantee in Dena Bank, Kalol. The learned counsel for
the petitioner has pointed out nothing as to what
prejudice was caused to the petitioner in absence of
personal hearing nor anything has been averred in the
petition in that respect. During the course of
arguments, the learned Sr. advocate Mr. Oza for the
petitioner could not show as to what was the material or
argument to be produced or advanced in the arguments in
the personal hearing by the petitioner and what was the
material to be discussed in the personal meeting. Mere
raising a technical point that the petitioner was not
given personal hearing and without showing any prejudice
is not sufficient to hold that the act of the respondent
Corporation in not providing an opportunity of personal
hearing is in violation of principles of natural justice.
Moreover, on the facts not disputed, only one conclusion
is that the petitioner deliberately got submitted two
fake bank guarantees of total amount of Rs. 5,80,000/-.
Thus, I find no substance in the contention of the
learned counsel for the petitioner that the petitioner
was not afforded fair and proper opportunity of being
heard which violates the principles of natural justice.
10.The second contention of the learned Sr.
Advocate Mr. Oza for the petitioner is that the entire
action of the respondent Corporation for banning the
business transations of the petitioner with ONGS is bias
and malafide, as a result, the impugned order is not
sustainable in the eye of law, inasmuch as Mr. Prakash
Mehta took over the charge of General Manager on
retirement of one Mr. G.L.Gupta. Though the two fake
guarantees were filed due to mistake of some employee of
the petitioner, the petitioner was permitted to replace
them with fresh bank guarantees in the year 1998 and it
was known to the officers of ONGC. The mistake of the
petitioner was condoned by the respondent Corporation and
about 80 contracts were given to the petitioner by the
respondent Corporation, but Mr. Prakash Mehta inquired
about issuance of fake bank guarantees from the bank vide
letter dated 29th March, 2000 and the bank replied by its
letter dated 5.4.2000 that the matter regarding bank
guarantees, the bank has already informed by several
letters and telegrams that two bank guarantees afforded
were forged and fake. Mr. Prakash Mehta required the
petitioner to explain and substantiate the genuineness
and correctness of the aforesaid two bank guarantees
within 15 days of the aforesaid two bank guarantees
within 15 days by its letter dated 16.5.2000. The
petitioner filed its reply on 28th November, 2000. Mr.
Prakash Mehta demanded illegal gratification of Rs. 7
lacs for awarding the contracts to the petitioner and to
hush up the matter regarding fake bank guarantees,
otherwise the petitioner would be blacklisted. As the
petitioner was not inclined to give illegal gratification
and hence Mr. Prakash Mehta waited for illegal
gratification till 11.8.2000. However, he was caught red
handed in the trap by ACB while accpting Rs.50,000/- as
part payment towards the amount of Rs. 7 lac. Thus, the
whole action for banning the business of the petitioner
was taken at the instance of Mr. Prakash Mehta who
demanded the illegal gratification of Rs. 7 lacs and is
malafide and bias.
As against this argument of Mr. Oza, learned Sr. Advocate Mr. Vakil for the respondent
Corporation contended that the allegations of bias and
malafide have to be pleaded and person concerned against
whom the allegations of bias and malafide are made must
be impleaded so that real facts regarding bias and
malafide could be brought to the notice of the Court.
There must be real “likelihood of bias” or “reasonable
suspicion of “bias”. In the present case, there is no
real ” likelihood or bias or “reasonable suspicion of
bias” at all. Mere bald allegations of bias or malafide
are not sufficient. Moreover, the show cause notice was
issued by another officer and it cannot be said that the
action of the respondent Corporation against the
petitioner was bias and malafide at the instance of Mr.
Prakash Mehta as he was placed under suspension. The
learned counsel for the respondent relied on the
following decisions of the Supreme Court.
1.I.K.Mishra vs. Union of India and others
reported in (1997) 6 Supreme Court Cases, 228. It is
observed as under:
“8.Lastly, it was urged that the order
compulsorily retiring the appelant was a malafide
order as the same was passed at the instance of
Shri Manazure Muastafa Siddiqui, Accountant
General, M.P., who bore grudge against the
appellant. This argument is being noted only to
be rejected. It may be noticed that the record
before us does not show that Shri Manazure
Muastafa Siddiqui was party to the suit. In fact
he was not impleaded by name in the suit.
Further, the allegations against Shri Siddiqui
were totally vague. No inference of malafide
couldbe drawn from such allegations. In the
absence of full facts and particulars in the
plaint in respect of allegation of malafide the
order of compulsorily retiring the appellant
cannot be held to be a malafide order.”
2.State of West Bengal and others vs.
Shivanand Pathak and others reported in 1998(5) SCC, 513.
It has been held as under:
“25. Bias may be defined as a preconceived
opinion or a predisposition or predetermination
to decide a case or an issue in a particular
manner, so much so that such predisposition does
notleave the mind open to conviction. It is, in
fact, a condition of mind, which sways judgments
and renders the judge unable to exercise
impartiality in a particular case.
26. Bias has many forms. It may be pecuniary
bias, personal bias, bias as to subject-matter in
dispute, orpolicy bias etc. In the instant case,
we are not concerned with any of these forms of
bias. We have to deal, as we shall presently
see, a new form of bias, namely, bias on account
of judicial obstinacy.
33. Bias, as pointed out earlier, is a condition
of mind and, therefore, it may not always be
possible to furnish actual proof of bias. But
the courts for this reason, cannot be said to be
in a crippled state. There are many ways to
discover bias; for example, by evaluating the
facts and circumstances of the case or applying
the tests of “real likelihood of bias” or
“reasonable suspicion of bias”. de Smith in
Judicial Review of Administratie Action, 1980
Edn.pp.262m 264, has explained that “reasonable
suspicion” test looks mainly to outward
appearances while “real likelihood” test focuses
on the court’s own evaluation of the
probabilities.”
3.Utkal University vs. Dr. Nrusingha
Charan Sarangi and others others reported in 1999(2) SCC,
193. The relevant portion is quoted below:
“9. The last contention of the first respondent
which has been accepted by the High Court is that
of bias on the part of one of the members of the
Selection Committee. The so called bias, as set
out in the original petition, is that one of the
experts was a member of an organisation which
brought out a magazine of the Selection Committee
was on the Editorial Board. Both the University
as well as the selected candidate have pointed
out that this fact was known to the first
respondent throughout. He did not, at any time,
object to the composition of the Selection
Committee. He objected only after the selection
was over and he was not selected. This would
amount to waiver of such objection on the part of
the first respondent. Reliance is placed on a
decision of this Court in G.Sarana (Dr.) Vs.
Universityof Lucknow in which this Court found
that despite the fact that the appellant knew all
the relevant facts, he had voluntarily appeared
before the Committee and taken a chance of having
a faourable recommendation from it. Having done
so, it was not open to him to turn round and
question the constitution of the Committee. A
similar view has been taken by this Court in the
case of U.D.Lama vs. State of Sikkim SCC at page
119.”
11.I have carefully considered the
contentions of the learned counsel for the parties. This
is a case in which lower rank officers of the respondent
Corporation on the information by the bank were knowing
the fact of submission of fake and fraudulent bank
guarantees. When higher officers of the respondent
Corporation came to know about the fact, not only a
report was submitted a report for proper action against
the petitioner, but also against those officers who were
knowing about fake and forged bank guarantees of the
petitioner, inasmuch as further affidavit-in-reply has
been filed by Mr. Sanjay Ramanlal Trivedi, Chief
Engineer (Construction and Maintenance) wherein he has
stated that he found three officers of oNGC in his
report, responsible for not bringing the facts to the
notice of ONGC. Hence, he submitted a report dated 26th
April, 2000 recommending suitable action against the
petitioner. Mr. Prakash Mehta in his submission dated
5.5.2000 met the Group General Manager and submitted his
proposal to write a letter to the petitioner according
draft submitted and sought confirmation whether ONGC was
justified in keeping the bid of the petitioner in
abeyance in various standards. By the letter dated 29th
March, 2000, it was inquired from the bank itself about
fake bank guarantees of the petitioner. The bank vide
its letter dated 5.4.2000 confirmed that the aforesaid
bank guarantees were fake and forged. Then Mr. Prakash
Mehta required the petitioner by a letter dated 16.5.2000
to explain and substantiate the genuineness and
correctness of the bank guarantee. The petitioner
submitted its reply dated 28th May, 2000 stating therein
that the petitioner was not aware of obtaining bank
guarantees by the officer in charge. But in the meeting
of the high ranking officers of ONGC, it was decided that
fresh bank guarantees should be furnished by the
petitioner. Accordingly, fresh bank guarantees were
furnished by the petitioner and they were accepted by the
respondent ONGC. Mr. Prakash Mehta had already directed
to process the case against the petitioner on 11.8.2001
in the forenoon. The petitioner was required to give
fresh bank guarantees becauses the execution of work for
which fake and forged bank guarantees were submitted was
not complete. Hence, it was necessary for ONGC to
safeguard its financial interest in the event of any
claim arising in favour of ONGC on account of the
defective performance of the contract by the petitioner.
In absence of finding of any authority or court of law,
it would be difficult to accept at this stage that Mr.
Prakash Mehta was caught red handed while accepting
illegal gratification of only Rs. 50,000/- as part
payment towards demand of Rs. 7 lacs. It is also
possible that the petitioner finding itself in hot water
at the instance of Mr. Prakash Mehta made arrangement
for trapping Mr. Prakash Mehta. It is also not unusual
for a person to place currency notes in the hand or
pocket of other person and/or in order to get other
person trapped and arrested red handed. Traps are made
only in order to get rid of any difficulty. The
petitioner, in absence of any finding of the authority or
court of law, is not an exception. In the present case,
the fact is not denied that fake and forged bank
guarantees were submitted by the petitioner firm. As
soon as that fact came to the knowledge of high ranking
officers of ONGC, the inquiry was initiaated. The
petitioner was required to submit explnation and after
receipt of the explanation, an order was passed for
processing the case against the petitioner. After
finding prima facie case against the petitioner, a show
cause notice was issued by another officer and not by
Prkash Mehta and after considering the allegations made
in the show cause notice and the explanation in the
reply, the competent authority has passed the impugned
order which is not vitiated or illegal on this score and
I do not find any susbtance in the contention of the
learned counsel for the petitioner that the action
against the petitioner is malafide and bias at the
instance of Mr. Prakash Mehta, and more particularly
when there is no allegation of malafide or bias against
the officer who issued the show cause notice and the
officer who has passed the impugned order.
12.The next contention of the learned
counsel for the petitioner is that the respondent
Corporation has condoned the alleged misconduct against
the petitioner and has waived its right to reopen the
chapter which has already been closed. The respondent
ONGC having known about two fake bank guarantees of the
petitioner permitted the petitioner to file fresh bank
guarantees. The question of renewal of the aforesaid
bank guarantees was considered and condoned by the ONGC
in the meeting held in the first week of July, 1998,
seven highest officers of ONGC, namely :
(1) G.L.Gupt,a G.M.(T.P.L.)
(2) S.K.Sinha, C.E. (C & M)
(3) K.C.Arora, S.E. (C & M)
(4) G.C.Gupta, Dy. S.E.(E & M) now S.E.
(5) B.Kalikar, Dy. S.E. (C & M) now S.E.
(6) Satish Kumar, E.E. (C & M) now S.E.
(7) Bharat Parikh, Branch Manager, State Bank of
Surashtra, Kalol Branch.
13.The plea of the petitioner that it was a
bonfide mistake and the petitioner was not involved in
issuance of fake bank guarantees and they were permitted
by the respondent Corporation to replace by fresh bank
guarantees. Thus, the mistake of the petitioner was
condoned. Thereafter the petitioner was awarded about 80
contracts by ONGC. Thus, ONGC waived right of taking
action against the petitione and hence no action can be
taken against the petitioner after a period of two years.
I have examined this contention raised on behalf of the
petitioner and in my view, it is not tenable at all in
view of the fact that ONGC permitted the petitioner to
file fresh bank guarantees for safegurding the financial
interest of ONGC. The statement made in the reply dated
14.12.2000 in respect of the alleged meeting of seven
high ranking officers in which the plea of the petitioner
that it was a bonafide mistake of the employee of the
petitioner and the petitioner was not at all involved in
the misconduct was accepted and condoned has been denied
by the Chief Engineer in the further affidavit-in-reply
which has been filed in this Court. There is nothing on
record to show that any such meeting of high ranking
officers was held and the matter regarding fake
guarantees was considered and any decision was taken. So
far as awarding of further contracts is concerned, high
ranking officers of ONGC did not know about the
misconduct of the petitioner in the month of March and
April, 2000 that the preliminary inquiry was not held,
the matter against the petitioner was not processed, and
hence the contract were awarded to the petitioner and
therefore, no inference can be drawn against the
respondent Corporation on the basis of the material on
record that ONGC has ever condoned the misconduct or
mischevious act of the petitioner and waived its right to
reopen the chapter. Mere delay in taking action against
the petitioner is no ground to relieve the petitioner
from its liability. In some of the Supreme Court
decisions, it has been held that if any contract, licence
or service has been obtained by misrepresentation of
facts or fraud and that was pre-requisite condition that
contract, licence or service can be revoked or terminated
at any time, at the instance of any person as held by the
Supreme Court of India in the case of Union of India and
others vs. Bhaskaran reported in 1995 (4) supplement,
SCC 100 and in the case of Kumari Mathavi and others vs.
Additional Commissioner, Tribal Development and others
reported in 1995 Supplement (3) SCC, 241. In the present
case, filing of bank guarantees is a pre-requisite
condition for contract and it is found that the bank
guarantees filed by the petitioner were fake and forged
and that would amount to misconduct and on the basis of
the misconduct, proper action can be taken banning future
business or transaction and that, in my view, cannot be
said to be an improper action on the part of the
respondent Corporation.
14.The next contention of the learned
counsel for the petitioner is that the impugned order is
not a speaking order as it gives out no ground or reason
for arriving at a conclusion and passing the order, hence
it is not sustainable in the eye of law and in this
regard, he relied on the decision of the learned Single
Judge of this Court in the case of Gujarat State Civil
Supplies Corporation Ltd. vs. Regional Provident Fund
Commissioner and others reported in 1999(1) GLH, 803
wherein it has been held as under:
“Any authority making an order affecting civil
right of any person adversely is not only under
an obligation to afford a fair opportunity of
hearing and adopt a fair procedure, but, is also
under an obligation to make a speaking order,
that is to say reason for his concluding must
find place in the order. Order must speak for
itself. All those are parts of principles of
natural justice. In the case of determination of
sum payable by an employer to provident fund is
required to be determined after affording
opportunity of hearing to concerned parties and
that all the more necessitates the making of a
speaking order.”
15.I have considered this argument of the
learned counsel for the petitioner. In law, there is no
prescribed format of order giving out reasons or grounds
for arriving at a conclusion nor can we expect from
purely technical person like officers of ONGC to give out
reasons for a conclusion. That could have been done only
when before passing the impugned order, the officer could
have consulted their advocate on panel for a proper form
to pass order giving out reasons for the final action.
However, it is mentioned in the impugned order that on
facts mentioned in the show cause notice and contents of
the reply, the decision has been taken to ban the
business dealings with the petitioner for a period of 10
years. In the show cause notice, it is stated that the
petitioner has submitted two fake bank guarantees and on
that ground, ONGC proposed as to why further business
should not be banned requiring the reply within 15 days.
The petitioner stated in the reply to the show cause
notice that due to mistake of its employee, the bank
guarantees were filed which have been rectified by
replacing new fresh bank guarantees in lieu of old bank
guarantees. Thus, undisputed facts have been considered
by the authorities in passing the impugned order. The
learned counsel for the petitioner could not point out
anything which dislodges admitted/undisputed fact of
filing fake and forged bank guarantees. As such, in the
facts, the impugned order cannot be said to be a
non-speaking order and even if it gives no reasons, I do
not think any good reason that it vitiates the
proceedings as it relates to filing of two fake and
forged bank guarantees by the petitioner and that fact
has not been disputed or denied by the petitioner.
Hence, even if no ground is mentioned, the entire facts
have been considered by this Court. Therefore, this
contention of the learned counsel for the petitioner is
also not at all sustainable in the eye of law.
16.The learned counsel for the respondents
raised a preliminary objection that this petition is not
entertainable due to successive litigations. The
petitioner filed civil suit in the trial court and
succeeded in obtaining ad-interim injunction which was
set aside by the appellate court. Without availing a
regular remedy of Civil Revision Application in this
Court for which a caveat had also been filed by the
respondents, the petitioner has filed this petition when
the suit was pending. The suit has been withdrawn during
pendency of the present petition. In this respect, he
also relied on certain authorities. However, the learned
counsel for the petitioner contended that where the
petitioner has a constitutional right it can be decided
in a writ petition without availing of alternative remedy
and he also relied on certain authorities in this regard.
I do not think it proper to decide this issue at this
stage where the petition has no merit on other grounds
which have already been discussed and decided above.
17.Thus, as a result of the above
discussion, this petition deserves to be dismissed.
Accordingly, this petition fails and is hereby dismissed.
Rule is discharged with no order as to costs. Interim
relief, if any stands vacated.
***
***darji