Bombay High Court
M K Enteerprises vs Municipal Corporation For Greater ... on 21 February, 2019
Equivalent citations: 2019 (3) ABR 169, AIR 2020 (NOC) 132 (BOM)
Author: Bharati H. Dangre
Bench: Ranjit More, Bharati H. Dangre
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO.2885 OF 2018
M.K. Enterprises )
Through its Proprietor )
Mr.Moin Khan, having office at )
Salman Apartment, 1st Floor, Room No.102 )
Plot No.3, Hirabai Compound, )
Ghodepdeo Cross Road No.1, )
Mazgaon, Mumbai-400 010. )...Petitioner
V/s.
1. Municipal Corporation of Greater )
Mumbai, a Body Corporate and Local )
Authority, constituted under the )
Provisions of Mumbai Municipal )
Corporation Act, 1888, having its )
at Mahanagar Palika Marg, )
Fort, Mumbai-400 001. )
2. The Municipal Commissioner of the )
Municipal Corporation of Greater )
Mumbai, having his office at Municipal )
Head Office, Mahapalika Marg, )
Fort, Mumbai-400 001. )
3. The Additional Municipal Commissioner )
(Projects), of the Municipal )
Corporation for Greater Mumbai, )
having his office at Municipal Head Office )
Mahapalika Marg, Fort, Mumbai-400001 )
4. The Chairman, Standing Committee )
Municipal Corporation for Greater Mumbai, )
having his office at Municipal Head Office, )
Mahapalika Marg, Fort, Mumbai-400 001 )
N.S. Kamble page 1 of 71
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5. Deputy Municipal Commissioner )
(C.R.A.), Municipal Corporation for )
Greater Mumbai, Municipal Head Office, )
Mahapalika Marg, Fort, Mumbai-400 001 )
6. Deputy Municipal Commissioner (Z-II) )
Municipal Corporation for Greater Mumbai )
F-South Ward Office, Parel, Mumbai )
7. Deputy Municipal Commissioner (Health))
Municipal Corporation of Greater Mumbai )
Municipal Head Office, Mahapalika Marg )
Fort, Mumbai - 400 001 )
8. The Chief Engineer (Sewerage Operation))
MCGM, having its office at )
89, Dr.Annie Besant Road, )
Love Grove Pumping Station, )
Worli, Mumbai - 400 018 )
9. Chief Engineer (Solid Waste Management))
MCGM, having its office at )
89, Dr.Annie Besant Road, )
Love Grove Pumping Station, )
Worli, Mumbai - 400 018 )
10. Deputy Chief Engineer (Wold Waste )
Management), Planning, of MCGM )
5th Floor, Municipal Khatav Market, )
Building, Opposite Avishkar Building )
Khatavwadi, Sleater Road )
Grant Road (W), Mumbai-400 007 )
11. Buildwell Infrastructure Pvt. Ltd., )
Having its registered office at A-403, )
Jagannath Apartent, Rokadia Lane, )
Borivali (W), Mumbai- 400 092 )
N.S. Kamble page 2 of 71
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12. Kaviraj MBB Waste Management Pvt. Ltd. )
Having its registered office at )
Shop No.2, Ground Floor, 260, )
Godbole Building, Opp Kasturba Hospital )
Arthur Road, Mumbai-400 011 )
13. Gulf Hotel )
Through its Proprietor, Mr.Abu Asim Azmi )
Having its office at Kamal Mansion )
Haji Niyaz Ahmed Azmi Marg )
Colaba, Mumbai-400 005 )
14 Landmark Corporation )
C/o Buildwell Infrastructure Pvt. Ltd. )
15 R D Deora & Co. )
C/o Buildwell Infrastructure Pvt. Ltd. )...Respondents
WITH
WRIT PETITION (L) NO.4145 OF 2018
1. Buildwell Infrastructure Pvt. Ltd. )
a company incorporated and registered )
under the Companies Act, 1956, having )
registered office at A-402, Jagannath )
Apartments, Rokadia Lane, Borivli (W) )
Mumbai - 400 092 )
2. Suresh Mehta )
adult Indian inhabitant, a director of )
Petitioner No.1, having his office at )
A-402, Jagannath Apartments, Rokadia )
Lane, Borvali (W), Mumbai-400 092 )...Petitioners
V/s.
1. Municipal Corporation of Greater )
Mumbai, a statutory Body constituted )
under the Mumbai Municipal )
Corporation Act, 1888, having its )
at Mahanagar Palika Marg, )
Fort, Mumbai-400 001. )
N.S. Kamble page 3 of 71
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2. The Commissioner )
Municipal Corporation of Greater )
Mumbai, having office at Municipal )
Mahapalika Marg, Mumbai-400 001. )
3. The Additional Municipal Commissioner )
(Projects), having his office at )
Mahapalika Marg, Mumbai-400001 )
4. The Chief Engineer (Sewerage Operations))
having office at 2nd Floor, )
Engineering Hub, Dr.E.Moses )
Road, Worli Naka, Mumbai 400 018 )
5. The Executive Engineer (Sewerage )
Operations) )
having office at 2nd Floor, )
Engineering Hub, Dr.E.Moses )
Road, Worli Naka, Mumbai-400 018 )...Respondents
----
Mr.Ravi Kadam, Senior Advocate a/w Mr.V.P. Sawant, Mr.Rahul
Hakani I/b Niyati Hakani for the Petitioner.
Mr.Rajiv Chavan, Senior Advocate a/w Priyanka Chavan, Anupamaa
Pawar, Neelam Kaintura, Sumangala Yadav i/b Ms.Rupali Adhate
for MCGM in WPL No.2885 of 2018.
Mr.P.K. Dhakephalkar, Senior Advocate i/b Mr.Kirit Hakani for
Respondent Nos.12 and 13.
Mr.Milind Sathe, Senior Advocate a/w Mr.Simil Purohit a/w
Mr.Farhan Khan, Sagar Hate, Mangesh Avhale i/b Pankaj Uttaradhi
for Respondent No.11 and Petitioner in WPL No.4145 of 2018.
Mr.Anant Vadgaonkar a/w Ms.Rupali Adhate for MCGM in WP
No.4145 of 2018.
----
CORAM : RANJIT MORE &
SMT.BHARATI H. DANGRE, JJ.
RESERVED ON : 22nd JANUARY 2019
PRONOUNCED ON : 21st FEBRUARY 2019
N.S. Kamble page 4 of 71
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JUDGMENT :(Per Smt.Bharati H. Dangre,J)
1. The above mentioned Writ Petitions revolve around the same set of facts and also involve a similar issue for adjudication and hence are taken up for hearing together. Since the parties agreed for hearing the petitions finally, we issue Rule and take up both the Writ Petitions for final hearing by consensus.
2. Writ Petition No.2885 of 2018 is filed by the petitioner, a proprietorship concern who has bid in joint venture for carrying out works of transportation of Solid Waste Management for the Municipal Corporation of Greater Mumbai (hereinafter referred to as 'MCGM'). The first Writ Petition emanates from two orders passed by the MCGM, entertaining the Appeal filed by the respondent No.11, a registered contractor of MCGM, who was inflicted a penalty of debarment, pursuant to a Departmental Enquiry and by the two impugned orders, the debarment period is slashed. The petitioners are aggrieved by the said impugned orders since the respondent No.11, being benefited by the said orders has become eligible N.S. Kamble page 5 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 to participate in the tender process floated by the MCGM on 08.05.2018 for hire of vehicles for collection and transportation of Municipal Solid Waste (MSW).
3. Before embarking upon the issue involved, a brief chronology of the facts is imperative. The respondent No.1 impleaded in the Writ Petition is the Municipal Corporation of Greater Mumbai and the respondent Nos.2, 3, 5, 6 and 7 are its Officers whereas respondent No.4 is the Chairman of the Standing Committee of the MCGM. The grievance of the petitioners revolve around respondent No.11 who is one of the contractor of MCGM who was subjected to a departmental enquiry which the MCGM conducted in relation to the outstanding payment towards the Civil works contract within its jurisdiction during the period 2005 to 2009 against its 12 delinquent Officers holding the post of Executive Engineers, Assistant Engineers and Superintendent Engineers and also certain contractors.
Pursuant to the full-fledged departmental enquiry by the enquiry officer Shri.M.M. Kamble, DMC (Vigilance), the N.S. Kamble page 6 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 report was submitted and the eight charges levelled against the Officer were held to be fully proved and they were indicted for their involvement in sanctioning the proposal and issuing various works orders to different contractors. The enquiry report recorded a finding of guilt against the contractors who were implicated with allegation of defrauding the MCGM.
The enquiry report records a finding that contractor M/s.Buildwell Infrastructure Pvt. Ltd. claimed the payment of 11 Construction Works Contract (CWC) carried out during the period from 2004 to 2006 on its letter head though the work was carried out by M/s.Buildwell Construction. The claim of Rs. 1.05 crore was staked by M/s.Buildwell Infrastructure Pvt. Ltd., and a representation was made to the Municipal Commissioner through the Municipal Contractors Construction Association (for short 'MCCA'). In the backdrop of the said allegations, the contractor was informed by the enquiry officer to furnish various documents related to the CWC works which were claimed to be executed and for which the outstanding dues of payment were raised to MCGM by them and to remain present for recording of their statement during the course of N.S. Kamble page 7 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 the enquiry. The statement of Mr.Suresh Mehta, Director of M/s.Buildwell Infrastructure Pvt. Ltd. was recorded and the Proprietor of M/s.Buildwell Construction Mr.Rajesh M. Jain authorized to represent and sign the statement in respect of the contract alloted to them did not attend the enquiry proceedings and hence the case was treated as ex-parte.
The enquiry officer rejected the monetary claim, as sufficient material was not produced and mala fide intention was attributed to the contractor to defraud the MCGM and the penalty of debarment of the contractor for a period of six years was recommended so as to not allow the contractor to participate in the tender related to MCGM w.e.f. 16.03.2013. The said report was placed before the Municipal Commissioner by the Assistant Municipal Commissioner and the Report as well as penalty imposed on respondent No.11 was approved.
4. The case of the petitioner revolves around the action of MCGM against the respondent No.11. It is stated in the petition that the Municipal Corporation of Greater Mumbai has framed the Rules Governing the Registration of Contractors N.S. Kamble page 8 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 for Civil, Mechanical-Electrical Electronics Engineering Works, 1992 and the said Rules set out the procedure for registration of the contractor and also prescribe the penalties which can be imposed on the contractor. According to the petitioner, the said Rules framed in the year 1992 authorised the penalty of de-registration to be imposed on a contractor on the ground mentioned in the said Rules and the authority competent to impose the penalty was the Municipal Commissioner or any of the Additional Municipal Commissioner. According to the petitioners, the Rules did not contemplate an appeal and the order passed by the Municipal Commissioner was final and binding. It is the contention of the petitioners that inspite of the said provision being in existence, the respondent No.11 preferred an appeal against the order of debarment passed by the Municipal Commissioner and the AMC(P) directed that the appeal be heard by the Committee of two Deputy Municipal Commissioners and accordingly a Panel of Shri.Wagaralkar, D.M.C.(Z-II), Shri.Sunil Shamne, DMC (C.R.A.) was constituted to decide the appeal.
The petitioner has impugned the order dated N.S. Kamble page 9 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 03.08.2016 passed on an appeal being preferred by respondent No.11. By the said order, the Panel has reconsidered the penalty of debarment for the period of six years w.e.f. 16.03.2013 and revised the same for four years. The objection of the petitioner is to the maintainability of such an appeal in light of the existing rules/procedure governing the registration/de-registration of the contractor. The petitioner has further assailed the order passed on 16.02.2017 by the same Panel of two Deputy Commissioners by which the decision is taken to curtail the effect of de-registration of respondent No.11. In the backdrop of the fact that the perusal of note of the enquiry officer disclosed that the contractor is an experienced contractor in the field of collection and transportation of solid waste and since the debarred contractor had pointed out that a fresh tender for collection and transportation of solid waste was invited and the due date of submission of tender was extended to 17.02.2017. The case of the petitioner is that in order to accommodate the said contractor in the ongoing tender process, said order was passed and the penalty of de-registration was withdrawn w.e.f.
N.S. Kamble page 10 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 17.02.2017 so that the contractor could participate in tender floated by the MCGM. The petitioner attributes mala fides in the procedure adopted by the MCGM in considering the case of the respondent No.11 and it is averred that the process was twisted, Rules bent so that Buildwell Infrastructure gains an advantage.
5. It is contention of the petitioner that E-tender No.7100125825 was floated by MCGM on 08.05.2018 and the petitioner along with its joint venture submitted the bid for Ward-K (West). In the said tender process respondent No.11 also submitted its bid, and at that time, the petitioner became aware of black listing of the respondent No.11 from the news report and the chronology of events which was narrated in the news report. According to the petitioner, the price bid was opened on 09.08.2018 and respondent No.11 was found to be the lowest bidder and whereas the petitioner is the second lowest. The petitioner received certain information which was sought by one Mr.Subhash Patil under the Right to Information Act, regarding the de-registration of respondent No.11 and it is N.S. Kamble page 11 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 at this stage being aware of the benevolence and the indulgence shown to the respondent No.11 and as to how the power was mala fide exercised by the Corporation authorities in favour of respondent No.11, the petitioner has approached this Court.
6. In support of the said Writ Petition, we have heard learned senior counsel Shri.Ravi Kadam who has taken us through the sequence of events involved.
The learned senior counsel Shri.Kadam would assert that the petitioner has every locus to file the present Writ Petition and he also offers an explanation for filing the present Writ Petition in the year 2018. He would submit that the order of de-registration which was passed against respondent No.11 and the subsequent orders passed in Appeal were not known to him and it is only through the news Article published by the Times of India, Mumbai, he gained knowledge of the said fact. It is submitted that after the article came to the notice of the petitioner, the issue was taken further with the MCGM and the petitioner then collected various details and instituted the Writ N.S. Kamble page 12 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 Petition on 23.08.2018. Shri.Kadam would submit that it is no doubt true that the petitioner otherwise would not have any interest in the action taken against the respondent No.11 contractor but he would submit that the said issue is of grave public importance since it depicts how public body like the Corporation is discharging the duty cast upon it and he would scathingly attack the discreet and non-transparent manner in which the respondent No.11 was showered favors by the Corporation. The learned senior counsel would rely on the judgment in case of Shivajirao Nilangekar Patil V/s. Mahesh Madhav Gosavi (Dr) and Ors.1 to submit that even a private litigant can invoke the jurisdiction of this Court through a petition if it highlights the issue of Public Interest Litigation involving lamentable state of affairs and in the present case Shri.Kadam would urge us to take serious note of the brazenness with which the proceedings are decided by the authorities knowing fully well that such an appeal is not maintainable, and he would pray that this Court should intervene in a petition which though not filed as a Public Interest Litigation, is in the nature of Public Interest.
1 (1987) 1 SCC 227
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Shri.Kadam would severely criticize the impugned orders passed by the Corporation and in support of his submission, he would place reliance on the registration Rules framed by the MCGM. He would submit that the order of de-registration was passed under the Registration Rules of 1992 and to be precise, on 19.12.2014, an appeal came to be filed after the registration Rules of 2015 came into effect but none of these Rules contain any provision for appeal or review against the order of the Municipal Commissioner and no appeal is maintainable. Though he concedes that in the Registration Rules of 2016 the power of review has been conferred on the authority passing the order, he makes a categorical submission that the order impugned is passed by the Municipal Commissioner and it is only communicated by the Chief Engineer and this is borne from the fact that the Chief Engineer is not conferred with any power to impose the penalty of de-registration under the existing Rules and it is only the Municipal Commissioner/AMC who is competent to impose the penalty. The learned senior counsel also submits that the respondent No.11 had invoked the jurisdiction of this Court by filing a Writ Petition on the N.S. Kamble page 14 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 very ground that no appeal lies against the order of the de- registration passed by the Municipal Commissioner however, since the interim relief was refused by this Court by a reasoned order, he approached the authority and filed an appeal and it is only after the appeal was heard, he withdrew the Writ Petition No.1397 of 2015 on 13.04.2016. Shri.Kadam also submits that once the Writ Petition was withdrawn without seeking any liberty, in light of the decision of the Hon'ble Apex Court in case of Sarguja Transport Service V/s. State Transport Appellate Tribunal, M.P., Gwalior and Ors.2 the Writ Petition filed by M/s.Buildwell Infrastructe Pvt. Ltd. is not maintainable.
7. The learned senior counsel would also advance a submission to the effect that the order of the enquiry officer proposing the de-registration is not ex-parte in the sense that the respondent No.11 was not heard by the eqnuiry officer and in fact he makes a submission that the Director of the respondent No.11 was heard and his submission was recorded and he was also offered opportunity to produce all the documents. The proceedings were treated ex-parte as 2 AIR 1987 SC 88 N.S. Kamble page 15 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 proprietor of M/s.Buildwell Construction, who had, on paper carried out the work, did not present himself before the enquiry officer and therefore it is not a case where the petitioner can take advantage of non-observance of principles of natural justice. On merits, he would submit that the enquiry officer has rightly concluded that there was no material to substantiate the claim and therefore the finding recorded by the enquiry officer and the penalty imposed by the Municipal Commissioner is proportionate to the guilt of the respondent No.11 which is recorded after full-fledged departmental enquiry. Shri.Kadam would submit that this finding of fact recorded by the enquiry officer is not disturbed by the Appellate Authority at all and it is rather maintained but without any justification, period of debarment has been reduced from six years to four years.
Shri.Kadam would snub the order passed by the Appellate Authority as being without jurisdiction and hence nullity and also on merits, he submit that such an order is not maintainable since the castigation by enquiry officer is not set aside by the Appellate Authority. He would further attribute utter mala fides to the respondent-authorities and to the N.S. Kamble page 16 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 respondent-authorities in passing a further order of review on 16.02.2017 thereby reviewing its earlier order in appeal in respect of de-registration of contractor of firm M/s.Buildwell Infrastructure Pvt. Ltd. by restricting upto 16.08.2017 and directing that its stand is withdrawn from 17.08.2017, which was in fact done so as to enable said contractor participating in the tender process due date for which it was scheduled to be on 17.02.2017.
8. The Writ Petition filed by the petitioner is vehemently opposed by respondent No.11 who is represented by the learned senior counsel Dr.Sathe who would raise serious objection to the maintainability of the present Writ Petition at the instance of the petitioner on the ground of locus specifically when, according to him, the present petition is not a Public Interest Litigation. Dr.Sathe would make a submission that the action of the debarment against him is a matter between the contractor and the Corporation and the petitioner has no intervening interest in the said lis between them. Dr.Sathe would also question the delay in instituting the said N.S. Kamble page 17 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 writ petition and he would submit that the writ petition is filed by the petitioner in August 2018 and on earlier two occasions, tenders were floated by MCGM firstly in the month of February 2017 where M/s.Buildwell Infrastructure Pvt. Ltd. had participated and was declared to be qualified but the tender process was scraped and on another occasion in the month of September 2017, but on both occasions, the said tender process did not culminate into issuance of work order. Dr.Sathe would submit that the petitioner did not bother to assail the orders passed by the Appellate Authorities in his favour reviewing its decision to de-register but it is only in pursuance of the tender floated in the month of May 2018 when the respondent No.11 is found to be lowest bidder, petitioner has come forward and instituted the present Writ Petition which is a malicious attempt to sabotage his success in the tender process. The learned senior counsel makes a categorical submission that every illegal order do not call for interference and surely not at the instance of a person like the petitioner who is completely alien to the issue of Departmental action against the respondent No.11.
Apart from the said preliminary issue, the learned N.S. Kamble page 18 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 senior counsel would make a categorical submission that the order of de-registration communicated to the petitioner is dated 13.01.2015 which is passed by Chief Engineer and it refers to the Approval order passed by the Municipal Commissioner vide No.MGC/F/5297 dated 19.12.2014. He then would make a submission that if this is a situation, then an appeal would surely lie to the superior authority i.e. Municipal Commissioner and Municipal Commissioner has delegated the power to decide the issue of de-registration of M/s.Buildwell Infrastructure Pvt. Ltd. by entrusting it to two Deputy Municipal Commissioners. Dr.Sathe would place reliance on the Rules Governing Registration of Contractor/s for Civil and Mechanical and Electrical Engineering Works, 2016 where the Deputy Municipal Commissioner is contemplated as an Appellate Authority and he would submit that the Appellate Authority is empowered to review its own decision regarding the orders passed in respect of the de-registration of the contractor and this is how he justifies the impugned orders passed at Annexure A and B to the petition.
Another submission of Dr.Sathe is to the effect that N.S. Kamble page 19 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 the Rules on which heavy reliance has been placed as the Rules Governing Registration of Contractor/s for Civil and Mechanical and Electrical Engineering Works either of 1992 and 2016 are not statutory rules and do not have force of law. He submits that the Municipal Corporation of Greater Mumbai has framed the Rules so as to have a better control over the execution of various municipal constructions and other allied works. He makes a categorical submission that though the term "Rule" is loosely used, they are merely administrative instructions which have no binding force nor any enforceability. To buttress his submission, he would rely on judgment of the Hon'ble Apex Court in case of Sukhdev Singh and Others V/s. Bhagtram Sardar Singh Raghuvanshi and Another3.
9. As regards the contention of Shri.Kadam about the decision of withdrawing the earlier writ petition, the learned senior counsel would make a categorical submission that the Writ Petition filed by him came to be withdrawn since an alternative efficacious a remedy of appeal was available. The 3 (1975)-1-SCC-421 N.S. Kamble page 20 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 appeal was entertained and appropriate order came to be passed. In any contingency, Dr.Sathe would submit that there cannot be a situation where he is without any remedy. On the other hand, he submits that the locus of the petitioner is doubtful and the said petition is actuated with malice as it is instituted at a particular stage, with the sole intention to oust the respondent No.11 who is the lowest bidder in the new tender process.
Dr.Sathe further asseverated that the order of debarment itself would reveal that the contractor was not offered an opportunity of hearing and it is settled position of law that an order imposing penalty without offering an opportunity of hearing is non-est and cannot be sustained.
10. Sequel to this, a fresh petition is filed by M/s.Buildwell Infrastructure Pvt. Ltd., before this Court challenging the said action of the Corporation, thereby de- registering the petitioner as a contractor for a period of six years. Dr.Sathe, would invite our attention to the said Writ Petition which is filed in December 2018 and it is urged in the N.S. Kamble page 21 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 Petition that the Enquiry Officer who conducted the enquiry has proceeded ex-parte and such an approach of the Enquiry Officer is contrary to the principles of natural justice. He submits that the petitioner is a Private Limited Company registered and incorporated under the Companies Act. It was formerly a proprietary concern in the name of M/s.Buildwell Construction (BWC) and was converted into a Private Limited Company and/or about in May 2006 and by virtue of this act, all the on going works/purchases, liabilities, revenue etc., were taken over by the petitioner No.1, including the authority to operate the bank accounts. The learned senior counsel would submit that the erstwhile M/s.Buildwell Construction was a registered municipal contractor prior to 2000 for civil works including the repairs and maintenance works and in the year 2004 - 2006, pursuant to a tender invited by the MCGM, M/s.Buildwell Construction was offered the work to be carried out in G/South Ward of Respondent No.1 and an award dated 24.05.2005 was issued to it for execution of CWC work. Further, it is the case of Dr.Sathe that the respondent No.1 issued subsequent orders in favour of BWC and several works approximately about 100 N.S. Kamble page 22 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 in number were carried out by the proprietorship concern and they were completed. It is further asserted that on completion of each work, officials of Vigilance Department had inspected the site, took joint measurement and forwarded the same along with their comments to the concerned department for making payment. In the interregnum, BWC was converted into a private limited company and this was informed to the respondent No.1 and it is specifically averred that the certified copy of the Memorandum of Association and Certificate of Incorporation as well as the agreement by which the petitioner No.1 succeeded the BWC came to be forwarded to the MCGM. It is a specific contention that change in the composition of M/s.Buildwell Construction was duly intimated to the respondent and no dispute and/or objection was ever raised by the MCGM at the relevant time. However, in spite of the works being completed, payment in respect of the 11 works was not made by the respondent No.1 and hence the petitioner No.1 vide its letter dated 20.08.2008 requested the payment and along with said letters, the particulars in regard to the outstanding payment due from the Corporation was also N.S. Kamble page 23 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 forwarded. It is the specific case of the petitioner that from January 2009 to March 2011, the file relating to the works carried out by the petitioners was kept pending and the payment was not released. It is further stated that Municipal Contractors Association (MCCA) had issued a letter to the respondent No.1 raising grievance and demands on behalf of the Municipal Contractors and this included the claim on behalf of one M/s.Buildwell with which the petitioner is not concerned since its erstwhile entity was M/s.Buildwell Construction which was never a member of the MCCA and therefore, there was no question of its claim being put forth through the MCCA. However, the claim of the petitioner was scrutinized and the petitioner came to be served with show cause notice on 01.12.2012 alleging that it raised demand for payment for work which was not carried out by it and it had failed to submit the relevant records/documents to substantiate the claim and that it staked false/enhanced payment through MCCA along with other contractors. The show cause notice served on the petitioner asked him to show cause as to why the registration should not be cancelled and it be black listed for N.S. Kamble page 24 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 participating in the bids of the MCGM in future. The petitioner responded to the show cause notice and also submitted the details of the work carried out by erstwhile proprietary concern. The enquiry report dated 31.01.2014 indicted the petitioner on a conclusion that the claim of the petitioner No.1 was made with a mala fide intention to defraud the Corporation by adopting corrupt and fraudulent practices. Based on the said report of the Enquiry Officer, the respondent No.1 Commissioner informed the petitioner that firm has been de- registered for the period of six years with effect from 16.03.2013. The petitioner submits that the said order passed on 13.01.2015 has been obtained by him under Right to Information Act and the said order is assailed in the present Writ Petition on the ground that it is passed in utter violation of principles of natural justice and since no opportunity has been offered to the petitioner before taking the impugned decision of debarment and since it entails civil consequences, the opportunity ought to have been afforded. The present petition is therefore prayed for quashing and setting aside the impugned report dated 31.01.2018 and also the impugned order dated N.S. Kamble page 25 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 16.03.2013 and 13.01.2015 passed by the respondent. It is in the backdrop of these facts Dr.Sathe pressed for hearing the Writ Petition along with the present Writ Petition. He also categorically states that the present petition is filed by the petitioner at a belated stage, to deal with a contingency to the effect that if this Hon'ble Court is of the opinion that there is no provision for Appeal under the rules governing registration of contract/s contractors/s, Civil, Mechanical, Electrical and Electronics Engineering works 2015. In that event, the orders dated 03.10.2016 and 16.02.2017 would not be sustained. He therefore prayed for hearing of the petition along with Writ Petition Lodging No.2885 of 2018 filed by M/s.M.K. Enterprises.
11. The learned senior counsel Shri.Chavan appear on behalf of the MCGM and would advance the submission that the order imposing the penalty on respondent No.11 is passed by the Chief Engineer and not by the Municipal Commissioner. He would submit that the procedure is merely hand maiden of justice and therefore in order to do substantial justice, the N.S. Kamble page 26 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 appeal filed by the respondent No.11 was entertained by the higher authority. As regards the submission that the registration rules do not provide for any remedy of appeal, the learned senior counsel would submit that the Rules framed do not have any statutory force and hence not binding. He would place heavy reliance on the two judgments of the Hon'ble Apex Court in case of Modern School V/s. Shashi Pal Sharma and Others4 and in case of the Chief Commercial Manager, South Central Railway Secunderabad and Others V/s. G.Ratnam & Others5 to support his submission that the administrative rules, Regulations and Instruction do not give rise to a legal right, in favour of the aggrieved party and cannot be enforced in a Court of law against the administration. The learned senior counsel Shri.Chavan would also make as submission to the effect that the notings of the MCGM which have been placed on record by the petitioner merely endorses the approval of the Municipal Commissioner to the decision taken. He would further submit that this act of approval is merely an administrative act and that can not lead to the conclusion that the order is passed by 4 (2007)-8-SCC-540 5 (2007)-8-SCC-212 N.S. Kamble page 27 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 the Municipal Commissioner. He would rely on the judgment of the Hon'ble Apex Court of Ashok Kumar Sahu V/s. Union of Indian & Others6 where the Hon'ble Apex Court has construed the term "approve" to mean to have or express a favourable opinion of/or accept as satisfactory and according to the learned senior counsel, it would merely convey an act of ratifying, confirmation and sanction. He would also place reliance in case of Vijayadevi Navalkishore Bhartia V/s. Land Acquisition Officer and Another7 wherein the Hon'ble Apex Court has construed the scope of the term "Approval". The substratum of the submission of the learned senior counsel is that the Rules which are not statutory in nature do not prohibit a superior authority of the Corporation to entertain an appeal filed by the respondent No.11 to do substantial justice and this course of action cannot be frowned upon as malafide since the said action is not prohibited one. He also strenuously contested the Writ Petition filed by M/s.M.K. Enterprises on the ground of the locus of the petitioner since the issue of imposition of penalty was purely between the contractor and the Corporation 6 (2006) 6 SCC 704 7 (2003)-5-SCC-83 N.S. Kamble page 28 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 and he would make a submission that the said Writ Petition deserves dismissal.
12. With the assistance of the learned counsel for the parties, we have perused the Writ Petition No.2885 of 2018 along with its annexures and the affidavits filed in response to the said Writ Petition. We have also heard the learned senior counsel Shri.Kadam appearing for the petitioner, Dr.Sathe appearing for the Respondent No.11, who is petitioner in Writ Petition.4145 of 2018 and learned senior counsel Shri.Rajiv Chavan appearing for the Corporation.
Perusal of the chronology of the events leading to the Petitions before us would divulge that in the year 2010, thirty contractors of MCGM submitted claim of approximately 95 crores to the Municipal Commissioner from Sewerage Operation Department for the period commencing from 2005- 2009. A preliminary enquiry was initiated in the year 2013 to verify the claims and on such an enquiry, 15 contractors came to be exonerated. Thereafter, full-fledge Departmental Enquiry (FFDE) was concluded against the 17 contractors and 12 N.S. Kamble page 29 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 officers of the Civil Works Department. The enquiry officer- DMC(Vigilance) submitted his report of the outstanding payment towards the CWC and remedial works carried out by the contractors during the period 2005-2009. On consideration of the said report, the Assistant Municipal Commissioner forwarded the papers for obtaining orders from the Municipal Commissioner on the report of the full-fledge departmental enquiry and the finding regarding the role of responsible officers and the contractor. The report of the full-fledge departmental enquiry was contained in five volumes. Volume No.3 was dedicated to the examination of the contractors who were alleged to have defrauded the Corporation. The case M/s.Buildwell Construction was covered by the said report and the report forwarded to the Municipal Commissioner disclose that the enquiry officer had treated the case as ex-parte and rejected the monetary claims made by M/s.Buildwell Construction to MCGM as sufficient material was not produced to substantiate the claims. The enquiry officer also opined that as per various letters addressed by the contractor to the MCGM claiming payments of Rs.1.05 crores, the intention of the N.S. Kamble page 30 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 contractor was to defraud the MCGM by colluding with other contractors is proved. In the backdrop of the factual position, the report forwarded to the Commissioner contained the following endorsement as against the petitioner "Taking into consideration the evidence on record, the enquiry officers report on the recommendation I agree with the proposal of EO and also abide by the letter of debarment vide No.CH.ENG/S.O./4704 dated 16.03.2013 and to de-register the contractor for the period of six years so as to not allow to them to participate in tenders related to MCGM with effect from 16.03.2013". The Additional Municipal Commissioner presented the notings which contained the recommendations of the enquiry officer in the full-fledge departmental enquiry and his own recommendation of imposition of penalty befitting the findings recorded by the enquiry officer for approval of the Commissioner. On 18.12.2014, the Municipal Commissioner makes a following endorsement:-
"Approved as proposed by AMC(P)"
The said noting also disclose issuance of an order vide No.MGC/K/5297 dated 19.12.2014. Reference to the said N.S. Kamble page 31 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 order of the Municipal Commissioner is found in the communication that is subsequently issued to the petitioner by the Chief Engineer. The orders passed by the Chief Engineer (Sewerage Operation) on 13.01.2015 makes a reference to the Hon'ble Municipal Commissioner's order No.MGC/F/5297 dated 19.12.2014 and said communication reiterates that with reference to the circular of the Executive Engineer dated 16.03.2013, after detailed enquiry in the matter and as approved by the Hon'ble Municipal Commissioner vide order No.MGC/F/5297 dated 19.12.2014, the decisions taken are tabulated. This includes the name of the petitioner at Serial No.2 and the action to be taken which is approved by the Municipal Commissioner namely "To de-register the contractors with effect from 16.03.2013". The said letter further makes a request to the Executive Engineer EE (MOM and REG) Cell to refer the orders of the Municipal Commissioner and take further necessary action by modifying the circular which is mentioned in the reference. This letter is accompanied by the copy of the final report and the orders.
It is thus evident that the respondent No.11 was N.S. Kamble page 32 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 subjected to full-fledged departmental enquiry with and on its culmination a penalty was imposed and this decision resulted in issuance of an order vide No.MGC/F/5297 dated 19.12.2014. The Chief Engineer communicated this order to the respondent No.11 on 31st January 2015.
13. The argument is advanced by Dr.Sathe on behalf of M/s.Buildwell Infrastructure Pvt. Ltd. that the decision of imposing penalty was taken by the Chief Engineer. It is attempted to canvass that the endorsement of the approval by the Municipal Commissioner is merely an administrative act and that do not amount to an order passed by the Commissioner. This submission assumes importance in light of the future course of action of the respondent No.11 contractor who proceeded to file Appeal before the Appellate Authority under the Rules governing the Registration of the Contractor framed by the MCGM. On hearing both the learned senior counsel in support of the said point canvassed before us, we have carefully perused the documents placed on record and specifically the documents endorsing the approval by the N.S. Kamble page 33 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 Municipal Commissioner on the note submitted by the AMC(P) as "confidential" note vide No.AMC/P/16138 dated 18.12.2014. This is communication addressed by the AMC to the Municipal Commissioner who on going through the full- fledge departmental enquiry report has recommended to impose the penalty on the respondent No.11 contractor.
14. The Rules governing Registration of Contractors, its binding effect being a subject matter of the dispute between the parties, needs a reference at this stage. The Municipal Corporation of Greater Mumbai which is constituted under the Mumbai Municipal Corporation Act, 1888 and it discharges obligatory and discretionary duties through the Municipal Commissioner in whom the entire executive power is vested under the said enactment and who is empowered to execute the contract on behalf of the Corporation, which binds the Corporation, it was felt necessary to prescribe the registration of contractors to have a better control over the execution of various construction and other allied works undertaken by the Corporation. The existing rules framed in the year 1969 came N.S. Kamble page 34 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 to be revised by framing new rules in the year 1992 and they came to be known as "Rules Governing the Registration of Contractors of Civil-Mechanical-Electrical and Electronics, 1992" which came into effect in 01.09.1992. The said Rules are applicable for registration of the contractors for the works contract on behalf of the MCGM within and outside the Greater Mumabi. The term 'Registration' is understood in the said Rules to mean enrollment of the contractors as "Municipal approved contractors" for carrying out various municipal works. By virtue of the said rules, the contractor on satisfying the requirements as prescribed in the said rules is entitled for being registered for Civil Engineering/ Mechanical/ Electrical/ Electronic works and such contractors are classified according to the financial status and its organizational and technical capability. The Rules set out the procedure for registration and the Registration Committee appointed by the Municipal Commissioner is the final authority to take a decision on registration subject to review by Municipal Commissioner.
15. The said Rules include a provision for imposition of N.S. Kamble page 35 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 penalties on the registered contractor and it prescribes four penalties i.e. warning, fine, demotion and de-registration. The authorities competent to impose the penalties are also set out in the Rules and the Chief Engineer of MCGM is competent to issue warning, fine or order of demotion. The power of issuing warning or imposing fine could also be exercised by the Executive Engineer concerned in-charge of construction. The Municipal Commissioner or any of the Additional Municipal Commissioners is competent, either suo moto or on the basis of reports received to impose on a contractor any of the four penalties prescribed by the Rules, including the penalty of de- registration. The rules contemplate an opportunity of hearing either in person or through the authorized representative before imposing penalty of de-registration. The contractor can avail an opportunity to seek hearing before the Registration Committee in form of an Appeal against an order of Chief Engineer.
Further Appeal was provided against the order of Registration Committee to the Additional Municipal Commissioner who was authorized to pass appropriate orders N.S. Kamble page 36 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 or submit the matter to the Municipal Commissioner if the initial order was passed by the Additional Municipal Commissioner. The decision of the Additional Municipal Commissioner or as the case may be, the Municipal Commissioner is final and binding.
16. The said Rules came to be amended in the year 2015 and came into force from 1 st May 2015. The amended Rules provide for registration of contractors and and its renewal and the substantive provisions remained the same as the earlier rules except that under the new Rules a penalty of suspension of registration and a penalty of black listing was inserted. Rule 8.8 empowered the Chief Engineer in case of Central Agencies and Zonal Deputy Chief Engineer in case of Ward Officers of MCGM to issue warning and/or impose fine and order of demotion to contractors. The power to issue warning or impose any fine could also be exercised by the Executive Engineer concerned in charge of construction. The Municipal Commissioner or any of the Additional Municipal Commissioner, is competent to impose any of the penalties N.S. Kamble page 37 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 prescribed under the Rules. As far as the provision of Appeal is concerned, it prescribed that against a decision of the penal action taken by Chief Engineer, the Appeal would lie to the concerned Deputy Municipal Commissioner (Engineering Wing)/Additional Municipal Commissioner/Municipal Commissioner, as the case may be, and the decision of the Municipal Commissioner will be final and binding.
These Rules were again amended in the year 2016 and the authority was set out in Clause which reads thus:-
7.2.2 On the basis of report/s received from concerned Chief Engineer or Assistant Commissioner, the Director (E.S & P) or concerned Deputy Municipal Commissioner/ Additional Municipal Commissioner/Municipal Commissioner will be competent, either suo-motu, or to impose any of the penalties mentioned in clause 7.1 on the contractor/s.
The appellate authorities for the penal action was prescribed in Clause 7.4 to the following effect:-
7.4 APPELLATE AUTHORITIES FOR PENAL ACTION a In case of Demotion, Director (E.S & P) or concerned Deputy Municipal Commissioner is the authority and, b In case of banning/de-registration/debarring, Additional Municipal Commissioner/Municipal Commissioner are the final authorities.
N.S. Kamble page 38 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 A power of review came to be included in the Rules for the first time in form of Rule 7.6 7.6 REVIEW The appellate authorities, on representation or appeals from the firms may review suspension/banning/demotion/de-registration orders orders within 30 days.
17. With these Rules in force, it is sought to be argued that the said Rules permit an Appeal and also a review and by invoking the said powers, both the impugned orders dated 3 rd October 2016 and 16th February 2017 have been passed. The said argument needs to be tested. On completion of the Full Fledged Departmental Enquiry, the Municipal Commissioner passed an order of debarment on the petitioner on 19 th December 2014. The respondent no.11 thereafter approached this Court by filing a Writ Petition which was numbered as Writ Petition No.2252 of 2015. During the pendency of the petition, the respondent no.11 preferred an Appeal on 10.08.2015 which came to be decided on 3rd October 2016. The time when appeal was filed, the Rules of 2015 were in force as the amended Rules of 2016 came into force with effect from 1 st December 2016. As a matter of fact, when the impugned order was N.S. Kamble page 39 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 passed by the Commissioner on 19th December 2014, de- registering the respondent no.11, the Rules of 1992 were in force. By the Rules of 1992, the penalty of debarment which is imposed on the respondent no.11 could be passed only by the Municipal Commissioner or any of the Additional Municipal Commissioner and Appeal was permitted to the Registration Committee if an order was passed by the Chief Engineer. Against the order of the Registration Committee, the Appeal would lie to the Additional Municipal Commissioner who would either pass the orders or submit the matter to the Municipal Commissioner if the initial order was passed by the Additional Municipal Commissioner. As far as Rules of 2015 are concerned which came into effect from 1 st May 2015, an Appeal would lie against the decision of Chief Engineer to the Director/Deputy Municipal Commissioner/ Additional Municipal Commissioner/ Municipal Commissioner. Even under the said Rules, the penalty of de-registration could be imposed only by the Municipal Commissioner or any of the Additional Municipal Commissioner. As we have already dealt with the submission as to the authority who had passed the N.S. Kamble page 40 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 impugned order on 19th December 2014 and we have held that the order was passed by the Municipal Commissioner himself, there was no question of preferring any Appeal against the said order and neither the Rules of 1992 nor Rules of 2015 appeal would lie against order of Municipal Commissioner.
18. The Appeal which was preferred by the respondent no.11 came to be heard by the panel of two Deputy Municipal Commissioners. The impugned order dated 16th February 2017 itself makes a reference to the Appeal being filed challenging the order passed by the Municipal Commissioner vide order No. MGC/A/5297 dated 19th December 2014 ordering de- registration of the firm of the respondent. The said order sets out that the Additional Municipal Commission on obtaining remarks of the Law Officer had ruled that the Appeal be heard by the Committee of two Deputy Municipal Commissioners and after the appeal was heard, an order came to be passed on 3 rd October 2016. The said Appeal could not have been entertained in light of the existing Rules of 2015 since the order was passed by the Municipal Commissioner and we affirm our N.S. Kamble page 41 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 conclusion that the order was passed by the Municipal Commissioner since the authority who could have passed an order of debarment is the Municipal Commissioner or the Addl. Municipal Commissioner. The respondent no.11's case is that the Chief Engineer vide his letter dated 13 th January 2015 had communicated him the order, but in any case, it is only a communication of the decision which is already taken by the Municipal Commissioner. The Appeal filed by the respondent no.11 on 10th August 2015 was therefore, not maintainable and since the order is non est, there is no question of its review on basis of 2016 Rules. The provision of review came to be introduced for the first time in the Rules of 2016 which came into force with effect from 1 st February 2016. In such circumstances, both the orders are unsustainable in light of the prevailing rules.
19. We would now deal with the submission of Dr.Sathe, the learned counsel for the respondent and also the argument advanced on behalf of the learned senior counsel Shri.Rajiv Chavan to the effect that the Rules Governing the N.S. Kamble page 42 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 Registration of Contractor framed by the MCGM are not the statutory rules and, therefore, they are devoid of any binding effect. In support of the said contention several authorities are cited by both the learned senior counsels. Reliance is placed on the judgment of the Constitution Bench in case of Sukhdev Singh & Ors Vs/.Bhagatram Sardar Singh Raghuvanshi and Anr.8 In the said judgment, their lordships of the Hon'ble Apex Court has sought to draw distinction between rules and regulations on the one hand and administrative instructions on the other.
Relying on the judgment of the Hon'ble Apex Court in case of G.J. Fernandez vs State Of Mysore & Ors9 it was held that the public works department code was not a subordinate legislation. The principle laid down by the Constitution Bench is a settled one and we need not give second thought to the said proposition as enunciated by the Constitution Bench.
Shri.Chavan has also placed reliance on the judgment of the Hon'ble Apex Court in case of Modern School 8 (1975) 1 SCC 421 9 1967 AIR 1753 N.S. Kamble page 43 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 V/s. Shashi Pal Sharma & Ors.10 The said case revolve around the fact that the respondent teacher rendered a resignation which was accepted by the Appellant School and it was forwarded to Director of Eduction, who having not communicated his approval within 30 days, appellant informed the respondent that his resignation is accepted and he would be relieved. The respondent however contended that he has withdrawn his letter of resignation, the very next day and acceptance of his resignation was illegal. While dealing with the reliance placed on the departmental instructions dated 17.10.1996 regarding the manner in which the meeting of the Managing Committee should be called for, was held to be a matter governed by the internal rules of the school. In the backdrop of the peculiar facts, it was held that the said departmental instructions do not state that any deviation therefrom would result in the resolution passed by the Managing Committee by circulation, a nullity and therefore, the same must be held to be directory. The reliance by the Division Bench of the High Court holding that there was deviation from this procedure and therefore the resignation would not have 10 (2007) 8 SCC 540 N.S. Kamble page 44 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 been accepted was set aside on the basis that the guidelines only formed the internal rules governing the school and the departmental instructions as to how the Managing Committee's meeting should be held, should not have been considered to be governed partaking the statutory instructions.
By this time, it is settled position of law that in order to accord statutory force to the executive instructions, it must be shown that the instructions are issued either under the authority conferred on the government by some statute or flowing from the Constitution. Guidelines or executive instructions which are not statutory in character would not fall within the ambit of the 'laws' and its compliance cannot be enforced by the Courts. Breach of any of such statutory guidelines will not confer any right on any member of the public seeking its compliance through a writ in the nature of mandamus. The guidelines which ought to have been relied upon, if not issued in the exercise of statutory power, do not hold any binding force and right flows from the guidelines cannot be enforced in the Court of law. These guidelines in form of administrative instructions cannot make any roads into N.S. Kamble page 45 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 statutory rights of an individual.
The Hon'ble Apex Court in case of Veerendra Kumar Dueby V/s. Chief of Army Staff and Ors. 11 has held that on occasions the administrative instructions/ orders/ circulars/decisions may supplement the rules though they cannot make in roads into the statutory rights of the individual but if an administrative authority prescribes a certain procedural safeguards to those affected against arbitrary exercise of powers, such safeguards or procedural equity and fairness will not fall foul of the rule or dubbed ultra virus of the statute. While dealing with the appellant who was enrolled as an operator in the Indian Army and he received a show cause notice pointing out he was awarded four red ink entries for various offences and that he had become a habitual offender was served with a show cause notice as to why he should not be discharged from service under the Army Rule. The response to the show cause was of no avail and the appellant had approached the High Court. The matter was then transferred to the Armed Forces Tribunal which also dismissed the claim of the appellant. The Government relied upon the procedure for 11 (2016) 2 SCC 627 N.S. Kamble page 46 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 removal of undesirable and inefficient officers in terms of its Circular dated 28.12.1988 which contemplated a preliminary enquiry before recommending discharge of dismissal of an officer. It was argued that the procedure prescribed by the Competent Authority for exercise of power of discharge under Rule 13 was observed but only in breach thereby rendering the discharge is illegal. Argument was also advanced on behalf of the respondent that Rule 13 did not prescribed any specific procedure to be followed for discharge of undesirable person and the said circular relied upon by the appellant was only directory and did not create any right in the individual concerned to demand and enquiry in the matter. The argument in nutshell was that the said rules are unenforcible.
In the backdrop of the said facts their lordships of the Hon'ble Apex Court observed thus :-
14. It is true that Rule 13 does not in specific terms envisage an enquiry nor does it provide for consideration of factors to which we have referred above. But it is equally true that Rule 13 does not in terms make it mandatory for the competent authority to discharge an individual just because he has been awarded four red ink entries. The threshold of four N.S. Kamble page 47 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 red ink entries as a ground for discharge has no statutory sanction. Its genesis lies in administrative instructions issued on the subject. That being so, administrative instructions could, while prescribing any such threshold as well, regulate the exercise of the power by the competent authority qua an individual who qualifies for consideration on any such administratively prescribed norm. Inasmuch as the competent authority has insisted upon an enquiry to be conducted in which an opportunity is given to the individual concerned before he is discharged from service, the instructions cannot be faulted on the ground that the instructions concede to the individual more than what is provided for by the rule. The instructions are aimed at ensuring a non-
discriminatory fair and non- arbitrary application of the statutory rule.
15. It may have been possible to assail the circular instructions if the same had taken away something that was granted to the individual by the rule. That is because administrative instructions cannot make inroads into statutory rights of an individual. But if an administrative authority prescribes a certain procedural safeguard to those affected against arbitrary exercise of powers, such safeguards or N.S. Kamble page 48 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 procedural equity and fairness will not fall foul of the rule or be dubbed ultra vires of the statute.
16. The procedure prescribed by circular dated 28th December, 1988 far from violating Rule 13 provides safeguards against an unfair and improper use of the power vested in the authority, especially when even independent of the procedure stipulated by the competent authority in the circular aforementioned, the authority exercising the power of discharge is expected to take into consideration all relevant factors. That an individual has put in long years of service giving more often than not the best part of his life to armed forces, that he has been exposed to hard stations and difficult living conditions during his tenure and that he may be completing pensionable service are factors which the authority competent to discharge would have even independent of the procedure been required to take into consideration while exercising the power of discharge. Inasmuch as the procedure stipulated specifically made them relevant for the exercise of the power by the competent authority there was neither any breach nor any encroachment by executive instructions into the territory covered by the statute.
17. The procedure presented simply regulates the exercise of power which would, but for such regulation and safeguards against arbitrariness, be perilously close N.S. Kamble page 49 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 to being ultra vires in that the authority competent to discharge shall, but for the safeguards, be vested with uncanalised and absolute power of discharge without any guidelines as to the manner in which such power may be exercised. Any such unregulated and uncanalised power would in turn offend Article 14 of the Constitution.
20. Perusal of the Rules Governing the Registration of Contractor can be seen as not in the nature of statutory rules but merely in form of guidelines governing the Registration of Contractor since the Municipal Corporation should entrust its various works to the contractors and with the avowed purpose of streamlining the recognition conferred on such contractors including its deprivation. The mechanism of registration of the contractor who would be eligible to carry the work within the jurisdiction of the Corporation therefore was sought to be regulated through the said Rules and it sets out procedure for registration of the contractor and even for its revocation and the penalties to be imposed on a contractor by way of penal action. The said rules also prescribed the remedy available to a contractor when he is aggrieved by any decision. The object enshrined in the rules, though in form of guidelines is to ensure N.S. Kamble page 50 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 a level of certainty and to exact out unfettered discretion which could be exercised by an authority. The Corporation and its officer being public authority discharging the public trust obligations, are expected to act reasonably by displaying an element of fairness to the exclusion of arbitrariness. The Officers entrusted with such onerous duty are expected to act with a degree of certainty and not according to individual's perception or whims and fancies. The said rules therefore assured procedural certainty in the backdrop of the fact that the Corporation is dealing with several contractors and in the matter of registration of contractor. It does not lie in the mouth of the Corporation to advance an argument that the said rules are merely guidelines and have no binding force.
On going through the factual aspects of the matter, we have noted that the Corporation has acted in derogation of the said rules and attempts were made to bend the rules so as to suit a particular contractor and then an argument is sought to be advanced that the rules have no binding effect.
21. In the backdrop of the legal and factual scenario, N.S. Kamble page 51 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 we are of the clear opinion that the said rules though may not have a statutory flavor but they are governing the field since the year 1992 and though its adherence cannot be made imperative, at the same time they can not trammeled to suit the convenience either of a particular contractor or to the sweet choice of a particular officer. Since no benefit is sought to be derived of the said rules nor the petitioner is seeking their enforcement, the only submission which is advanced is that the rules are being implemented by the Corporation and relied upon by the contractors and there is no reason to suddenly deviate from the said procedural norms on the specious ground that the said rules do not have statutory rules. We are not inclined to accept the said submission of the learned senior counsel Shri.Chavan and specifically observe that the rules have been bend as they could suit the convenience of the respondent No.11, and at the first instance, the period of debarment was reduced and by another order passed in the exercise of the power of review, the period of debarment have been cut short so as to enable the respondent No.11 to participate in a tender process of MCGM. Though the rules may not have binding N.S. Kamble page 52 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 effect and its enforcement could not have been sought, no justification is offered by the Corporation to deviate from the said rules which have been followed consistently.
22. The submission is also advanced by the learned counsel Shri.Chavan that there were clear distinction between the word "approval" and the word "permission". He has advanced the submission to justify the notings made on the files where the Municipal Commissioner has granted approval to the proposal forwarded to him by the Assistant Municipal Commissioner. He would place reliance on the judgment of the Hon'ble Apex Court in case of Ashok Kumar Sahu V/s. Union of India & Ors.12 Where the Hon'ble Apex Court has depicted the distinction between the two terms. It has been held that the expression "approval" presupposes an existing order, whereas "acceptance" means communicated acceptance. A distinction exists between the expressions is sought to be explained to the effect whereas in the latter, an application of mind on the part of the competent authority is sine qua non, approval of an order only envisages statutory entitlement.
12 (2006) 6 SCC 704
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Approval of an order is required as directed by the statute. It can be given a retrospective effect.
We fail to understand the application of the proposition laid down in the said judgment to the facts of the present case. Another judgment on which the learned senior counsel has placed reliance in case of Vijayadevi Navalkishore Bhartia V/s. Land Acquisition Officer and Another 13 Where the term "approval" has been construed and it has been held that the power to grant approval is limited to application of mind of the officer to see whether the award is acceptable to the Government or not. The said term "approval" was construed in light of the provisions of Section 11(1) of the Land Acquisition Act. Proviso appended to Section 11(1) of the Land Acquisition Act which prescribes that the proposed award made by the Collector must for the approval of the appropriate Government or such officer as the appropriate government may be authorised in that behalf. In the context of an administrative act, their lordships have held that the word "approval" does not mean anything more than either confirming, rectifying, assenting, sanctioning or consenting.
13 (2003) 5 SCC 83
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Approval has been looked at as an administrative power which limits the jurisdiction of the authority to apply mind to see whether the proposed award is acceptable by the Government or not. It has been held that in that proposed process for the forming an opinion to be approved or not to be approved, the Commissioner satisfies himself as to the material relied upon by the Collector but he cannot be refer the finding as he is the Appellate Authority.
On factual examination, we reach a conclusion that on conduct of FDDE, a finding of guilt came to be recorded and it was forwarded to the Additional Municipal Commissioner, who examined the report, approved the recommendations of penalty and put the file before the Municipal Commissioner who took a final decision, since he was the final Authority. Even the AMC could have passed the order of de-registration, but not the Chief Engineer under the prevailing Rules of 1992. Hence here the term approved cannot be considered as mere concurrence but the decision is culminated into an order dated 19.12.2014 passed by Municipal Commissioner and the MCGM cannot escape from the said order.
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23. Turning back to the facts of the present case, we have already observed above that the Rules governing the Registration of Contractors which were enforced at the relevant time when the order of debarment passed against the respondent No.11, the Rules 1992 were in force and the power to de-register was only conferred on the Municipal Commissioner or any of the Additional Municipal Commissioner. Against the decision of de-registration, appeal would lie to the Municipal Commissioner if the order was passed by the Additional Municipal Commissioner and the decision of the Municipal Commissioner was final and binding. Reference to the documents which form part of the petition make it amply clear that the order dated 16.03.2013 which was passed against the respondent No.11 debarring him from participating in any of the tenders of the MCGM, during the pendency of the enquiry was passed by the Chief Engineer. The said order of debarment of the petitioner from participating in the light of the enquiry pending before the Anti Corruption Bureau and full-fledged departmental enquiry. Full-fledged departmental enquiry was conducted by the enquiry officer and N.S. Kamble page 56 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 the report was forwarded to the Additional Municipal Commissioner. The Additional Municipal Commissioner on analyzing the enquiry report, proposed the penalty on the delinquents and the contractors which included the respondent No.11. The Additional Municipal Commissioner made submission before the Municipal Commissioner about imposition of the penalty on the concerned delinquents and the Municipal Commissioner on 18.12.2014 approved the proposal as passed by the AMC(P). The said approval culminated into an order vide No.MGC/F/5297 dated 19.12.2014 issued by the Municipal Commissioner and the Chief Engineer communicated this order passed by the Municipal Commissioner to the respondent No.11 on 13.01.2015. It would be appropriate to reproduce the said Communication:-
"To, M/s.Buildwell Construction A-402, Jagannath Apt.
Rokadia Lane, Borvali (E), Mumbai-400 092.
Subject:D.E. Report of outstanding payment towards C.W.C. & Remedial works carried out by the contractors during the period of 2005-09 in Ch.Eng.(S.O.) Dept. N.S. Kamble page 57 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 Gentlemen, With reference to the letter of this office vide No.Ch.Eng./S.O./4704 dtd. 16.03.2013, after detailed enquiry in the matter and as approved by the Hon'ble Municipal Commissioner vide No.MGC/F/5297 dated 19.12.2014, it is clearly informed that your firm has been deregistered for a period of 06 years with effect from 16th March 2013.
Yours faithfully, Chief Engineer (Sewerage Operation)"
24. Thus, there is a specific reference to the order passed by the Municipal Commissioner and not only this, perusal of the impugned order dated 03.10.2016 would disclose that the M/s.Buildwell Infrastructure Pvt. Ltd. has submitted appeals before Hon'ble MC/AMC(P)against the order No.MGC/F/5297 dated 19.12.2014 ordering de-registration of firms for the period of six years. This clearly demonstrate that even the respondent No.11 was conscious of the fact that the order is passed by the Municipal Commissioner and a decision was taken to place the appeal before the Committee of two DMC's. The mechanism which is sought to be invoked is de hors the rules in existence and against an order passed by the N.S. Kamble page 58 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 Municipal Commissioner, since he was the authority which was competent to pass an order of de-registration, appeal was preferred to the Additional Municipal Commissioner but there is no mechanism how a subordinate officer can hear the appeal from the higher officer though by a panel of two DMC's. Thus, there is no justification offered in adopting the said mechanism which was not in existence when the appeals were preferred. By the time the appeals were preferred, the 2015 Rules were in force and even under the said Rules, appeal would lie from the order of the Additional Municipal Commissioner to the Municipal Commissioner. In the backdrop of the existence of the above referred undisputed facts, a mechanism to refer the appeal to panel of two DMC's finds no justification. The second impugned order which is passed on 16.02.2017 is again an order passed by the AMC which permitted a review by the Appellate Authority of its own decision in light of Rule No.7.6 of the Rules of 2016. These Rules which are sought to be relied upon have come into force with effect from 01.12.2016 and the power of review is sought to be invoked based on the said rule. We have observed the blatant violation of the procedural norms N.S. Kamble page 59 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 dealing with substantive right of the respondent No.11 so as to suit his convenience. The Rules which were aimed at certainty in the field are deviated without any exceptional circumstances to confer benevolence on respondent No.11.
25. In support of Writ petition filed by the respondent No.11 M/s.Buildwell Infrastructure Pvt. Ltd., Dr.Sathe has placed heavy reliance on the judgment of the Hon'ble Apex Court in case of Kulja Industries Limited V/s. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and Others14. Referring to the decision in case of Erusian Equipment & Chemical Ltd. V/s. State of West Bengal, the Hon'ble Apex Court held thus :-
"17. The Government is a government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public 14 (2014) 14 SCC 731 N.S. Kamble page 60 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one but 'if it does so, it must do as fairly without discrimination and without unfair procedure. Reputation is a part of person's character and personality. Blacklisting tarnishes one's reputation.
20. Blacklisting has the effect of preventing a person from the privilege and advantage 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 blacklist.
By this time the settled position of law that an order of blacklisting without adherence of principles of natural justice have been disapproved and opportunity of hearing to the party has been held to be an essential pre-condition for exercise of the power. In the backdrop of this settled position, we have perused the facts set out in Writ Petition No.4145 of 2018. It is evident that the petitioner has been denied such an opportunity. The enquiry officer has erroneously proceeded ex-
parte against the petitioner on the ground that M/s.Buildwell Construction was a proprietary concern of Mr.Rajesh Jain and he ought to have remained present before the enquiry officer N.S. Kamble page 61 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 but he fails to do so. It is a specific case of the petitioner that M/s.Buildwell Construction was incorporated into M/s.Buildwell Infrastructure Limited with effect from May 2006. The perusal of the proceedings before the enquiry officer would also disclose that the Director of the petitioner No.1- Company was authorised to appear before the enquiry officer.
Accordingly, Shri.Suresh Mehta appeared before the enquiry officer and the statement made by him was reconfirmed by Mr.R.M. Jain vide his letter dated 24.04.2013 and hence there is no question of proceeding ex-parte. Not only this, Mr.R.M. Jain also addressed a communication dated 24.04.2013 making himself available for the purpose of enquiry if required.
However, the enquiry officer did not seek attendance of Mr.Jain at any point of time. In such circumstances, the approach of the enquiry officer to proceed ex-parte against the petitioner can only be treated as violation of principles of natural justice.
26. Further perusal of the enquiry proceedings would disclose that the petitioner has filed reply clarifying that all the works which were alloted to M/s.Buildwell Construction were N.S. Kamble page 62 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 carried out by the petitioner No.1 under the supervision of the departmental staff in accordance with the work orders issued and under supervision of the respondent No.1 including the Vigilance department staff. It was also pointed out in the reply that the relevant records were prepared by the officials of the respondent No.1 by taking joint measurement and entries were effected in the registers of respondent No.1 on the basis of which the bills were prepared. It was also asserted that the works carried out by the petitioner was assessed by the Vigilance Department and the clearance was issued for release of payment. The petitioner No.2 Shri.Suresh Mehta who is Director of petitioner No.1, a Private Limited Company attended the proceedings before the enquiry officer on 27.07.2013 and got his statement recorded to the effect that the petitioner No.1 was not a member of the MCCA and all the details of the formation of the Private Limited Company and the details of the register/copies of the progress of the works were placed before to the enquiry officer and the copies of the 11 work orders were forwarded to the enquiry officer. The report proceeds and records the following conclusions :
N.S. Kamble page 63 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 "(i) MCCA has in the name of Buildwell, on 3rd May 2010 claimed payment of the works carried out by petitioner No.1 (without considering that the claim made by MCCA on behalf of Buildwell, an entity to which Petitioner No.1 is not a member),
(ii) Petitioner No.1 did not furnish various records in relation to the works carried out by it and as such, in absence of requisite documents, the stand of the Petitioners that the requisite documents/records are available with Respondent No.1 deserves to be rejected.
(iii) Since documents were not produced by Petitioner No.1, the claim for payment by Petitioner No.1 for carrying out the works is false and not genuine.
(iv) since Mr.Rajesh M. Jain, who was the executants of the Articles of Agreement for the contracted works did not appear before the Enquiry Officer, the case was treated as ex-parte,
(v) Petitioner No.1 is a member of MCCA as Petitioner No.1 has not produced any supporting evidence/witness from the association to support his claim.
27. Based on the said report, a recommendation was made to the Commissioner for de-registering the name of the petitioner No.2 for the period of 6 years with effect from 16.03.2013 and the respondent No.1 by communication dated 13.01.2015 informed the petitioner that the firm has been de-
registered. These documents were sought by the petitioner
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under the Right to Information Act. The findings so recorded in the enquiry Report are perverse inasmuch as it holds that the petitioner has been held guilty for non-producing the documents though it was categorically pointed out that the respondent No.1 Corporation had maintained the records. This fact was completely ignored by the enquiry officer as he concluded that the petitioners have failed to submit documents in relation to taking over the possession handing over a site etc. The enquiry officer has proceeded ex-parte on the ground that M/s.Buildwell Construction was a proprietary concern of Mr.Rakesh Jain and he ought to have remained present before the Enquiry Officer. This finding is erroneous as M/s.Buildwell Construction was incorporated in M/s.Buildwell Infrastructure Pvt. Ltd. Co. with effect from May 2006 and these documents were forwarded to the Corporation and no objection was raised in respect of the said transformation. The Director of petitioner No.1 was authorized to appear before enquiry officer and the statement made by him that he was so authorized was reconfirmed by Shri.R.K. Jain, the Proprietor of M/s.Buildwell Construction. Therefore, there is no question treating the N.S. Kamble page 65 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 proceeding ex-parte and the findings recorded by the enquiry officer which is ignorance of the letter dated 24.04.2013 addressed by Mr.R.M. Jain can only be seen to be perverse. At no point of time, the enquiry officer issued letter to Mr.Jain nor sought any clarification. The approach of the enquiry officer in ignoring the statement categorically made by the petitioner No.2 before the enquiry officer that they had no association with MCCA and that M/s.Buildwell Construction was never a member of MCCA is not contradicted. Nothing was brought on record before the enquiry officer to show that MCCA was represented and/or claiming payments of works done by M/s.Buildwell Construction and this could not have been the conclusion drawn on the basis of the letter dated 03.05.2010. The enquiry officer in ignorance of the said aspect has recorded the finding and ignorance of the factual material placed before it and is thus ex-facie illegal and cannot be sustained. The existing proprietary firm was converted into a private limited company and there was no occasion to treat the petitioners case ex-parte and concluded that there was intention to defraud the respondent-corporation only on the basis that the claim was N.S. Kamble page 66 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 raised on the letter head of the petitioner No.1 where the work was carried out by M/s.Buildwell Construction. M/s.Buildwell Construction was a contractor for respondent No.1 for more than 15 years and its conversion into a Private Limited Company is not objected to at any point of time by the Corporation. The respondents, in any event, contractually bound to payment towards the works carried out under the 11 works order specifically when the concerned authorities, namely, the Executive Engineer (Civil) Vigilance Department had confirmed the works carried out by the petitioners and quantum of payment was duly concluded on the basis of the remarks by the Vigilance Department. The respondent- Corporation is an instrumentality of State and discharging public functions and it is expected to act fairly and in a transparent manner. When the contract is entered into by the Commissioner on behalf of the Corporation, the said contract is binding and it is expected on behalf of the authorities to enforce the said contracts and when it is vested in the power to black list a contractor or debar him, the said decision can always be tested on the touch stone of the principles of natural N.S. Kamble page 67 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 justice and also doctrine of proportionality. By this time, it is settled proposition of law that the fair hearing to the parties being black listed it is essential pre-requisite for exercise of the power of black listing. The Corporation had itself framed rules governing the procedure for debarment and black listing of a particular contractor and it is incumbent to follow the said procedure though it may not confer a right on the contractor but it is expected for the public functionary to follow a particular set of norms while it exercises its contractual power. Debarment or black listing being in the nature of the penalty and the authorities competent to impose the same, the power should be exercised in a cautious manner and infraction of the principles of the natural justice while exercising the power would run counter to the fundamental principles of the fair play. In such circumstances, the impugned order passed by the Municipal Corporation cannot be sustained and deserves to be quashed and set aside.
28. The above observations made by us are in the backdrop of the large scale deviation of the procedural norms N.S. Kamble page 68 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 adopted by the Corporation to favour a particular contractor and though serious objection is raised about the maintainability petition being filed to question the procedural impropriety, we feel that the petition is liable to be entertained as it exposes the working and functioning of a public body like the Corporation and as how the rules are twisted to shower favors on a particular contractor and we have entertained the Writ petition though not a Public Interest Litigation. As far as the second petition is concerned we have noted the argument of learned senior counsel Shri.Kadam, that M/s.Buildwell Infrastructure Pvt. Ltd. had withdrawn a Writ Petition filed before this Court when interim relief was refused, we would observe that the Writ Petition came to be withdrawn in order to avail a remedy of appeal and the permission was granted by this Court to avail the said remedy. The present proceedings filed by the said contractor now questions the very order of debarment and therefore we do not feel it proper to shut such a remedy of judicial review which is otherwise available in exercise of Writ jurisdiction of this Court. We have thus rejected the preliminary contention of both the respective parties appearing N.S. Kamble page 69 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 in the petitions.
29. On 20.08.2018, this Court had recorded a statement made on behalf of the Corporation that period of two weeks the work order in respect of the subject tender will be issued. The said statement continues till and date and resultantly the tender process initiated in pursuance of e-tender notice published by MCGM for "hire of vehicles for collection and transportation of municipal solid waste (MSW)" is not finalized. In the said tender process, the petitioner in WP No.4145 of 2018 is a lowest bidder and Shri.Sathe has made categorical statement that the bid submitted by him is lowest. In such circumstances, once we have arrived a conclusion that the order of deregistration passed against M/s.Buildwell Infrastructure Pvt. Ltd. is not sustainable, we have no hesitation in permitting the MCGM to allot the work in pursuance of the tender notice published on 08.05.2018 in favour of the lowest bidder, i.e. the M/s.Buildwell Infrastructure Pvt. Ltd.
Since, we have heard both the petitions together we are not inclined to grant the Chamber Summons filed by the N.S. Kamble page 70 of 71 ::: Uploaded on - 22/02/2019 ::: Downloaded on - 20/03/2019 17:55:37 ::: jud-wpl-2885-2018 with wp-4145-2018 M.K. Enterprises.
Resultantly, we pass the following order:-
ORDER
(i) Writ Petition No.2885 of 2018 is partly allowed and the order dated 03.10.2016 (Exhibit- A) and order dated 16.02.2017 (Exhibit-B) are quashed and set aside. We however, declined to grant remaining relief prayed in the Writ Petition.
(ii) As far as Writ Petition No.4145 of 2018 we allowed the Writ Petition and quashed and set aside the enquiry report dated 31.01.2014 and the communication by the Chief Engineer dated 13.01.2015. Since the order dated 16.03.2013 was passed pending the FFDE, we do not interfere with the said order, as it was interim in nature. Since the said order of debarment against the petitioner passed on 13.01.2015 has been set aside, the petitioner is held entitled to participate in the tender floated by the MCGM and since he is found to be a lowest bidder in the tender process, the MCGM is at liberty to issue work order in its favour.
(iii) No order as to cost.
(SMT.BHARATI H. DANGRE, J.) (RANJIT MORE, J.)
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