Bombay High Court
M/S Sai Enterprises Thr. Prop. Rajeev ... vs Union Of India, Thr. Ministry Of ... on 2 August, 2018
Author: R. K. Deshpande
Bench: R. K. Deshpande
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR
Writ Petition No. 7214/2017
PETITIONER:- M/s. Sai Enterprises,
through its Proprietor Rajeev Ramkisan
Khichar, R/o. Plot No. 18, Rathi Layout,
behind Church, 8th Mile, Amravati Road,
Nagpur - 440023.
VERSUS
RESPONDENTS: 1. Union of India through Ministry of
Defense, South Block, Central
Government Office, New Delhi,
Delhi - 110011.
2. Chairman, Ordinance Factory,
10th , S. K. Bose Road, Calcutta,
West Bengal, 700 001.
3. Ordinance Factory, Ambazari,
through its General Manager,
Nagpur - 440 021.
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Shri Akshay Naik, Advocate for petitioner.
Ms. Mugdha R. Chandurkar, A.S.G.I. for respondent Nos. 1 to 3.
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CORAM: R. K. DESHPANDE AND
ARUN. D. UPADHYE, JJ.
Date : 02.08.2018
JUDGMENT (PER R. K. DESHPANDE, J.)
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2. The petition challenges the order dated 10.10.2017 passed by the respondent No. 3 that the petitioner - Firm has failed to supply the required manpower to Ordnance Factory, Ambajhari as mentioned in the supply order, due to which the defence production has been badly affected. The order further further states that the respondent No.3 has found that order passed for debarment, forfeiting of Performance Security Deposit (P.S.D.) and short closure of the supply order dated 15.07.2017 as just and proper.
3. Relying upon the decision of this Court in the earlier round of litigation between the same parties delivered on 18.09.2017 in Writ Petition No. 4714/2017, it is urged by Ms. Chandurkar, the learned counsel appearing for the respondents that the order passed by this Court directing to pass an order after hearing the petitioner has already been complied with. She submits that the order has been passed in compliance with the provision of the Clauses of the termination and penalty, contained under the Labour Contract. She therefore, submits that the petition needs to be dismissed, particularly when, this Court in the earlier round of litigation has not set aside the order dated 15.07.2017.
4. The judgment delivered by this Court in Writ Petition No. 4714/2017 has to be understood in the light of the provisions under the ::: Uploaded on - 06/08/2018 ::: Downloaded on - 07/08/2018 01:15:20 ::: 3 34jgWP7214.17.odt Contract and the Law settled by the Hon'ble Apex Court in the decision of the Gorkha Security Services Vs. Government (NCT of Delhi) and Others reported in (2014) 9 SCC 105. Para 16 of the said decision being relevant is reproduced below:-
"16. It is common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rational behind it. With blacklisting, many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts."
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5. In the present case, Clause No. 3 regarding termination and penalty under the contract reads as under:-
"3. If any contractor is found indulging in unfair practices like payment of less wages, making deliberate delays in payment of wages or making illegal demands from any Contract Labourers then Contractor will be severely penalized which may include de- listing/debarring/black list of the firm/Penalty as deemed fit by CFAJ/ forfeiting of dues and PSD amount of the contract including Termination of Contract."
6. The said Clause is also incorporated under the contract in question for the period from 02.02.2017 to 01.02.2018. There is no grievance about short closure of the contract by the respondents. The grievance is in respect of forfeiting of the P.S.D. and blacklisting the petitioner as contractor.
7. Bare perusal of Clause No. 3 under the Contract reproduced above, shows that there has to be the specific finding as to the Contractor indulging in unfair practices like payment of less wages, making deliberate delays in payment of wages or making ::: Uploaded on - 06/08/2018 ::: Downloaded on - 07/08/2018 01:15:20 ::: 5 34jgWP7214.17.odt illegal demands from any contract labourers, while imposing penalty including de-listing, debarring, blacklisting or forfeiting the dues and P.S.D. amount.
8. In the light of what the Hon'ble Supreme Court has held in para 16 of the decision in case of Gorkhas Security Services cited supra, the show cause notice was required to be issued making out the case under Clause 3 of the Contract reproduced above, so as to provide the petitioner an effective opportunity to meet the case. It does not lie in the mouth of the respondents to say that this Court has directed grant of hearing and therefore, issuance of show cause notice was dispensed with. The judgment delivered by this Court cannot be construed to mean that the respondents were exempted from issuing show cause notice making out the case under Clause 3, before taking the impugned action of either forfeiting of the dues and P.S.D. amount or blacklisting the Contractor - Petitioner. The fact that this Court has directed the respondents to provide an opportunity of being heard to the petitioner does not mean that this Court has directed the respondents to comply with empty formalities. The spirit behind passing of the order by the Court and its effect has to be taken into consideration. Merely because this Court has not set aside the order dated 15.07.2017, it does not mean that this Court has attached validity to such order. The consequence ::: Uploaded on - 06/08/2018 ::: Downloaded on - 07/08/2018 01:15:20 ::: 6 34jgWP7214.17.odt of directing the respondents to provide an opportunity to the petitioner of being heard in the matter implies that this Court has set aside the order dated 15.07.2017.
9. In view of above, it is not possible for us either to sustain the order dated 10.10.2017 impugned in the petition or even the order dated 15.07.2017 which was the subject matter of challenge in the earlier writ petition. Both orders will have to be quashed and set aside.
10. In the result, the writ petition is allowed and following order is passed:-
O R D E R
(i) Orders dated 10.10.2017 and 15.07.2017 passed by the respondents are hereby quashed and set aside.
(ii) It shall be open for the respondents, if they so desire to follow the terms of the contract laid down by themselves and then proceed to take action in accordance with law.
(iii) Rule is made absolute in the above terms. No order as to costs.
JUDGE JUDGE
Gohane
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