Madhya Pradesh High Court
M/S Yogendra Dev Pandey Travelling ... vs Bhopal Sahkari Dugdh Sangh Maryadit on 28 May, 2024
Author: Gurpal Singh Ahluwalia
Bench: Gurpal Singh Ahluwalia
1 W.P. No.14333/2020
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE GURPAL SINGH AHLUWALIA
ON THE 28th OF MAY, 2024
WRIT PETITION No. 14333 of 2020
BETWEEN:-
M/S YOGENDRA DEV PANDEY TRAVELLING AGENCY
THROUGH ITS PRO. YOGENDRA DEV PANDEY S/O
SHRI OM SHARAN PANDEY A/A 28 CHHAYA NAGAR
UJJAIN (MADHYA PRADESH)
.....PETITIONER
(SMT. SHOBHA MENON - SENIOR ADVOCATE WITH SHRI RAHUL CHOUBEY -
ADVOCATE )
AND
1. BHOPAL SAHKARI DUGDH SANGH MARYADIT
THR. ITS CHIEF EXECUTIVE OFFICER BHOPAL
DAIRY PLANT HABIBGANJ BHOPAL (MADHYA
PRADESH)
2. SHRI KANCHAN SAXENA CHIEF EXECUTIVE
OFFICER BHOPAL SAHKARI DUGDH SANGH
MARYADIT BHOPAL DAIRY PLANT
HABIBGANJ (MADHYA PRADESH)
3. CHAIRMAN BHOPAL SAHKARI DUGDH SANGH
MARYADIT BHOPAL DAIRY PLANT
HABIBGANJ, BHOPAL (MADHYA PRADESH)
.....RESPONDENTS
(SHRI AJAY MISHRA - SENIOR ADVOCATE WITH SHRI SHASHANK MISHRA -
ADVOCATE )
"Reserved on : 14.05.2024"
"Pronounced on : 28.05.2024"
This petition having been heard and reserved for order, coming
on for pronouncement this day, the court passed the following:
2 W.P. No.14333/2020
ORDER
This petition under Article 226 of Constitution of India has been filed seeking following relief(s):-
"(i) call for the entire records leading to the passing of the impugned orders dated 11.09.2020 (Annexures P-
20); dated 07.07.2020 (Annexure P-21) and dated 07.09.2020 (Annexure P-23) for perusal of this Hon'ble Court;
(ii) issue a writ of certiorari setting aside the entire proceedings w.e.f. 01.09.2020 (issuance of show cause notice) resulting in the impugned order of 11.09.2019 (Annexure P-20) as also 07.09.2020 (Annexure P-23) and 07.07.2020 (Annexure P-21) and hold it has arbitrary, malafide, illegal and unreasonable;
(iii) issue such other writ/order directing respondents to release all the monetary benefits that have been deliberately withheld and also award the compensation to the tune of Rs.25 Lakhs or more as this Hon'ble Court deems fit under the facts and circumstances of the case in favour of petitioner against respondent No.2;
(iv) order costs of the petition to the petitioner;
(v) pass any other relief which this Hon'ble Court deems fit and proper, in the interest of justice.
2. It is submitted by counsel for petitioner that respondents floated a tender on 27.08.2018 for transportation of milk from the Municipal limits of Bhopal to the Chilling Center as also transportation from Multai/Betul to the Dairy Center at Bhopal. The petitioner participated in the bid process and was declared as successful bidder for transportation of milk from the Chilling Center within the State of Madhya Pradesh and accordingly, agreement dated 14.11.2018 was 3 W.P. No.14333/2020 executed, which was valid for a period of two years i.e. up to 30.09.2020 with a stipulation that the CEO with the consent of the contractor can extend the period of contract subject to the satisfactory performance of contract.
3. It is submitted that on 14.12.2019, Sub Inspector, Police Station Crime Branch, Bhopal seems to had received an information that a Tanker bringing milk from the Chilling Plant, Multai has stopped at a Dhaba wherein the driver has stolen the milk and has mixed it with water and urea. The aforesaid Tanker was bearing registration No. MP- 13-H-2178. As soon as the Police approached, the man was identified as Gopal and the driver of the Tanker was identified as Farhan. On inspection, the seal of the lid of the tanker was found broken. The milk was to be transported from the Chilling Plant at Multai to Bhopal Milk Federation of Habibganj. On the basis the aforesaid allegation, an FIR was lodged against the Driver and another person as well as the petitioner and it has been specifically mentioned in the writ petition that the said matter is pending for prosecution before the competent Court of law. An order of detention under Section 3 of National Security Act was also passed against the petitioner. The said order of detention was challenged by the wife of the petitioner by filing W.P.No.28729/2019 and by order dated 27.02.2020, the said writ petition was allowed and the order of detention under the National Security Act was quashed.
4. On 15.12.2019, the respondents on the basis of the alleged FIR in regard to the incident dated 14.12.2019, black listed the petitioner without giving any opportunity of hearing and accordingly, the order of black listing was challenged before this Court by filing W.P.No.8603/2020. The order of black listing was stayed and ultimately 4 W.P. No.14333/2020 the order of black listing was set aside on the ground of non-grant of opportunity of hearing.
5. It is submitted that on 18.12.2019, an enquiry report was submitted pointing out that since the Tanker is parked in the Police Station, therefore the sample of the milk could not be collected. The Federation has the Laboratory to detect the presence of urea beyond 0.08% because in the natural milk 0.07% urea is found. Had there been any instances of mixing the urea in the past, then it would have been detected in the laboratory but no such adulteration was detected by the laboratory. However, in the said report, it was also mentioned that in between 20.11.2019 to 11.12.2019, seal of 9 Tankers was found broken.
6. It is also submitted by counsel for petitioner that although the contract was for utilization of 15 Tankers but after the incident, service of only 5 Tankers was taken by the Federation and the remaining Tankers were not used by the Federation in spite of multiple request sent by the petitioner. It is submitted that on 1.9.2020, the respondents No. 1 and 2 issued the show cause notice to the petitioner on the basis of the report as well as charge-sheet filed against the petitioner for offence under Section 381/406 of IPC. The said notice was received on 05.09.2020 and accordingly the petitioner made a request to the authority on 07.09.2020 to provide a copy of letter dated 15.05.2020, which was the substratum for issuance of letter dated 1.9.2020. In spite of request made by petitioner, the respondents No.1 and 2 did not furnish the copy of the order and passed the impugned order dated 11.09.2020 by which the agreement entered between the parties on 14.11.2018 was terminated. Apart from that, the order dated 07.7.2020 was also cancelled.
5 W.P. No.14333/20207. It is submitted that only along with impugned order dated 11.09.2020, the respondents had enclosed the copy of the letter dated 15.05.2020 and prior thereto no copy of the said letter was ever granted to the petitioner thereby seriously prejudicing the rights of the petitioner.
8. It is the case of the petitioner that the termination of the contract has been done in a most malafide manner. Since, the criminal case with regard to theft of milk is still pending, therefore the respondents should not have terminated the contract.
9. The respondents have exercised their power under Clause 7, 9, 17 and 31 of the tender notice, which does not provide for termination of contract. The petitioner is enjoying his reputation in the market and the right to life within the meaning of Article 21 of Constitution of India also includes the reputation. The order dated 11.09.2020 is the outcome of non-application of mind. To buttress her contentions, the Counsel for the Petitioner has relied upon the Judgments passed by the Supreme Court in the case of ABL International Ltd. and Another Vs. Export Credit Guarantee Corporation of India Ltd. and Others, reported in (2004) 3 SCC 553, Noble Resources Let. Vs. State of Orissa and Another, reported in (2006) 10 SCC 236, Karnataka State Forest Industries Corporation Vs. Indian Rocks, reported in (2009) 1 SCC 150, Ram Barai Singh and Company Vs. State of Bihar and Others, reported in (2015) 13 SCC 592 and Mohindhr Singh Gill and Another Vs. Chief Election Commissioner New Delhi and Others, reported in (1978) 1 SCC 405.
10. Per contra, the petition is vehemently opposed by counsel for the respondents No.1 and 2. It is submitted by Shri Ajay Mishra, Senior 6 W.P. No.14333/2020 Advocate that the federation is enjoying a high reputation in the market of sale of milk and milk products. It has one of the best laboratories in the country. Even a slide adulteration cannot be tolerated because that will not only adversely affect the reputation of the Federation but it would also affect the quality of the product, which is purchased by lacs of people who have faith on the milk or milk products sold by the Federation. It is submitted that because of presence of urea in the fodder, which is consumed by the cattle, 0.07% of urea is naturally found in the milk. If 100 liters of milk is taken out from the Tanker and is replaced by 100 liters of water with 0.07% of urea, then it will not be possible for the Federation to detect the adulteration because if the ultimate quantity of urea in the milk comes to 0.07%, then it is within the permissible limit.
11. It is submitted that in fact the transporter after stealing the milk from the Tanker was adding same quantity of water with 0.07% of urea thereby maintaining the permissible limit of urea in the milk transported by it and by adopting such method they had successfully avoided any adverse report from the laboratory. However, on a query raised by this Court, it was submitted by counsel for petitioner that addition of 100 liters of water would certainly reduce the fat contents. It is submitted that whenever the fat contents are found below than the permissible limit, then it is never branded as adulterated but it is branded as mixed milk.
12. When specific question was put to the counsel for respondents No.1 and 2 that mixing of water will affect the quality of milk or not, then it was fairly conceded by counsel for respondents No.1 and 2 that it 7 W.P. No.14333/2020 would affect but tried to justify by submitting that even a milk with less fat contents are sold in the market.
13. It is submitted that on various occasions, warnings were issued to the petitioner and only when the police under the drive Yudh for Shudh kept a track of the movements of the Tankers, caught the driver red handed while he was stealing the milk and was mixing it with water and urea. Accordingly, thereafter registered the case.
14. It is further submitted that on multiple occasions the seal of the Tanker was found to be broken and also relied upon the enquiry report, which also mentioned that even quality of the seal was also bad. It is further submitted that as per Clause-7 of tender notice the contract can be terminated.
15. To buttress his contentions, the counsel for respondent has relied upon the Judgments passed by Supreme Court in the case of ABL International Ltd. (Supra), State of Kerala and others Vs. M.K. Jose reported in (2015) 9 SCC 433, State of U.P. and others VS. Bridge & Roof Co. (India) Ltd. reported in 1996(6) SCC 586, and Judgment passed by Division Bench of this Court in the case of Amit Khamparia Vs. State of M.P. and others reported in (2016) 3 MPLC 163 (M.P.)(D.B.).
16. Heard the learned Counsel for the Parties. Whether the order dated 11-9-2020 is bad on account of non-supply of communication dated 15-5-2020 sent by Add. S.P.?
17. The Petitioner has filed the copy of communication dated 15-5- 2020 sent by Add. S.P. which reads as under:
dk;;kZy; vfrfjä iqfyl v/kh{kd ¼vijk/k½ Hkksiky e-ç-
dz-@ viqv@vi-@HkkS@jh@vkj-&58@20 fnukad& 15@05@2020 8 W.P. No.14333/2020 izfr çca/k lapkyd ,e-ih- LVsV dks&vkijsfVo Ms;jh QsMjs'ku fyfeVsM nqX/k Hkou nqX/k ekxZ gchcxat Hkksiky e-i-
fo"k;& VSadj ls nw/k pksjh ds lac/a k esAa laneZ& Øekad@114@xqfu&12¼ch½@,eihlhMh,Q@2019] Hkksiky fnukad&08@01@2020 &00& mijksä fo"k;kUrxZr ,oa lanfHkZr i= ds laca/k esa ys[k gSA fd Fkkuk çHkkjh Fkkuk Økbe czkap Hkksiky ls çfrosnu çkIr fd;k x;k Fkkuk çHkkjh Onkjk vius çfrosnu esa çfrosfnr fd;k fd fnukad& 15@12@2019 dks eq[kfcj dh lwpuk ij Vªd Øekad ,e-ih- 13 ,p&2178 ds pkyd vkjksih Qjgku] ;ksxsUnz nso] xksiky ds fo#) vi-Ø- 207@19 /kkjk 381@406 Hkknfo dk iathc) dj foospuk esa fy;k x;k foospuk ds nkSjku vkjksih Qjgku] ;ksxsUæ nso] xksiky dks fxj¶rkj fd;k x;kA çdj.k dh foospuk iw.kZ gksus ij pkyku ekuuh; U;k;ky; esa is'k fd;k x;k gSA çdj.k] ekuuh; U;k;ky; esa fopkjk/khu gSA çdj.k dh foospuk ds nkSjku lkaph nqX/k la?k ds fdlh Hkh vf/kdkjh@deZpkjh dh lfyIirk ugh ik;h xbZ gSA çfrosnu vko';d dk;Zokgh gsrq lknj çsf"kr gSA vfrfjä iqfyl v/kh{kd ¼vijk/k½ Hkksiky e-ç-
çfrfyfi e[; dk;Zikyu vf/kdkjh Hkksiky lgdkjh nqX/k la?k e;kZfnr Hkksiky dh vksj i= dzekad ¼2595½ e/; Hkks- l- nq-l-@2020 Hkksiky fnukad& 24@02@2020 ds rkjrE; esa lknj izsf"krA vfrfjDr iqfyl v/kh{kd ¼vijk/k½ Hkksiky e-ç-
18. By show cause notice 1-9-2020, the Petitioner was called upon to explain as to why his contract may not be terminated on account of registration of offence and the matter is pending in the Court.
19. In reply to that show cause notice, it was replied by the Petitioner, that copy of letter dated 15-5-2020 sent by Add. S.P., has not been supplied.
20. Now, the only question for consideration is that whether non- supply of letter dated 15-5-2020 along with show cause notice dated 1- 9 W.P. No.14333/2020 9-2020 would vitiate the proceedings or not?
21. Before considering the aforesaid aspect, this Court would like to consider the law governing the field of violation of principle of Natural Justice.
22. The Supreme Court in case of Nirma Industries Limited and another Vs. Securities and Exchange Board of India reported in (2013) 8 SCC 20 has held as under:
"30. In B. Karunakar [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] , having defined the meaning of "civil consequences", this Court reiterated the principle that the Court/Tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished to the employee. It is only if the Court or Tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment. In other words, the Court reiterated that the person challenging the order on the basis that it is causing civil consequences would have to prove the prejudice that has been caused by the non-grant of opportunity of hearing............
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35. Mr Venugopal has further pointed out that apart from the appellants, even the merchant bankers did not make a request for a personal hearing. He submitted that grant of an opportunity for a personal hearing cannot be insisted upon in all circumstances. In support of this submission, he relied on the judgment of this Court in Union of India v. Jesus Sales Corpn. [(1996) 4 SCC 69] The submission cannot be brushed aside in view of the observations made by this Court in the aforesaid judgment, which are as under:
(SCC pp. 74-75, para 5) 10 W.P. No.14333/2020 "5. The High Court has primarily considered the question as to whether denying an opportunity to the appellant to be heard before his prayer to dispense with the deposit of the penalty is rejected, violates and contravenes the principles of natural justice. In that connection, several judgments of this Court have been referred to. It need not be pointed out that under different situations and conditions the requirement of compliance with the principle of natural justice vary. The courts cannot insist that under all circumstances and under different statutory provisions personal hearings have to be afforded to the persons concerned. If this principle of affording personal hearing is extended whenever statutory authorities are vested with the power to exercise discretion in connection with statutory appeals, it shall lead to chaotic conditions. Many statutory appeals and applications are disposed of by the competent authorities who have been vested with powers to dispose of the same. Such authorities which shall be deemed to be quasi-
judicial authorities are expected to apply their judicial mind over the grievances made by the appellants or applicants concerned, but it cannot be held that before dismissing such appeals or applications in all events the quasi-judicial authorities must hear the appellants or the applicants, as the case may be. When principles of natural justice require an opportunity to be heard before an adverse order is passed on any appeal or application, it does not in all circumstances mean a personal hearing. The requirement is complied with by affording an opportunity to the person concerned to present his case before such quasi- judicial authority who is expected to apply his judicial mind to the issues involved. Of course, if in his own discretion if he requires the appellant or the applicant to be heard because of special facts and circumstances of the case, then certainly it is always open to such authority to decide the 11 W.P. No.14333/2020 appeal or the application only after affording a personal hearing. But any order passed after taking into consideration the points raised in the appeal or the application shall not be held to be invalid merely on the ground that no personal hearing had been afforded."
23. The Supreme Court in case of Chairman, State Bank of India and another Vs. M.J. James reported in (2022) 2 SCC 301 has held as under:-
"31. In State of U.P. v. Sudhir Kumar Singh [State of U.P. v. Sudhir Kumar Singh, (2021) 19 SCC 706 :
2020 SCC OnLine SC 847] referring to the aforesaid cases and several other decisions of this Court, the law was crystallised as under : (SCC para 42) "42. An analysis of the aforesaid judgments thus reveals:
42.1. Natural justice is a flexible tool in the hands of the judiciary to reach out in fit cases to remedy injustice. The breach of the audi alteram partem rule cannot by itself, without more, lead to the conclusion that prejudice is thereby caused.
42.2. Where procedural and/or substantive provisions of law embody the principles of natural justice, their infraction per se does not lead to invalidity of the orders passed. Here again, prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest, but also in public interest.
42.3. No prejudice is caused to the person complaining of the breach of natural justice where such person does not dispute the case against him or it. This can happen by reason of estoppel, acquiescence, waiver and by way of non-challenge 12 W.P. No.14333/2020 or non-denial or admission of facts, in cases in which the Court finds on facts that no real prejudice can therefore be said to have been caused to the person complaining of the breach of natural justice.
42.4. In cases where facts can be stated to be admitted or indisputable, and only one conclusion is possible, the Court does not pass futile orders of setting aside or remand when there is, in fact, no prejudice caused. This conclusion must be drawn by the Court on an appraisal of the facts of a case, and not by the authority who denies natural justice to a person.
42.5. The "prejudice" exception must be more than a mere apprehension or even a reasonable suspicion of a litigant. It should exist as a matter of fact, or be based upon a definite inference of likelihood of prejudice flowing from the non-
observance of natural justice."
24. The Supreme Court in case of Dharampal Satyapal Limited Vs. Deputy Commissioner of Central Excise, Gauhati and others reported in (2015) 8 SCC 519 has held as under:-
"20. Natural justice is an expression of English Common Law. Natural justice is not a single theory--it is a family of views. In one sense administering justice itself is treated as natural virtue and, therefore, a part of natural justice. It is also called "naturalist" approach to the phrase "natural justice" and is related to "moral naturalism". Moral naturalism captures the essence of commonsense morality--that good and evil, right and wrong, are the real features of the natural world that human reason can comprehend. In this sense, it may comprehend virtue ethics and virtue jurisprudence in relation to justice as all these are attributes of natural justice. We are not addressing ourselves with this connotation of natural justice here.13 W.P. No.14333/2020
21. In Common Law, the concept and doctrine of natural justice, particularly which is made applicable in the decision-making by judicial and quasi-judicial bodies, has assumed a different connotation. It is developed with this fundamental in mind that those whose duty is to decide, must act judicially. They must deal with the question referred both without bias and they must give (sic an opportunity) to each of the parties to adequately present the case made. It is perceived that the practice of aforesaid attributes in mind only would lead to doing justice. Since these attributes are treated as natural or fundamental, it is known as "natural justice". The principles of natural justice developed over a period of time and which is still in vogue and valid even today are: (i) rule against bias i.e. nemo debet esse judex in propria sua causa; and (ii) opportunity of being heard to the party concerned i.e. audi alteram partem. These are known as principles of natural justice. To these principles a third principle is added, which is of recent origin. It is the duty to give reasons in support of decision, namely, passing of a "reasoned order".
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38. But that is not the end of the matter. While the law on the principle of audi alteram partem has progressed in the manner mentioned above, at the same time, the courts have also repeatedly remarked that the principles of natural justice are very flexible principles. They cannot be applied in any straitjacket formula. It all depends upon the kind of functions performed and to the extent to which a person is likely to be affected. For this reason, certain exceptions to the aforesaid principles have been invoked under certain circumstances. For example, the courts have held that it would be sufficient to allow a person to make a representation and oral hearing may not be necessary in all cases, though in some matters, depending upon the nature of the case, not only full-fledged oral hearing but even cross-examination of witnesses is treated as a necessary concomitant of the principles of natural justice. Likewise, in service matters relating to major 14 W.P. No.14333/2020 punishment by way of disciplinary action, the requirement is very strict and full-fledged opportunity is envisaged under the statutory rules as well. On the other hand, in those cases where there is an admission of charge, even when no such formal inquiry is held, the punishment based on such admission is upheld. It is for this reason, in certain circumstances, even post- decisional hearing is held to be permissible. Further, the courts have held that under certain circumstances principles of natural justice may even be excluded by reason of diverse factors like time, place, the apprehended danger and so on.
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40. In this behalf, we need to notice one other exception which has been carved out to the aforesaid principle by the courts. Even if it is found by the court that there is a violation of principles of natural justice, the courts have held that it may not be necessary to strike down the action and refer the matter back to the authorities to take fresh decision after complying with the procedural requirement in those cases where non- grant of hearing has not caused any prejudice to the person against whom the action is taken. Therefore, every violation of a facet of natural justice may not lead to the conclusion that the order passed is always null and void. The validity of the order has to be decided on the touchstone of "prejudice". The ultimate test is always the same viz. the test of prejudice or the test of fair hearing.
41. In ECIL [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 704] , the majority opinion, penned down by Sawant, J., while summing up the discussion and answering the various questions posed, had to say as under qua the prejudice principle: (SCC pp. 756-58, para 30) "30. Hence the incidental questions raised above may be answered as follows:
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(v) The next question to be answered is what is the effect on the order of punishment when the report 15 W.P. No.14333/2020 of the enquiry officer is not furnished to the employee and what relief should be granted to him in such cases. The answer to this question has to be relative to the punishment awarded. When the employee is dismissed or removed from service and the inquiry is set aside because the report is not furnished to him, in some cases the non-
furnishing of the report may have prejudiced him gravely while in other cases it may have made no difference to the ultimate punishment awarded to him. Hence to direct reinstatement of the employee with back wages in all cases is to reduce the rules of justice to a mechanical ritual. The theory of reasonable opportunity and the principles of natural justice have been evolved to uphold the rule of law and to assist the individual to vindicate his just rights. They are not incantations to be invoked nor rites to be performed on all and sundry occasions. Whether in fact, prejudice has been caused to the employee or not on account of the denial to him of the report, has to be considered on the facts and circumstances of each case. Where, therefore, even after the furnishing of the report, no different consequence would have followed, it would be a perversion of justice to permit the employee to resume duty and to get all the consequential benefits. It amounts to rewarding the dishonest and the guilty and thus to stretching the concept of justice to illogical and exasperating limits. It amounts to an 'unnatural expansion of natural justice' which in itself is antithetical to justice."
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44. At the same time, it cannot be denied that as far as courts are concerned, they are empowered to consider as to whether any purpose would be served in remanding the case keeping in mind whether any prejudice is caused to the person against whom the action is taken. This was so clarified in ECIL [(1993) 4 SCC 727 : 1993 SCC (L&S) 1184 : (1993) 25 ATC 16 W.P. No.14333/2020 704] itself in the following words: (SCC p. 758, para
31) "31. Hence, in all cases where the enquiry officer's report is not furnished to the delinquent employee in the disciplinary proceedings, the courts and tribunals should cause the copy of the report to be furnished to the aggrieved employee if he has not already secured it before coming to the court/tribunal and given the employee an opportunity to show how his or her case was prejudiced because of the non-supply of the report. If after hearing the parties, the court/tribunal comes to the conclusion that the non-supply of the report would have made no difference to the ultimate findings and the punishment given, the court/tribunal should not interfere with the order of punishment. The court/tribunal should not mechanically set aside the order of punishment on the ground that the report was not furnished as is regrettably being done at present. The courts should avoid resorting to short cuts. Since it is the courts/tribunals which will apply their judicial mind to the question and give their reasons for setting aside or not setting aside the order of punishment, (and not any internal appellate or revisional authority), there would be neither a breach of the principles of natural justice nor a denial of the reasonable opportunity. It is only if the court/tribunal finds that the furnishing of the report would have made a difference to the result in the case that it should set aside the order of punishment."
25. The Supreme Court in case of Canara Bank and others v. Debasis Das and others reported in (2003) 4 SCC 557 has held as under:-
"22. What is known as "useless formality theory"
has received consideration of this Court in M.C. Mehta v. Union of India [(1999) 6 SCC 237] . It was observed as under: (SCC pp. 245-47, paras 22-23) 17 W.P. No.14333/2020 "22. Before we go into the final aspects of this contention, we would like to state that cases relating to breach of natural justice do also occur where all facts are not admitted or are not all beyond dispute. In the context of those cases there is a considerable case-law and literature as to whether relief can be refused even if the court thinks that the case of the applicant is not one of 'real substance' or that there is no substantial possibility of his success or that the result will not be different, even if natural justice is followed see Malloch v. Aberdeen Corpn. [(1971) 2 All ER 1278 : (1971) 1 WLR 1578 (HL)] (per Lord Reid and Lord Wilberforce), Glynn v. Keele University [(1971) 2 All ER 89 : (1971) 1 WLR 487] , Cinnamond v. British Airports Authority [(1980) 2 All ER 368 : (1980) 1 WLR 582 (CA)] and other cases where such a view has been held. The latest addition to this view is R. v. Ealing Magistrates' Court, ex p Fannaran [(1996) 8 Admn LR 351] (Admn LR at p. 358) [see de Smith, Suppl. p. 89 (1998)] where Straughton, L.J. held that there must be 'demonstrable beyond doubt' that the result would have been different. Lord Woolf in Lloyd v. McMahon [(1987) 1 All ER 1118 :
1987 AC 625 : (1987) 2 WLR 821 (CA)] has also not disfavoured refusal of discretion in certain cases of breach of natural justice. The New Zealand Court in McCarthy v. Grant [1959 NZLR 1014] however goes halfway when it says that (as in the case of bias), it is sufficient for the applicant to show that there is 'real likelihood -- not certainty -- of prejudice'. On the other hand, Garner's Administrative Law (8th Edn., 1996, pp. 271-72) says that slight proof that the result would have been different is sufficient. On the other side of the argument, we have apart from Ridge v. Baldwin [1964 AC 40 : (1963) 2 All ER 66 : (1963) 2 WLR 935 (HL)] , Megarry, J. in John v. Rees [(1969) 2 All ER 274 : 1970 Ch 18 W.P. No.14333/2020 345 : (1969) 2 WLR 1294] stating that there are always 'open and shut cases' and no absolute rule of proof of prejudice can be laid down. Merits are not for the court but for the authority to consider.
Ackner, J. has said that the 'useless formality theory' is a dangerous one and, however inconvenient, natural justice must be followed. His Lordship observed that 'convenience and justice are often not on speaking terms'. More recently, Lord Bingham has deprecated the 'useless formality theory' in R. v. Chief Constable of the Thames Valley Police Forces, ex p Cotton [1990 IRLR 344] by giving six reasons. (See also his article 'Should Public Law Remedies be Discretionary?' 1991 PL, p. 64.) A detailed and emphatic criticism of the 'useless formality theory' has been made much earlier in 'Natural Justice, Substance or Shadow' by Prof. D.H. Clark of Canada (see 1975 PL, pp. 27-63) contending that Malloch [(1971) 2 All ER 1278 :
(1971) 1 WLR 1578 (HL)] and Glynn [(1971) 2 All ER 89 : (1971) 1 WLR 487] were wrongly decided. Foulkes (Administrative Law, 8th Edn., 1996, p. 323), Craig (Administrative Law, 3rd Edn., p. 596) and others say that the court cannot prejudge what is to be decided by the decision-
making authority. de Smith (5th Edn., 1994, paras 10.031 to 10.036) says courts have not yet committed themselves to any one view though discretion is always with the court. Wade (Administrative Law, 5th Edn., 1994, pp. 526-30) says that while futile writs may not be issued, a distinction has to be made according to the nature of the decision. Thus, in relation to cases other than those relating to admitted or indisputable facts, there is a considerable divergence of opinion whether the applicant can be compelled to prove that the outcome will be in his favour or he has to prove a case of substance or if he can prove a 'real likelihood' of success or if he is entitled to relief even if there is some remote chance of 19 W.P. No.14333/2020 success. We may, however, point out that even in cases where the facts are not all admitted or beyond dispute, there is a considerable unanimity that the courts can, in exercise of their 'discretion', refuse certiorari, prohibition, mandamus or injunction even though natural justice is not followed. We may also state that there is yet another line of cases as in State Bank of Patiala v. S.K. Sharma [(1996) 3 SCC 364 :
1996 SCC (L&S) 717] , Rajendra Singh v. State of M.P. [(1996) 5 SCC 460] that even in relation to statutory provisions requiring notice, a distinction is to be made between cases where the provision is intended for individual benefit and where a provision is intended to protect public interest. In the former case, it can be waived while in the case of the latter, it cannot be waived.
23. We do not propose to express any opinion on the correctness or otherwise of the 'useless formality' theory and leave the matter for decision in an appropriate case, inasmuch as in the case before us, 'admitted and indisputable' facts show that grant of a writ will be in vain as pointed out by Chinnappa Reddy, J."
23. As was observed by this Court we need not go into "useless formality theory" in detail; in view of the fact that no prejudice has been shown. As is rightly pointed out by learned counsel for the appellants, unless failure of justice is occasioned or that it would not be in public interest to dismiss a petition on the fact situation of a case, this Court may refuse to exercise the said jurisdiction (see Gadde Venkateswara Rao v. Govt. of A.P. [AIR 1966 SC 828] ). It is to be noted that legal formulations cannot be divorced from the fact situation of the case. Personal hearing was granted by the Appellate Authority, though not statutorily prescribed. In a given case post-decisional hearing can obliterate the procedural deficiency of a 20 W.P. No.14333/2020 pre-decisional hearing. (See Charan Lal Sahu v. Union of India [(1990) 1 SCC 613 : AIR 1990 SC 1480] .)"
26. Thus, the Principle of Natural Justice has undergone material changes, and an order cannot be quashed merely on the ground of violation of Principles of Natural Justice by applying the theory of useless formality and the person complaining violation of Natural Justice has to point out the prejudice which was caused to him.
27. If the facts of the present case are considered, then this Court with an intention to verify as to whether any prejudice was caused to the petitioner or not, enquired from the Counsel for the Petitioner, that whether the Petitioner was arrested by the Police, whether a criminal case has been registered against the Petitioner and whether charge sheet has been filed against the Petitioner or not? It was accepted by the Petitioner himself, who was present in the Court, that a charge sheet has been filed and the criminal trial is pending. However, it was submitted by the Petitioner that charges have not been framed for the reason that the driver of the tanker has not been granted bail so far.
28. Although the order sheets of the Trial Court have not been filed but it is clear from the reply given by the Petitioner himself, that the charges have not been framed so far. If the Counsel for the co-accused is seeking adjournments, then it cannot be said that the prosecution is responsible for the delay. Be that whatever it may be.
29. One thing is clear that the information given by Add. S.P., by his letter dated 15-5-2020 thereby informing the arrest of the petitioner and his employees, registration of criminal case and filing of the charge sheet has not been denied by the Petitioner. The aforesaid facts were also in the knowledge of the petitioner even at the time of filing of his 21 W.P. No.14333/2020 reply to the show cause notice dated 1-9-2020.
30. However, it is submitted by Counsel for the Petitioner, that by letter dated 15-5-2020, the Add. S.P. had also informed, that no employee of Federation was involved, therefore, the Petitioner had a right to contest the said finding.
31. Considered the submissions made by Counsel for the Petitioner.
32. This Petition is regarding termination of contract. Whether or not any employee of the Federation was also involved would not authorize the Petitioner to get himself involved in activities which are forbidden under the contract.
33 Thus, it is held that since, non-supply of communication dated 15- 5-2020 has not prejudiced the petitioner in any manner, therefore, it cannot be said that the order of termination of contract by order dated 11-9-2020 was bad. Thus, the aforesaid contention is hereby rejected. When the original term of contract has come to an end on 30-9- 2020, then whether this Court grant any substantive relief to the Petitioner or not?
34. The undisputed fact is that work order for transportation of milk was issued in favor of the petitioner which was valid upto 30-9-2020 and the contract was terminated on 11-9-2020. As per Clause 8(b) of the Tender, after the original term of contract is over, then subject to satisfactory discharge of work, the Chief Executive Officer shall have right to extend the period of contract with the consent of the successful bidder.
35. In the present case, the contract was terminated on 11-9-2020 (Annexure P/20) i.e., just 19 days prior to the last date of Contract. By this petition, the petitioner has sought the quashment of order dated 11- 22 W.P. No.14333/2020 9-2020 (Annexure P/20). One thing is clear i.e., the term of original contract is over and even if the petition is allowed, still this Court cannot grant the relief of continuation of contract for transportation of milk. It is submitted by the Counsel for the Petitioner, that after quashing the order dated 11-9-2020 (Annexure P/20), this Court can relegate the Petitioner to the Civil Court to file a suit for damages.
36. Considered the submissions made by the Counsel for the Petitioner.
37. Section 34 of Specific Relief Act, reads as under:
"34. Discretion of court as to declaration of status or right.--Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying or interested to deny, his title to such character or right, and the court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief: Provided that no court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.
Explanation.--A trustee of property is a "person interested to deny" a title adverse to the title of someone who is not in existence, and for whom, if in existence, he would be a trustee."
38. This Court has already reproduced the prayer clause. The petitioner has claimed the quashment of order dated 11-9-2020, 7-9- 2020 and 7-7-2020. The petitioner has also claimed release of all monetary benefits which have been withheld and also the compensation of Rs. 25,00,000/-.
39. During the course of arguments, it was not argued by the Counsel for the Petitioner, that any monetary claim which had already accrued 23 W.P. No.14333/2020 prior to termination of contract has not been paid. Therefore, the prayer for release of all monetary benefits which have been withheld is a misconceived prayer, which is liable to be rejected and hence, it is rejected.
40. So far as the question of payment of damages/compensation is concerned, the Counsel for the petitioner has also admitted during the course of arguments that this Court while exercising power under Article 226 of Constitution of India cannot ascertain the quantum of damages/compensation and for that purposes, the Petitioner will have to approach the Civil Court. Furthermore, in the petition, the petitioner is claiming violation of his private right and violation of any public law or infringement of public interest has not been pleaded as well as argued. The Supreme Court in the case of Silppi Constructions Contractors v. Union of India, (2020) 16 SCC 489 has held as under:
"6. Aggrieved, the original writ petitioner is before us in these petitions. This Court in a catena of judgments has laid down the principles with regard to judicial review in contractual matters. It is settled law that the writ courts should not easily interfere in commercial activities just because public sector undertakings or government agencies are involved.
7. In Tata Cellular v. Union of India, it was held that judicial review of government contracts was permissible in order to prevent arbitrariness or favouritism. The principles enunciated in this case are: (SCC pp. 687-88, para 94) "94. ...
(1) The modern trend points to judicial restraint in administrative action.
(2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative 24 W.P. No.14333/2020 decision is permitted it will be substituting its own decision, without the necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts.
(5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative sphere. However, the decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides.
(6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure."
(emphasis in original)
8. In Raunaq International Ltd. v. I.V.R. Construction Ltd., this Court held that the superior courts should not interfere in matters of tenders unless substantial public interest was involved or the transaction was mala fide.
9. In Air India Ltd. v. Cochin International Airport Ltd., this Court once again stressed the need for overwhelming public interest to justify judicial intervention in contracts involving the State and its instrumentalities. It was held that the courts must proceed with great caution while exercising their discretionary powers and should exercise these powers only in furtherance of public interest and not merely on making out a legal point.
10. In Karnataka SIIDC Ltd. v. Cavalet (India) Ltd. it was held that while effective steps must be taken to realise the maximum amount, the High Court exercising its power under Article 226 of the Constitution is not competent to 25 W.P. No.14333/2020 decide the correctness of the sale effected by the Corporation.
11. In Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd. it was held that while exercising power of judicial review in respect of contracts, the court should concern itself primarily with the question, whether there has been any infirmity in the decision-making process. By way of judicial review, the court cannot examine details of terms of contract which have been entered into by public bodies or the State.
12. In B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. it was held that it is not always necessary that a contract be awarded to the lowest tenderer and it must be kept in mind that the employer is the best judge therefor; the same ordinarily being within its domain. Therefore, the court's interference in such matters should be minimal. The High Court's jurisdiction in such matters being limited, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record.
13. In Jagdish Mandal v. State of Orissa it was held:
(SCC p. 531, para 22) "22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction.
Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a 26 W.P. No.14333/2020 grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold."
14. In Michigan Rubber (India) Ltd. v. State of Karnataka it was held that if the State or its instrumentalities acted reasonably, fairly and in public interest in awarding contract, interference by court would be very restrictive since no person could claim fundamental right to carry on business with the Government. Therefore, the courts would not normally interfere in policy decisions and in matters challenging award of contract by the State or public authorities.
15.InAfcons Infrastructure Ltd. v. Nagpur Metro Rail Corpn. Ltd. it was held that a mere disagreement with the decision-making process or the decision of the administrative authority is no reason for a constitutional court to interfere. The threshold of mala fides, intention to favour someone or arbitrariness, irrationality or perversity must be met before the constitutional court interferes with the decision-making process or the decision. The owner or the employer of a project, having authored the tender documents, is the best person to understand and appreciate its requirements and interpret its documents. It is possible that the owner or employer of a project may give an interpretation to the tender documents that is not acceptable to the constitutional courts but that by itself is not a reason for interfering with the interpretation given.
16. In Montecarlo Ltd. v. NTPC it was held that where a decision is taken that is manifestly in consonance with the language of the tender document or subserves the purpose for which the tender is floated, the court should follow the principle of restraint. Technical evaluation or comparison by the court would be impermissible. The principle that is 27 W.P. No.14333/2020 applied to scan and understand an ordinary instrument relatable to contract in other spheres has to be treated differently than interpreting and appreciating tender documents relating to technical works and projects requiring special skills. The owner should be allowed to carry out the purpose and there has to be allowance of free play in the joints.
17. In Municipal Corpn., Ujjain v. BVG (India) Ltd. it was held that the authority concerned is in the best position to find out the best person or the best quotation depending on the work to be entrusted under the contract. The court cannot compel the authority to choose such undeserving person/company to carry out the work. Poor quality of work or goods can lead to tremendous public hardship and substantial financial outlay either in correcting mistakes or in rectifying defects or even at times in redoing the entire work.
18. Most recently this Court in Caretel Infotech Ltd. v. Hindustan Petroleum Corpn. Ltd. observed that a writ petition under Article 226 of the Constitution was maintainable only in view of government and public sector enterprises venturing into economic activities. This Court observed that there are various checks and balances to ensure fairness in procedure. It was observed that the window has been opened too wide as every small or big tender is challenged as a matter of routine which results in government and public sectors suffering when unnecessary, close scrutiny of minute details is done.
19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their powers of judicial review in contractual or commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear-cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not 28 W.P. No.14333/2020 subject to scrutiny under writ jurisdiction. No doubt, the bodies which are State within the meaning of Article 12 of the Constitution are bound to act fairly and are amenable to the writ jurisdiction of superior courts but this discretionary power must be exercised with a great deal of restraint and caution. The courts must realise their limitations and the havoc which needless interference in commercial matters can cause. In contracts involving technical issues the courts should be even more reluctant because most of us in Judges' robes do not have the necessary expertise to adjudicate upon technical issues beyond our domain. As laid down in the judgments cited above the courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder. In fact, the courts must give "fair play in the joints" to the government and public sector undertakings in matters of contract. Courts must also not interfere where such interference will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the State instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the court's interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."
41. The Supreme Court in the case of Joshi Technologies International Inc. v. Union of India, reported in (2015) 7 SCC 728 29 W.P. No.14333/2020 has held as under:
"55. Law in this aspect has developed through catena of judgments of this Court and from the reading of these judgments it would follow that in pure contractual matters the extraordinary remedy of writ under Article 226 or Article 32 of the Constitution cannot be invoked. However, in a limited sphere such remedies are available only when the non-Government contracting party is able to demonstrate that it is a public law remedy which such party seeks to invoke, in contradistinction to the private law remedy simpliciter under the contract. Some of the case law to bring home this cardinal principle is taken note of hereinafter.
*****
69. The position thus summarised in the aforesaid principles has to be understood in the context of discussion that preceded which we have pointed out above. As per this, no doubt, there is no absolute bar to the maintainability of the writ petition even in contractual matters or where there are disputed questions of fact or even when monetary claim is raised. At the same time, discretion lies with the High Court which under certain circumstances, it can refuse to exercise. It also follows that under the following circumstances, "normally", the Court would not exercise such a discretion:
69.1. The Court may not examine the issue unless the action has some public law character attached to it. 69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be resorted to through the means of arbitration. 69.3. If there are very serious disputed questions of fact which are of complex nature and require oral evidence for their determination.
69.4. Money claims per se particularly arising out of contractual obligations are normally not to be entertained except in exceptional circumstances.30 W.P. No.14333/2020
70. Further, the legal position which emerges from various judgments of this Court dealing with different situations/aspects relating to contracts entered into by the State/public authority with private parties, can be summarised as under:
70.1. At the stage of entering into a contract, the State acts purely in its executive capacity and is bound by the obligations of fairness.
70.2. State in its executive capacity, even in the contractual field, is under obligation to act fairly and cannot practise some discriminations.
70.3. Even in cases where question is of choice or consideration of competing claims before entering into the field of contract, facts have to be investigated and found before the question of a violation of Article 14 of the Constitution could arise. If those facts are disputed and require assessment of evidence the correctness of which can only be tested satisfactorily by taking detailed evidence, involving examination and cross-examination of witnesses, the case could not be conveniently or satisfactorily decided in proceedings under Article 226 of the Constitution. In such cases the Court can direct the aggrieved party to resort to alternate remedy of civil suit, etc. 70.4. Writ jurisdiction of the High Court under Article 226 of the Constitution was not intended to facilitate avoidance of obligation voluntarily incurred. 70.5. Writ petition was not maintainable to avoid contractual obligation. Occurrence of commercial difficulty, inconvenience or hardship in performance of the conditions agreed to in the contract can provide no justification in not complying with the terms of contract which the parties had accepted with open eyes. It cannot ever be that a licensee can work out the licence if he finds it profitable to do so: and he can challenge the conditions under which he agreed to take the licence, if he finds it commercially inexpedient to conduct his business. 70.6. Ordinarily, where a breach of contract is complained of, the party complaining of such breach may sue for specific performance of the contract, if contract is capable 31 W.P. No.14333/2020 of being specifically performed. Otherwise, the party may sue for damages.
70.7. Writ can be issued where there is executive action unsupported by law or even in respect of a corporation there is denial of equality before law or equal protection of law or if it can be shown that action of the public authorities was without giving any hearing and violation of principles of natural justice after holding that action could not have been taken without observing principles of natural justice.
70.8. If the contract between private party and the State/instrumentality and/or agency of the State is under the realm of a private law and there is no element of public law, the normal course for the aggrieved party, is to invoke the remedies provided under ordinary civil law rather than approaching the High Court under Article 226 of the Constitution of India and invoking its extraordinary jurisdiction.
70.9. The distinction between public law and private law element in the contract with the State is getting blurred.
However, it has not been totally obliterated and where the matter falls purely in private field of contract, this Court has maintained the position that writ petition is not maintainable. The dichotomy between public law and private law rights and remedies would depend on the factual matrix of each case and the distinction between the public law remedies and private law field, cannot be demarcated with precision. In fact, each case has to be examined, on its facts whether the contractual relations between the parties bear insignia of public element. Once on the facts of a particular case it is found that nature of the activity or controversy involves public law element, then the matter can be examined by the High Court in writ petitions under Article 226 of the Constitution of India to see whether action of the State and/or instrumentality or agency of the State is fair, just and equitable or that relevant factors are taken into consideration and irrelevant factors have not gone into the decision-making process or that the decision is not arbitrary.
70.10. Mere reasonable or legitimate expectation of a 32 W.P. No.14333/2020 citizen, in such a situation, may not by itself be a distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirements of due consideration of a legitimate expectation forms part of the principle of non- arbitrariness.
70.11. The scope of judicial review in respect of disputes falling within the domain of contractual obligations may be more limited and in doubtful cases the parties may be relegated to adjudication of their rights by resort to remedies provided for adjudication of purely contractual disputes."
42. The Supreme Court in the case of Rapid Metro Rail Gurgaon Ltd. v. Haryana Mass Rapid Transport Corpn. Ltd., reported in (2021) 17 SCC 533 has held as under:
"70. Clause (II) of the directions contained in SCC OnLine P&H para 8 of the order dated 20-9-2019 makes it abundantly clear that the basic purpose underlying the entrustment of the reference to the CAG was the determination of the debt due "as defined under the concession contract". The High Court, it must be emphasised, was seized of a proceeding under Article 226 of the Constitution, and its writ jurisdiction had been invoked to challenge the notices of termination issued by RMGL and RMGSL, and for ensuring that the consequence which would emanate on the expiry of the notice period of 90 days by the cessation of the metro operations could be prevented by the judicial intervention in the course of the public law jurisdiction. The issuance of a notice of termination, the consequences which would ensue, and the resolution of disputes is specifically provided in the arbitration agreement between the parties, which is an intrinsic part of the concession agreements. Hence, there was an evident interface between this element of public interest on the one hand and the contractual rights of the parties to the concession agreements on the other. However, when HMRTC and HSVP moved the High Court under Article 226, they did 33 W.P. No.14333/2020 so in view of the impending threat which was looming large on the horizon of the rapid metro operations being brought to a standstill as a result of the proximate expiry of the notice of 90 days preceding termination. In Sanjana M. Wig v. Hindustan Petroleum Corpn. Ltd., a two-Judge Bench of this Court, speaking through S.B. Sinha, J., has observed : (SCC pp. 247-48, paras 12-13 &
18) "12. The principal question which arises for consideration is as to whether a discretionary jurisdiction would be refused to be exercised solely on the ground of existence of an alternative remedy which is more efficacious. ...
13. However, access to justice by way of public law remedy would not be denied when a lis involves public law character and when the forum chosen by the parties would not be in a position to grant appropriate relief.
***
18. It may be true that in a given case when an action of the party is dehors the terms and conditions contained in an agreement as also beyond the scope and ambit of the domestic forum created therefor, the writ petition may be held to be maintainable; but indisputably therefor such a case has to be made out. It may also be true, as has been held by this Court in Amritsar Gas Service and E. Venkatakrishna that the arbitrator may not have the requisite jurisdiction to direct restoration of distributorship having regard to the provisions contained in Section 14 of the Specific Relief Act, 1963; but while entertaining a writ petition even in such a case, the court may not lose sight of the fact that if a serious disputed question of fact is involved arising out of a contract qua contract, ordinarily a writ petition would not be entertained. A writ petition, however, will be entertained when it involves a public law character or involves a question arising out of public law functions on the part of the respondent."
(emphasis supplied)
71. In the present case, the High Court was evidently concerned over a fundamental issue of public interest, which was the hardship that would be caused to 34 W.P. No.14333/2020 commuters who use the rapid metro as a vehicle for mass transport in Gurgaon. As such, the High Court's exercise of its writ jurisdiction under Article 226 in the present case was justified since non-interference, which would have inevitably led to the disruption of rapid metro lines for Gurgaon, would have had disastrous consequences for the general public. However, as a measure of abundant caution, we clarify that ordinarily the High Court in its jurisdiction under Article 226 would decline to entertain a dispute which is arbitrable. Moreover, remedies are available under the Arbitration and Conciliation Act, 1996 for seeking interim directions either under Section 9 before the Court vested with jurisdiction or under Section 17 before the Arbitral Tribunal itself."
43. Thus, it is held that in absence of any public interest, normally, the Courts should not interfere with the Contractual matters and should relegate the parties to avail the remedy under Civil Law or under Arbitration Law. Even otherwise, when this Court cannot grant consequential relief of revival of contract, then the Writ Petition for a declaration simplicitor that the order terminating contract was illegal is not maintainable. Since, the petitioner has merely complained of infringement of his private rights, therefore, on this ground also, this Court declines to exercise its power under Article 226 of Constitution of India.
Whether the respondents had right to terminate the contract on filing of charge sheet against the contractor and its employee on the allegations of theft of milk or not?
44. It is submitted by the Counsel for the respondents that since, the Federation is enjoying good reputation amongst its customers, therefore, another big industry like Amul could not establish its business in State of M.P. It is further submitted that after the police had filed the charge 35 W.P. No.14333/2020 sheet then it is clear that the police had found prima facie case of theft against the contractor and its employee. The Federation cannot wait till the final outcome of criminal trial, thereby jeopardising its reputation. It is submitted that every customer is entitled to a best product, therefore exercising power under clause 7 of the tender notice, the contract was terminated.
45. Whereas it is submitted by Counsel for petitioner, that contract could not have been terminated on solitary instance of theft.
46. Heard the learned Counsel for the parties.
47. Clause- 14 of Schedule-IV of the tender read as under:-
**14- ;g fd] psfdax ds nkSjku vFkok bl laca/k esa izkIr f'kdk;rksa dh tkWap djus ij ik;k tkrk gS fd okgu deZpkfj;ksa }kjk nw/k esa xMcM+h] gsjkQsjh] nw/k fudkydj fodz; djus ;k nw/k ihrs gq;s ik;s tkus ij ;k fdlh Hkh izdkj dh vfu;ferrk djrs gq, ik;s tkus ij lacfa /kr ifjogudrkZ ,oa okgu pkyd ds fo:) lacfa /kr Fkkus esa izFke lwpuk fjiksVZ ntZ djkrs gq,s vuqca/k vof/k dh leLr nw/k dh deh ,oa blls lfefr@la?k dks gksus okyh gkfu dk nsunkj f}rh; i{k jgsxk ,oa vuqca/k fujLr djus ,oa lqj{kkfuf/k tIr djus dk laiw.kZ vf/kdkj izFke i{k vFkkZr eq[; dk;Zikyu vf/kdkjh] Hkksiky lgdkjh nqX/k la?k ds ikl lqjf{kr jgsxkA**
48. Therefore, it is clear that in case of registration of FIR pertaining to theft of Milk etc. not only Federation would be entitled for recovery of loss but the CEO Federation would also be empowered to cancel the contract.
49. So far as the reliance of counsel for the petitioner Clause-7 of Schedule-III of the tender is concerned, it would apply on the different facts and circumstances. However, it is submitted by counsel for the petitioner that the contract of the petitioner has been terminated on the ground of violation of Clauses-7, 9, 17 and 31 of Schedule-III, therefore, Clause-14 of Schedule-IV cannot be read. The aforesaid contention made by counsel for petitioner cannot be accepted.
36 W.P. No.14333/202050. The order dated 11.09.2020 by which the contract of the petitioner was cancelled has been filed as a part of Annexure-P/19 which reads as under:-
Hkksiky lgdkjh nqX/k la?k e;kZfnr BHOPAL SAHAKARI DUGDHA SANGH MARYADIT ¼e/;izn's k lgdkjh lkslk;Vht vf/kfu;e 1960 ds v/khu iathd`r½ Hkksiky Msjh IykaV] gchcxat] Hkksiky&462024 e-iz- ¼Hkkjr½ dzekad@la;a= lapkyu@10248 Hkksiky fnukad 11@09@2020 izfr] Jh ;ksxUs nz nso ik.Ms;
VSadj ifjogudrkZ ;ksxsUnz nso ik.Ms; Vªsofyax ,tsalh 28] Nk;k uxj] mTtSu e-iz-
fo"k;%& vuqca/k dh 'krksZa ds mYya?ku ,oa vlarks"ktud dk;Z djus ij vkidh QeZ ds fo:) dk;Zokgh ,oa vuqca/k fujLr djus ckcr~A mijksDr fo"k;karxZr fnukad 14@12@2019 jkf= esa dzkbe czkap] ,e-ih-uxj Hkksiky }kjk vkids nqX/k la?k esa vuqcaf/kr VSadj dzekad ,eih13,p 2178 dks nw/k pksjh ,oa feykoV djrs gq, idM+k x;k Fkk rFkk bl lac/a k esa vijk/k dzekad 207@2019 Hkkjrh; n.M lafgrk dh /kkjk 381 ,oa 406 ds varxZr izdj.k iathc) fd;k x;k] tks fd Hkksiky ftyk U;k;ky; esa fopkjk/khu gSA vkidk mDr d`R; u dsoy nqX/k la?k dh Nfo dks /kwfey djrk gS] vfirq vuqca/k dsoy nqX/k la?k dh Nfo dks /kwfer djrk gS] vuqca/k ds f'kM~;wy&3 dh 'krZ dzekad 7]9]17 ,o 31 dk mYya?ku Hkh gSA ftlds ifj.kke Lo:Ik nqX/k la?k ds vkns'k dzekad 4725 fnukad 15@12@2019 ds }kjk vkidks ,oa vkidks nqX/k la?k esa vuqcaf/kr 15 VSadjksa dks dkyh lwph esa Mky fn;k x;k FkkA mDr vkns'k dks vkids }kjk ekuuh; mPp U;k;ky; tcyiqj esa ;kfpdk dzekad 85603@2020 }kjk pqukSrh nh xbZ FkhA ekuuh; mPp U;k;ky; us mDr ;kfpdk ds lanHkZ esa vius varfjx vkns'k fnukad 27@06@2020 }kjk nqX/k la?k ds mDr vkns'k ij LFkxu vkns'k fn;k x;k Fkk] ftlds vuqikyu esa nqX/k la?k us vkids ikap VSadj iqu% dk;Z vkeaf=r dj dk;Z izkjEhk dj fn;k x;k gSA mDr ;kfpdk ij ekuuh; mPp U;k;ky; us fnukad dkyh lwph ls ckgj fd;k x;kA uSlfxZd U;k; ds fl)karksa ds ikyu lac/a kh ekuuh; mPp U;k;ky; ds funsZ'kkuqlkj vkidks lquokbZ dk ekSdk nsrs gq, nqX/k la?k ds i= dzekad 9799 fnukad 01@09@2020 ds }kjk dk;fn'k fujLr djus laca/k dkj.k crkvks lwpuk i= tkjh fd;k x;k gS] ftldk larks"ktud mRrj izkIr ugha gqvkA lgh@& 37 W.P. No.14333/2020
51. From plain reading of this order it is clear that it has been passed on two grounds (i) the tanker belonging to the petitioner is found involved in commission of theft of milk and accordingly FIR in Crime No. 207/2019 for offence under Section 381 and 406 of IPC has been registered and the act of the petitioner is also in violation of Clauses-7, 9, 17 and 31 of Schedule-III. The use of the words **dk mYya?ku Hkh gS** clearly indicates that the violation of Clauses-7, 9, 17 and 31 was not a solitary ground for cancellation of contract but primary ground for cancellation of contract was that the Tanker No. M.P.13H2178 was found to be involved in commission of theft and adulteration. Therefore, whether Clause-14 of Schedule-IV is mentioned or not one thing is clear that the contract was terminated primarily on the ground that one of the Tanker of the petitioner was involved in commission of theft.
52. Furthermore, it is submitted by counsel for respondents that as per Clause-15 of Schedule-III, it was required that the Tanker should not be parked near in the Dhaba for at any case other than the main road and the total period of halt should not be more than 15 minutes but as per the FIR the Tanker was found parked in front of a Dhaba and driver and other persons were seen committing theft of milk and carrying out the adulteration.
53. The counsel for the petitioner has not controverted the aforesaid contentions. However, so far as the other instances of the irregularities committed by the petitioner on various occasions is concerned, it is submitted by counsel for petitioner that since all those irregularities which have been mentioned by the respondents in their affidavit are concerned, the same cannot be taken note of in the light of judgment passed by Supreme Court in the case of Mohindhr Singh Gill and 38 W.P. No.14333/2020 Another Vs. Chief Election Commissioner New Delhi and Others, reported in (1978) 1 SCC 405.
54. Considered the submissions made by counsel for petitioner.
55. The respondents in Sub-Clause-14, 15, 16, 17, 18, 19, 20 and 21 have narrated the following breaches which took place on earlier occasion and the action taken by the Federation. The previous instances mentioned in the Clause-14, 15, 16, 17, 18, 19, 20 and 21 reads as under:-
xiv) That on receipt of information of similar complaints letter dated 17.07.19 was issued by the General Manger (Plant Operation) to the petitioner conveying that unnecessary extra time has been taken in transporting the milk causing adverse effect on the quality of the milk.
It was specifically reported that the incidences of opening of seals have been noticed very frequently and the petitioner is not paying proper attention. The penalty was imposed and warning was given for serious action in future. The copy of letter dated 17.07.19 is annexed as Annexure R/2.
xv) That on reporting of breaches and violations another letter imposing penalty dated 05.08.19 was issued by the GM (Plant Operation) and copy whereof is annexed as Annexure R/3.
xvi) That the Incharge GM (PO) had issued letter dated 08.07.19, annexed as Annexure R/4, imposing penalty of Rs.
5,000/- because of reported breaches committed during transportation of milk by the tanker No. MP 13- H-0678 of petitioner specified in the letter itself.
39 W.P. No.14333/2020xvii) That the Incharge GM (PO) had issued letter dated 08.07.19, annexed as Annexure R/5, imposing penalty of Rs.
10,000/- because of reported breaches committed during transportation of milk by the tanker No. MP 13-GA-2677 of petitioner specified in the letter itself.
xviii) That the Incharge GM (PO) had issued letter dated 24.06.19, annexed as Annexure R/6, imposing penalty of Rs.
5,000/- because of reported breaches committed during transportation of milk by the tanker No. MP 13- H-2278 of petitioner specified in the letter itself.
xix) That the Incharge GM (PO) had issued letter dated 05.03.19, annexed as Annexure R/7, imposing penalty of Rs.
10,000/- because of reported breaches committed during transportation of milk by the tanker No. MP 13-H-2178 of petitioner specified in the letter itself.
xx) That the Incharge GM (PO) had issued letter dated 14.02.2019 annexed as Annexure R/8, imposing penalty of Rs.
10,000/- because of reported breaches committed during transportation of milk by the tanker No. MP 13-H-0678 of petitioner specified in the letter itself.
xxi) That the Incharge GM (PO) had issued letter dated 17.12.18, annexed as Annexure R/9, imposing penalty of Rs.
2,000/- because of reported breaches committed during transportation of milk by the tanker No. MP 13- H-2378 of petitioner specified in the letter itself.
40 W.P. No.14333/202056. The counsel for the petitioner is right in making a submission that the reasons must be reflected in the order and the same cannot be supplied by filing an affidavit for the reason that while adjudicating the writ petition, Court is required to consider as to whether the authorities had applied their minds before passing the impugned order or not and, therefore, subsequent supply of reasons cannot be accepted.
57. However, this Court has already held that the primary reason for cancellation of contract is registration of FIR coupled with the violation of Clauses-7, 9, 17 and 31 of Schedule-III. When the primary ground for cancellation of contract is on account of the registration of FIR for offence under Sections 381 and 406 of IPC, then in absence of any challenge to the previous breaches by the petitioner by filing rejoinder, this Court is of considered opinion that under the facts and circumstances of the case, the law laid down by the Supreme Court in the case of Mohindhr Singh Gill and Another (supra) would not apply with full force.
58. Furthermore, what prejudice was caused to the petitioner on account of non communication of previous breaches has also not been disclosed by the petitioner. Once, the breaches which were specifically pleaded by the respondents in Clauses-14, 15, 16, 17, 18, 19, 20 and 21 in their return have not been refuted by the petitioner by filing rejoinder, then this Court is of considered opinion that the petitioner cannot claim any breach.
Whether the petition is bad on account of availability of alternative remedy.
59. At the beginning of the arguments it was specifically clarified by this Court that in the light of the Clause-42 of Schedule-III, the petitioner 41 W.P. No.14333/2020 has an efficacious remedy of approaching the arbitrator for resolution of dispute but the petitioner insisted that this Court should hear the matter on merits.
60. Although the remedy of arbitration is available with the petitioner but as this Court has already heard the petition on merits, therefore, at this stage it would not like the petitioner to relegate back to avail alternative remedy of arbitration.
61. Considering the totality of the facts and circumstances of the case, this Court is of considered opinion that no case is made out warranting interference.
62. The petition fails and is hereby dismissed.
(G.S. AHLUWALIA) JUDGE VB/AL Digitally signed by ASHISH KUMAR LILHARE Date: 2024.05.28 16:42:44 +05'30'