Gujarat High Court
M/S. Royal Transport Contractor ... vs Gujarat State Civil Supplies ... on 19 April, 2021
Author: Sonia Gokani
Bench: Sonia Gokani, Vaibhavi D. Nanavati
C/SCA/4155/2021 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 4155 of 2021
=========== ==== == == == == == === == == == == == == == == == == == = == =
M/S. ROYAL TRANSPORT CONTRACTOR THROUGH PROPRIETARY
CONCERN OF VASIM FARUK DOLTI
Versus
GUJARAT STATE CIVIL SUPPLIES CORPORATION LTD
=========== ==== == == == == == === == == == == == == == == == == == = == ==
Appearance:
MR BHARAT T RAO(697) for the Petitioner(s) No. 1
MR. BHARGAV V PANDYA(7103) for the Respondent(s) No. 2
MR TIRTHRAJ PANDYA, AGP for the Respondent(s) No. 1,3
=========== ==== == == == == == === == == == == == == == == == == == = == ==
CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 19/04/2021
ORAL ORDER
(PER : HONOURABLE MS. JUSTICE SONIA GOKANI)
1. This is a petition preferred under Articles 14, 19 and 226 of the Constitution of India seeking to challenge the action of the respondent authority cancelling the contract of the petitioner for the door step delivery of essential commodities for Panchmahal District and withholding the security deposit of the petitioner essentially on the ground of gross violation of principles of natural justice for having acted without issuance of the show cause notice to the petitioner and without affording opportunity of hearing, such order dated 22.2.2021 is under challenge.
Page 1 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER2. The respondent No.1 published tender notice on 28.5.2020 inviting rates for supply of essential commodities by transporting into the Fair Price shops, Anganwadis and MidDay Meal Centers known as door step delivery scheme for all districts of Gujarat State for the year 202021. The petitioner participated in the etender and was declared successful for the purpose of Panchmahal district. Accordingly the process was completed and finalized on 27.7.2020. The tender came into force with effect from 1.8.2020. The work order was issued in favour of the petitioner and he entered into an agreement with the Collector, Panchmahal on 7.8.2020 for the contract for the period with effect from 1.8.2020 to 31.3.2021.
3. It is the say of the petitioner that the respondent appointed M/s. Vijay Tevar & Co., Chartered Accountant as Auditor to carry out the checking of godown and to certify and tally the stock register being maintained by the Godown Manager. After the inspection the respondent No.1 suspected malpractices. The physical stocks of wheat and rice had also been verified in the presence of panchas and later on, the Gujarat State Civil Supplies Page 2 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER Corporation Ltd., respondent herein lodged the complaint being C.R.No.11207061210114 with Shahera police station on 20.2.2021 for the offences punishable under Sections 406, 420, 409, 120(B) of the Indian Penal Code read with Sections 3 and 7 of the Essential Commodities Act. The FIR has shown as suspects, Arif Nurulamin Shaikh for and on behalf of the Royal Transport, M/s. Vijay Tevar & Co., Vishal Shah as a representative of the CA Team and Kanaiyalal Nagjibhai Rot. The FIR quantifies the possible damage to the Government to the tune of Rs.3,67,72,900/.
4. It is alleged by the petitioner that soon after the filing of the FIR, the respondent No.1 sent a communication to the District Manager (Grade1) and District Supply Officer, Dist.Panchmahal on 22.2.2021 informing that the work of door step delivery contractor is doubtful and an FIR is already filed with the Shahera police station. The respondent No.2 was instructed to forthwith stop the work of door step delivery awarded to the petitioner and make an alternative arrangement from other interested transporters at the rate given to the petitioner with the further directions that till the investigation is completed or till Page 3 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER any clear instruction is issued, no payment of any outstanding bills of the petitioner shall be made and the security deposit be withheld. This order dated 22.2.2021 is challenged in the petition for having been passed without issuance of show cause notice or affording opportunity of hearing. Clause point No.3.3 has been referred to of the general terms and conditions for the cost of delivery tender which provide that before expiry of the terms of the contract, the Corporation for any reason by issuing legal notice can cancel the contract. Essentially aggrieved by the fact that no notice has been issued and the action taken is arbitrary and in fragrant violation of principles of natural justice, the petitioner has approached this Court and requested for following prayers : "(A) To admit and allow this petition.
(B) To issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction, quashing and setting aside the impugned order dated 22.2.2021 passed by respondent no.1 cancelling the contract of the petitioner for door step delivery of essential commodities for Panchmahals District and withholding the security deposit of the petitioner since the said order is issued without issuing any show Page 4 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER cause notice to the petitioner and without affording an opportunity of personal hearing to the petitioner for the reasons stated in the memo of the petition and in the interest of justice;
(C) Pending admission, hearing and final disposal of the present petition, Your Lordships be pleased to stay the execution, implementation and operation of the impugned order dated dated 22.2.2021 passed by respondent no.1 cancelling the contract of the petitioner for door step delivery of essential commodities for Panchmahals District and withholding the security deposit of the petitioner since the said order is issued without any show cause notice to the petitioner and without affording an opportunity of personal hearing to the petitioner and further be pleased to permit the petitioner to continue the work of transportation in Panchmahals District for door step delivery of essential commodities for the reasons stated in the memo of the petition and in the interest of justice;
(D) Your Lordships may Grant ad interim relief in terms of prayer clause Para 41(C) above;
(E) Your Lordships may pass such other and further orders as this Honourable Court may deem fit and proper in favour of the petitioner in the interest of justice and circumstances of the Case."
5. This Court issued notice on 21.3.2021 (Coram : Honble Mr. Justice R. M. Chhaya and Hon'ble Mr. Justice R. P. Dholaria). In return, Page 5 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER reply has been filed on behalf of the respondent by one Brijeshkumar Rambhai Rana denying all allegations. According to the respondent, the petitioner's contract was temporarily withheld and the security deposit was also temporarily withheld. It is not in dispute that the tender notice dated 28.5.2020 which invited the rates for supplying essential commodities by transporting into the Fair Price Shops, Anganwadis and MidDay Meal Centers known as door step delivery ( DSD Contract) for all districts of Gujarat for 202021, allowed so far as Dist. Panchmahal is concerned to the present petitioner.
6. According to the respondent, some malpractice and discrepancies were noticed regarding stock of wheat and rice at Shahera godown of the Gujarat State Civil Supply Corporation, Dist. Panchmahal. The team of various officers had undertaken the surprise inspection of Shahera godown which consisted of Taluka Mamlatdar and Dy. Dist. Manager etc. Keeping two independent panchas they verified the physical stocks and the inspection was done on 19.2.2021. Thereafter Taluka Mamlatdar had lodged the FIR with Shahera police station on 20.2.2021. The Page 6 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER total diverted stocks according to the respondent is of Rs.3.67 crores (rounded off). It is further submitted that the complaint named Arif Nurulamin Shaikh of door step delivery contractor M/s. Royal Transport and others as suspects. According to the respondent, the order dated 22.2.2021 is not an order but an internal communication between the head office and the district office for temporary arrangement as the conduct of the petitioner was found suspicious and the same is under investigation. The show cause notice came to be issued on 2.3.2021. This has also been replied to by the petitioner on 5.3.2021. It is emphatically contended by the respondent that the letter dated 22.2.2021 which is impugned here is a precautionary step before issuance of show cause notice and the petition is premature and so far as case of Somnath Developer is concerned, Somnath Developer had been blacklisted and debarred, security deposit had been confiscated. So far as the present petitioner is concerned, his conduct is very suspicious, doubtful and police investigation is going on. Therefore, to stop him to work to avoid any future possibility of tampering with stock register and the possible diversion of essential Page 7 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER commodities at godown, it was a stopgap arrangement. There is no final order passed.
7. It is the say of the respondent that any shortage of or diversion of stock which affects the beneficiaries of ration card holders of the district will be covered under the National Food Security Act, 2013. Show cause notice is issued and that would be adjudicated by affording opportunity to the parties.
8. The rejoinder affidavit has been filed by the proprietor of M/s. Royal Transport Contractor, petitioner before this Court. According to him, issuance of show cause notice is an afterthought to over reach the process of law. It is only to put up a show that the respondent is open to the version that may be put forth by the petitioner that notice is issued. Any afterthought to fill in the gap must have been stayed.
9. It is further the say of the petitioner that the entire system is online which can be assessed by the head office from Gandhinagar, the proper maintenance of inward stock and outward stock, delivery, fair price shops etc., for being checked. The Godown Manager was looking after the entire door step Page 8 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER contract system only had an accessibility to the goods and the materials. The penal proceedings against the petitioner had preceded the opportunity of hearing.
10. We have heard the learned advocate Mr. Bharat Rao, appearing for the petitioner who vehemently made a submissions along the line of the memo of the petition. He has emphatically urged before this Court that subsequent issuance of show cause notice will not leave the Court to delegate the petitioner the authority's concern. The respondent authority already predecided its part. No purpose is likely to be served once the show cause notice is adjudicated by the respondent authority. He further has urged that the FIR is predominantly against the Godown Manager and till he is arrested no haste is to be made by the investigating agency and the FIR will be an empty formality to hear the petitioner as unless the issue of the FIR is kept aside by the authority concerned and it decides the matter independently, no fruitful outcome to come true.
11. For and on behalf of the respondent learned AGP Mr. Thirthraj Pandya has argued Page 9 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER the matter along the line of what has been contended in the affidavitinreply. According to him, the grievance on the part of the petitioner was nonavailment of the opportunity and the breach of principles of natural justice with the issuance of show cause notice that grievance does not remain. The authority concerned has a right to take the preventive action and the order which is impugned is a part of the preventive measure so that there is no further deterring away of the material nor would it in any manner further prejudice the right of the respondent authority. The contract was for those beneficiaries who are covered under the National Food Security Act and, therefore, the authority concerned shall need to be extremely vigilant while dealing with any suspicious activities.
12. Upon hearing both the sides and on careful examination of the materials placed before us, what could be noticed by this Court is that the door step delivery contract has been provided to the petitioner for the Dist.Panchmahal after he has completed the tender process which got finalized on 27.7.2020 and his work order was issued. This contract was from 1.8.2020 to 31.3.2021 which Page 10 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER has got over on 31.3.2021. By the communication dated 22.2.2021 addressed by the respondent No.1 to respondent No.2, it has directed the stoppage of work of door step delivery awarded to the petitioner with immediate effect and also directed to make an alternative arrangement from other interested transporters at the rate at which the petitioner had been awarded the contract and if others were not agreeable to work at the rate at which M/s. Royal Transporter had been awarded the contract, it was permitted to negotiate with the best of the ability and proposal was to be sent to the respondent No.1 within two days. It further directed not to make any payment till further directions issued at the end of the respondent No.1, since the conduct of the petitioner had been found suspicious and doubtful and it is under investigation. The security deposit also had been withheld till the further direction. It is to be noticed that the FIR has been lodged on 20.2.2021 by the complainant Mamlatdar, Shahera for the shortfall of the wheat and the rice quantified at Rs.3.67 crores (rounded off) with three persons as the suspects, one of them is representative and the employee of the present petitioner.
Page 11 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER13. Order dated 22.2.2021 is termed as not an order but an internal communication between the head office and the district office for temporary arrangement on account of the conduct of the petitioner having been found suspicious and doubtful and is still under the investigation.
14. Till the petitioner approached this Court and this Court issued a notice on 1.3.2021 for breach of principles of natural justice, since there was an absence of show cause notice, the petition was entertained by this Court. The show cause notice came to be issued on 2.3.2021 itself, where there is also a reference of FIR No.11207061210114 dated 20.2.2021. Noticing the fact that the show cause notice has been already issued with the categorical contentions in the affidavitinreply filed by the General Manager, GSCC Limited, Gandhinagar that the communication impugned was an internal communication by way of preventive measure, we deem it appropriate to relegate the petitioner for adjudication of the show cause notice dated 2.3.2021 to the respondents authorities. It has been emphatically urged before this Court that the issue of shortage of stock is under investigation and the order Page 12 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER which is impugned before this Court is a pure and simple precautionary step and nothing more than an internal communication. The respondent authorities in no uncertain terms, has ensured that it is open to afford the opportunity to the petitioner; including the opportunity of hearing before it adjudicates the case and passes a final order. Even otherwise, there are various factual issues which will need to be addressed by the authority concerned and it would be next to impossible to adjudicate them in the writ jurisdiction under Article 226 of the Constitution of India. Let, the show cause notice issued to the petitioner and the reply given on 5.3.2021 be decided by the respondentauthority within eight weeks from the date of receipt of copy of this order. Any further reply; if needs to be filed by the petitioner, it shall file the same within two weeks thereof through emode md [email protected]. Instead of insisting for personal hearing, hearing through video conferencing mode shall be conducted, to which learned advocate Shri Rao has agreed to.
15. It is apt to mention that the FIR reflects the suspects; one of them, according Page 13 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER to the petitioner, is absconding. In any case, the Police is required to investigate and file a chargesheet within ninety days in such matters and therefore, abscondence of one of the accused shall not in any manner hamper the course of investigation and the outcome of which shall need to be regarded by both the sides, as legal recourse will be open to the parties in respect of culmination; either in the form of charge sheet or filing of any of the summaries by the Investigating Officer. Without deciding anything on the aspect of merit, presently, predominantly on account of issuance of show cause notice, pending this petition on 2.3.2021, this petition is being disposed of by relegating the parties to the alternative efficacious remedy. Let the respondent decides the matter with requisite openeness and in accordance with law, without pre judging the issue in any manner. This disposal shall not come in the way of petitioner, and the authority concerned shall decide the matter on merit purely. If the outcome of the show cause notice in any manner prejudices the petitioner, the legal recourse open to it shall be resorted to. This Court has not expressed any opinion on merit. All contentions raised here are kept Page 14 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021 C/SCA/4155/2021 ORDER open to be decided by the appropriate authority.
16. Petition is accordingly disposed of. No order as to costs.
(SONIA GOKANI, J) (VAIBHAVI D. NANAVATI,J) K.K. SAIYED Page 15 of 15 Downloaded on : Sat Sep 04 04:32:18 IST 2021