Orissa High Court
Govinda Chandra Mishra vs The Superintendent, Government ... on 5 March, 1990
Equivalent citations: AIR1992ORI37, AIR 1992 ORISSA 37, (1992) 1 ARBILR 385 (1990) 69 CUT LT 674, (1990) 69 CUT LT 674
JUDGMENT S.C. Mohaptra, J.
1. This is an application under Article 226 of the Constitution of India.
2. Petitioner is a supply contractor of Government Ayurvedic Pharmacy, Bolangir. Order was placed with him for supply of some articles. Since he did not supply the same, notice was issued on 3-11-1982 by opposite party No. 2 to show cause why the contract shall not be cancelled and the security forefeited (Annexure 20). He admitted that he received communication to comply with the supply by 5-9-1982. When he requested the Superintendent (Opposite party No. 1) on 6-9-1982 to receive the articles, latter postponed the receipt for consultation with Additional District Magistrate. In this process, part of the articles have remained in house of the petitioner and the other part was with the common carrier. He also brought to the notice of the Director that about Rs. 20,000/-has remained outstanding against Government. Considering the explanation, Director cancelled the contract, forefeited security deposit of Rs. 3,150/- and ordered for recovery/ adjustment of Rs. 16,385.54 paise towards extra cost of the Government in procuring articles from the market and other sources. Added to it, he black listed the petitioner and prohibited to enter into any contract with Government Ayurvedic Pharmacy, Bolangir or any other hospital or dispensary or institution under the control of the Directorate of Indian Medicine and Homeopathy, Orissa for a period of five years. In the order, it was stated that no contract shall be entered into with the petitioner either in his own name or in the name of any other member of his family or firm with whom he is associated having coparcenary or partnership interest. On the basis of this order dated 16-3-1985 (Annexure 22) another order was also issued on that day (Annexure 23) blacklisting the petitioner. Aggrieved by the same petitioner has filed this writ application on 22-4-1983 and obtained interim stay of operation of Annexure 23 and realisation of Rs. 16,385.54 paise.
3. On behalf of the opposite parties, counter-affidavit has been filed wherein it was stated that petitioner did not supply the articles and intimated the Superintendent on 2-9-1982 that on 21-8-1982 he puchased all articles from Calcutta and booked them in Carry-Co, the common carrier. But on account of rains, the common carrier is not bringing the articles for which supply would be delayed.
4. Mr. B. P. Ray, learned counsel for the petitioner submitted that Annexures 22 and 23 are unreasonable, unjust and are in violation of principles of natural justice. Mr. P. K. Mohanty, learned Additional Government Advocate on the other hand submitted that the period of contract and blacklisting being over by now, no interference is called for. Admittedly, petitioner not having supplied the articles as agreed, forefeiture of security ought not to be interfered with. When petitioner did not supply the articles, the same had to be obtained at a higher price and on that account petitioner is liable to pay the excess costs which amounts to Rs. 16,385-54 paise which the opposite parties had right to recover from the petitioner or adjust from the amount payable to petitioner. Conduct of the petitioner is such that, he had rightly been black listed.
5. Essentially, the writ application involves disputes arising out of contract. Before cancellation of the contract and forefeiture of security deposit of Rs. 3,150/-opportunity was given to the petitioner to show cause. When petitioner intimated the Superintendent on 2-9-1982 one way that articles are not being supplied on account of the common carrier not bringing the articles due to rein, his explanation to the notice (Annexure-22) in another way that some of the articles were with him on 6-9-1982 and the orders were lying with the common carrier was not accepted by opposite party No. 2. In such circumstances a question of fact need not be considered in this writ application with adequate materials in support. Accordingly, cancellation of the contract and forfeiture security deserve no interference in this writ application. It is open to petitioner, if permissible to agitate the question in other forums.
6. Question relating to recovery on account of extra cost involved and black listing the petitioner requires careful consideration. In the notice to show cause (Annexure-22) petitioner was not called upon to explain why the amount of Rs. 16,385.54 paise would not be recovered or to explain why he would not be black listed. Black listing a businessman is a stigma and affects his career or in the business and prospects therein. Accordingly, such black listing has civil consequences. It affects reputation of the person black listed not only in his dealings with the Government but in his dealings with other private persons. Accordingly, principle of natural justice is required to be followed in such cases. This is a settled view of the Supreme Court as well as of this Court. (See AIR 1975 SC 266 Erusian Equipment and Chemicals v. State of West Bengal, AIR 1978 SC 930; Joseph Vilangandan v. The Executive Engineer, P.W.D. Ernakulam, (1971) 1 Cut WR 147; Purna Chandra Das v. Director of Public Instruction, Orissa and (1985) 1 Orissa LR 277 : (AIR 1986 Orissa 220); Dandapani Roule v. State of Orissa). Accordingly, Annexure-23 whose operation had been stayed by order of this Court during pendency of the writ application, is liable to be quashed.
7. Next question for consideration is the validity of direction to recover or adjust the extra cost involved for purchases on account of non-supply of articles by the petitioner. It is to be remembered as observed in AIR 1975 SC 266 (supra) that activities of the Government which is a Government of law and not of man form a different element and, therefore, there should be fairness and equality. Though this was expressed in a different context, the same has bearing in the present case also. Before directing recovery, petitioner should have been given an opportunity to explain why the said amount should not be recovered or adjusted from out of the pending bills. If such opportunity would have been given, petitioner might have explained that the Officers purchasing did not act fairly and paid higher price or that by the time of purchase the said articles were available with the petitioner for supply and if opportunity would have been given, he could have supplied the same. He might have also requested the Director to examine that in fact, articles for which orders were placed were never purchased. Accordingly, we are satisfied that there was no fair play in directing recovery or adjustment without giving opportunity to the petitioner to explain why steps proposed would not be taken. Accordingly, that part of Annexure-22 is also quashed. In case, opposite parties propose to recover or adjust the amount, notice to show cause shall be issued to the petitioner and after considering the same, appropriate orders would be passed. In case, no notice is served on the petitioner on or before 16-4-1990, the amount payable to the petitioner shall immediately be paid without detaining the same.
8. In the result, writ application is allowed to the extent indicated above. Let a writ in the nature of certiorari be issued quashing Annexure-23 and Annexure-22 in part. Let a writ in the nature of mandamus be issued directing opposite parties to issue notice to show cause by 16-4-1990 before directing recovery or adjustment of Rs. 16,385.54 paise failing which to pay the entire dues of the petitioner immediately thereafter. There shall be no order as to costs.
9. Requisites for issue of writ on opposite parties shall be filed by day after tomorrow.
V. Gopalaswamy, J.
10. I agree.