Gujarat High Court
Shivranjani Constructions Co vs Paschim Gujarat Vij Company Limited & 3 on 5 May, 2017
Author: Anant S. Dave
Bench: Anant S. Dave, A.Y. Kogje
C/SCA/12996/2016 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 12996 of 2016
With
SPECIAL CIVIL APPLICATION NO. 12997 of 2016
TO
SPECIAL CIVIL APPLICATION NO. 12999 of 2016
With
CIVIL APPLICATION NO. 12747 of 2016
In
SPECIAL CIVIL APPLICATION NO. 12996 of 2016
With
CIVIL APPLICATION NO. 12749 of 2016
In
SPECIAL CIVIL APPLICATION NO. 12999 of 2016
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SHIVRANJANI CONSTRUCTIONS CO....Petitioner(s)
Versus
PASCHIM GUJARAT VIJ COMPANY LIMITED & 3....Respondent(s)
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Appearance:
MR SALIL M THAKORE, ADVOCATE for the Petitioner(s) No. 1
MR MAULIK NANAVATI, ADOCATE NANAVATI & CO., ADVOCATE for the
Respondent(s) No. 1 - 4
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CORAM: HONOURABLE MR.JUSTICE ANANT S. DAVE
and
HONOURABLE MR.JUSTICE A.Y. KOGJE
Date : 05/05/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE ANANT S. DAVE)
1. In all these writ petitions filed by the petitioners, challenge is to show cause notices whereby Page 1 of 9 HC-NIC Page 1 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER the petitioners were called upon to account for conduct during the contract from 2013 to 2015 and the above challenge was on various grounds so mentioned in the writ petitions.
1.1 For the sake of convenience, we reproduce oral order dated 03.08.2016 passed by this Court in SCA No.12996 of 2016 while issuing notice and granting stay of the impugned notice:-
"1. Leave to amend the cause title and implead the person against whom the allegations have been made as one of the respondent and Paschim Gujarat Vij Company Limited through the Managing Director.
2. The petitioner has taken out this petition essentially challenging the Show Cause Notice dated 26.07.2016, calling upon the petitioner to account for conduct during the contract from 2013 to 2015 dubbing it to be a fraud perpetrating upon the respondent Company in executing the contract and also calling upon the petitioner to credit the amount which said to have been losses suffered by the respondent on account of fraud alleged in the notice.
3. Learned senior counsel for the petitioner invited Court's attention to the averments made in paragraph nos.6, 7 and 8 and submitted that on account of inter personal rivalry and Page 2 of 9 HC-NIC Page 2 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER grudges against the colleague, the person incumbent in the office of the Chief Engineer or who has resumed charge of the Chief Engineer, respondent no.3, is wrecking vengeance upon the present petitioner and other contractors and the Show Cause Notice clearly indicate that there is pre-determination of mind for inflicting appropriate punishment upon the petitioner for no fault on their part.
4. The counsel for the petitioner also invited Court's attention to the wordings and phraseology employed in the Show Cause Notice with special emphasis upon the following wordings and phraseology, which read as under;
You M/s Shivranjani Constructions Co. is hereby informed that you have committed serious irregularities and indulged huge financial fraud in work carried out under the name of your firm M/s Shivranjani Constructions Co., Bhavnagar.
...
Considering the serious offence carried out from your firm/agency, you are hereby Show Caused that why your firm/agency should not be stopped dealing/black listed/banned for doing any business including any new Line work/maintenance work or other related work with PGVCL.
....Page 3 of 9
HC-NIC Page 3 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER You should note that non-compliance of this Show Cause Notice, it will be automatically presumed and considered from PGVCL that you are agreed with the serving of the notice and subsequently the action will be proposed from the PGVCL committee.
You are also informed through this notice that you should credit all amount indulged in the fraud which is already shown under the FIR lodged against you.
List of work order issued to you is attached to this notice for which the work is still not final or not started yet from you. You are also been informed through this notice that you must stop/hold up working further with immediate effect.
.....
Based upon this phraseology employed, argument was advanced that this clearly reveals the pre- determination on the part of the concerned to take action and the Show Cause Notice is nothing, but merely an empty formality. When the Show Cause Notices are viewed to be an empty formality on account of the phraseology employed thereunder, the Courts have promptly stayed them on account of clear breach of natural justice and in support thereunder, the counsel for the petitioner cited following Page 4 of 9 HC-NIC Page 4 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER decisions;
(i) In case of Oryx Fisheries Private Limited Vs. Union of India And Others, reported in (2010) 13 Supreme Court Cases 427.
(ii) In case of Siemens Ltd. Vs. State of Maharashtra And Others, reported in (2006) 12 Supreme Court Cases 33 with special emphasis upon paragraph no.9.
(iii) In case of Kumaon Mandal Vikas Nigam Ltd. Vs. Girja Shankar Pant And Others, reported in (2001) 1 Supreme Court Cases 182 with special emphasis upon paragraph nos.23 and 24.
5. Learned counsel for the petitioner also invited Court's attention to a letter dated 26.07.2016 at page no.100, in which the petitioner has urged the Managing Director-
respondent no.1 to look into the matter or have it examined by independent person so that the petitioner may not have to suffer on account of grudge nourished by the respondent no.3 against them.
6. We are mindful of the fact that by way of this petition what is essentially challenged is the Show Cause Notice and ordinarily the Court in the given facts may not interfere at the stage of Show Cause Notice only, but when the phraseology employed in the Show Cause Notice is examined in light of the observations of the Page 5 of 9 HC-NIC Page 5 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER Supreme Court in cases cited hereinabove, then we have to accept the submission on behalf of the petitioner and prima facie hold that there exists substance in what has been submitted on behalf of the petitioner that the Show Cause Notice is straightway calling upon the petitioner to deposit the amount or credit the amount, which is said to have been losses suffered by the respondent Company without there being any further probe or without being informed about the version of the petitioner qua the allegations. Moreover, the averments made in the petition on oath indicating that the concerned respondent no.3 after coming into charge of the position of Chief Engineer, Zonal Division, Bhavnagar, saw to it that the contract given in the time i.e. from the year 2013 to 2015 and which were supervised by Shri Yadav, the colleague who was an instrumentality in filing adverse report against him, are subjected to coercive steps. The First Information Reports were filed for the period of the work carried out in the year 2013 to 2015 and when the completion and satisfactory certificates were issued and the final bills were paid.
7. Against the backdrop of the aforesaid facts, we are of the view that there appears a case for issuance of notice calling upon the respondents to answer the allegations made in Page 6 of 9 HC-NIC Page 6 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER this petition and in the meantime the Show Cause Notice, which prima facie appears to be containing conclusion against the petitioner without giving an opportunity of being heard, also needs to be stayed.
8. Accordingly, let there be a Notice returnable on 29.08.2016. In the meantime and till the returnable date, the Show Cause Notice dated 26.07.2016 is stayed.
9. The staying of the Show Cause Notice and observations made hereinabove are prima facie based upon the averments made on oath in this petition and they may not have any bearing whatsoever upon the criminal proceedings in the nature of First Information Report filed against the petitioner in any manner, nor are these observations be construed as Court's opinion upon the petitioner's conduct so as to affect the investigation in any manner. In other words, the Court is of the view that these observations are prima facie and they shall have no bearing whatsoever upon the pendency of the First Information Report and its investigation, if any, thereupon.
10. This order is passed ex parte, therefore, it is open to the other side to approach the Court even before the returnable date for vacation and/or modification of this order.
Page 7 of 9HC-NIC Page 7 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER Direct service permitted."
2. In reply to the notice, affidavit is filed on behalf of respondent Nos.1 and 2. It is stated that a decision is taken to withdraw the show causes notices in all these writ petitions and to issue a fresh notice in accordance with law. The affidavits, however, also deal with other contentions raised in these writ petitions.
3. Mr.Salim Thakore, learned Advocates for the petitioners, however, would contend that if the petitions are disposed of in terms of the above averments on oath in the affidavits in reply filed by the respondents, it would give a fresh cause of action for them to reissue show cause notices and therefore, such exercise may not be permitted and writ petitions be decided on merits.
4. Having addressed ourselves to the issues involved in these writ petitions and the nature of prayers in writ petitions to quash and set aside the impugned show cause notices issued by respondent No.2, now a decision is taken to withdraw such show causes notices as stated in affidavit in reply in each of the writ petitions and we find that the very basis of challenge of legality or otherwise of the show cause notices no more exists.
Page 8 of 9HC-NIC Page 8 of 9 Created On Sat May 06 00:06:01 IST 2017 C/SCA/12996/2016 ORDER
5. Accordingly, we dispose of the writ petitions in view of the decision taken by the respondents to withdraw the impugned show cause notices in each of the writ petitions. All these writ petitions are disposed of accordingly. Notice is discharged. Ad interim relief granted earlier is vacated. No order as to costs.
6. In view of the aforesaid order, Civil Applications do not survive. The same are disposed of accordingly.
(ANANT S.DAVE, J.) (A.Y. KOGJE, J.) SHITOLE Page 9 of 9 HC-NIC Page 9 of 9 Created On Sat May 06 00:06:01 IST 2017