Calcutta High Court (Appellete Side)
Services Private Limited & Anr vs The Union Of India & Ors on 25 July, 2017
Author: Debangsu Basak
Bench: Debangsu Basak
25-07-2017 S.D. W.P. 14412 (W) of 2017 M/s. Venus Guards & Allied Services Private Limited & Anr.
Vs. The Union of India & Ors.
Mr. Raj Dip Ray Ms. Mousamee Shome ....For the Petitioners.
Mr. Suddhasatva Banerjee Ms. T. Dasgupta ...For the L.I.C.I. The petitioners assail a decision taken by the Life Insurance Corporation of India (L.I.C.) in black listing the petitioners.
Learned Advocate for the petitioners submits that, the petitioners had entered into a contract for security service with the L.I.C. authorities. The L.I.C. authorities were demanding that, the petitioners pay bonuses to the persons engaged by the petitioners in discharg of the contractual obligations under such contract. According to the petitioners, such bonuses were not payable. Apparently, the L.I.C. authorities took a different view and had proceeded to allege that, the petitioners had acted in breach of the contractual obligations. The petitioners were served with a letter dated March 14, 2017 threatening that, the petitioners would be considered for black listing. The petitioners had replied thereto by a writing dated March 14, 2017. Subsequently, the petitioners were not granted any hearing. The petitioners were surprised to come across a notice published in the newspaper claiming that, the petitioners stand black listed. He submits that, the petitioners have not been communicated with the decision of black listing till date. He refers to the affidavit-in-opposition filed in Court and submits that, the decision of black listing is yet to be placed on record through such affidavit.
Learned Advocate appearing on behalf of the L.I.C. submits that, the petitioners were given adequate and proper notice of the intention of the authorities to black list the petitioners by reason of violation of the contractual obligations. He refers to the writing dated March 14, 2017 issued by L.I.C. authorities in this regard. He draws the attention of the Court to the response dated March 14, 2017 of the petitioners. By such writing, the petitioners have stated that the L.I.C. authorities are free to do whatever they like and that, the petitioners would be bound to knock the door of the Court for justice. Subsequently, the authorities had taken a decision to black list the petitioners. He refers to a note sheet dated April 24, 2017 in this regard. He submits that, the note sheet although not annexed to the affidavit-in-opposition is referred to in the affidavit-in- opposition. The authorities had taken a decision to black list the petitioners and that, the reasons for such decision appears from such note sheet. He relies upon (2012) 11 SCC 257 (Patel Engineering Ltd. vs. Union of India & Anr.) for the proposition that, prior to passing an order of black listing, the affected parties need not be given an oral hearing. He also relies upon (2014) 9 SCC 105 (Gorkha Security Services vs. Government (NCT of Delhi) and Ors. for similar proposition.
I have considered the rival contentions of the parties and the materials made available on record.
An administrative decision having civil consequences must be informed with reasons. The decision should be arrived at after adhering to the principles of natural justice. Patel Engineering (supra) and Gorkha Security Services (supra) are of the view that, in a fact scenario oral hearing need not be essential. In the present case, therefore, the test is whether the decision of black listing arrived at by L.I.C. authorities was done in adherence to the principles of natural justice or not and whether the decision of black listing is informed with reasons. I am not afraid on both the counts, L.I.C. are the authorities, fail the test. The reasons are not far to fetch.
A contract was entered into by and between the petitioners and the L.I.C. authorities for providing security guards. The L.I.C. authorities had a particular view of the obligations to be discharged by the petitioners in terms of such contract. Apparently, there was a failure on the part of the petitioners to discharge the same. These were the rival contentions between the parties as to the terms of the contract. One hand, the L.I.C. Authorities were claiming that, bonuses are payable by the petitioners to the persons engaged, on the other hand, the petitioners were contending that, the bonuses were not payable. The petitioners have given reasons as to why the bonuses are not payable. The L.I.C. authorities had issued a letter dated March 14, 2017 to the petitioners where it had evinced its intention to black list the petitioners, in the event, the directions given by the L.I.C. authorities in respect of the subsisting contract were not complied with. In other words, L.I.C. authorities were compelling the petitioners to accept its interpretation of the contract, i.e. to say, that, the petitioners are liable to pay the bonuses and failing that, the petitioners will be black listed.
In the course of argument, learned Advocate for the L.I.C. submits that, a writ petition is not maintainable in respect of disputes arising out of a contract. There are disputes between the parties with regard to the contract. The disputes are yet to be resolved. The L.I.C. authorities are seeking to impose its interpretation of the terms of the conditions of the contract upon the petitioners. It had issued a show-cause notice to such effect. The petitioners have replied thereto. The petitioners have contested the claim of the L.I.C. authorities. Without the same being adjudicated upon by a competent authority, in my view, the L.I.C. authorities were acting improperly in imposing a penalty of a black listing on the petitioners. Moreover, the petitioners were not given an opportunity to explain itself before the decision-making authority. The Regional Manager had issued the notice of show-cause dated March 14, 2017. The decision to black list the petitioners was taken at the Zonal Manager level. The Zonal Manager had before him a note sheet prepared by one of the officers of L.I.C. It is not on record and stated in the affidavit that, the Zonal Manager had the benefit of the show-cause notice and the reply thereto being placed before him for consideration. The note sheet does not relate to the show-cause notice and does not refer to the reply thereto. The note sheet for some reasons on the other has not been placed on record in the affidavit.
Be that as it may, the note sheet and the approval of the Zonal Manager claim that, the service provider has not discharged its statutory obligation and has involved in activities which have prejudicial to the interest of the Corporation. The fact scenario and the foundational basis on which the Zonal Manager had arrived at such conclusion are not stated in the note sheet. The decision, therefore, of the L.I.C. is uninformed with reasons. The reason for imposing the penalty of black listing on the petitioners cannot be garnered therefrom.
In such circumstances, the decision to black list the petitioners is set aside.
This will not prevent the authorities from taking a fresh decision on the subject, in accordance with law, if it is so entitled.
W.P. No. 14412 (W) of 2017 is disposed of.
No order as to costs.
Urgent website certified copies of this order, if applied for, be made available to the parties upon compliance of the formalities.
(Debangsu Basak, J.)