Gujarat High Court
Nilesh Devshibhai Karavadra vs State Of Gujarat on 3 May, 2023
Author: Vaibhavi D. Nanavati
Bench: Vaibhavi D. Nanavati
C/SCA/521/2023 ORDER DATED: 03/05/2023
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 521 of 2023
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NILESH DEVSHIBHAI KARAVADRA
Versus
STATE OF GUJARAT
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Appearance:
MS NAMRATA HARISHBHAI CHAUHAN(6534) for the Petitioner(s) No. 1
MR. NIRAJ SHARMA, AGP for the Respondent(s) No. 1
DS AFF.NOT FILED (N) for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2,3
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CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
Date : 03/05/2023
ORAL ORDER
1. Draft amendment dated 21.4.2023 is placed on record and the same is taken on record. Amendment to be carried out forthwith.
2. By way of present petition, the petitioners herein have prayed for the following reliefs :-
"(a) This Hon'ble Court may be pleased to admit and allow this petition;
(b) This Hon'ble Court may be pleased to quash and set aside the action of the respondents in closing down the online royalty account of the vehicle bearing Excavator Machine GJ- 03-HE-1153 of the ownership of the petitioner.
(c) Pending admission and final hearing of this petition, your Lordships may be pleased to unlock the online royalty account of the vehicle bearing Excavator Machine GJ-03-HE-Page 1 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023
C/SCA/521/2023 ORDER DATED: 03/05/2023 1153 on appropriate terms and conditions that may be deem fit and proper to this Hon'ble Court.
(d) Grant such other and further relief as thought fit in the interest of justice.
(e) The Hon'ble Court may be pleased to issue appropriate writ, order or direction to quash and set-aside the action of the respondent No.3 RTO of showing the status of the vehicle bearing Excavator Machine GJ-03-HE-1153 as blacklisted from 'Vahan Portal' which is as Annexure-B."
3. Brief facts germane for adjudication of the dispute read thus :-
3.1 It is the case of the petitioners herein that the petitioner is the owner of the vehicle i.e. Excavator Machine GJ-03-HE-1153 which having been used by the petitioner for the purpose of transportation of the minerals from the valid lease along the valid royalty and transit pass.
3.2 The petitioner is aggrieved by the action initiated by the respondent No.2 of blacklisting of the vehicle being Excavator Machine GJ-03-HE-1153 and the online Royalty account without issuance of show-cause notice on 19.4.2022. Ms. Chauhan, learned advocate appearing for the petitioner submitted that the action of the Page 2 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 respondents of locking/ closing the online royalty account of the vehicle is against the provisions of law and in gross violation of principles of natural justice.
3.3 The petitioner approached the respondent for release his machine and made a representation to released his vehicle as per the High Court order dated 8.2.2022 on 25.2.2022. The respondent No.2 passed the order of release of his machine on 8.3.2022. The petitioner is therefore filing this petition with limited request for unlocking the online royalty account of his vehicle bearing Excavator Machine GJ-03-HE-1153.
4. Heard Ms. N.S. Chauhan, the learned advocate appearing for the petitioners and Mr. Niraj Sharma, learned Assistant Government Pleader appearing for the respondent- State.
5. Ms. Chauhan, the learned advocate appearing for the petitioners submitted that the vehicle in question i.e. Excavator Machine GJ-03-HE-1153 came to be blacklisted by the respondent authority and the online Royalty Page 3 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 Account of the vehicle in question without issuance of show cause notice. The petitioner was unaware about the same. Being aggrieved by the aforesaid, the petitioners herein have approached this Court by filing the present petition.
6. Mr. Niraj Sharma, learned AGP was not in a position to controvert the submission advanced by the learned advocate for the petitioner.
7. At this stage, this Court deem it fit to refer to the following position of law :-
(a) In the case of Dharampal Satyapal Ltd. v/s. Deputy Commissioner of Central Excise reported in (2015) 8 SCC 519, relevant para-27 of the order reads thus:
"27. From the aforesaid discussion, it becomes clear that the opportunity to provide hearing before making any decision was considered to be a basic requirement in the Court proceeding. Later on, this principle was applied to other quasi-judicial authorities and other tribunals and ultimately it is now clearly laid down that even in the administrative actions, where the decision of the authority may result in civil consequences, a hearing before taking a decision is Page 4 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 necessary. It was, thus, observed in A.K. Kraipak's case (supra) that if the purpose of rules of natural justice is to prevent miscarriage of justice, one fails to see how these rules should not be made available to administrative inquiries."
(b) In the case of UMC Technologies Private Limited v/s. Food Corporation of India and Anr. reported in AIR 2021 SC (CIVIL) 833, relevant Paras-13, 14, 16, 17, 18, 19 and 26 reads thus:
"13. At the outset, it must be noted that it is the first principle of civilised jurisprudence that a person against whom any action is sought to be taken or whose right or interests are being affected should be given a reasonable opportunity to defend himself. The basic principle of natural justice is that before adjudication starts, the authority concerned should give to the affected party a notice of the case against him so that he can defend himself. Such notice should be adequate and the grounds necessitating action and the penalty/action proposed should be mentioned specifically and unambiguously. An order travelling beyond the bounds of notice is impermissible and without jurisdiction to that extent. This Court in Nasir Ahmad v. Assistant Custodian General, Evacuee Property, Lucknow and Anr. , 1 has held that it is essential for the notice to specify the particular grounds on the basis of which an action is proposed to be taken so as to enable the notice to answer the case against him. If these conditions are not satisfied, the person cannot Page 5 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 be said to have been granted any reasonable opportunity of being heard.
14. Specifically, in the context of blacklisting of a person or an entity by the state or a state corporation, the requirement of a valid, particularized and unambiguous show cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatization that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into government contracts. This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting takes away this privilege, it also tarnishes the blacklisted person's reputation and brings the person's character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.
16. The severity of the effects of blacklisting and the resultant need for strict observance of the principles of natural justice before passing an order of blacklisting were highlighted by this Court in Erusian Equipment & Chemicals Ltd. v. State of West Bengal in the following terms:
"12. ... The order of blacklisting has the effect of depriving a person of equality of opportunity in the Page 6 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. XXX XXX 15. ... The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The black lists are instruments of coercion. XXX XXX 20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."
17. Similarly, this Court in Raghunath Thakur v. State of Bihar, struck down an order of blacklisting for future contracts on the ground of non-observance of the principles of natural justice. The relevant extract of the judgment in that case is as follows:
"4. ... [I]t is an implied principle of the rule of law that Page 7 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 any order having civil consequences should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order."
18. This Court in Gorkha Security Services v. Government (NCT of Delhi) and Ors. has described blacklisting as being equivalent to the civil death of a person because blacklisting is stigmatic in nature and debars a person from participating in government tenders thereby precluding him from the award of government contracts. It has been held thus:
"16. It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts."Page 8 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023
C/SCA/521/2023 ORDER DATED: 03/05/2023
19. In light of the above decisions, it is clear that a prior show cause notice granting a reasonable opportunity of being heard is an essential element of all administrative decision- making and particularly so in decisions pertaining to blacklisting which entail grave consequences for the entity being blacklisted. In these cases, furnishing of a valid show cause notice is critical and a failure to do so would be fatal to any order of blacklisting pursuant thereto. 26. In view of our conclusion that the blacklisting order dated 09.01.2019 passed by the Corporation is contrary to the principles of natural justice, it is unnecessary for us to consider the other contentions of the learned counsel for the appellant. Having regard to the peculiar facts and circumstances of the present case, we deem it appropriate not to remit the matter to the Corporation for fresh consideration."
8. Considering the facts of the present case and the submissions advanced by Ms,. Chauhan, learned advocate appearing for the petitioners, this Court deems it fit to produce Rule 5(4) of the Gujarat Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules of 2017, which reads thus:
"(4) The Authorized Officer shall issue a special security permit paper-sheet which shall be used by the holder of a mineral concession or a trader, to print the Transit Permit or Page 9 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 the Delivery Challan, as the case may be. The special security permit paper-sheet shall be issued in such manner as may be specified by the Government. The Transit Permit or Delivery Challan shall be in triplicate and machine numbered with the book number and serial number thereof. [Provided that Government may, for the reasons to be recorded in writing, suspend issuance of transit permit as contemplated under subrule(2) above or delivery challan as contemplated under subrule (3) above, to the holder of a mineral concession or to a trader, as the case may be, in case (a) any dues or penalties have been levied by the Authorised Officer on such holder or trader and are outstanding; or (b) the trader or the owner of the relevant carrier has not procured registration for storage or transportation of mineral, as the case may be.]"
9. Considering the facts of the present case which are undisputed that the vehicle in question i.e. Excavator Machine GJ-03-HE-1153 is blacklisted without issuance of show cause notice and online ATR account came to be locked by the respondents without following the procedure as laid down in Rule 5(4) of the Gujarat Minerals (Prevention and Illegal Mining, Transportation & Storage) Rules, 2017, the impugned order blacklisting the vehicle i.e. Excavator Machine GJ-03-HE-1153 and ATR online account of the petitioner which has been locked by the respondent authority, are hereby quashed Page 10 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023 C/SCA/521/2023 ORDER DATED: 03/05/2023 and set aside.
10. The respondent authority is directed to unlock/reopen online ATR account of the petitioner. Liberty is reserved for the respondent authority to initiate appropriate proceedings after issuance of show cause notice qua blacklisting of the vehicle in question i.e. Excavator Machine GJ-03-HE-1153 and online ATR account after following due process of law.
11. With the aforesaid observations, the present petition stands allowed. Direct service is permitted.
(VAIBHAVI D. NANAVATI,J) SAJ GEORGE Page 11 of 11 Downloaded on : Fri May 05 20:52:29 IST 2023