Haji Abdul Shakoor & Co. Vs. Union of India & Ors.
EmailAppeal: Civil Appeal No. 7138 of 2001
(Arising out of SLP(C) No. 5194 of 2001)
(Arising out of SLP(C) No. 5194 of 2001)
Petitioner: Haji Abdul Shakoor & Co.
Respondent: Union of India & Ors.
Apeal: Civil Appeal No. 7138 of 2001
(Arising out of SLP(C) No. 5194 of 2001)
(Arising out of SLP(C) No. 5194 of 2001)
Judges: SYED SHAH MOHAMMED QUADRI & S.N. PHUKAN, JJ.
Date of Judgment: Dec 10, 2001
Head Note:
CONSTITUTION
Articles 14, 16 – Audi Alteram Partem – Natural justice – Denial – Class ‘B’ contractor – Contract carrying capacity increased to Rs. 7.20 crores, making him class ‘A’ contractor – His contract carrying capacity upto 6.50 crores transferred by respondent no. 2 to respondent no. 3, which accepted by letter dated 14.12.2000 – Vide letter dated 21.12.2000, respondent no. 3 reducing the capacity to Rs. 3.50 crores – No notice given. Held that order was arbitrary. Refusal by High Court to intervene, is not sustainable in law. Orders set aside, liberty given to review.
Held:
It is not in dispute that the appellant is a class ‘A’ contractor with the second respondent who transferred the contract carrying capacity of the appellant, limited to 6.50 crores to the headquarter, western command, respondent no. 3. This was accepted by the third respondent as evidenced by letter dated December 14.2000. This fact was re-affirmed by the letter of the second respondent issued on December 21, 2000. The net result of the exercise is that the appellant became eligible to compete as a class ‘A’ contractor upto the limit of Rs. 6.50 crores. This is a civil right of the appellant which cannot be taken away or even curtailed except in accordance with law. Admittedly before passing the impugned order, no opportunity of being heard was afforded to the appellant by the third respondent, as such the impugned order suffers from the vice of violation of the principles of natural justice and such an order cannot but be an arbitrary order.(Para 7)
Before reducing the capacity, no notice was issued to the appellant and he was not given an opportunity to represent its case in regard to reduction of contract carrying capacity which indeed converts the status of the appellant as class ‘B’ contractor. (Para 8)
JUDGEMENT:
ORDER
1. Leave is granted.
2. This appeal, by special leave, is directed against the order of the High Court of judicature at Allahabad, passed on March 13, 2001, dismissing writ petition no. 1041 of 2001, filed by the appellant challenging the validity of the order passed by the 3rd respondent on December 21, 2000.
3. The appellant was registered as a class ‘B’ contractor for supplying meat group items to headquarter, central command, respondent no. 2. The contract carrying capacity of the appellant was then limited to Rs. 1.80 crores. On September 4, 2000, its contract carrying capacity was enhanced to Rs. 7.20 crores by the central command, Lucknow by letter dated September 4, 2000. Thus, it became class ‘A’ contractor. On the request of the appellant, to enable it to compete in securing contract in western command, respondent no. 3, its contract carrying capacity limited to Rs. 6.50 crores was transferred by respondent no. 2 to respondent no. 3, which was acknowledged by letter dated December 14, 2000. The second respondent by its letter dated December 21, 2000 informed the appellant that its contract carrying capacity for Rs. 6.50 crores was accepted by the third respondent. However, by the impugned order of the third respondent, the contract carrying capacity of the appellant was reduced to Rs. 3.50 crores and the same was intimated to it on December 21, 2000. The validity of that letter was assailed by the appellant before the High Court at Allahabad in writ petition no. 1041 of 2001. On March 13, 2001, the division bench of the High Court dismissed the writ petition taking the view that the matter is related to non-statutory contract. It is the correctness of that order of the High Court that is under challenge in this appeal.
4. Mrs. Shobha Dixit, the learned senior counsel for the appellant, contends that by arbitrarily reducing the contract carrying capacity of the appellant, the third respondent rendered it ineligible to compete for securing contracts as a class ‘A’ contractor and in fact, the appellant is eliminated from the competition. The impugned order of the third respondent was passed without any notice to the appellant. The High Court has not correctly appreciated the point raised before it and dismissed the writ petition, therefore, the order of the High Court deserves to be set aside.
5. Mr. G. Venkatesh, the learned counsel appearing for the respondents, on the other hand, contends that having regard to the policy contained in letter dated December 21, 2000, the contract carrying capacity of the appellant was correctly determined and he was accordingly intimated. The High Court declined to interfere with the order of the third respondent, therefore, no interference is called for by this Court.
6. The short point that arises for our consideration is : whether the order of the High Court under challenge, declining to interfere with the impugned order issued by the third respondent on December 21, 2000, is sustainable in law.
7. It is not in dispute that the appellant is a class ‘A’ contractor with the second respondent who transferred the contract carrying capacity of the appellant limited to 6.50 crores to the headquarter, western command, respondent no. 3. This was accepted by the third respondent as evidenced by letter dated December 14, 2000. This fact was re-affirmed by the letter of the second respondent issued on December 21, 2000. The net result of the exercise is that the appellant became eligible to compete as a class ‘A’ contractor upto the limit of Rs. 6.50 crores. This is a civil right of the appellant which cannot be taken away or even curtailed except in accordance with law. Admittedly before passing the impugned order, no opportunity of being heard was afforded to the appellant by the third respondent, as such the impugned order suffers from the vice of violation of the principles of natural justice and such an order cannot but be an arbitrary order. This is evident from the impugned order which reads as follows:
“REGISTERED BY POST/UPC
Tele No. 2761 Mukkhyalaya Paschim Kaman
Headquarters
Western Command
Chandimandir – 134 107
58817/ST-5 21st December, 2000.
M/s, Haji Abdul Shakoor & Co.
485/2 Outside Sainyer Gate,
Jhansi (U.P.)
TRANSFER OF CONTRACT CARRYING CAPACITY
Dear Sir,
1. Reference THIS HQ letter no. 58817/HAS/8/ST-5 dated 14th December, 2000.
2. Contract carrying capacity accepted by this HQ has been amended as under :
For : 6.50 crores
Read : 3.50 crores
3. You are requested to obtain any further clarification on above change from your parent command.
Yours faithfully
Sd-
(V.K. Handu)
Col
Col ST
For Offg MGASC”
8. From a perusal of this letter, it is apparent that before reducing the capacity, no notice was issued to the appellant and he was not given an opportunity to represent its case in regard to reduction of contract carrying capacity which indeed, converts the status of the appellant as class ‘B’ contractor. Whether the policy which is called in aid to support the impugned order is valid in law, and if so, it applies to the appellant, are factors which need to be determined after giving an opportunity of being heard to the appellant. Further, it is also evident that the impugned order is a non-speaking order. Unfortunately, the High Court missed these germane aspects, therefore the order of the High Court, under challenge cannot be sustained.
9. For all these reasons, the order of the High Court under challenge is set aside, the impugned order passed by the third respondent is quashed. The appellant shall, therefore, be treated by the respondents as having the contract carrying capacity of Rs. 6.50 crores. However, we leave it open to the director general, supply and transport, army headquarters, New Delhi, if he is of the opinion that the contract carrying capacity of the appellant as accepted by the third respondent in his letter 58817/HAS/8/ST-5 dated December 14, 2000 needs to be reviewed, to consider that question and pass appropriate order in accordance with law after issuing notice to the appellant and giving an opportunity of being heard. It is needless to mention that the order shall be a speaking one.
10. The appeal is accordingly allowed. In the circumstances of the case, there will be no order as to costs.
1. Leave is granted.
2. This appeal, by special leave, is directed against the order of the High Court of judicature at Allahabad, passed on March 13, 2001, dismissing writ petition no. 1041 of 2001, filed by the appellant challenging the validity of the order passed by the 3rd respondent on December 21, 2000.
3. The appellant was registered as a class ‘B’ contractor for supplying meat group items to headquarter, central command, respondent no. 2. The contract carrying capacity of the appellant was then limited to Rs. 1.80 crores. On September 4, 2000, its contract carrying capacity was enhanced to Rs. 7.20 crores by the central command, Lucknow by letter dated September 4, 2000. Thus, it became class ‘A’ contractor. On the request of the appellant, to enable it to compete in securing contract in western command, respondent no. 3, its contract carrying capacity limited to Rs. 6.50 crores was transferred by respondent no. 2 to respondent no. 3, which was acknowledged by letter dated December 14, 2000. The second respondent by its letter dated December 21, 2000 informed the appellant that its contract carrying capacity for Rs. 6.50 crores was accepted by the third respondent. However, by the impugned order of the third respondent, the contract carrying capacity of the appellant was reduced to Rs. 3.50 crores and the same was intimated to it on December 21, 2000. The validity of that letter was assailed by the appellant before the High Court at Allahabad in writ petition no. 1041 of 2001. On March 13, 2001, the division bench of the High Court dismissed the writ petition taking the view that the matter is related to non-statutory contract. It is the correctness of that order of the High Court that is under challenge in this appeal.
4. Mrs. Shobha Dixit, the learned senior counsel for the appellant, contends that by arbitrarily reducing the contract carrying capacity of the appellant, the third respondent rendered it ineligible to compete for securing contracts as a class ‘A’ contractor and in fact, the appellant is eliminated from the competition. The impugned order of the third respondent was passed without any notice to the appellant. The High Court has not correctly appreciated the point raised before it and dismissed the writ petition, therefore, the order of the High Court deserves to be set aside.
5. Mr. G. Venkatesh, the learned counsel appearing for the respondents, on the other hand, contends that having regard to the policy contained in letter dated December 21, 2000, the contract carrying capacity of the appellant was correctly determined and he was accordingly intimated. The High Court declined to interfere with the order of the third respondent, therefore, no interference is called for by this Court.
6. The short point that arises for our consideration is : whether the order of the High Court under challenge, declining to interfere with the impugned order issued by the third respondent on December 21, 2000, is sustainable in law.
7. It is not in dispute that the appellant is a class ‘A’ contractor with the second respondent who transferred the contract carrying capacity of the appellant limited to 6.50 crores to the headquarter, western command, respondent no. 3. This was accepted by the third respondent as evidenced by letter dated December 14, 2000. This fact was re-affirmed by the letter of the second respondent issued on December 21, 2000. The net result of the exercise is that the appellant became eligible to compete as a class ‘A’ contractor upto the limit of Rs. 6.50 crores. This is a civil right of the appellant which cannot be taken away or even curtailed except in accordance with law. Admittedly before passing the impugned order, no opportunity of being heard was afforded to the appellant by the third respondent, as such the impugned order suffers from the vice of violation of the principles of natural justice and such an order cannot but be an arbitrary order. This is evident from the impugned order which reads as follows:
“REGISTERED BY POST/UPC
Tele No. 2761 Mukkhyalaya Paschim Kaman
Headquarters
Western Command
Chandimandir – 134 107
58817/ST-5 21st December, 2000.
M/s, Haji Abdul Shakoor & Co.
485/2 Outside Sainyer Gate,
Jhansi (U.P.)
TRANSFER OF CONTRACT CARRYING CAPACITY
Dear Sir,
1. Reference THIS HQ letter no. 58817/HAS/8/ST-5 dated 14th December, 2000.
2. Contract carrying capacity accepted by this HQ has been amended as under :
For : 6.50 crores
Read : 3.50 crores
3. You are requested to obtain any further clarification on above change from your parent command.
Yours faithfully
Sd-
(V.K. Handu)
Col
Col ST
For Offg MGASC”
8. From a perusal of this letter, it is apparent that before reducing the capacity, no notice was issued to the appellant and he was not given an opportunity to represent its case in regard to reduction of contract carrying capacity which indeed, converts the status of the appellant as class ‘B’ contractor. Whether the policy which is called in aid to support the impugned order is valid in law, and if so, it applies to the appellant, are factors which need to be determined after giving an opportunity of being heard to the appellant. Further, it is also evident that the impugned order is a non-speaking order. Unfortunately, the High Court missed these germane aspects, therefore the order of the High Court, under challenge cannot be sustained.
9. For all these reasons, the order of the High Court under challenge is set aside, the impugned order passed by the third respondent is quashed. The appellant shall, therefore, be treated by the respondents as having the contract carrying capacity of Rs. 6.50 crores. However, we leave it open to the director general, supply and transport, army headquarters, New Delhi, if he is of the opinion that the contract carrying capacity of the appellant as accepted by the third respondent in his letter 58817/HAS/8/ST-5 dated December 14, 2000 needs to be reviewed, to consider that question and pass appropriate order in accordance with law after issuing notice to the appellant and giving an opportunity of being heard. It is needless to mention that the order shall be a speaking one.
10. The appeal is accordingly allowed. In the circumstances of the case, there will be no order as to costs.
