B.Ramanjaneyulu, S/O.Venkata ... vs The Government Of Andhra Pradesh
2022 Latest Caselaw 1386 AP

                               1



     THE HON'BLE SRI JUSTICE BATTU DEVANAND

  WRIT PETITION Nos.23789 of 2013, 35547 of 2013,
          4741 of 2014 and 19089 OF 2015

COMMON ORDER:


Writ Petition No.23789 of 2013:


     This Writ Petition has been filed to declare the letter

bearing   No.Vig.2/RWS&S/2937/2009,       dated    01.08.2013

issued by the 2nd Respondent, directing the 7th Respondent to

recover an amount of Rs.3,46,99,235/- from the work bills of

the Petitioner without even putting the Petitioner on notice

and without following due process of law, as being illegal,

arbitrary and contrary to the principles of natural justice and

consequently to set aside the same.

Writ Petition No.35547 of 2013:

2) This Writ Petition has been filed to declare the

proceedings issued by the 2nd Respondent vide Proc.No.

T1/DEE(T)/V&E/General/2013, dated 23.11.2013, thereby the

Petitioner is kept under blacklist duly suspending all business

with immediate effect in terms of clause (3) and 5(a),

Annexure-II of G.O.Ms.No.94, dated 1.7.2003 of Irrigation &

CAD Department and canceling the registration of Petitioner

vide Regn.No.COT/SP/791/2010 and Procs. No.T1/DEE(T)/

B.Ramanjaneyulu/Regn/Special Class/2010, dated 13.07.2010

as being illegal, arbitrary and contrary to the principles of

natural justice and contrary to the orders passed in

W.P.No.15792 of 2013 dated 28.11.2013 and contrary to

provisions of Clause 5 of G.O.Ms.No.94, dated 1.7.2003 and

consequently to set aside the same, in the interest of justice".

WRIT PETITION No.4741 OF 2014:

3) This writ petition has been filed to declare the

inaction and failure of the respondents particularly respondent

No.4 in not making the payment of amounts released by the

3rd respondent from time to time as illegal, arbitrary and more

over contrary to the order, dated 28.11.2013 passed in

W.P.No.15792 of 2013 and order, dated 12.12.2013 in WP MP

No.45316 of 2013 in W.P.No.25789 of 2013 and being

violative of Article 14 & 19(f) of the Constitution of India and

consequential direction.

WRIT PETITION No.19089 OF 2015:

4) This writ petition has been filed to declare the

proceedings issued by the 1st Respondent vide Memo

No.3131/Vig.II/2014, dated 11.06.2015, through which it was

ordered to recover an amount of Rs.3,46,99,235/- from the

petitioner, to suspend his business, blacklisting him and to

take action for criminal prosecution, as illegal, arbitrary and

contrary to the orders, dated 28.11.2013 passed in

W.P.No.15792 of 2013 and also against the principles of

natural justice and consequently set aside the same.

5) All these writ petitions filed by the same petitioner

and the contentions of the petitioner and Respondents are

one and the same in all the cases and the proceedings

challenged in all writ petitions are inter-linked and

consequential. As such, this Court intends to dispose of all

these writ petitions by a common order.

6) In W.P.No.23789 of 2013, the 4th Respondent filed

counter; in W.P.No.4741 of 2014, the 3rd Respondent filed

counter and in W.P.No.19089 of 2015, the 1st Respondent

filed counter.

7) For convenience, the averments made in affidavit

filed by writ petitioner and counter-affidavit filed by the 1st

Respondent in W.P.No.19089 of 2015 and submissions of the

respective counsels appearing on both sides are considered.

8) The case of the petitioner is that the petitioner is

the Special Class Contractor and executed several projects in

the State of Andhra Pradesh. He participated in a bid for

execution of work viz., "Providing drinking water facilities to

the quality affected habitation for Chinaganjam, Parchur and

Karamchedu Mandals in Prakasam District" (in short

hereinafter referred to as "work") and was selected in the

scrutiny of the bids and the 3rd respondent, Superintendent

Engineer, issued proceedings, dated 23.07.2007, entrusting

the work to him. Thereupon, he entered into an agreement

with 3rd Respondent on 17.09.2007, to execute the work. The

tender contract value of the work was Rs.3,59,56,894-31 ps.,

and he has to complete the work within one year and the

scheme was commissioned on 01.04.2008.

9) Learned counsel for the petitioner submits that the

petitioner completed the work and handed over the same to

the concerned authorities on 31.03.2008. After completion of

work, the EE (PR) Vigilance & Quality Control Division,

Vijayawada, inspected the work on 28.03.2008 and submitted

his report to the Chief Engineer (PR), Vigilance & Quality

Control Division, Hyderabad on 09.04.2008. As per the said

report, there is no deficiency on the part of the petitioner in

execution of the work.

10) As the petitioner handed over the scheme to the

authorities on 31.03.2008, the defect liability period was over

by 31.03.2010. During the defect liability period, the 4th

Respondent addressed a letter, dated 10.09.2008, stating

that HDPE pumping main between Thimmarajupalem and A.B.

Palem is frequently leaking and causing interruption to

pumping and requested him to see that the pumping main

from Parchur to A.B. Palem is rectified and stabilized at once

and report compliance, so as to avoid further interruption in

pumping water from Parchur to A.B. Palem. Accordingly, he

attended the work as suggested by the 4th respondent and

after rectifying the same, he addressed a letter, dated

13.11.2008, to the 4th respondent.

11) Learned counsel for the petitioner contends that

the 3rd respondent submitted his report to the 2nd respondent

on 07.03.2010 wherein it clearly reveals that the work has

been completed and commissioned and the petitioner has

attended the defects as suggested by them. Though the

pipes developed leakages at certain points on account of

defect in the design and planning of the pipeline system, the

petitioner had obliged the Respondents and replaced the

pipeline during the defect liability period considering it as his

obligation. After completion of the work, the Vigilance and

Quality Control Division, Panchayat Raj and Engineering

Department, inspected the site and submitted a report, dated

09.04.2008 and based on the said report, the payments were

made to the petitioner.

12) Learned counsel for the petitioner submits that on

a complaint given by one Daggubati Venkateswara Rao, the

then MLA of Parchur Constituency, the Vigilance and

Enforcement Department conducted an enquiry and submitted

a report, dated 28.09.2012, on the technical aspects relating

to design and inadequate number of Air Valves and Sluice

Valves in the pipelines. Most of the defects pointed out in the

report relate to the planning and design of the pipeline

system which can be attributed only to the Department. The

Respondent Nos.2 to 4 and Vigilance and Enforcement

Department deliberately glossed over the fact that leakages

developed by the pipeline was on account of inadequate

number of Air Valves and Sluice Valves in the pipelines and at

appropriate places. Lack of Air Valves and Sluice Valves at

appropriate places resulted in trapping of air in the pipeline,

caused undue pressure on the pipes at the joints and also

prevented free flow of water. Ignoring the said defects, the

1st respondent being under the influence of the said MLA,

issued proceedings vide Memo No.10369/Vig.IA/2010-7,

dated 23.04.2013, through which the 2nd respondent was

requested to recover an amount of Rs.3,46,99,235/- from the

petitioner, suspend his business, to blacklist him and to

prosecute him along with other officials. The 2nd respondent in

turn issued proceedings vide Memo No.Vig.(2)/RWS&S/2937/

2009, dated 20.05.2013, directing the 3rd respondent to

recover the said amount and initiate criminal proceedings

against the petitioner. Aggrieved by the said Memos, the

petitioner filed W.P.No.15792 of 2013 before this Hon'ble

Court.

13) Learned counsel for the petitioner further submits

that during the pendency of the W.P.No.15792 of 2013, the

2nd respondent addressed a letter, dated 01.08.2013, to the

5th respondent to recover an amount of Rs.3,46,99,235/-

from the petitioner. He filed WPMP No.29494 of 2013 in

W.P.No.15792 of 2013 wherein this Court by order, dated

27.08.2013, directed that 75% of the amount shall not be

recovered. Aggrieved by the said order, the petitioner

preferred W.A.No.1538 of 2013 wherein the Division Bench of

this Court directed the 2nd respondent to give notice to the

petitioner and pass appropriate orders. Thereupon, the 2nd

respondent issued a Memo, dated 21.11.2013, directed the

5th respondent to recover an amount of Rs.3,46,99,235/-

from the petitioner, which was also questioned by seeking

amendment of the prayer.

14) This Hon'ble Court by order, dated 28.11.2013,

allowed the W.P.No.15792 of 2013 by setting aside the

impugned Memos, dated 23.04.2013 and 20.05.2013, issued

by the respondent Nos.1 and 2 respectively including all the

consequential proceedings issued by the 2nd respondent,

dated 01.08.2013 and 21.11.2013 to the 5th respondent to

recover the amount from the petitioner and the matter was

remitted back to the State Government for consideration

afresh and for taking a decision strictly in accordance with law

and further directed the State Government to conclude the

entire exercise within a period of two months from the date of

receipt of the orders.

15) The 1st respondent without considering the specific

finding of this Hon'ble Court, in a routine manner, issued a

Memo No.3131/Vig.IA/2014-2, dated 13.02.2014, calling for

the explanation of the petitioner. The petitioner submitted his

explanation on 06.03.2014, but was not considered at all.

16) Even before the explanation, the Respondents

withheld substantial amounts from the bills payable in

connection with other contracts. Questioning the said

arbitrary and illegal action, he filed W.P.No.4741 of 2014

wherein the Hon'ble Court granted interim direction by order,

dated 28.02.2014, directed the respondents to confine

withholding of the amount only to Rs.3,46,99,235/- and pay

the remaining amounts.

17) Learned counsel for the petitioner submits that the

opportunity as observed by the Hon'ble Court is not mere

issuing show cause notice in a routine manner, but the

opportunity as observed includes to collect samples in the

presence of petitioner and to conduct tests in a Government

laboratory and to furnish the copy of such analysis report to

the petitioner, so as to enable him to contest the findings.

Mere issuing show cause notice basing upon earlier

proceedings which were done in secrecy did not amount to

giving an opportunity to the petitioner by any means. As

such, the issuance of the impugned proceedings by the 1st

respondent merely asked for an explanation to show cause

notice, but failed to afford an opportunity of hearing which is

also mandatory in a proceeding of the present nature and is

liable to be set aside.

18) The 1st respondent in its counter submits that the

4th Respondent in his letter vide Rc.No.AEE/Chinaganjam/

Project/2008, dated 10.09.2008, had instructed the petitioner

to rectify the pipeline between Parchur and A.B. Palem of

Prakasam District and stabilize the pumping main as so many

leakages are occurring, but, the petitioner claimed that the

leakages were attended. He contends that during the

inspection of Chief Engineer, Vigilance & Quality Control

RWS&S, Hyderabad, on 12.06.2009 in the presence of

petitioner, it is noticed and opined that the scheme may be

put in use by replacing the pipeline wherever required duly

fixing responsibility on the Field Engineers and the petitioner.

Generally, the Defect Liability Period is (24) months from the

date of commissioning of the scheme. If any damage, burst

and/or leakages are observed during the defect liability

period, they shall be attended along with the required

materials by the Contractor at his expenses. No separate

payment will be made for the maintenance of scheme/pipeline

during the above defect liability period. It is further

submitted that as the Contractor is yet to rectify the pipelines

and leakages, the Defect Liability Period shall be extended for

as long as defects remain to be corrected.

19) It is further submitted that during the inspection

on 25.04.2011, the Chief Engineer, Vigilance & Quality

Control (V&QC) has found that the HDPE pipes procured and

utilized for the work by the Contractor are found to be of

inferior quality and the entire pipelines need to be replaced

with good quality pipes by the petitioner for the work to be

functioning in a proper manner. The Chief Engineer, V&QC

has further reported that it was found that the Carbon Black

content is more in 315 mm dia PN4 in HDPE pipes after

getting them tested in a lab, which indicates that the material

of the pipes used is containing materials other than the HDPE

virgin material which may result in cleavage of joints and

causes brittle fracture. Hence, he reported that the petitioner

is responsible for procurement of good quality pipes as

prescribed, as pipes were tested using random sampling

method and found that the quality of pipes is not good and

the petitioner is responsible and he should replace the

defective pipelines at his own cost.

20) It is further submitted that on the letters, dated

02.05.2011 and 20.08.2011, addressed by the then MLA,

Parchur Constituency, alleging that even after three trial runs,

the Department failed to supply water and requested to issue

instructions to the Department either for rectification of the

scheme or to recover the amount from the petitioner. On

30.09.2011 and 15.10.2011, notices were issued to the

petitioner for replacement of inferior quality of pipes.

21) It is further submitted that the G.A. (V&E)

Department in its Vigilance Report No.72, dated 28.09.2012

have found that the scheme is not functioning at all and it is

defunct and the pipes of inferior quality are used and it is

causing breakages at different points. It is also found that

the petitioner has not executed the work as per the

agreement conditions and claiming payment and causing

huge financial loss to the Government and recommended to

initiate action against the petitioner for suspending his

business and blacklisting the petitioner and criminal

prosecution under the relevant Sections of 410, 409 and 120-

B of IPC and also recommended to appoint a Committee of

Engineers from RWS&S Department for suggesting remedial

measures for commissioning the scheme, duly replacing the

inferior quality pipes and other materials with proper

alignment at an early date brining the scheme to use.

22) Accordingly, in Government Memo No.10369/

Vig.IA/2010-7, PR & RD (Vig.IA) Department, dated

23.04.2013, instructions were issued to the Engineer-in-Chief,

RWS&S, Hyderabad for recovery of an amount of

Rs.3,46,99,235/- from the petitioner and to suspend

business, blacklist the petitioner and take action for criminal

prosecution. Aggrieved by the same, the petitioner filed

W.P.No.15792 of 2013 before this Hon'ble Court. As per the

order, dated 28.11.2013 of the Hon'ble Court in

W.P.No.15792 of 2013, the Engineer-in-Chief, RWS&S in his

Office letter, dated 04.11.2013, has requested the petitioner

to submit his explanation, as why his name should not be

blacklisted and suspension of business is enforced within two

weeks. The petitioner received the said letter on 08.11.2013,

but he has not submitted any explanation. Accordingly, the

petitioner was kept under Black-list vide Proc.No.T1/DEE(T)/

V&E/General/2013, dated 23.11.2013, of the Engineer-in-

Chief, RWS&S, Hyderabad. Aggrieved by the same, the

petitioner filed W.P.No.35547 of 2013 before this Hon'ble

Court. The Hon'ble Court by order, dated 06.12.2013 in

W.P.No.35547 of 2013 held that "In view of the Judgment

rendered in W.P.No.15792 of 2013, the respondents are

directed not to give effect to or act upon the impugned

order".

23) It is submitted that in obedience to the orders of

this Court, dated 28.11.2013 in W.P.No.15792 of 2013, a

show cause notice vide Govt. Memo No.3131/Vig.IA/2014-2,

PR & RD (Vig.IA) Dept., dated 13.02.2014 was issued to the

petitioner. Aggrieved by the show-cause notice vide

Government Memo, dated 13.02.2014, the petitioner filed

W.P.No.4741 of 2014 wherein it is held that since the

petitioner has already succeeded in W.P.No.15792 of 2013

and since he is yet to reply to the show cause notice, dated

13.02.2014 referred above, pending further orders, the action

of the Respondents in withholding the amount from the bills

of the petitioner is not interfered with. However, balance

amount allegedly withheld shall be released to the petitioner

and it is not covered by the notice aforesaid.

24) It is further submitted that the petitioner has

submitted his explanation on 06.03.2014 to the show cause

notice issued to him and requested to withdraw the show

cause notice/Govt. Memo No. 3131/Vig.IA/2014-2, PR & RD

(Vig.IA) Dept., dated 13.02.2014. Accordingly, in Govt. Memo

No.3131/Vig.II/2014-6, dated 14.05.2015, the Chief Engineer

(RWS-I), Hyderabad was requested to furnish his remarks on

the explanation submitted by the Petitioner. He in turn

submitted his remarks in his letter, dated 06.06.2015 by

observing that the averments of the petitioner have not merit

and hence, Government have decided to reject his

representation. Accordingly, in Govt.Memo No.3131/Vig.II/

2014, dated 11.06.2015, it has been ordered to recover an

amount of Rs.3,46,99,235/- from the petitioner, suspend his

Business, blacklist him and take action for criminal

prosecution against him. Aggrieved by the same, the present

writ petition has been filed by the petitioner.

25) This Court gave careful consideration to the

arguments advanced by Sri N. Subba Rao, learned counsel for

the petitioner and the learned Government Pleader for

Panchayat Raj and Rural Development for the Respondents

and perused the entire material available on record including

the Judgments relied by both counsels.

26) From the above, the following admitted facts are

noted by this Court:

(1) The petitioner is a Special Class Contractor and he participated in a bid for execution of work for "Providing drinking water facilities to the quality affected habitation for Chinaganjam, Parchur and Karamchedu Mandals in Prakasam District".

(2) The tender contract value of the work was Rs.3,59,56,894-31 ps.

(3) The petitioner was selected in the scrutiny of the bids and he entered into an agreement with the Superintending Engineer, Rural Water Supply and Sanitation Department, Ongole, Prakasam District, Andhra Pradesh (i.e.) 3rd Respondent herein on 17.09.2007.

(4) As per tender condition, the petitioner has to complete the execution of work within one year.

(5) The petitioner completed the work and handed over the same to the concerned authorities on 31.03.2008 and the scheme was commissioned on 01.04.2008.

(6) The Executive Engineer (PR) Vigilance & Quality Control Division, Vijayawada, inspected the work on 28.03.2008 and submitted a report to the Chief Engineer (PR), Vigilance & Quality Control Division, Hyderabad, on

09.04.2008. As per the report, there is no deficiency on the part of the petitioner in execution of work.

(7) As per tender condition, the defect liability period was over by 31.03.2010.

(8) During the defect liability period, the 4th Respondent addressed a letter, dated 10.09.2008, stating that HDPE pumping main between Thimmarajupalem and A.B. Palem is frequently leaking and causing interruption to pumping and requested the petitioner to see that the pumping main from Parchur to A.B. Palem is rectified and stabilized and to submit compliance report.

(9) The petitioner attended the work as suggested by the 4th Respondent and rectified the same and informed to the 4th Respondent by letter, dated 13.11.2008.

(10) Basing on the complaint given by Daggupati Venkateswara Rao, the then MLA of Parchur Constituency, the Vigilance and Enforcement Department conducted an enquiry and submitted a report, dated 28.09.2012. In the said report it is stated that the pipes of inferior quality are used and thereby causing frequent leakages at different points.

(11) The Vigilance and Enforcement Department has recommended to initiate action against the petitioner for suspension of business, blacklisting and for criminal prosecution.

(12) The 1st respondent issued Memo No.10369/Vig.IA/ 2010-7, dated 23.04.2013 directing the 2nd Respondent to recover an amount of Rs.3,46,99,235/- from the

petitioner, to suspend his business, to blacklisting and to prosecute him along with other officials.

(13) The 2nd Respondent issued Memo No.VIG.2/ RWS&S/2937/2009, dated 20.05.2013 directing the 3rd Respondent to recover the said amount and initiate criminal proceedings against the petitioner.

(14) Against the Memo, dated 23.04.2013 issued by 1st Respondent and Memo, dated 20.05.2013 issued by the 3rd Respondent, the petitioner filed W.P.No.15792 of 2013 before this Court.

(15) The High Court passed interim order on 05.06.2013 staying criminal prosecution against the petitioner.

(16) The W.P.No.15792 of 2013 was allowed by order, dated 28.11.2013 setting aside the Government Memo, dated 23.04.2013 and consequential proceedings, dated 21.11.2013 of the Engineer-in-Chief and remitted the matter to the State Government for consideration afresh and for taking a decision strictly, in accordance with law, after providing fair and reasonable opportunity to the petitioner.

(17) The petitioner filed W.P.No.23789 of 2013 against the letter No.Vig.2/RWS&S/2937/2009, dated 01.08.2013, issued by ENC, RWS&S, addressing to the Pay and Accounts Officers, Ongole, to recover an amount of Rs.3,46,99,235/- from the working bills of the petitioner. This Court by order, dated 12.12.2013 in WPMP No.45316 of 2013 wherein the proceedings, dated 01.08.2013 as well as 21.11.2013 kept in abeyance and directed no further action shall be taken thereon.

(18) The Engineer-in-Chief, RWS&S vide letter No.T1/DEE(T)/V&E/General/2013, dated 04.11.2013 issued notice calling the explanation of the petitioner so as to why he should not be blacklisted and suspension of business is enforced.

(19) On 23.11.2013, the ENC, RWS&S, issued orders keeping the petitioner under blacklist and duly suspending all the businesses of the petitioner with immediate effect.

(20) The petitioner filed W.P.No.35547 of 2013 against the proceedings, dated 23.11.2013 of the ENC, RWS&S.

(21) This Court passed interim order, dated 06.12.2013 in W.P.No.35547 of 2013 directing the Respondents not to give effect or act upon the impugned order in view of the judgment rendered in W.P.No.15792 of 2013.

(22) In compliance of the order, dated 28.11.2013 in W.P.No.15792 of 2013, a show-cause notice was issued to the petitioner as to why he should not be blacklisted duly suspending his business, for criminal prosecution and for recovery of an amount of Rs.3,46,99,235/-.

(23) Against withdrawing the payment of Bill of other works executed, the petitioner filed W.P.No.4741 of 2014. This Court passed interim order, dated 28.02.2014, holding that since the petitioner already succeeded in the writ petition aforesaid and since he is yet to reply to the show-cause notice, dated 13.02.2014, pending further orders, the action of the respondents in withholding the amount of Rs.3,46,99,235/- from the bills of the petitioner is not

interfered with. However, balance amount allegedly withhold shall be released to the petitioner as it is not covered by the impugned notice.

(24) The petitioner submitted explanation on 06.03.2014 to the show-cause notice, dated 13.02.2014.

(25) The Government issued orders in Memo No.3131/Vig.II/2014, dated 11.06.2015, to recover an amount of Rs.3,46,99,235/- from the petitioner, suspend his business, blacklist him and take action for criminal prosecution.

(26) Against the Government order, dated 11.06.2015, the petitioner filed W.P.No.19089 of 2015.

(27) This Court by order, dated 29.06.2015 in WPMP No.24694 of 2015, ordered interim suspension of the impugned order of the Government, dated 11.06.2015.

(28) As per the recommendation made by the Vigilance and Enforcement Department in the Report No.72, dated 28.09.2012 to appoint committee of Engineers from RWS&S Department for suggesting remedial measures for commissioning the scheme. The committee of Engineers conducted meeting on 07.04.2016 and in their minutes the committee instructed the Executive Engineer, RWS&S Division, Ongole, to see that the contractor to take up the operation of the scheme and run the scheme continuously for atleast 30 days in a span of two months by replacing the required pipes and specials at his own cost and he has to hand over the scheme in running to the department. The water has to

reach the tail end point of pipeline laid in A.B.Palem, SS Tank and also instructed the Executive Engineer and Deputy Executive Engineer to monitor the operation of the scheme.

(29) The Superintending Engineer, RWS&S, Ongole, submitted a detailed report, dated 30.01.2020 on the remedial measures for the restoration of scheme by the petitioner wherein it is stated that water out of 64 days of observation period, the water reached to all tanks continuously for 36 days, 59 days to all the tanks except to Upputur tank due to leakage near R&B Road crossings. It is also stated in the said report that other than Upputur tank, water is being released to all the remaining DW tanks continuously and requested to consider that the scheme has restored and stabilized.

(30) Basing on the report submitted by the Superintending Engineer on remedial measures taken up by the petitioner, the Engineer-in-Chief, RWS&S, Vijayawada, vide letter, dated 24.02.2020 requested the Government to take necessary action.

(31) On 02.07.2020 the Engineer-in-Chief, RWS&S, Vijayawada, addressed a letter to the Government to take necessary action on the request of the petitioner to release the amount withhold in the said work, as he has run the scheme for more than 30 days in a span of two months and the water has reached the tail end point of the pipeline, A.B. Palem, SS tank, as per the instructions of the technical committee.

27) In view of the above admitted facts, it appears that

in compliance of the order, dated 28.11.2013 in

W.P.No.15792 of 203, the 1st Respondent issued a show-

cause notice, dated 13.02.2014 and the petitioner submitted

his explanation on 06.03.2014 and after considering the said

explanation, the impugned proceedings, dated 11.06.2015, is

passed to recover an amount of Rs.3,46,99,235/- from the

petitioner and to suspend his business, blacklist him and to

take action for criminal prosecution.

28) The main allegation against the petitioner is that

inferior quality pipes are used in execution of work.

Admittedly, the petitioner is not being a manufacturer of

HDPE pipes and with regard to its quality, the manufacturer

has certified about it. The petitioner is only an executing

agency, but not a manufacturer of HDPE pipes. As and when

the petitioner had already indicated before entering into the

agreement that he is intending to procure HDPE pipes from

M/s. Kataria Industries Private Limited, Ratlam, Madhya

Pradesh and the Respondent Nos.3 and 4 examined and

satisfied that the manufacturer has being manufacturing

quality products and the manufacturer has also furnished the

quality assurance certificate, the 1st Respondent could not find

fault of the petitioner in using the pipes procured from the

said manufacturer for execution of works.

29) Admittedly, the inspection by the Respondents and

Vigilance and Enforcement officials was conducted behind the

back of the petitioner and quality of pipes were tested at M/s

Godavary Polymers Private Limited. There is no proper

reasoning assigned by the 1st Respondent for the reply

submitted by the petitioner for specific charge No.4 wherein

he contends that as per the agreement, the samples have to

be tested in Government Lab and the same was tested in a

private Laboratory being run by a contractor-cum-

manufacturer of pipes and the said private lab i.e., M/s

Godavary Polymers Private Limited is a competitor to

M/s.Kataria Industries Private Limited from where the

petitioner procured the pipes to execute the works. There is

no answer from the Respondents' side with regard to the

contentions raised by the petitioner on this aspect.

30) While considering this aspect, this Court allowed

W.P.No.16792 of 2013, by order, dated 28.11.2013 and

opined as extracted hereinunder:

"There is a considerable amount of force behind the submission of the learned Senior Counsel, Sri C.V.Mohan Reddy that the fact that the samples of the pipes used by the petitioner have been got analyzed with M/s Godavary Polymers Private Limited is objectionable for the reason that the said M/s Godavary Polymers Private Limited is also a contractor to the State Government in

the matter of supplying of HDPE pipes, and in such an event, M/s Godavary Polymers Private Limited would become an interested person in the subject matter. Even if they have maintained very high standards while analyzing the samples, but nonetheless a rival contractor or businessman will be left with an apprehension in mind that his sample may not have received the best of the attention or consideration and the anxiety would be shown somehow to find fault with its quality as the pipes have been preferred to be procured from a faraway place in Madhya Pradesh State. Further, M/s Godavary Polymers are not chosen or designated in the contract as quality testing lab. Therefore, the State Government ought to have considered well before getting the samples analyzed with a rival contractor. If such as event is inevitable, the State should have made available the analysis report furnished by M/s Godavary Polymers Private Limited to the petitioner, so that he, in turn, would have confronted his own supplier and obtained either the confirmation or second opinion about the quality of the material that has been procured by him. This aspect also deserves consideration in the hands of the State Government."

31) It also appears that the analysis report issued by

M/s Godavary Polymers Private Limited is not furnished to the

petitioner, as opined by this Court in the above mentioned

order to enable the petitioner to have confronted his own

supplier or to proceed for second opinion about the quality of

the material procured by him.

32) On careful examination of the impugned order and

the entire material available on record, it appears that simply

basing on the report of the Vigilance and Enforcement

Department, dated 28.09.2012, the Respondents are

proceeding against to the petitioner from the beginning. The

reasons given to come to a conclusion that the explanation

submitted by the petitioner for the charges mentioned in the

show cause notice are not having merit, appears to be illegal

and unjust.

33) The explanation submitted by the petitioner for all

the charges leveled against him is not considered properly

and the observations recorded in the impugned order by the

1st Respondent are vague.

34) The 1st Respondent appointed one Dr. Prem Chand,

IAS (Retired), Member, Commissioner of Inquiries, as

Inquiring Authority to inquire into the charges framed against

the then Executive Engineer, WS&S Division, Ongole; the then

Deputy Executive Engineer, RWS(P) Sub-Division, Martur and

the then Assistant Engineer, PR, on the allegation of

irregularities in utilization of inferior quality of HDPE pipes for

providing drinking water facilities (i.e.) the work executed by

the petitioner. The Inquiry Authority after conducting detailed

inquiry against three charged Officers submitted a report

wherein gave finding as extracted hereinunder:

"In view of the analysis and assessment made above, the single charge framed against all the three charged Officers either in the charge, dated 31.01.2012 or in the additional charge framed dated 22.06.2013 is not sustainable".

35) Initially, the Respondents issued Memo, dated

23.04.2013, to initiate major disciplinary action coupled with

criminal prosecution against the charged Officers for their

failure to supervise the works executed by the petitioner. The

charged Officers filed W.P.No.15474, 15477 and 15469 of

2013 before this Court. In the said writ petitions, the

Respondents filed their counter stating that in view of the

findings of the Inquiry Officer, all further proceedings against

the charged Officers were dropped vide G.O.Rt.No.550,

Panchayat Raj and Rural Development (Vig.IV) Department,

dated 11.08.2017 and accordingly, this Court by order, dated

17.02.2020 in W.P.No.15474 of 2013 and W.P.No.15477 of

2013 and by order, dated 29.02.2020 in W.P.No.15469 of

2013, set aside the Memo No.10369/Vig.IA/2010-7, dated

23.04.2013, holding that the petitioners therein are entitled

for consequential and other reliefs for which they are

otherwise entitled.

36) In view of the above, it has to be concluded that

the concerned Officers, who are responsible to supervise the

works executed by the petitioner, discharged their duties as

per the procedure and due to that reason only, the Inquiry

Officer held that the single charge framed against the

concerned Officers is not sustainable. As and when the

concerned Officers are responsible for supervision of the

works executed by the petitioner discharged their functions

properly and under their supervision only the petitioner

executed the works, now the 1st Respondent cannot find fault

with respect to the execution of work by the petitioner.

37) It is further to be noted that basing on the

Vigilance Report, dated 28.09.2012, the 1st Respondent

appointed a committee of Engineers from RWS&S Department

for suggesting remedial measures for commissioning the

scheme. As per the minutes of the committee of Engineers

held on 07.04.2016, the committee has instructed the

Executive Engineer, RWS&S Division, Ongole, to see that the

petitioner to take up the operation of the scheme and run the

scheme continuously atleast for 30 days in a span of two

months by replacing the required pipes and specials at his

own cost and he has to hand over the scheme in running to

the department. The committee of Engineers also instructed

that the water has to reach the tail end point of pipeline laid

in A.B. Palem, SS tank and also instructed the Executive

Engineer and Deputy Executive Engineer to monitor the

operation of the scheme.

38) It is an admitted fact that as per the instructions of

the committee of Engineers, the petitioner successfully

completed the scheme. The work was appraised and

evaluated by the Respondents as well as technical committee

as suggested by the Vigilance and Enforcement Department,

the scheme is running successfully to the satisfaction of the

Respondents. As per the averments made in the counter-

affidavit filed by the 1st Respondent also, it is established that

the Superintending Engineer (i.e.,) 3rd Respondent herein has

submitted a detailed report to the 2nd Respondent on

03.01.2020, informing that the water reached to all tanks

continuously for 36 days, 59 days to all the tanks except

Upputur tank due to leakage near R&B Road crossings. As

such, the 3rd respondent endorsed that the scheme is running

successfully.

39) In view of the letter, dated 30.01.2020 of the 3rd

Respondent, the 2nd Respondent sent letters to the 1st

Respondent, dated 24.02.2020 and 02.07.2020, informing the

1st Respondent that the scheme was considered, restored and

stabilized and requested the 1st Respondent to take further

necessary action on the request made by the petitioner to

release the amount withheld.

40) It is the contention of the Respondents that the

petitioner is responsible for delay in commissioning the

scheme and as such, he shall be made responsible. We are

not agreeing with the contention of the Respondents. Though

the Vigilance and Enforcement Department in their report,

dated 28.09.2012 recommended to appoint committee of

Engineers from RWS&S Department in suggesting remedial

measures for commissioning the scheme, the committee was

constituted only in the year, 2016 by the Respondent No.1

and in the meeting held on 07.04.2016, the committee of

Engineers issued instructions for remedial measures. As per

the directions of the Executive Engineer and Deputy Executive

Engineer, RWS&S Division, Ongole, the petitioner by replacing

the required pipes and specials at his own cost and handed

over the scheme in running to the department. It is certified

by the concerned Field Level Officers and by the Respondent

Nos.2 to 4. For these reasons, the reason for delay in

commissioning the scheme is not attributable to the

petitioner. In fact, the Respondents are responsible for not

constituting the committee of Engineers immediately after

receipt of the report from the Vigilance and Enforcement

Department.

41) In view of the aforesaid reasons, in the light of the

Inquiry Report submitted by the Inquiry Officer and basing on

which, the Government has issued G.O.Rt.No.550, Panchayat

Raj and Rural Development (Vig.IV) Department, dated

11.08.2017, wherein the Government dropped further action

against all charged Officers on the premise that charges are

not proved and the petitioner successfully completed the

scheme as directed by the committee of Engineers and it is

proved by the letter, dated 30.01.2020 of the 3rd Respondent

and letters, dated 20.02.2020 and 02.07.2020 of the 2nd

Respondent addressed to the 1st Respondent, the scheme is

running successfully, this Court opines that the petitioner had

executed the work as per terms and conditions of the

agreement.

42) Learned counsel for the petitioner relied on the

judgments of the Hon'ble Supreme Court in (1) UMC

Technologies Private Limited vs. Food Corporation of

India and Ors.1 and (2) Afcons Infrastructure Limited vs.

Nagpur Metro Rail Corporation Limited and another2.

43) In UMC Technologies Private Limited's case (1

supra) the Hon'ble Supreme Court at para Nos.25 and 26, it is

held hereinunder:

MANU/SC/0858/2020

(2016) 16 Supreme Court Cases 818

25. The mere existence of a Clause in the Bid Document, which mentions blacklisting as a bar against eligibility, cannot satisfy the mandatory requirement of a clear mention of the proposed action in the show cause notice. The Corporation's notice is completely silent about blacklisting and as such, it could not have led the Appellant to infer that such an action could be taken by the Corporation in pursuance of this notice. Had the Corporation expressed its mind in the show cause notice to black list, the Appellant could have filed a suitable reply for the same. Therefore, we are of the opinion that the show cause notice dated 10.04.2018 does not fulfill the requirements of a valid show cause notice for blacklisting. In our view, the order of blacklisting the Appellant clearly traversed beyond the bounds of the show cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 09.01.2019 cannot be sustained.

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.

44) Learned Government Pleader relied on the

judgments of the Hon'ble Supreme Court in (1) Construction

& Design Services vs. Delhi Development Authority3 and

(2) Joshi Technologies International INC. vs. Union of

India and others4.

45) Though this Court has fully agreeing with the

proposition of law laid down in the judgments relied on by the

learned counsel for the Respondents, in our view, those

MANU/SC/0313/2015

(2015) 7 Supreme Court Cases 728

judgments are not applicable to the facts and circumstances

of the present case.

46) For the above mentioned reasons, in our

considered opinion, withholding the amount of

Rs.3,46,99,235/- out of the payments to be made to the

petitioner for other works executed by him is un-reasonable,

illegal and arbitrary and against to the principles of natural

justice.

47) On careful examination of the impugned order,

dated 11.06.2015, it appears that the explanation submitted

by the petitioner is not properly considered by the 1st

Respondent in proper perspective. It is also appears from the

impugned proceedings that the 1st Respondent did not provide

an opportunity of hearing to the petitioner. On this ground,

the decision of the 1st Respondent to blacklist the petitioner

cannot be sustained, as the said decision is taken unilaterally

and against the principles of natural justice.

48) Considering the above facts and circumstances, in

the considered opinion of the Court, the impugned order is

issued by the 1st Respondent with pre-determined mind and

without considering the explanation submitted by the

petitioner in proper perspective, without following the order,

dated 28.11.2013 passed by this Court in W.P.No.15792 of

2013. This Court further opined that in the light of the

Inquiry Report submitted by the Inquiry Officer against the

concerned charged Officers and the decision of the

Government taken to drop all further action against the

concerned Officers, who supervised the work executed by the

petitioner by issuing G.O.Rt.No.550, Panchayat Raj and Rural

Development (Vig.IV) Department, dated 11.08.2017 and

successful commission of the scheme by the petitioner as

suggested by the committee of Engineers constituted in

compliance of the report of Vigilance and Enforcement, dated

28.09.2012, the impugned order is unsustainable and

untenable and therefore it is liable to be set aside.

49) For the above mentioned reasons, we hold that the

impugned Memo No.10369/Vig.IA/2010-7, dated 23.04.2013

is illegal, arbitrary, unjust, contrary to the order, dated

28.11.2013 in W.P.No.15792 of 2013 and against to the

principles of natural justice.

50) Accordingly, W.P.No.19089 of 2015 is allowed with

the following directions:

(i) The impugned Memo No.3131/Vig.II/2014, dated

11.06.2015, is set aside.

(ii) The Respondents are directed to release an amount

of Rs.3,46,99,235/- to the petitioner forthwith.

51) In the light of the reasons mentioned to allow the

W.P.No.19089 of 2015, in our considered opinion, no further

orders are required in W.P.Nos.23789 of 2013, 35547 of 2013

and 4741 of 2014 and accordingly, these writ petitions are

disposed of.

52) There shall be no order as to costs.

Consequently, miscellaneous petition if any, shall

stand closed.

_________________________ JUSTICE BATTU DEVANAND

Dt.22.03.2022

Note: Issue CC tomorrow B/o PGR

HON'BLE SRI JUSTICE BATTU DEVANAND

W.P. Nos.23789 of 2013, 35547 of 2013, 4741 of 2014 and 19089 OF 2015

Dt:22.03.2022

PGR