Mohan Devidasrao Gangane vs The State Of Maharashtra And ...
2016 Latest Caselaw 6635 Bom

                                                                        wp11523-15.odt
                  IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                             BENCH AT AURANGABAD

                            WRIT PETITION NO. 11523 OF 2015




                                                                             
            Nisar Ahmed Khan,                ...  Petitioner 
            Proprietor, N.A. Khan Transport 




                                                     
            Contractor,
            Age 53 years, Occu: Business,
            R/o 6/P, Opp.  Railway 
            Maldhakka, Silk Mills Colony, 




                                                    
            aurangabad.

            VERSUS

    1.  The State of Maharashtra,




                                           
        Through the Secretary for Co-
        operation Department,     
        Mantralaya, Mumbai.

    2.  Chairman  and Managing Director, ... Respondents.
                                 
        Maharashtra State Warehousing 
        Corporation, 583/B, Cultekdi 
        Market Yard, Pune 411 037 
        (Public Undertaking listed in 
      

        Maharashtra )
   



    Mr.   V.   D.   Hon,   Senior   Advocate   i/by   Mr.   A.   V.   Hon, 
    Advocate for the petitioner,
    Mr. A.A. Jagatkar, AGP, for Respondent No.1,
    Mr. Mukul Kulkarni, Advocate h/for Mr.N. B.Suryawanshi, 





    Advocate for  Respondent No.2.

                                  CORAM           : S. V. GANGAPURWALA & 
                                                    K. L. WADANE, JJ.





                                  RESERVED ON     : 27th October,  2016

                                  PRONOUNCED ON   : 23rd November, 2016. 


    JUDGMENT (Per S. V.Gangapurwala, J):                          

1. Heard the learned counsel for the parties.

2. Rule. Rule made returnable forthwith. With

wp11523-15.odt consent of parties, the petition is taken up for final

disposal

3. The order dated 09.4.2015 passed by respondent

No.2 Corporation thereby prohibiting the petitioner

from filling in tenders of the Respondent Corporation

for one year and keeping in abeyance the amount of

Rs.39,52,698/- payable to the petitioner so also

keeping the right reserved to recover the amount of

Rs.53,03,759/- is assailed in the present petition.

4. Mr. Hon, the learned Senior Advocate for the

petitioner strenuously contends that the petitioner is

carrying the transport business and since 10 years, is

doing the work for the respondents. According to the

learned Senior Advocate, the petitioner was awarded a

contract for transportation of food grains of the

Maharashtra State Warehousing Corporation from Rake

Point Aurangabad to Jadhavwadi Godown, New Mondha,

Aurangabad and godowon at Gat No.57, Satara Parisar,

Aurangabad for a period from 01.09.2010 to 31.08.2012.

Subsequently, the petitioner was also asked to

transport the food grains beyond the contract period,

thereby extending the contract period vide extension

orders dated 27.08.2012, 27.09.2012.

wp11523-15.odt

5. The learned Senior Advocate submits that prior

to the impugned order being passed, earlier also, the

order of similar nature, blacklisting the petitioner

was passed; which order was set aside by this Court in

writ Petition bearing No.3946/2013. The Court directed

the respondents to observe the principles of natural

justice. Thereafter again show cause notice was issued,

which was duly replied and the impugned order came to

be passed.

6.

According to the learned Senior Advocate, the

allegation of the respondents that the food grain i.e.

wheat was mixed with DAP fertilizers at the railway

premises after unloading the same is erroneous and

against the record. The petitioner has given

explanation that the wheat and DAP fertilizers were

already mixed up in the Rake. Wheat and DAP Fertilizers

were put in the same wagon. The same was mixed up in

the wagon itself, for which the petitioner is not

responsible. The Authority of respondent No.2

Corporation called for the report from the Officials of

Food Corporation of India (FCI). In the said enquiry

also, the petitioner was not held responsible for the

admixture of DAP Fertilizers, cement and wheat. The

wp11523-15.odt learned Senior Advocate relies on the reports submitted

by the ICCS, FCI, Manmad alognwith the telegram sent

to the Deputy Manager, FCI, Dhan, District Kurukshetra.

7. The learned Senior Advocate relies on the

various communications and correspondence to submit

that the negligence was on the part of the FCI at

loading point, due to which, DAP fertilizers and wheat

was put in the same rake i.e railway wagon. According

to the learned Senior Advocate, during the period of

contract which was for more than two and half years,

not a single notice was received by the petitioner

about unsatisfactory work. On the contrary, the

petitioner was given extension for almost six months

after the expiry of contract. The learned senior

Advocate further submits that the gunny bags containing

wheat and cement bags/fertilizer bags were torn and

at the same time were open i.e. without tag and

admixture is a result of the same in the wagon itself.

The petitioner unloaded the same with due care and

caution. The petitioner himself reported about the

admixture of wheat and fertilizers and/or cement to the

Representatives of Respondent No.2 Corporation as well

as FCI from time to time and Panchanamas were also

wp11523-15.odt prepared on 06.02.2012 and 07.02.2012 in the presence

of Mathadi workers. It is the petitioner who had

requested for taking care so that the food grain is not

mixed with fertilizers or cement. The petitioner

received more letters on 2nd March, 2012 and 9th

March, 2012, calling upon the petitioner to unload the

rake, failing which the petitioner would be liable for

penal action, including demurrage and wharfage. The

petitioner replied the said letters stating that in the

months of January, February, March, 2012, the food

grain was received, which was already mixed with

fertilizers and cement in the rake itself.

8. According to the learned senior Advocate as

there was no place for unloading the wheat at the

platform of the railway goods shed, the petitioner was

required to pay demurrage of Rs.5 lakhs in addition to

shunting charges. The Senior Manager (Business

Development) of respondent No.2, on 19.4.2012 also

submitted a report that the stocks which were received

were mixed with fertilizers/cement in uncleaned wagon.

No proper dunnage was placed underneath in the wagon

which caused food grain to mix with cement

/fertilizers. Even the bags were not properly sealed,

wp11523-15.odt and were loosely stitched. The learned Senior Advocate

refers to various correspondence to show that the

admixture was in the rake itself and that there was no

place for unloading of food grains from rakes at

Aurangabad railway goods shed as a result, food grain,

fertilizers and cement cement were mixed up. According

to the learned Senior Advocate, the Senior Railway

Manager of respondent No.2 Corporation at Aurangabad

informed to the Senior Divisional Operation Manager,

South Central Railway Nanded that huge stock of

fertilizers and cement was dump on both tracks at

unloading point, as a result, there was no space for

unloading or taking direct delivery from wagon to

truck. The Senior Railway Manager therefore requested

not to place food grain rakes until availability of

clear and vacant platform in order to avoid chances of

mixing fertilizers with food grains.

9. The learned Senior Advocate further submits that

the petitioner is not at fault. Even a star question

was raised in the State Legislature and the reply given

was that all the bags were received in hand stitched

condition and the stitching was also not as per

norms. FCI wagons are not cleaned before loading due

wp11523-15.odt to which wagon palla mixed with cement and fertilizer

and other material at bottom side. The texture of

gunnies was also very poor and bust condition. The

fault was of the FCI still, the petitioner is being

made a scape goat and liable.

10. The learned senior Advocate submits that the

officials of the FCI did not hold the petitioner

responsible for admixture of DAP fertilizers, cement

and other materials. The action of restraining the

petitioner from participating in tender process for one

year is erroneous. According to the learned Senior

Advocate, even after the expiry of contract on 31 st

August, 2012, the petitioner was granted extension of

contract of transportation five times for six months.

If the petitioner would have been found negligent,

extension would not have been granted. The joint

committee report relied by the respondent while passing

the impugned order itself contains an admission that

the complaint is lodged with the Area Manager of FCI

Manmad on 12.7.2012 after lapse of six months. The

same is not in accordance with the procedure. The

allegation of negligence against the petitioner cannot

be accepted also on the ground that the contract of

wp11523-15.odt handling and transportation of food grains allotted to

the petitioner was not terminated/cancelled for breach

of the terms and conditions of the contract. On the

contrary, extension was given. The petitioner is not,

by any stretch, responsible for the alleged

contamination of the goods.

11. The learned Senior Advocate further submits that

the unloading and shifting has been done under the

strict supervision of ICCS who had deputed the Area

Manager, FCI, Manmad and MSWC Officials. The report

is sent by the Storage Superintendent, Warehousing

Corporation to the Depot Manager, FCI and in the said

report no allegation is made against the petitioner

with regard to contamination of food grains. According

to the learned Senior Advocate the petitioner is in

the business of transportation of goods for last 37

years and since 10 years he is executing contracts

with the Warehousing Corporation. Even certificates are

issued that the petitioner is doing the said work and

the performance in professional capacity and also

reliability in execution of the work is good. Even the

complaint filed against the petitioner under the

provisions of the Food Protection Act, 2006 is

wp11523-15.odt dismissed, thereby establishing that the petitioner

is, by no stretch, responsible for the alleged

contamination of goods.

12. The learned Senior Advocate further submits

that as far as Mathdi Workers' payment is concerned,

there cannot be any dispute about the same as the

petitioner is responsible to pay the charges as was

decided at the time of the contract and the petitioner

has paid the same. Explanation has been given by the

petitioner in that regard that revision of wages by

the Mathadi Workers Board is unilateral. Revised

rates will not be applicable to the contracts on hand,

but to the fresh tenders. Moreover, the petitioner

has already assailed the same by filing separate writ

petition. According to learned Senior Advocate, the

order impugned is illegal and cannot be sustained and

deserves to be caused and set aside.

13. Mr.Kurkarni, the learned counsel for the

respondent No.2 Corporation submits that only because

the petitioner was granted extensions owing to some

exigency of time and situation, the petitioner cannot

derive any benefit out of the same. It was not because

of excellent work of the petitioner, extension was

wp11523-15.odt granted to him but since the fresh tender process, due

to court matters, was to take time, the petitioner was

given extension. The petitioner is trying to shift the

blame on others for his own fault. The petitioner has

breached the terms and conditions mentioned in the

contract. It was the duty and responsibility of the

petitioner to take care for the safety of goods and

to unload the food grains from the rake within 9 hours

and to shift them in godown. The petitioner left the

goods at railway yard for 4 to 10 days in open. So

also the petitioner failed to lay tarpaulin on the

floor before unloading the rakes. Serious lapses were

committed by the petitioner while unloading the rakes.

The petitioner did not take the precaution required as

per the terms of the tender. The petitioner was

repeatedly negligent and irresponsible in unloading the

food grains so also the fertilizers/cement bags. The

food grains which were meant for human consumption

under the public distribution system were mixed with

fertilizers on account of negligence of the petitioner

and the action of disqualification of the petitioner,

in the present situation, was inevitable. The

photographs placed on record would clearly point out

the negligent and irresponsible conduct of the

wp11523-15.odt petitioner. The learned advocate further submits that

time to time, Committees were constituted to enquir

into the complaints against the petitioner in respect

of mixing of fertilizer/cement with food gains. It is

clear from the reports of the said Committees that

there was negligence on the part of the petitioner in

handling and transporting of food grains at railway

yard as well as during transportation.

14. The learned counsel for the respondent has taken

us through the reports of the three Enquiry Committees.

The second Committee recommended the recovery of

Rs.53,03,759/-. It is sought to be recovered from the

charges paid by the FCI to the respondent Corporation.

The said recovery shows negligence and lapses on the

part of the petitioner. The three members committee

appointed by the FCI, upon necessary enquiry and

inspection, has concluded that contamination of food

grains has not occurred inside wagon but it has

occurred after unloading the food grains in railway

shed and also the stocks shifted to warehouse took

abnormal time i.e. 4 to 10 days for unloading. The

amount of Rs. 53 lakhs has been deducted by the FCI

from the bills of Storage charges /supervision

wp11523-15.odt charges, which are to be paid by FCI to the respondent

Corporation. The respondent Corporation has been held

responsible for contamination of stocks by the FCI. It

is because of the negligent act of the petitioner only,

the said stigma is put on the respondent Corporation.

15. The learned counsel further submits that there

were various complaints against the petitioner and the

petitioner was intimated from time to time to improve

the execution of work but to no avail. Due to

negligence of the petitioner, the answering respondent

has suffered huge losses and 9088 bags of food grains

meant for human consumption have been damaged due to

its mixing with the fertilizer and cement. It is the

petitioner who is responsible for the same and hence

the action of disqualification of the petitioner is

justified. A preliminary enquiry was conducted by the

Q.C. Branch and Business Development Branch so also

after analyzing the joint inspection report of officers

from the FCI, it is held that the petitioner has not

worked in accordance with the tender conditions. It was

found that the work of the petitioner was not

satisfactory. The petitioner was rightly disqualified

by the impugned order for violating the terms and

wp11523-15.odt conditions of the agreement and is responsible for

commission of serious lapses.

16. The learned counsel further submits that as per

the contract, the petitioner was responsible for

payment of Mathadi workers as per the rates fixed by

the Mathadi Board from time to time. Though the

amounts were received by the petitioner from the

respondent Corporation in his running bills, the same

were not deposited with the Mathadi Board. Even the

cheques given by the petitioner towards charges to

the Mathadi Board of Rs.90 lakhs had bounced. Mathadi

Board is claiming the amount now, which is required to

be paid by the respondent Corporation. In fact the

said amount is liable to be paid by the petitioner. The

respondent was constrained to make payment to the

Mathadi Board of an amount of Rs.35 lakhs which in

fact the petitioner was bound to pay. The learned

counsel further submits that as per order dated

19.11.2013, the Mathadi Board had ordered the

petitioner and the respondent to pay Rs.78,20,119/- due

towards bouncing of cheques given by the petitioner

towards labour, levy amount and 10% surcharge. The

contention of the petitioner that the Senior Regional

wp11523-15.odt Manager had made it clear that wages fixed by the

Mathadi Board shall be applicable from the date of

grant of new tender is incorrect. The same is contrary

to the agreement. The petitioner is rightly

disqualified from the tender process for one year as

per the impugned order. As the petitioner has failed to

pay the amount of labour charges and levy charges, the

respondent was constrained to deposit Rs.35 lakhs. As

such the said amount is rightly retained. So also the

respondent is directed by the FCI to deposit

Rs.53,03,759/- and for the same, in the impugned

order, right is reserved to claim recovery from the

petitioner.

17. The learned counsel submits that no illegality

has been committed while passing the impugned order. In

fact, the liberal approach had been taken against the

petitioner. The respondent Corporation has a right to

blacklist the petitioner in case of non adherence to

the contract and the same would not be open for review.

The learned counsel submits that it is for the

respondent to determine the period of blacklisting and

the same has to be decided by the Authority only. The

learned counsel relies on the judgment of the Apex

wp11523-15.odt Court in the case of M/s Kulja Industries Ltd. Vs.

Chief General Manager, W.T. Proj., BSNL and others

reported in AIR 2014 SC 09.

18. We have considered the submissions canvassed by

the learned counsel for the respective parties.

19. As far as the grievance with regard to the

payment of the labour charges and levy amount to the

Mathadi Board is concerned, this Court need not dwell

upon the same as it is submitted by the learned

counsel for the petitioner that the petitioner has

filed a separate writ petition with regard to the

wages fixed by the Mathadi Board. The petitioner may

agitate the same in the said writ petition.

20. The predominant grievance of the petitioner

is with regard to blacklisting the petitioner for one

year, that is restraining the petitioner from

participating in tender process for one year with the

respondent. The said period of one year has already

lapsed. However, as per terms of the tenders that are

issued by the respondent, a person who is earlier

blacklisted or whose security amount is forfeited, is

not entitled for participation in tender process for

wp11523-15.odt further 3/5 years at the discretion of the respondent.

As such, the matter is being agitated.

21. The learned counsel for the respective parties

have relied on the voluminous various correspondence

and the reports submitted by the various authorities.

22. This Court would be slow to investigate or tread

upon the factual disputes. We would certainly be

guided by the reports placed on record. The Apex Court,

in case of M/s Kulja Industries Ltd., referred to

supra, has held that the power to blacklist a

contractor where the contract be for supply of material

or equipment or for the execution of any other work

whatsoever is inherent in the party allotting the

contract. There is no need for any such power being

specifically conferred by Statute or reserved by

contractor. The Apex Court, in the said judgment has

also observed that the writ court can examine as to

whether the order is reasonable, fair and proportionate

to the gravity of the offence/act complained.

23. In the present case, the petitioner is not

accused of any fraud, misappropriation or forgery. The

allegation against the petitioner is of negligence,

wp11523-15.odt irresponsible conduct, because of which, according to

the respondents, loss is sustained and about 9088 bags

of wheat are contaminated as they were mixed with

fertilizers/cement.

24. There are contrary reports on record. The

disputed period appears to be from January to March,

2012. Report dated 30th January, 2012 by the Storage

Superintendent, Maharashtra State Warehousing

Corporation, Jadhavwadi, Aurangabad and Manager, F.C.I.

Manmad shows that the bags were received, the stocks

were unloaded and shifted under the strict supervision

of ICCS deputed by the Area Manager, FCI, Manmad. It

states that dunange is not used in wagon. Hand stitched

bags are not as per norms. ICCS reports state that the

gunny texture of the goods unloaded from 26.01.2012 to

30th January, 2012 is found very weak and poor. Hand

stitched bags are not properly stitched. Stitching is

not up to the mark. Loose spillage is found scattered

in each wagon. ICCS report with regard to the unloading

from 03.02.2012 to 14.02.2012 states that the stitching

of bags are not as per norms, wagons are not cleaned

before loading, due to which wagon pallas mixed with

cement and fertilizers and other materials at the

wp11523-15.odt bottom side. Dunnage also is not used in any wagons so

also textures of gunny is also very very poor and bust

condition. Various reports of ICCS are on the same

lines.

25. Report dated 18.10.2012 signed by the Assistant

general Manager (QC), F.C.I. Manmad reads as under

(Page 416):

"Conclusion:

1) While going through enclosed ICCS Report i.e. D to G, in which it is clearly mention

that wagons are not cleaned before the loading. But it is not clear that fertilizer contamination took place in

wagon except the ICCS Report Annexure 'E'.

So it can be presumed that the contamination might have been taken place at the time of wagon unloading due to non

use of tarpaulins at the time of unloading at rail head.

2) No certificate obtained by MSWC

authority from railway i.e. wagons are contaminated.

3) MSWC authority not lodged consigner claim within stipulation time for fertilizer contaminated stock.

wp11523-15.odt

4) If contamination occurred in wagon or at rail head no separated bags stacked by MSWC at the time of receipt.

5) As per their records it shows that, MSWC

authority stacked bags and unclean rail head palla in mixed condition and stock issued out to state Govt. without

segregation and invited complaint.

6) After words they segregated the unclean RHP bags from the stacks and kept in eight

stacks in different godowns. In primaphacy,

it seems that due to negligence of consignor and consignee during loading/ unloading, the

stock become contaminated and thereby spoil the image of corporation."

The fact finding committees were appointed by the

respondents. Fact finding report of three members

Committee is signed by the Assistant General Manager

(Q), FCI, Manmad, Assistant General Maager (Genl) FCI,

RO, Mumbai and Area Manager, FCI, Manmad, Camp

Aurangabad. Report reads as under (Pages 419-420):

"CONCLUSION :

1. Considering the photograph, the contamination of food grain is not occurred inside the wagons, but it occurs after the unloading the food grain in railhead and also shifted to warehouse it takes abnormal days i.e. from 4 to 9 days after unloading.

wp11523-15.odt

2. Despite of instruction by DSO Aurangabad not to issue the stock from godown No.5,7 and 10 to PDS. MSWC authorities issue the stock

to PDS and invited repeated complaints.

3. After intimated said matter by way of quality complaint, the AGM(QC),DO, Manmad advised the Warehouse Manager to refer the

sample to FCI. DO Manmad but the Warehouse Manager did not refer the sample to DO Manmad.

4. Without Knowledge of FCI, so moto referred

the samples to Public Health Laboratory, Aurangabad which was unwarranted."

Another report, signed by 8 members committee

concluded as under (pages 425-426):

"CONCLUSION:

Looking to the records of local MSWC and reports of DSO, Aurangabad, AGM(QC),FCI

Manmad, PFA Authority and FCI nominated committee, the Joint Committee of officers of FCI and MSWC after considering all the facts and figures of the records hereby

infers that:

1. As per the correspondence made by the local MSWC authority, number of cement / fertilizer were unloaded at Aurangabad goods shed therefore the contamination of food grains has

wp11523-15.odt occurred at Railway Goods shed Aurangabad as well as due to mixing of wagon palla with cement / fertilizer

residue in uncleaned wagons of two rakes received Ex-Malanpur(MP).

2. It is a fact that only two rakes received with uncleaned wagons with

cement / fertilizers and reported 2515 RHP bags, whereas the declared number of contaminated bags are 9040 bags

which were stacked in the sound stack

noticed at the time of issue under PDS.

3. No proper complaint has been found in

the records of the MSWC with the consignor within stipulated time in accordance with the procedure in vogue

regarding contamination of stocks.

4. In view of the correspondence made by local MSWC with railways, Collector/DSO regarding position of Aurangabad Goods

shed, it is clear that the contamination has occurred at Aurangabad Goods shed only while

filling palla and collecting sweepages in the cut and torn, mouth open bags, the same were not kept separately rather this contaminated stock has been physically issued to the PDS ignoring the facts that they were chemically contaminated with fertilizer.

wp11523-15.odt

5. The losses on account of mismanagement at local level as well as no timely communication to the concerned

authority by MSWC resulted in the huge accumulation of contaminated bags.

6. Since few bags have been noticed with machine stitched, such bags can be

segregated,sampled after obtaining permission from concerned PFA authorities by MSWC authority prior to

disposal as also shall ensure proper QC

treatments to avoid any kind of further deterioration in the quality till its disposal.

7. On completion of the above formalities the stocks in question can be disposed

off as per FCI procedure for

contamination of food grain stocks.

26. Going through the said conclusions recorded by

the fact finding committees so also the ICCS reports,

it is clear that the fault lay on either side. The

ICCS report clearly implies negligence at the time of

loading the goods in rake i.e. wheat, fertilizers and

cements were loaded in the same wagon. Texture of the

gunny bags was not proper. Stitching was not proper,

wagons were not clean and the admixture has taken

wp11523-15.odt place at the bottom side in the wagon. As per report of

the fact finding committees also version is that the

contamination of the food grain has occurred at the

railway shed Aurangabad as well as due to mixing of

wagaon palla with cement/fertilizers, residue in

unclean wagon at two rakes.

27. This Court would have its own limitation of

sitting over the report of the fact finding committees

so also the ICCS report. Reports throw light on the

negligence at the time of loading so also at the time

of unloading and storage. This Court certainly need

not tread upon the said reports. The fact is that

negligence is attributed even at the time of loading

for which the petitioner is not responsible and also

negligence is attributed to the petitioner after

unloading. Considering the fact that for the period of

more than one year, the petitioner has suffered the

order of being restrained and prohibited from

participating in tender process and that the petitioner

is not wholly responsible for the admixture of the

food-grains with fertilizers/cement, we set aside the

order of blacklisting the petitioner.

28. As far as recovery of the amount is concerned,

wp11523-15.odt no conclusion has been arrived at by the respondents

while passing the impugned order. There is no order

forfeiting the security deposit. The order only states

that some amount is retained and right is reserved for

claiming the amount, however, no definite finding has

been arrived at by the authority in that regard. It is

open for the Authorities to take decision upon the same

after hearing the petitioner on the said aspect. As far

as Mathadi charges are concerned, we have already

opined that same would be left to be agitated by the

petitioner in the proceeding which he has already

initiated.

29. Rule is accordingly made partly absolute. No

costs.

(K. L. WADANE, J.) (S. V. GANGAPURWALA, J. )

JPC