Merittrac Services Private ... vs Steel Authority Of India Limited & ...
2022 Latest Caselaw 1661 Cal

17   30.03.2021
     Court No.15
                                     W.P.A. 2813 Of 2018



                         MeritTrac Services Private Limited & Ors.

                                             Versus

                           Steel Authority of India Limited & Ors.



                   Mr. Kishore Datta, Sr. Adv.
                   Ms. Srijib Chakraborty, Adv.
                   Mr. Sunny Nandy, Adv.

                                                      ....for the petitioners.
                   Mr. Anirban Ray, Adv.
                   Mr. Prantik Garai, Adv.
                   Ms. Supriya Dubey, Adv.
                                                      ..... for the SAIL.


                      Petitioner being MeritTrac Services Private Limited has

                   approached this court with the present writ petition, inter

                   alia, challenging the order dated 2nd January, 2018 issued

                   by AGM (Pers-CF & HRIS) of Steel Authority of India

                   Limited, IISCO Steel Plant (for short 'IISCO') whereby

                   petitioner company was banned for a period of six months

                   from the date of issuance of previous business banning

                   order dated 4th May, 2017.



                      Facts

of the case revolved around Notice Inviting Tender

(NIT) dated 10th June, 2013 and subsequent work order

dated 23rd May, 2014 issued in favour of the petitioner

company for recruitment of 290 (Two Hundred Ninety)

Operator-cum-Technician (Trainee) and 169 (One Hundred

Sixty Nine) Attendant-cum-Technician (Trainee) for the year

2014-15 by conducting written test including all associated

activities and providing logistic support for holding the

interview until the submission of the final merit list for such

selection on the basis of terms and condition and the nature

of work as delineated in the said NIT and work order.

Petitioner company subsequently conducted written test

held on 10th August, 2014 in Kolkata. Thereafter it was

detected based on complaint lodged to IISCO that 6 (six)

persons were appointed by resorting to impersonation and it

was alleged that instead of those six appointed persons

some other proxy candidates participated in the written test

on 10th August, 2014. Based on such complaint on initiation

of disciplinary proceeding those six appointed candidates

were dismissed from service. Consequently on receipt of

such complaint by the vigilance department of IISCO matter

was brought to the notice of CBI and the CBI investigation

was initiated to unearth the truth and to find out who were

responsible for such malpractice conducted at the time of

holding such written test.

Mr. Kishore Datta, learned senior advocate, appears on

behalf of the petitioner company and submits that one

show-cause notice was issued on 27th September, 2016

addressed to the petitioner in order to respond to such

notice as to why action for banning of business dealings

should not be initiated against the petitioner by IISCO. In

respect of such show-cause notice petitioner replied vide

letter dated 18th October, 2016 and subsequent thereto on

behalf of IISCO one order dated 4th May, 2017 was issued

whereby a decision was taking to ban the petitioner

company from having any business dealing with IISCO for a

period of six months.

Such order of banning dated 4th May, 2017 triggered

first writ petition being WPA 17712 of 2017 which was

disposed of by a coordinate bench vide order dated 18th

July, 2017. The coordinate bench while disposing of the first

writ petition set-aside the said banning order dated 4th May,

2017 chiefly on the ground that the banning order was

bereft of cogent reasons and there was no finding on the

facts based on which IISCO inferred such adverse

conclusion against the petitioner. However, the coordinate

bench fixed further date of hearing of the issue by the

concerned authority of IISCO on 24th July, 2017 at 11 a.m.

and it was directed that all points were kept open before the

IISCO while taking de novo decision based on the banning

proceeding initiated pursuant to the show-cause notice

dated 27th September, 2016.

Accordingly, the issue was heard by the committee of

IISCO on 24th July, 2017 when on behalf of the petitioner

company orally and by writing request was made to share

copies of all documents which were being relied upon by the

said committee in connection with allegation of gross

negligence against the petitioner for enabling the petitioner

company to represent their case before the hearing

authority. According to Mr. Datta the committee which

heard the issue pursuant to the order of this court dated

18th July, 2017 referred the issue of necessity of supplying

such documents as prayed for by the petitioner wrongly to

the higher authorities as it emanates from the impugned

order dated 2nd January, 2018. Ultimately, it further

appears that such prayer for supplying copies of documents

was spurned pursuant to decision of the higher authority

based on which it is submitted on behalf of the petitioner

that unilaterally the impugned decision was taken on 2nd

January, 2018 that too by the AGM (Pers-CF & HRIS) and

not by the committee which heard the issue pursuant to the

order of this court.

It has been specifically contended on behalf of the

petitioner company that observance of principle of natural

justice demands supply of documents based on which

banning proceeding was initiated against the petitioner and

the documents which were taken into consideration by the

hearing authority before taking decision on banning. In

support of such contention reliance has been placed on the

following judgments of the Apex Court reported in -

(i) (1989) 1 SCC pg. 229 (Raghunath Thakur Vs. State of

Bihar & Ors.) paragraph 4;

(ii) (1975) 1 SCC pg. 70 (M/s. Erusian Equipment &

Chemicals Ltd. Vs. State of West Bengal & Another)

paragraph 20 and 21.

Per contra Mr. Anirban Ray, learned advocate appears

on behalf of IISCO and submits that the committee which

was constituted to hear out the issue on being requested to

supply the relevant documents by the petitioner on 24th

July, 2017 did not share its view with the higher authorities

so that the higher authorities can take the decision on

supply of documents being uninfluenced by the view prima

facie adopted by the hearing authority. Ultimately, pursuant

to such decision of the higher authority the committee

constituted for hearing the issue took final decision as

contained in order dated 2nd January, 2018. Mr. Ray has

defended such decision taken on behalf of IISCO since

according to the committee as well as the higher authority to

which issue of supplying documents as demanded by the

petitioner was referred to, it was not required to supply such

document to the petitioner before taking any decision

pursuant to the order passed by this court on the first writ

petition. Attention of this court has been drawn to the order

passed by this court dated 18th July, 2017 whereby the

IISCO was directed to fix the hearing on 24th July, 2017 for

taking early decision as agreed by the parties and in case of

necessity hearing would continue on day to day basis on

every working day of such authority within the office hours

of IISCO till conclusion of such hearing. Based on such

direction of this court dated 18th July, 2017 it has been

contended on behalf of IISCO that since such direction for

early hearing of the issue was passed by the court as agreed

by the parties there is no infirmity in the proceedings

initiated by the respondents by conducting hearing on 24th

July, 2017 based on which an order of banning was passed

on 2nd January, 2018 pursuant to the decision taken by the

higher authority not to supply such documents as prayed

for by the petitioner on 24th July, 2017.

This court has heard the submissions of the learned

advocates appearing for the parties and has perused the

relevant documents available on records. It appears on

perusal of the show-cause notice dated 27th September,

2016 that based on a complaint to the vigilance department

of the IISCO regarding appearance of some proxy candidates

in place of original applicants in the written test for the post

Attendant-cum-Technician (Trainee) held on 10th August,

2014 and on investigation being carried out by the vigilance

department certain facts were unearthed as specified in the

said show-cause notice which prompted the IISCO to initiate

banning proceeding against the petitioner by issuing such

show-cause notice. On hearing the learned advocate

representing the IISCO it appears there is nothing on record

from which it appears the complaint as referred to in the

show-cause notice dated 27th September, 2016 has been

supplied to the petitioner. The order of banning which has

ultimately been clamped upon the petitioner vide impugned

order dated 2nd January, 2018 has definitely got civil and

evil consequences which would prejudice the petitioner

company in its future business dealings therefore,

considering the nature of order passed against the petitioner

company this court finds it apposite to give direction upon

the IISCO and it's appropriate hearing authority to supply

such complaint as referred to in the show-cause letter dated

27th September, 2016 to the petitioner before taking decision

upon conducting hearing pursuant to the order passed by

this court.

It is axiomatic to draw inspiration from paragraph 4 of

Raghunath Thakur (Supra) which runs infra:

"4. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State

Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence 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. In that view of the matter, the last portion of the order insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the blacklist in respect of future contracts under the Collector is set aisde. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for blacklisting the appellant if the government is so entitled to do in accordance with law, i.e. after giving the appellant due notice and an opportunity of making representation.

After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefor. We, however, make it quite clear that we are not expressing any opinion on the correctness of otherwise of the allegations made against the appellant. The appeal is thus disposed of."

It appears to this court on consideration of the law laid down by the Apex Court in Raghunath Thakur (Supra) that for making appropriate representations before taking decision on banning against a particular organization or person documents relied upon by the prosecution based on which conclusion can be arrived against need to be supplied. Without receipt of such relevant documents the petitioner company as it appears in the present case may be prejudiced in presenting its case before the hearing authority. Therefore, this court directs the concerned authority of IISCO to supply complaint as referred to in show-cause letter dated 27th September, 2016 to the petitioner within a period of seven days from date. In addition thereto within seven days from this date petitioner company shall be at liberty to forward a letter to IISCO stating the documents which are required to be supplied to it explaining the relevancy thereof. In the event, the petitioner company submits the aforesaid letter within the time stipulated hereinabove, on receipt of the same within seven days thereafter the appropriate authority of IISCO shall decide requirement of supplying the documents as prayed for by the petitioner company based on relevancy thereof and the same shall be communicated to the petitioner company within seven days thereafter. If IISCO decides not to supply other documents adequate reasons shall be assigned why those documents are not relevant. Based on such decision to be taken on behalf of IISCO the appropriate authority of IISCO shall proceed to hear the petitioner company afresh and on granting opportunity to make deliberation to the petitioner final decision is to be taken by the concerned authority of IISCO within a period of thirty days thereafter. It is made clear that all points are kept open for consideration by the concerned authority of IISCO.

Before parting with this court is inclined to express its view on referring the issue of supplying documents as prayed for by the petitioner company on 24th July, 2017 to the higher authority and depending on the decision taken by the higher authority on such issue the committee constituted for hearing the matter in terms of the previous order of this court dated 18th July, 2017 took decision; such course resorted to by the said committee of IISCO is inappropriate which vitiated the proceeding of hearing and the committee which took decision on hearing the petitioner on 24th July, 2017 was required to take decision on such request of the petitioner company to supply documents instead of referring the matter before the higher authorities. Therefore the modality adopted by the committee of IISCO ought not to be recurred.

Accordingly, the impugned order dated 2nd January, 2018 issued by AGM (Pers-CF & HRIS) is set-aside.

With the above direction writ petition stands disposed of. There will be no order as to costs.

Urgent Photostat certified copy of the order, if applied for, be given to the parties, upon usual undertakings.

(Saugata Bhattacharyya, J.)