M/S J.D.C. Caterers vs Indian Railway Catering And ...
2008 Latest Caselaw 1212 Del

10.

*            IN THE HIGH COURT OF DELHI AT NEW DELHI.

+                           WP(C)No.1791/2008

M/S J.D.C. CATERERS                        ......           PETITIONER.
                            Through:       Mr. Amit S. Chaddha, Sr. Adv.
                                           with Mr. Surinder Mehra, Adv.



                                    VERSUS

INDIAN RAILWAY CATERING
AND TOURISM CORPORATION
LTD.                                       .....          RESPONDENTS.
                   Through:                Mr. Gaurab Banerjee, Sr. Adv.
                                           with Mr. Sunil Malhotra, Mr.
                                           Saurav Agrawal and Mr. Anshu
                                           Tonk, Advs.


CORAM:
HON'BLE MR. JUSTICE G.S. SISTANI

      1.Whether reporters of local papers may be allowed to see
        the Judgment ? Yes

      2.To be referred to the Reporter or not?            Yes

      3.Whether the Judgment should be reported in the Digest? Yes


                                 01.08.2008

G.S.SISTANI, J. (ORAL)

+W.P. (C) No.1791/2008 *

1. The present writ petition is, inter alia, directed against the

communication by the Indian Railway Catering and Tourism

Corporation (hereinafter, "IRCTC"), dated 20.2.2008, cancelling the

license of the petitioner to operate and maintain a catering stall on

the purported ground that the petitioner had filed forged

certificates for fulfilling his eligibility criteria to obtain the license.

2. During the pendency of the present petition, the petitioner had

moved in an application seeking interim relief. This Court vide

order dated 5.3.2008 stayed the effect and operation of the

impugned communication dated 20.2.2008, which stay continues

till date.

3. Pleadings are complete. With the consent of the parties, the writ

petition is taken up for final hearing.

4. Facts, necessary for the disposal of the present petition, may first

be noticed:

In pursuance of a technical and financial bid opened on 30.1.2006, the respondent vide letter dated 29.5.2006 granted license to the petitioner for management of a catering stall at Yashwantpur Railway Station. The eligibility criteria for grant of the license required, inter alia, the applicant to have a minimum of two years experience in catering. The petitioner accepted the license and deposited the requisite security amount and the annual license fee along with his certificates as proof of his eligibility for obtaining the license. The respondent vide letter dated 13.7.2006 acknowledged the remittance of the security amount and annual license fee deposited by the petitioner. The respondent vide the said letter also informed the petitioner that the verification of the certificates submitted by him had been completed. Thereafter, both parties executed an agreement which came into force on 24.4.2007. However, on 24.10.2007, the respondent issued a show cause notice, seeking therein an explanation from the petitioner as to why his license ought not be cancelled on account of forged certificates submitted by him as proof of his eligibility for obtaining the license. The petitioner vide replies dated 5.11.2007, 4.12.2007, 26.12.2007 and 19.2.2008 clarified that the certificates submitted by him were genuine, and in support thereof, further furnished a certificate dated 14.2.2008 as proof of his eligibility. However, the respondent vide communication dated 20.2.2008 informed the petitioner that his license had been cancelled and that he had been debarred and banned from

participating in future projects of the IRCTC. Aggrieved, the petitioner has knocked the doors of this Court, seeking, inter alia, that the communication dated 20.8.2008 be quashed.

5. For felicity of reference, the impugned communication dated

20.8.2008, filed at page 70 of the writ petition, is reproduced

below:

"No. 2007/IRCTC/Catg./Confidential Matters Dated: 20.8.2008

M/s. Jay Dee Caterers,

H.O., A-1/299-A, Sector-VI

Rohini,

Delhi - 110085

Sub: Submission of forged documents for obtaining license for catering stall at Yeshwantpur Railway Station

Ref: Your letters No. NIL dated 05.11.07, 04.12.07 & 26.12.07

On perusal of your letter referred above, explaining the details, competent authority has not accepted your submission/representation. It has been clearly established that you have given misleading information and submitted bogus/forged certificates as part of technical bid (Packet-A) to IRCTC in support of experience criteria so as to comply with the tender conditions fraudulently.

It has been decided to terminate the license for catering stall at Yeshwantpur Railway Station as per clauses of the Tender document including Clause-4 (Submission of bids) - Sub-Clause-4.7 and Clause-8 (Events of default)-Sub-Clause-8.1. You (M/s Jay Dee Caterers) are hereby banned and debarred from participating in future projects of IRCTC. Therefore, you are requested to terminate your operations at the catering stall and hand over vacant possession of the premises to IRCTC as per Clause - 4 - (Obligation and rights of the licensee) - Sub-Clause 4.6 of the Tender document within 15 days from the date of issue of this letter.

Catering Stall has been commissioned on 24.3.2007. You have remitted security deposit amount and first year annual licence fee amount as detailed below:-

(i) Security Deposit amount - Rs. 1, 36,875/-

(ii) First year annual licence fee - Rs. 5,47,500/-

As per the above clauses of the Tender document, it has been decided to forfeit

a) Security deposit amount of Rs. 1,36,875/-

b) Annual licence fee of first year for the remaining number of days on pro-rata basis from the date of handing over the stall to IRCTC upto 23.03.2008

sd/-

Ashok Chowdhry GGM/LCS

6. Mr. Amit Chaddha, learned senior counsel for the petitioner, whilst

assailing the impugned communication dated 20.2.2008, has

vehemently denied the allegation that the petitioner submitted

forged certificates at the time of obtaining the license from the

respondent. It is adduced that the petitioner, at the time of

accepting the license, had submitted two certificates as proofs of

eligibility - one from the office of the Divisional Forest Officer,

Bilaspur Forest Division, Bilaspur, Chattisgarh and the other from

Guru Nanak Higher Secondary School, Tundla, Firozabad. It is

contended that the genuineness of these certificates submitted by

the petitioner is evident from the letter dated 13.7.2006 whereby

respondent, whilst acknowledging the remittance of the security

amount and annual license fee deposited by the petitioner, also

informed the latter that the verification of the certificates

submitted by him had been completed. It is also contended that

the respondent in its impugned communication dated 20.8.2008

has failed to take into consideration the replies of the petitioner to

the show cause notice dated 24.10.2007, especially the reply

dated 19.2.2008 vide which the petitioner placed on the record of

the respondent the certificate dated 14.2.2008 issued by the DFO,

Bilaspar certifying the genuineness of the certificate issued to him.

In view thereof, it is contended by learned senior counsel for the

petitioner that the impugned communication dated 20.8.2008 is

bad for want of compliance with the principles of natural justice

inasmuch there was neither any misrepresentation nor any

fraudulent practice adopted by the petitioner in obtaining the

license from the respondent.

7. Per contra, the respondent, in its reply to the present petition, has

stoutly resisted the case of the petitioner. Mr. Gaurab Banerjee,

learned counsel for the petitioner has adduced that the initial

verification conducted by the respondents was merely based on

the documents enclosed by the petitioner at the time of grant of

licence, and that it was only in the subsequent investigation

carried out by the respondent on 6.4.2008 that it was revealed that

the petitioner had submitted forged certificates as proof of his

eligibility. To buttress his point, learned senior counsel has drawn

the attention of this Court to the letter dated dated 10.3.2008, filed

at page 88 of the present writ petition, wherein the Principal, Guru

Nanak Inter College, Tundla, Firozabad has categorically denied

having issued any experience certificate to the petitioner.

8. I have heard learned counsel for both parties and perused the

documents on record.

9. The constricted scope of the jurisdiction of this Court under Article

226 of the Constitution of India does not countenance me to delve

into the merits of the lis raised by the present petition. Whilst it is

beyond the jurisdiction of this Court to question the veracity of the

respondent‟s decision to cancel the license of the petitioner per se;

nevertheless, what this Court can certainly do is examine the the

manner in which such decision was arrived at by the respondent.

10. Prima facie perusal of the impugned communication dated

20.8.2008 reveals that the respondent has not explained the

reasons for its decision to terminate the license of the petitioner. It

also appears that the petitioner was not afforded a personal

hearing by the respondent inasmuch as the impugned

communication dated 20.8.2008 is conspicuously silent on this

aspect. The cannons of natural justice and fair hearing, embodied

in the maxim audi alteram partem, warrant that any adverse

administrative action should be qualified with an opportunity of

personal hearing and reasons in respect thereof to the person

against whom such action is taken. There is no gainsay that every

person, natural or juristic, who has been proceeded against by a

public authority has a vested right to be heard and explained

before any adverse action is taken against him. Moreover, mere

cognizance or acknowledgement of replies to show cause notice in

the course of an administrative action cannot be treated as a

substitute of personal hearing which is indispensable to dispense

natural justice. Thus, mere acknowledgment of the petitioner‟s

replies dated 5.11.07, 4.12.07 and 26.12.07 to the show cause

notice dated 24.10.2007 was not sufficient; the respondent ought

to have heard the petitioner and made good the reasons for

dismissing the explanation put forth by him in his replies to the

show cause notice. I am further assured in my view by the second

show cause notice dated 30.5.2008, issued after the filing of the

present petition, whereby the respondent has called upon the

petitioner to give proper explanation qua the cerificares submitted

by him. Moreover, the necessary implication of the issuance of the

second show cause notice dated 30.5.2008 would be that the

respondent has acceded to re- consider the case of the petitioner

before it finally takes any action against him.

11. For the reasons stated above, I find the impugned communication

by the respondent, dated 20.8.2008, cancelling the license of the

petitioner to be manifestly non-speaking in character, vitiated by

procedural impropriety, and thus, liable to be quashed. However,

taking into consideration the facts and circumstances that have

transpired prior and pursuant to the institution of the present

petition, viz., the certificate dated 14.2.2008, the factum of the

second show cause notice dated 30.5.2008 by the respondent and

acceptance thereof by the petitioner, etc., interests of justice and

equity warrant that the present petition be allowed in the following

terms:

(i) The impugned communication dated 20.2.2008 is

quashed.

(ii) The petitioner shall file his reply to the second show

cause notice dated 30.5.2008 within two weeks from

today. As agreed, the petitioner will, however, in the

reply also show cause as to why the petitioner should not

be banned and debarred from participating in future

projects and no fresh show cause will be issued.

(iii) The respondent will fix a date of hearing on the show

cause notices dated 24.10.2007 and 30.5.2008.

(iv) It is only after hearing the petitioner and after taking into

consideration the replies by him to the show cause

notices dated 24.10.2007 and 30.5.2008 as well as such

other documents which the petitioner wishes to rely

upon, viz., the letter dated 19.2.2008, the certificate

dated 14.2.2008, etc. that the respondent will pass a

speaking order explaining the reasons for its decision.

12. Needless to say that the findings and observations of this Court in

the present order shall be without prejudice to final decision that

the respondent takes after due compliance with the principles of

natural justice and fair hearing.

13. The present petition stands disposed off subject to the aforesaid

terms.

G.S. SISTANI, J.

August 01, 2008 „msr‟//