Pipara And Co Llp vs Government Of Gujarat
2021 Latest Caselaw 7797 Guj

       C/SCA/7341/2021                              ORDER DATED: 06/07/2021



             IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

               R/SPECIAL CIVIL APPLICATION NO. 7341 of 2021

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                            PIPARA AND CO LLP
                                  Versus
                         GOVERNMENT OF GUJARAT
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Appearance:
M R BHATT & CO.(5953) for the Petitioner(s) No. 1,2
MUNJAAL M BHATT(8283) for the Petitioner(s) No. 1,2
MR CHINTAN DAVE, AGP(1) for the Respondent(s) No. 1,2
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 CORAM:HONOURABLE MR. JUSTICE J.B.PARDIWALA
       and
       HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                        Date : 06/07/2021
                          ORAL ORDER

(PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA)

1. By this writ-application under Article 226 of the Constitution of India, the writ-applicants have prayed for the following reliefs:-

20(a) be pleased to issue a writ of mandamus or any other writ, order or direction quashing and setting aside the impugned letter dated 19.03.2021 issued by respondent no.1, marked as Annexure-A to this petition and hold that the termination of petitioner no.1's agreement is illegal;

(b) be pleased to issue a writ of mandamus or any other writ, order or direction directing respondent no.1 and 2 to produce on record the letter dated 05.12.2020 in the event respondent no.1 has relied on the said letter before issuance of letter dated 19.03.2021 and subsequently, provide an opportunity to the petitioners to respond to the same;

(bb) be pleased to issue a writ of mandamus or any other writ, order or direction quashing and setting aside the letter dated 05.12.2020 issued by respondent no.2 to various PSUs including the respondent no.1;

(bbb) pending admission, final hearing and disposal of the

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petition, be pleased to stay the effect, implementation and execution of the letter dated 05.12.2020 issued by respondent no.2 to various PSUs including the respondent no.1;

(c) pending admission, final hearing and disposal of the petition, be pleased to stay the effect, implementation and execution of the impugned letter dated 19.03.2021 issued by respondent no.1, marked as Annexure-A to this petition and permit the petitioners to complete the work as agreed for F.Y. 2020-21;

(d) in any view of the matter, be pleased to pass any such order(s) directing respondent no.1 not to consider the letter dated 05.12.2020 (if placed reliance upon) or the impugned letter dated 19.03.2021 as a ground for blacklisting the petitioners for future agreements;

(e) be pleased to grant ad-interim ex-parte relief in terms of Paragraph 20(c) and (d) herein above;

(f) pass any such order(s) that this Hon'ble Court deems fit in the facts and circumstances of the case.

2. On 12.05.2021 one of us [Ms. Vaibhavi D. Nanavati, J] sitting as a Vacation Judge passed the following order:-

"Heard learned Senior Advocate Mr.M. R. Bhatt with learned advocate Mr.Munjaal Bhatt for the petitioners and learned AGP Mr.Dhawan Jaiswal for the respondent - State.

By way of this petition, the petitioners are aggrieved by decision taken by the respondent no.1 against the petitioner no.1 by letter dated 19.03.2021 received on 23.04.2021, whereby the existing agreement of petitioner no.1 is abruptly terminated with immediate effect. It is further stated that no show cause notice issued before terminating their existing agreement, which is a direct breach of principles of natural justice.

Learned AGP Mr.Dhawan Jaiswal states, on instructions that petitioners will be given opportunity of hearing keeping open all the rights and contentions.

Notice returnable on 17.05.2021. Learned AGP waives service of notice for and on behalf of the respondent - State. In the meantime, pursuant to the communication dated

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19.03.2021 no coercive steps be taken against all the petitioners till the next date of hearing."

3. Thereafter, this bench passed the following order dated 10.06.2021.

"1 Draft amendment is allowed. The necessary incorporation shall be carried at the earliest. One copy of the amended petition shall be furnished at the earliest to Mr. Thakkar, the learned A.G.P. appearing for the respondents.

2 We have heard Mr. Manish R. Bhatt, the learned Senior Counsel assisted by Mr. Munjaal M. Bhatt, the learned counsel appearing for the writ applicants and Mr. Mit Thakkar, the learned A.G.P. appearing for the respondents.

3 Mr. Bhatt, the learned Senior Counsel has given us more than a fair idea as regards the controversy involved in the present litigation. The subject matter of challenge in the present writ application is the communication in writing dated 19th March 2021 addressed by the office of the Development Commissioner, State of Gujarat to the writ applicants informing that they shall withdraw their staff from the districts stated in the communication and should not continue with the work of audit, etc. Mr. Bhatt also took us through the service level agreement, which is at page : B to this writ application, more particularly, clauses 5.8, 5.9 and 7.1 therein. Prima facie, we find merit in the submissions of Mr. Bhatt that the impugned communication is in breach of the principles of natural justice and an opportunity of hearing ought to have been given before passing such an order.

4 Mr. Thakkar, the learned A.G.P. appearing for the respondents would submit that some time may be granted for the purpose of filing an affidavit-in-reply. We take notice of the fact that this writ application was heard by one of us (Vaibhavi D. Nanavati, J.) during the summer vacation and an interim order has also been passed restraining the respondents from taking any coercive steps. The interim protection continues till this date. However, the fact remains that pursuant to the impugned communication, the staff has been withdrawn by the writ applicants. We call upon the respondents to show cause as to why this impugned order should not be quashed on the ground of breach of principles of natural justice.

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5 Post this matter on 17th June 2021 on top of the Board. By the next date of hearing, the reply should be on record. Rejoinder, if any, should also be placed on record.

6 The interim order earlier granted to continue."

4. We may not advert to the facts of this litigation in details as those have been discussed at length in one another litigation of the very same writ-applicants i.e.Special Civil Application No.7342 of 2021 and allied petitions.

5. The subject matter of challenge in the present litigation is the communication dated 19.03.2021, Annexure-A to the petition Page-

19. The same reads thus:-

No.EGVGS/Double Entry Account/2020-21/2725 Office of the Development Commissioner Dr. Jivraj Mehta Bhavan, Block No.16/2, Gujarat State, Gandhinagar.

Date: 19.03.2021 To, Pipara & Co. LLP Pipara Corporate House, Near Gruh Finance, Netaji Marg, Law Garden, Ahmedabad.

Subject: To stay the work of remaining financial year for maintenance and upkeeps of accounts of the Panchayati Raj Institutions.

Ref.: As per letter Vik/Audit/U-7/C.A.Firm/2020-2/59 Dt.19.03.2021.

Respected Sir,

With reference to the subject noted above, it is to be stated that you had appointed for the districts of Amreli, Kutch, Chhota Udepur, Dang, Tapi, Bharuch, Vadodara, Valsad, Surat and Surendranagar for the maintenance and upkeeps of the accounts of the Panchayati Raj Institutions. In this regard, you are instructed to stop your work for the remaining financial years with immediate effect and instruct your staff that they shall not remain present at the

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District/Taluka Panchayat Office.

Sd/- (illegible) Member Secretary (EGVGS) & Development Commissioner, Gujarat State, Gandhinagar.

6. The impugned communication is the ultimate result or the consequence of the letter dated 05.12.2020 addressed by the Deputy Secretary, Finance Department to the various Managing Directors of the Public Sector Undertakings under the State of Gujarat. This letter has been ordered to be quashed and set aside vide judgment and order rendered by this Court in the Special Civil Application No.7342 of 2021 and allied petitions. In our judgment rendered in the Special Civil Application No.7342 of 2021 and allied petitions, we have explained in details why the communication dated 05.12.2020 referred to above is not sustainable in law.

7. In such circumstances referred to above, we have no hesitation in quashing and setting aside the impugned Communication, Annexure-A to this petition at Page-19. The same is hereby quashed and set aside. The writ-applicants shall be permitted to continue with the work assigned to them by way of contract to be precise in terms of the letter dated 10.11.2020, Annexure-D, Page-42.

8. The writ-application succeeds and is hereby allowed.

(J. B. PARDIWALA, J)

(VAIBHAVI D. NANAVATI,J) A. B. VAGHELA