Kishansingh Chouhan Security ... vs Union Of India Notice To Be Served ...
2021 Latest Caselaw 7318 Guj

     C/SCA/12858/2020                                 ORDER DATED: 30/06/2021




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

          R/SPECIAL CIVIL APPLICATION NO. 12858 of 2020
                                With
            CIVIL APPLICATION (FOR STAY) NO. 1 of 2021
                                 In
          R/SPECIAL CIVIL APPLICATION NO. 12858 of 2020
                                With
            CIVIL APPLICATION (FOR STAY) NO. 2 of 2021
                                 In
          R/SPECIAL CIVIL APPLICATION NO. 12858 of 2020
==========================================================
     KISHANSINGH CHOUHAN SECURITY AGENCY THROUGH ITS
       PROPRIETOR KISHANSINGH BAHADURSINGH CHOUHAN
                               Versus
  UNION OF INDIA NOTICE TO BE SERVED THROUGH THE DIRECTOR
               GENERAL OF RESETTLEMENT & 3 other(s)
==========================================================
Appearance:
MR PRABHAKAR UPADYAY(1060) for the Petitioner(s) No. 1
MR CHIRAYU MEHTA ADVOCATE for MR DEVANG VYAS(2794) for the
Respondent(s) No. 1
MR HARDIK S SONI(5124) for the Respondent(s) No. 2
NOTICE SERVED(4) for the Respondent(s) No. 3,4
==========================================================

CORAM:HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

Date : 30/06/2021

ORAL ORDER

1. The present proceedings consists of main writ petition as well as two Civil Applications which are filed by the petitioner, are taken up for consideration finally upon a specific request of both the learned advocates and hence, the Court has opened up the hearing.

2. The main writ petition is filed under Article 226 of the Constitution of India, inter alia praying for the following reliefs :-

"18(A) Your Lordships may kindly be pleased to allow the present petition.

(B) Your Lordships may kindly be pleased to issue a writ of mandamus and/or any other appropriate writ, order or direction to

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quash and set aside the impugned order/communication dated 11.09.2020 passed by respondent no.1 at Annexure-G to the petition.

(C) Pending hearing and final disposal of this petition, Your Lordships may kindly be pleased to stay the implementation, execution and operation of the impugned order/communication dated 11.09.2020 passed by respondent no. 1 at Annexure-G to this petition;

(D) Your Lordships may kindly be pleased to pass such other and further relief which may deem fit in the interest of justice."

2. Along with this, Civil Application No. 1 of 2020 is filed for seeking interim relief, for staying operation and implementation of the impugned order dated 11.09.2020, but the same is ordered to be heard along with main petition vide order dated 21.01.2021. Thereafter, it appears that another Civil Application for the similar relief is filed in the month of June, 2021 by the very petitioner - applicant for similar relief for interim stay of the impugned order, but it appears that the earlier order dated 21.01.2021 is not attached with this application. However, be that as it may, the learned advocates have contested the main proceedings itself.

3. The case of the original petitioner is that the petitioner is a sole proprietorship concern of Mr. Kishan Singh Chouhan, an Ex-Army Man who retired from Indian Air Force as a Wing Commander. The petitioner applied for empanelment with the DGR i.e. The Director General of Resettlement after retirement from service. An application/request of the petitioner came to be accepted and was empanelled with security agency with effect from 04.12.2018. The Central Government, Ministry of Defence formulated a policy, whereby Public Sector Undertakings or the State owned establishments were encouraged to engage the security agencies sponsored by respondent no. 1 i.e. the Director General of Resettlement. The Ex-servicemen who are interested in providing the

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security services are empanelled. By virtue of Office Memorandum dated 09.07.2012, guidelines have been framed for functioning of the DGR empanelled Ex-servicemen for security service, which is attached to the petition compilation at Annexure-A and on the basis of such guideline, a contract have been awarded on 02.01.2019 for a period of two years i.e. with effect from the commencement of the contract. Later on, during the passage of time, respondent no. 1 authority served a show cause notice dated 25.08.2020 inter alia seeking explanation from the petitioner as to why action under the provisions of para 26 of Office Memorandum dated 09.07.2012 may not be taken against the petitioner, which show cause notice came to be replied on 31.08.2020, and hearing whereof was given to the petitioner and then after the submission of further reply, along with necessary documents, on 10.09.2020, a request was made to consider the case of the petitioner, but according to the petitioner, respondent no. 1 was pleased to pass an order on 11.09.2020, whereby the security agency of the petitioner is disempanelled from the active list of DGCR Empanaled Security Agencies under para 26(b) of the Office Memorandum as stated above. It is this order, which is made the subject matter of present petition under Article 226 of the Constitution of India.

4. Mr. Prabhakar Upadyay, learned advocate appearing on behalf of the petitioner has vehemently submitted that the order in question is not only unjust and arbitrary, but is passed as power charged authority since pandemic situation prevailing across the country has not been taken into consideration. Apart from that, learned advocate Mr. Upadyay has further submitted that on account of this situation, the Ex-servicemen were not available to the petitioner to maintain the ratio as required under the Office Memorandum and, therefore, it was beyond the reach of the petitioner to maintain ratio and this fact ought not to have been ignored by the authority while passing the order. It has further been contended that the resultant effect of this impugned order is that several other

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service contractors are also not continued of the petitioner as a security agency on account of this impugned order. Hence, it has got a far reaching consequence and such arbitrary exercise of jurisdiction may not be allowed to continue and thereby has requested the Court to stay the operation and implementation of the impugned order and grant the relief as prayed for in the petition.

4.1. To substantiate his contention, learned advocate Mr. Upadyay has submitted that it was specifically brought to the notice of the authority that on account of this serious situation prevailing, Ex-servicemen and the required guards were not available which has resulted into failure to maintain the ratio as mentioned in the Office Memorandum contained in clause-4 reflecting on page 19 of the petition compilation and, therefore, it was a force measure, which has resulted into such inability, which ought to have been considered. Be that as it may, learned advocate Mr. Upadyay has submitted that the petitioner is now in a position to maintain that ratio as the situation is improving and as such, such arbitrary disempanellment may not be allowed to continue any further and as such, has requested the Court to grant the reliefs as prayed for in the petition. Learned advocate Mr. Upadyay has taken the Court to various documents which are attached to the petition compilation and has submitted that 90% of Ex-servicemen would be now possible to be inducted in the agency and as such, the authority ought to have paid attention to such stand being taken. Hence, the order in question deserves to be corrected by issuing appropriate writ in the context of the reliefs as prayed for. No other submissions have been made.

5. To meet with the aforesaid submissions made by learned advocate Mr. Upadyay, Mr. Hardik Soni, learned advocate appearing for respondent no. 2 has said that essentially the order is to be defended by the Central authority, but he would like to bring to the notice of this Court

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one of the serious conducts of the petitioner to mislead the authority and that conduct according to him will oust the petitioner from equitable jurisdiction of this Court. By referring to the communication reflecting on page 48 dated 20.01.2021, learned advocate Mr. Soni has submitted that there is no order of stay granted by this Court at any point of time, but surprisingly in writing the very petitioner has informed DGM that the Hon'ble High Court has granted stay order in response to the petition filed by the firm regarding termination of the security contract and the order will be uploaded online on the website of Gujarat High Court by tomorrow and, therefore, requested to continue the security contract. Now, this communication is dated 20.01.2021, but the record indicates that at no point of time any interim relief is granted in favour of the petitioner and the order of notice and notice as to interim relief is of 22.10.2020 whereas after two and half months, in writing the petitioner has an audacity to inform DGM to indicate that the stay order has been granted and, the order will be uploaded on the next date i.e. on 23.10.2020. No such order is visible on the record and, therefore, this conduct itself is sufficient enough to dismiss the petition with heavy costs.

6. In addition to the aforesaid submissions, learned advocate Mr. Chirayu Mehta for Mr. Devang Vyas, learned advocate appearing for respondent no. 1 has vehemently opposed the petition by raising multiple contentions. It has been submitted that first of all there is a clear breach committed by the petitioner to observe the guidelines issued in Office Memorandum and it is undisputed that the ratio has not been maintained as required under clause no. 14 and that being breached by the petitioner, no relief be granted in favour of the petitioner. Apart from that, learned advocate Mr. Mehta has further submitted that ultimately this is an issue related to breach of the terms of the contract and, therefore, scope of judicial review is very limited, especially to the extent to examine as to

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whether any arbitrariness or any violation of natural justice or any mala fide is reflecting from the decision making process. Learned advocate Mr. Mehta has submitted that here is a case in which undisputedly there is a breach of clause 14 by the petitioner. It is also an undisputed fact that the petitioner was given adequate opportunity of hearing which he has availed and further no mala fies are alleged and as such, in absence of any such circumstance, the decision making process being not irregular in any form, the Court may not exercise extra ordinary jurisdiction, particularly, in view of the serious misconduct reflected on page 48 of the petition compilation. It has further been contended that the reply which has been given to the petitioner is served on 27.02.2021, in which, it has been clearly mentioned in para 4.3.9. on page 58 that appeal remedy is available to the petitioner against the action of disempanellment and that appellate authority is the Director General of Resettlement, Major General Mohinder Kumar Sagoch and that remedy though being available, the petitioner has rush down to this Court. Hence, in view of the aforesaid situation which is prevailing, this Court may not exercise the discretion in favour of the petitioner.

6.1. There are other issues also raised in the affidavit-in-reply submitted by the respondent, but the central issue is with regard to the maintenance of ratio of 90:10 of security guard which is undisputedly not maintained and further on account of this pandemic situation, the petitioner has never informed well in advance that for want of adequate Ex-servicemen ratio would not be maintained. It is only after the show cause notice having been given, this ground of pandemic situation is taken as a shelter. Hence, grant of any relief in favour of the petitioner would frustrate the very object for which the scheme is floated for the benevolent interest of the Ex-servicemen. Hence, the petitioner is having no remote respect to the object for which he was granted empanelment and there is hardly any reason available for the petitioner to persuade the Court to exercise extra

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ordinary jurisdiction. Hence, requested to dismiss the petition.

7. Having heard the learned advocates appearing for the respective parties and having gone through the material on record, few circumstances are not possible to be unnoticed by this Court which are clearly reflecting.

7.1. By virtue of Office Memorandum, the Government of India, Ministry of Defence vide Office Memorandum dated 09.07.2012 has framed the guidelines governing the function of DGR empanelment, Ex- servicemen for security service and the said Office Memorandum is on page 17 of the petition compilation. One of the criteria for empanelment is to observe the terms of the guidelines and the Employment of Security Personnel is also mentioned in the guidelines in clause - 14, which reads as under :-

"14. Employment of Security Personnel :

(a) Percentage of ESM Employees. At least 90 percent ESM would be employed by the individual ESM and 100 percent by the State ESM Corporation (Authority-Amendment issued vide para 5 of the Office Memorandum 28)3)/2012 (Res-I) dated 16 January, 2013).

(b) Age of Security Guard and Supervisor. The upper age limit of a Security Guard and Supervisor will be 65 years in consonance with PSARA Act, 2005.".

7.2. It is not in dispute that the petitioner has never informed prior to notice that on account of pandemic situation, it would not be possible for the petitioner to maintain this ratio, which has been mentioned in clause 14 . The show cause notice has been issued clearly giving opportunity to the petitioner as to why breach has been committed of clause- 14(a) as stated above and in response thereto, an explanation is given on 31.08.2020 that the petitioner could not maintain ratio at CCT

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Ankleshwar due to prevailing Covid-19 pandemic or efforts were made to maintain this ratio is also not reflecting in explanation which has been given. The order in question which has been passed on 11.09.2020 is appearing to be an order after granting an opportunity of hearing to the petitioner and there is no violation of principles of natural justice in any form and as such, the decision making process on the basis of the aforesaid undisputed fact is in close conformity of the principles of natural justice and cannot be said to be perverse in any form or arbitrary in nature and hence, no case is made out to call for any interference.

7.3. Yet another aspect that though there is a clear remedy provided by way of an appeal before the authority as mentioned in para 4.3.9 on page 58 of the petition compilation, the petitioner has chosen not to approach the appellate authority but insisted for grant of relief in the present proceedings and for that purpose the Court is constrained to examine the decision making process by the authority, which is found to be not irregular or illegal in any form.

7.4. The main material and the shocking conduct of the petitioner which is reflecting in a communication dated 20.01.2021 reflecting on page 48 in which a clear assertion is made in writing that the Hon'ble Court has granted stay order and the same will be uploaded by tomorrow and, therefore, requested to continue the security contract. Now this conduct of the petitioner is absolutely uncalled for and it is a serious conduct, which cannot be taken so lightly. The following is the assertion quoted hereunder from the said communication dated 20.01.2021.

"Dear Sir,

1. The Honourable High Court of Gujarat has granted a stay order in response to the petition filed by may firm regarding the termination of security contract.

C/SCA/12858/2020 ORDER DATED: 30/06/2021

2. The order will be uploaded online on the website of Gujarat High Court by tomorrow.

3. Henceforth we request you to continue the security contract with my agency.

4. The IA details of such case is attached herewith for your reference.

5. Thanking you.

Yours Faithfully,

KISHAN SINGH CHOUHAN SECURITY AGENCY sd/-

AUTHORISED SIGNATORY."

7.5. The aforesaid assertion which has been made if to be compared with the order-sheet of the present proceedings, at no point of time either on 20.01.2021 any interim stay is granted not prior to it and way back on 22.10.2020, notice and notice as to interim relief is issued, but then despite several adjournments, the order-sheet does not indicate any interim relief in favour of the petitioner. Hence, this is a serious act committed by the petitioner which is not possible to be unnoticed by the Court.

7.6. Yet another circumstance which is reflecting is that by way of Civil Application No. 1 of 2021 filed by this very petitioner which is registered on 03.01.2021 in which vide order dated 21.01.2021 this Civil Application for seeking stay of the impugned order is ordered to be heard along with the main matter and similar request is made by the petitioner by way of filing another Civil Application No. 2 of 2021 presented on 28.06.2021. Upon perusal of the said Civil Application and annexures attached to the same, conveniently the petitioner has annexed the order dated 22.10.2020 only but has not attached the order which has been passed in another similar application dated 21.01.2021 and as such, an

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attempt is made to conceal the material fact from the Court. Had the said order been placed on record, probably Civil Application No. 2 of 2021 could not have been opened up and, therefore, this being the position prevailing on record, a serious conduct on the part of the petitioner would dis-entitle him from equitable jurisdiction of this Court. Even otherwise, the petition lacks merit and does not deserves to be entertained.

8. This Court at one point of time was inclined to impose cost for such serious conduct, but the petitioner an Ex-serviceman has served the nation for some time, the Court is desisting itself from taking any step in that direction. In the aforesaid circumstances, which are reflecting on record, the grievance raised by the petitioner arrayed in the controversy of contractual rights and whenever, a decision is taken by the authority based upon the terms of the contract, the Court should normally desists itself from exercising judicial review unless a decision found to be mala fide or arbitrary or in violation of the principles of natural justice. None of the contingencies are visible in the present case on hand, hence at this stage, the Court is reminded of the observations made by the Apex Court in the case of Silppi Constructions Contractors v. Union of India & Anr., reported in (2020) 16 SCC 489, in which the Apex Court has reiterated that the judicial review on administrative action is not to be undertaken when there is a dispute related to contract. The following are the observations contained in para nos. 6, 11, 12 and 13 since relevant to the issue, the Court deems it proper to reproduce hereunder :-

"6. Aggrieved, the original writ petitioner is before us in these petitions. This Court in a catena of judgments has laid down the principles with regard to judicial review in contractual matters. It is settled law that the writ courts should not easily interfere in commercial activities just because public sector undertakings or government agencies are involved.

11. In Master Marine Services (P) Ltd. vs. Metcalfe & Hodgkinson (P) Ltd.5 it was held that while exercising power of judicial review in

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respect of contracts, the Court should concern itself primarily with the question, whether there has been any infirmity in the decision−making process. By way of judicial review, Court cannot examine details of terms of contract which have been entered into by public bodies or State.

12. In B.S.N. Joshi & Sons Ltd. vs. Nair Coal Services Ltd.6 it was held that it is not always necessary that a contract be awarded to the lowest tenderer and it must be kept in mind that the employer is the best judge therefor; the same ordinarily being within its domain. Therefore, the court's interference in such 4 (2005) 4 SCC 456 5 (2005) 6 SCC 138 6 (2006) 11 SCC 548 matters should be minimal. The High Court's jurisdiction in such matters being limited, the Court should normally exercise judicial restraint unless illegality or arbitrariness on the part of the employer is apparent on the face of the record.

13. In Jagdish Mandal vs. State of Orissa7 it was held:

22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made lawfully and not to check whether choice or decision is sound. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/ procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold."

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20. The essence of the law laid down in the judgments referred to above is the exercise of restraint and caution; the need for overwhelming public interest to justify judicial intervention in matters of contract involving the state instrumentalities; the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable; the court does not sit like a court of appeal over the appropriate authority; the court must realise that the authority floating the tender is the best judge of its requirements and, therefore, the courts interference should be minimal. The authority which floats the contract or tender, and has authored the tender documents is the best judge as to how the documents have to be interpreted. If two interpretations are possible then the interpretation of the author must be accepted. The courts will only interfere to prevent arbitrariness, irrationality, bias, mala fides or perversity. With this approach in mind we shall deal with the present case."

9. In view of the aforesaid proposition and in view of the fact that the decision of the respondent authority is not ill-founded in any manner, no case is made out by the petitioner. Hence, in the considered opinion of this Court, the petition deserves to be dismissed. Accordingly, notice is discharged with no order as to costs.

10. In view of the main petition being disposed of, both the civil applications stand disposed of. No costs.

(ASHUTOSH J. SHASTRI, J) phalguni