M/S Amar Roller Flour Mills And vs Food Corporation Of India And ...
2022 Latest Caselaw 744 j&K

     HIGH COURT OF JAMMU AND KASHMIR AND LADAKH
                      AT JAMMU
                                                      Reserved on 18.04.2022
                                                      Pronounced on 09.05.2022
                                                 WP(C) No. 1912/2021(O&M)
                                                 c/w
                                                 WP(C) No. 2038/2021(O&M)

M/s Amar Roller Flour Mills and                    .....Appellant(s)/Petitioner(s)
others
M/s Nav Bharat Flour Mills and
others


                      Through: Mr. Paras Gupta,Advocate
                                   in WP(C) No. 1912/2021
                                   Mr. Abhishek Wazir, Advocate
                                   in WP(C) No. 2038/2021
                vs
Food Corporation of India and others                          ..... Respondent(s)
Food Corporation of India and others
                      Through: Mr. Jahangir Iqbal Ganai, Sr. Advocate with
                               Mr. Ahtsham H. Bhat, Advocate


Coram: HON'BLE MR. JUSTICE RAJNESH OSWAL, JUDGE
                                   JUDGMENT

WP(C) No. 1912/2021

1. With the consent of the learned counsels appearing for the parties, both

these writ petitions were finally considered. As in both the petitions,

same order is impugned and common issues are involved therefore, both

these petitions are being disposed of by common judgment.

2. The respondents issued e-tender/NIT bearing No.

Comml./2(1)/Wheat/OMSS(D)/J&K/15-16 dated 28.03.2016 inviting

bids from the empanelled traders/bulk consumers for sale of Wheat

under OMSS(D) and the petitioner Nos. 3 and 4 participated in the same

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and they were declared successful, after the respondents opened the

aforesaid tender on 31.03.2016. The petitioner No. 3 was allotted a

quantity of 3000 metric tonnes of wheat whereas petitioner No. 4 was

allotted a quantity of 3500 metric tonnes of wheat. It is stated that after

getting the tender details, the petitioner Nos. 3 and 4 approached the

respondents and respondent No. 2 issued release order dated 07.04.2016

to petitioner No. 3 for „FCI Wheat Crop year URS 2015-2016 from FSD

New Godown, Jammu‟ for 3000 metric tonnes. Similarly, the respondent

No. 2 issued release order dated 07.04.2016 to petitioner No. 4 for „FCI

Wheat Crop year-URS 2015-2016 from FSD New Godown, Jammu‟ for

3500 metric tonnes. The respondents could not complete the delivery of

the adequate wheat to the petitioners 3 and 4 as per quantity allotted to

them, as such, the time period for delivery of the remaining quantity of

wheat from the godowns of the respondents was extended. After the last

extension granted by the respondents, the petitioner Nos. 3 and 4

completed all the terms and conditions of the tender allotted to them and

the petitioner Nos. 3 and 4 also paid the full amount to the respondents

for lifting of the wheat URS for the year 2015-2016. It is further stated

that the petitioners have been given the impugned order dated

07.09.2021 by one of the employees of the respondents. A perusal of the

order reveals that it tries to impose ban upon the petitioners 2 to 5 with

respect to some abnormalities against e-auction dated 31.03.2016 under

OMSS(D) whereby as alleged in the order FAQ(Fair Average Quality)

wheat was lifted from the designated depots instead of URS(Under

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Relaxed Specifications)wheat for crop year 2015-2016 resulting into the

loss to the respondent-Corporation.

3. The petitioners have filed the present writ petition for quashing order

dated 07.09.2021 passed by the respondents on the ground that the same

has been passed without affording opportunity of being heard to the

petitioners and also that the same has been passed without considering

the fact that the petitioners 2 and 5 had never applied for the tender as

mentioned in the order impugned and illegal recovery has been initiated

against the petitioners.

4. Response stands filed by the respondents in which it has been stated that

the recovery has been initiated after it was pointed out by the CAG Audit

that 6632 metric tonnes of wheat was lifted from FAQ (Fair Average

Quality) stock instead of URS (Under Relaxed Specifications) wheat,

which was the tendered item and it was also for this item, the petitioner

Nos. 2 to 5 were declared as winners in respect of e-auction winner list

dated 17.03.2016 and e-auction winner list dated 31.03.2016. The audit

worked out the differential amount of the rates of the crop year 2016-

2017 (FAQ) and 2015-2016(URS) to the tune of Rs. 86.35 per quintal.

Having regard to the FAQ wheat stocks of crop year 2016-2017 lifted by

the petitioners 2-5 from FSD New Godown, Jammu, a notice dated

29.03.2019 was served upon the petitioners Nos. 2 to 5 with an advice to

deposit the amount recoverable. The petitioners did not choose to

comply with the request made and the matter was taken up with other

authorities of the Food Corporation of India in terms of the impugned

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communication being the differential costs at the rate of 86.35 per

quintal for the FAQ quality lifted by them. The petitioner Nos. 2-5 were

again advised to deposit the amount recoverable vide notice dated

06.06.2019 but the petitioner Nos. 2 to 5 did not choose to deposit the

amount determined to be recovered under and in terms of impugned

communication. It is further stated that the petitioners 2 to 5 have not

disclosed as to what prejudice has been caused on account of the

petitioners 2 to 5 not being heard in the matter. The petitioners 2 to 5

have not disputed the fact that they have lifted FAQ wheat instead of

URS wheat, which was the tendered item and it was for this commodity

the petitioners 2 to 5 were declared as winners. It is further stated that the

respondents had floated e-tenders dated 17.03.2016 and 31.03.2016 for

sale of URS wheat under OMSS (D) scheme lying at various depots

under Food Corporation of India Regional Office, Jammu. The

petitioners 2 and 5 participated in the OMMS (D) scheme NIT dated

17.03.2016 and had lifted the FAQ wheat under the extension period.

The petitioners 2 and 5 instead of informing this Court about they being

winners with respect to the e-auction dated 17.03.2016, have deliberately

suppressed this fact and have projected their innocence with regard to

lifting of FAQ wheat and thereto liable for recovery of amount

determined against them as per the notice issued. Admittedly, the

petitioners 3 and 4 have participated in OMSS (D) scheme NIT dated

31.03.2016. The petitioners 2 to 5 were declared as winners and the

release orders issued in favour of the petitioners 2 to 5 would also

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indicate that the petitioners 2 to 5 were allotted for URS wheat 2015-

2016. The petitioners 2 to 5 have deposited the full payment for URS

wheat of 2015-2016. The petitioners 2 to 5, however, lifted FAQ wheat,

the price of which is on higher side than that of URS wheat.

5. The petitioners have filed the supplementary affidavit in which it is

stated that the recovery proceedings have been initiated by the impugned

communication without any prior notice as no notice was served upon

the petitioners before passing the communication impugned. It is also

stated that the impugned recovery order and proceedings have been

initiated after the expiry period of limitation period as prescribed under

law. The petitioners have denied CAG report for want of knowledge. It

is further stated that only after getting the release order from the

respondents for getting the wheat as per tender and e-auction dated

31.07.2016, the specific wheat i.e. URS quality was lifted by petitioner

Nos. 3 and 4 from the godown of the respondents against proper receipt

which was issued by the respondents itself in the year, 2016 which

clearly mentions the number of bags/wheat etc. lifted by the petitioners 3

and 4 and it is denied that the petitioner Nos. 3 and 4 lifted wheat of

FAQ quality instead of URS as alleged in the impugned communication.

6. Mr. Paras Gupta, learned counsel for the petitioners has vehemently

argued that the petitioners 2 and 5 never participated in the tender for

which the recoveries have been ordered against them and further have

not been afforded any opportunity of being heard before issuance of the

communication impugned. Mr. Gupta has relied upon the judgment in

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Uttar Pradesh Power Transmission Corporation Ltd and anr v CG

Power and Industrial Solutions Limited and anr, 2021 AIR (SC)

2411.

7. Per contra, Mr. Jahangir Iqbal Ganai, learned senior counsel appearing

for the respondents has submitted that the notices were issued to the

petitioners for depositing the differential amount as they were supposed

to lift URS wheat but they lifted FAQ wheat and further that it has not

been demonstrated by the petitioners that any prejudice has been caused

to them even if it is assumed to be true that no notice was issued to the

petitioners. He further submitted that even if it is assumed for the sake of

the arguments, that the petitioners were not at all at fault even then once

the petitioners have been wrongly benefitted, they must return the same.

He also submitted that the employees of the respondents who were found

to be involved for the lapse have been punished after initiation of

departmental proceedings.

8. Heard and perused the record.

9. The claim of the petitioners is that the petitioners 2 and 5 have never

participated in the tender opened on 31.03.2016 and further that the

impugned communication has been issued without affording any

opportunity of being heard to the petitioners. So far as perusal of the

reply filed by the respondents, it is evident that there were two e-tenders

(NITs) and as such, there were two e-auction winners lists i.e. dated

17.03.2016 and 31.03.2016 and petitioners 2 and 5 were the successful

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candidates in e-auction 17.03.2016 whereas petitioner Nos. 3 and 4 were

successful candidates in e-auction winner list dated 31.03.2016.

10. The petitioners 2 and 5 are in fact trying to get the advantage of the

wrong mentioning of e-auction date in the communication impugned and

rather in reply, the petitioners 2 and 5 have not denied the fact that they

were not successful in e-auction list dated 17.03.2016. The respondents

have contended that they have issued prior notice to the petitioners

before passing the impugned order dated 07.09.2021. From perusal of

the communications dated 29.03.2019 and 06.06.2019, it is revealed that

the petitioners 2 to 5 have been asked to deposit the amounts for

differential costs at the rate of Rs. 86.35 per quintal for the whole wheat

lifted by them, as the petitioners 2 to 5 had lifted FAQ wheat whereas

they were required to lift the URS wheat. The following amounts are

sought to be recovered by the impugned communication:

Petitioner No.2 - Rs. 12,80,823/

Petitioner No. 3 - Rs. 14,58,040/

Petitioner No. 4- Rs. 5,20,888/

Petitioner No. 5- Rs. 9,12,738/

11. In the writ petition there is no whisper that the petitioner Nos. 3 and 4

did not lift FAQ wheat though by way of supplementary affidavit, they

have specifically denied that they lifted the FAQ quality wheat instead of

URS wheat. From the record, it is evident that no opportunity of being

heard has been afforded to the petitioners and the notices as relied upon

by the respondents dated 29.03.2019 and 06.06.2019 cannot be termed as

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a show cause notice but rather in these notices, the petitioners were

advised to deposit the amount. In fact the petitioners have not been

allowed by the respondents to put forth their cause before issuing the

communication impugned. From the record, it is also evident that the

disciplinary proceedings were initiated and the punitive action has been

initiated against the employees of the Corporation who were found to be

negligent in performance of their duties.

12. There is a force in the contention of Mr. Ganai, that even if a person has

wrongly obtained the benefit, he must repay/ return it. This Court does

not agree with the contention of the petitioners 2 and 5 that recoveries

have been issued when they had not participated in e-auction dated

31.03.2016 particularly in view of the fact that there is no denial by

petitioner Nos. 2 and 5 that they did not participate in the e-auction dated

17.03.2016. The petitioners 2 to 5 cannot be permitted to get the benefit

of the wrong date of e-auction mentioned in the impugned

communication as these are the typographical errors and particularly

when the petitioners 2 and 5 have participated in e-tender dated

17.03.2016 and figured in the winner list. Needless to say that the huge

public money is involved but equally true is that no opportunity of being

heard has been afforded to the petitioners. In Canara Bank v. V.K.

Awasthy, (2005) 6 SCC 321, the Apex Court has held as under:

"9. The expressions "natural justice" and "legal justice" do not present a watertight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural

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justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, no form or procedure should ever be permitted to exclude the presentation of a litigant's defence.

10. The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the "Magna Carta". The classic exposition of Sir Edward Coke of natural justice requires to "vocate, interrogate and adjudicate". In the celebrated case of Cooper v. Wands worth Board of Works [(1863) 143 ER 414 : 14 CBNS 180 : (1861-73) All ER Rep Ext 1554] the principle was thus stated:

"Even God himself did not pass sentence upon Adam before he was called upon to make his defence. „Adam‟ (says God), „where art thou? Hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat?‟ "

Since then the principle has been chiseled, honed and refined, enriching its content. Judicial treatment has added light and luminosity to the concept, like polishing of a diamond.

11. Principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an

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order affecting those rights. These rules are intended to prevent such authority from doing injustice."

13. The judgment relied upon by the learned counsel for the petitioners is

not applicable in the present facts and circumstances of the case, as in

the said case it was held that solely on the basis of the CAG report, the

UPPTCL cannot recover and extract building cess as UPPTCL had no

authority to realize labour under the Cess Act. So far as the instant case

is concerned, it is the differential amount that is being sought to be

recovered by the respondents as such, this judgment is not applicable.

14. In view of all what has been discussed above, this Court deems it proper

to dispose of the writ petition with the following directions:

a. The petitioner Nos. 2-5 shall make the representations to the

respondents with regard to their claims/defence vis-à-vis recoveries

sought to be effected from them, within the period of 30 days from

the date of this order and on receipt thereof, the respondents shall

pass the appropriate order within further period of 30 days and

further the petitioner Nos. 2 to 5 shall be at liberty to approach the

respondents for personal hearing as well within above mentioned

period and if they opt, the same shall be granted to the petitioner

Nos. 2 to 5.

b. The parties shall maintain status quo with regard to the impugned

communication till the representations of the petitioner Nos. 2 to 5

are considered and decided by the respondents and impugned

communication shall remain subject to the outcome of the decision

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upon the representations of the petitioner Nos. 2 to 5 by the

respondents.

c. In the event no representation is made by the petitioner Nos. 2 to 5

within above mentioned period, the respondents shall be at liberty

to proceed ahead in terms of impugned communication dated

06.09.2021.

WP(C) No. 2038/2021

15. In this writ petition, amount sought to be recovered from the petitioner is

Rs. 7,48,337.00. Disposed of in terms of order passed and directions

issued in connected writ petition bearing WP(C) No. 1912/2021.

(Rajnesh Oswal) Judge

JAMMU 09.05.2022 Rakesh Whether the order is speaking: Yes/No Whether the order is reportable: Yes/No