Jharkhand High Court
M/S. Damodar Ropeways And Infra Limited vs The State Of Jharkhand Through The ... on 12 November, 2024
Author: S.N. Pathak
Bench: S. N. Pathak, Navneet Kumar
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No. 3858 of 2024
M/s. Damodar Ropeways and Infra Limited, its registered office at 1/A,
Vansittart Row, P.O. - GPO, Kolkata, P.S. Hare Street, District - Kolkata -
700001, represented through its authorized signatory namely Mahesh
Mohata, son of Shri Damodar Lal Mohata, Aged about - 50 years, 2/1 B.
Dr. Rajesndra Road, L.R. Sarani, Kolkata, P.O. and P.S. - L.R. Sarani,
District - Kolkata - 700001.
... Petitioner
VERSUS
1. The State of Jharkhand through the Secretary, Department of Tourism,
Officiating from his office at Project Bhawan, P.O. - Jaganjnathpur,
P.S. - Jagannathpur, District Ranchi.
2. Jharkhand Tourism Development Corporation Limited through its
Managing Director, officiating from his office at 6th Floor, Premium
Suite Building, JUPMI Campus, Plant Plaza Road, P.O. and P.S. -
Dhurwa, District - Ranchi.
... ... Respondents.
CORAM: HON'BLE DR. JUSTICE S. N. PATHAK
HON'BLE MR. JUSTICE NAVNEET KUMAR
For the Petitioner : Mr. Prashant Pallav, Advocate
Mr. Parth Jalan, Advocate
Ms. Shivani Jaluka, Advocate
Mr. Bajrang Kumar, Advocate
For the Respondent No. 1: Mr. Piyush Chitresh, AC to AG
For the Respondent No. 2: Mr. Sumeet Gadodia, Advocate
Ms. Shilpi Sandil Gadodia, Advocate
Mr. Prakher Harit, Advocate
C.A.V. on. 11.09.2024 Pronounced on 12.11.2024
Dr. S.N. Pathak, J. Heard the parties.
PRAYER
2. Petitioner, a Limited Company, through its authorized signatory has
knocked door of this Court against the order of blacklisting for a period of
five years and imposition of penalty of Rs.9,11,63,250/-, issued vide order
as contained in Memo No. 614/2024, dated 24.06.2024 (Annexure-21).
RC 1 W.P.(C) No. 3858 of 2024
Further prayer has been made for quashing the report dated
07.04.2023 (Annexure-8), limited to the extent that its finding with respect
to (i) management of record (ii) greasing (iii) testing of shaft (iv) mobility
of transitioning devices and (v) training of its personnel, as the findings
are unscientific and contrary to the records and arrived at in complete
violation of principles of natural justice.
FACTS OF THE CASE
3. As per the factual matrix, petitioner, a Limited Company registered
under the Companies Act, is engaged in operation and maintenance of
Ropeways with experience of more than fifty years in constructing highest
number of passenger ropeways and is operating highest number of
ropeways. Petitioner has constructed several Ropeways in India including
Vaishno Devi, Hirakund, Guwahati, Tawang, Digha, Kolkata, Naina Devi
- Himachal Pradesh, Chitrakoot, Maihar, Jammu, Nandankanan -
Bhubaneswar, Udaipur, Namchi, Dewas, Pushkar, Auli and Gangtok.
4. A detailed Project Report was prepared by the RITES Limited with
an estimated cost of Rs.6,14,00,000/-. After approval, budgetary allocation
was made and an agreement was signed between RITES and the
respondent no. 2 for construction of Ropeway at 'Trikut Parvat'.
Thereafter, the work order was issued in favour of the petitioner for the
construction of Ropeway. The Project was completed on 21.07.2009 and
was handed over to RITES who then handed it over to the State. the
Technical Committee conducted detailed inspection of the site and was
found fit in all aspects and thereafter, the Project was made operational
vide Resolution bearing number 1976, dated 21.08.2009. The Ropeway
was operated by the petitioner till 21.01.2010 i.e. for a period of six
months only and thereafter, a tender was floated by the respondent no. 1
for operation and management of passenger ropeways. In the said tender,
petitioner emerged as a successful party and was awarded the contract for
operation and maintenance of the ropeway. In the year 2014, petitioner
again qualified in the second tender and entered into a contract dated
28.05.2014 with the respondent no. 2 to operate and maintain passenger
RC 2 W.P.(C) No. 3858 of 2024
ropeway which was valid for a period of five years i.e. till 15.05.2019
with a clause of extension for another two terms of five years each.
Petitioner continued to deposit royalty and agreement continued, which is
evident from the letter of the respondent no. 2 bearing number
DRIL/2021-22/695, dated 28.02.2022. The parties were acting in
accordance with contract and petitioner was vigilant and continued to
undertake the required tests as per prevalent norms.
5. It is further case of the petitioner that on 10.04.2022, an unfortunate
incident took place at the ropeway site of 'Trikut Parwat' where the shaft
of the ropeway broke owing to which ropeway was stuck and one
passenger car plummeted to the ground. Thereafter, all the steps were
taken to bring back the stranded passengers to the nearest station. Rescue
operation was stopped due to unavailability of sunlight and the next day
morning i.e. on 11.04.2022, the district administration arranged the
helicopters for safe rescue of left over stranded passengers. One passenger
was declared dead at the hospital on 11.04.2022 whereas two passengers
lost their lives during joint rescue operation being performed by the team
members of Indian Airforce and NDRF.
6. After the incident, petitioner released a sum of Rs.25,00,000/- to the
family members of each of the three deceased persons, total being
Rs.75,00,000/-. However, pursuant to the letter number 286/2022, dated
13.04.2022, order of 'status quo' was issued and as such no repair,
maintenance or construction was allowed to be done. An inquiry
committee was constituted for finding out the reasons behind the fatal
incident. According to the team from Central Mechanical Engineering
Research Institute, acting at the behest of Technical Committee, the main
cause of the incident was 'entrapment of hydrogen' in the shaft.
7. It is further case of the petitioner that a suo motu Public Interest
Litigation was heard by Hon'ble Court in W.P. (PIL) No. 1663 of 2022
wherein petitioner was not a party but the respondents have portrayed that
main cause of accident was attributable to the petitioner. Thereafter, a
show-cause notice being 426/2023, dated 04.05.2023 was issued to the
RC 3 W.P.(C) No. 3858 of 2024
petitioner which was duly replied vide letter dated 22.05.2023 clearly
stating therein that the inquiry team itself has found that the shaft did not
suffer any damage at the time of procurement. The fracture analysis
revealed that the fracture occurred due to high concentration of hydrogen,
which had developed at the time of manufacturing itself. The defect was
of the rarest category and the accident was beyond control of operation
and maintenance person. The annual testing of the shafts was done by
NABL accredited labs and no anomaly was detected during the tests
conducted in the year 2016, 2018, 2019 and 2021.
8. It is further case of the petitioner that a pre-meditated notice being
102/2024, dated 31.01.2024 was sent to the petitioner wherein it was
stated that a sum of Rs.9,11,63,250/- was payable on account of damages.
The respondent no. 2 sought a sum of Rs.3,29,40,000/- on account of lease
rent (royalty) payable from 16.05.2021 to 15.05.2024; sum of
Rs.82,33,250/- on account of charges of rescue by Air Force; a sum of
Rs.5,00,00,000/- on account of cost towards repair without any working of
cost estimation. The said notice was also replied by the petitioner-
Company vide its letter dated 09.02.2024 stating therein that the accident
was not attributable to the petitioner-Company and further the imposition
of charges were not proper.
9. Another notice dated 31.01.2024 was issued to the petitioner
questioning therein regarding (i) greasing (ii) tensioning arrangements (iii)
non-compliance of PMP (Preventive Maintenance Plan) format as per
code and (iv) training of manpower. This notice was also duly replied vide
letter dated 09.02.2024 denying the allegations levelled against them.
10. Petitioner was shocked and surprised to come to know from the
newspaper report wherein it was mentioned that respondent no. 2 had
taken a decision to blacklist the Company and further penalty to the tune
of Rs.9,11,63,250/- was imposed without any notice or opportunity of
being heard. Thereafter, petitioner approached before the respondents vide
letter dated 18.06.2024 requesting therein to provide an opportunity of
being heard. An order issued vide memo no. 614/2024, dated 24.06.2024
was communicated on the email of the petitioner on 26.06.2024 informing
RC 4 W.P.(C) No. 3858 of 2024
that petitioner had been blacklisted for a period of five years and a penalty
of Rs.9,11,63,250/- had been imposed. Being aggrieved, petitioner has
knocked door of this Court.
ARGUMENTS ON BEHALF OF THE PETITIONER-COMPANY
11. Mr. Prashant Pallav assisted by Mr. Parth Jalan, Ms. Shivani Jhaluka
and Mr. Bajrang Kumar, learned counsels argues that petitioner is a
Limited Company registered under the Companies Act, 2013 and is a
leader in the field of operation and maintenance of Ropeways since last 50
(fifty) years. Learned counsel further argues that the basic mandate of law
has not been followed by the Respondents at the stage of Enquiry as well
as the decision-making process. Action of the respondents is an example
of gross illegalities at the stage of the decision-making process which led
to the petitioner being blacklisted for a period of 5 (five) years.
12. Mr. Prashant Pallav, learned counsel argues that the respondent has
proceeded on the basis that in case if an accident has occurred, then some
person has to be held responsible. The easiest way is to blame the O&M
operator. The Respondent has conveniently chosen to ignore that an
accident can take place inevitably without the fault being attributed to
anyone. The 'doctrine of inevitable accident' is recognized by the Hon'ble
Apex Court and in the case of State of Uttar Pradesh v. M/s Mcdowell
and Company Limited reported in (2022) 6 SCC 223 at page 274.
Quoting para 80 and 81, learned counsel submits that petitioner has
unnecessarily been punished. The para-80 and 81 of the said Judgment
reads as under:
"80. The submissions before this Court on behalf of the respondent
Company had been that the company had taken all precautions which
was expected of it and yet if the fire incident took place, it was something
beyond human control for which the respondent Company cannot be held
liable. This line of submission, at best, could be taken into another
exception to the rules governing liability, where inevitable accident is
generally recognised as a ground of exception. This line of submission,
at best, could be taken into another exception to the rules governing
liability, where inevitable accident is generally recognised as a ground of
exception. Again, we may refer to the principles stated by Salmond [12th
Edn., p. 399.] thus:
RC 5 W.P.(C) No. 3858 of 2024
"Accident, like mistake, is either culpable or inevitable. It is
culpable when due to negligence, but inevitable when the
avoidance of it would have required a degree of care exceeding
the standard demanded by the law. Culpable accident is no
defence, save in those exceptional cases in which wrongful intent
is the exclusive and necessary ground of liability. Inevitable
accident is commonly a good defence, both in the civil and in the
criminal law.
81. To accept the case of the respondent Company about it being an
"inevitable accident", it is to be seen if preventing of the fire in question
would have required a degree of care from the respondent Company
beyond or exceeding the standard demanded by law. ... ... ...
13. Learned counsel argues that the petitioner-Company is engaged in
operation and maintenance of Ropeways and has experience of more than
fifty years with experience of constructing highest number of passenger
ropeways and is operating highest number of ropeways. Petitioner had
taken all care and precaution and had gone beyond the requirement of the
Code and the agreement to ensure safety of the passengers. It is an
admitted fact that the reason behind the accident i.e. failure of the shaft
occurred due to the hydrogen entrapment at the stage of manufacturing of
the steel. This is a rarest defect, which was beyond the control of the
petitioner-Company. The detection of the same could not be done despite
repeated tests by NABL accredited labs which is recognized by the
Government. The remaining ancillary reasons have not led to the accident
and the finding returned are also contrary to the records of the case. The
entire purpose and the action of blacklisting was to justify themselves
before the Court of Justice and, therefore, the petitioner-Company has
been made a scapegoat. It is also the reason that the most basic principles
of natural justice, fairness, reasonableness and equality, which are required
to be followed so diligently in cases of blacklisting have been ignored.
14. The main cause of the incident was 'entrapment of hydrogen' in the
shaft at the stage of manufacturing itself. This defect had occurred during
the time of manufacturing of raw material i.e. steel itself and despite
regular and repeated tests, the same could not be detected. Learned
counsel further argues that such defect is of rarest category and arose at
the stage of manufacturing of the raw material itself and as such
RC 6 W.P.(C) No. 3858 of 2024
petitioner-Company could not be held responsible for the same. There was
regular annual testing done by NABL accredited labs and no anomaly was
ever detected during such tests. Learned counsel further argues that after
COVID-19, the petitioner-Company promptly arranged for the shaft to be
tested before it resumed operation after COVID-19.
15. Relying upon the Judgment rendered in the case of Gorkha Security
Services V. Government (NCT of Delhi) & others reported in (2014) 9
SCC 105, learned counsel argues that action of the respondents is in teeth
of the Judgment as it has clearly been held that no order of blacklisting
can be passed without adhering to the principles of natural justice.
16. Mr. Prashant Pallav, learned counsel further argues that the basic
mandate of law has not been followed by the respondents at the stage of
the Enquiry and the Decision-making process. There are improprieties at
the stage of enquiry and the gross illegalities at the stage of the decision-
making process which lead to the petitioner-Company being blacklisted
for a period of 5 (five) years. Pointing out the improprieties, learned
counsel submits that action of the JTDC based on the Enquiry Report,
submitted by the Enquiry Committee constituted by the State, suffers from
vice of arbitrariness, illegality and procedural impropriety as the said
report was never submitted by the State authorities nor it was approved by
the State authorities. The said report was never accepted by the State,
however, was accepted by JTDC which is a separate juristic entity and as
such the entire enquiry suffers from procedural impropriety, no order of
blacklisting could have been passed on the basis of the same. This shows
the apparent biasness, haste and pre-meditated mindset of the Respondent.
17. Learned counsel further argues that the Enquiry Committee cannot
defer from the finding of the expert committee which was constituted by
the Enquiry Committee considering the technical issue involve in the case.
The 5 (five) members committee appointed an independent expert body
i.e. CSIR-CMERI to find the cause behind the accident. The CSIR-
CMERI, on the basis of a detailed study, returned a finding that the reason
behind the accident was hydrogen entrapment which took place at the
RC 7 W.P.(C) No. 3858 of 2024
stage of manufacturing of steel (i.e. the raw material for the manufacturing
of the shaft) and was beyond the control of the operation and maintenance
personnel. It was also stated that the accident was of the rarest category.
However, the Enquiry Committee, went beyond the report of CSIR-
CMERI and assigned vague reasons such as issues of greasing, tensioning
arrange and non-compliance with the format of the Preventive
Maintenance Plan and Preventive Maintenance Schedule. Once the
Enquiry Committee found conclusively on basis of reports of independent
experts, that the accident was beyond the control of the O&M operator (i.e
the Petitioner-Company), they indulged in the exercise of finding ancillary
and vague reasons to make the Petitioner-Company a scapegoat. This
amounts to witch hunting on part of the Respondent No. 2. Such deference
from the finding of the expert committee, without any cogent reasons and
holding the petitioner accountable, shows arbitrariness on part of the
Respondent. The petitioner was not provided the opportunity of being
heard, during the stage of Enquiry. The Enquiry Committee in its report
has gone beyond its mandate and attributed reasons to the petitioner-
Company. In doing so, the Petitioner-Company was not afforded any
opportunity of being heard. No notices were issued to the Petitioner by the
Committee which has been admitted by the Respondent in Para-26 of their
counter-affidavit, relevant portion thereof reads as under:
"In this context, it is stated that there is no requirement under law
to involve the Petitioner an/or to grant opportunity of hearing to the
Petitioner by the said fact finding committee".
18. Learned counsel further argues that petitioner has been running and
operating the ropeway since 2009. It was well aware about the technical
aspects of the ropeway and accordingly should have been given an
opportunity of being heard, where such technicalities are involved.
Moreso, the Enquiry Committee, in the garb of finding out the reasons of
the accident has essentially attributed reasons adverse to the Petitioner-
Company and as such the Respondent ought to have adhered to the
principles of audi alterum partum, before returning any adverse finding as
against the Petitioner.
RC 8 W.P.(C) No. 3858 of 2024
19. Referring to different clauses at Pages-213 and 214 of the report,
learned counsel submits that the Managing Director has not given any
independent finding rather he has relied upon the enquiry report which
was prepared without considering reply of the petitioner-Company and
without hearing them, the impugned order has been passed which is not
tenable and fit to be quashed and set aside. From perusal of impugned
order itself it would be apparent that the same has been passed without
application of mind. Several irregularities have been pointed out in the
report and it has been submitted that the deadlock of the show-cause was
the enquiry report and no show-cause was issued during the course of
enquiry while coming to the finding against the petitioner. The three
show-cause notices were issued without considering the reply.
20. The Petitioner-Company was not able to clarify the same to the
enquiry committee as no opportunity was given to it. Owing to the failure
of adhering to the principles of natural justice, the findings so returned by
it caused serious prejudice to the Petitioner-Company. The opportunity of
being heard was mandatory requirement owing to the ground that enquiry
committee not only returned findings on fact but also attributed the cause
behind them to the Petitioner. Moreover, the report was the basis on which
the entire reply of the Petitioner was negated by the decision-making
authority. The above facts show the finding of the Enquiry Committee
with respect to (i) greasing, (ii) tensioning arrangement and (iii)
manpower is not only contrary to the records (and therefore perverse) but
also violates the principle of natural justice and as such is fit to be set
aside. Consequently, the order of backlisting, which is based solely on the
Enquiry Report is also liable to be quashed.
21. Learned counsel argues that the enquiry committee dated 07.04.2023
is liable to be set aside as the same suffers from violation of principles of
natural justice as petitioner was not given any opportunity at the stage of
enquiry by the expert committee. Learned counsel further argues that the
impugned order of blacklisting for a period of five years and imposition of
penalty of Rs.9,11,63,250/- contained in Memo NO. 614/2024 dated
24.06.2024, has been passed in a mechanical manner without due
RC 9 W.P.(C) No. 3858 of 2024
application of mind and without giving sufficient opportunity of being
heard to the petitioner. Learned counsel further argues that the report of
the expert committee dated 07.04.2023 is incorrect and suffers from vice
of perversity with respect to its findings on (i) management of record (ii)
greasing (iii) testing of shaft (iv) mobility of transitioning devices and (v)
training of its personnel.
22. To buttress his arguments, learned counsel has placed reliance upon
the Judgments, which are as follows:
(i) Rail Engineering Works Vs. The Chairman-cum-Managing Director,
Tamil Nadu Generati9on and Distribution Corporation Limited and
Others reported in MANU/TN/2639/2022;
(ii) Kulja Industries Limited Vs. Chief General Manager W.T. Proj
BSNL and others reported in (2014) 14 SCC 731;
(iii) Daffodills Pharmaceuticals Ltd. & Others Vs. State of U.P. &
Others reported in (2020) 18 SCC 550;
(iv) UMC Technologies Private Limited Vs. Food Corporation of India
& others reported in (2021) 2 SCC 552.
ARGUMENTS ON BEHALF OF RESPONDENT NO. 2
23. Mr. Sumeet Gadodia, learned counsel representing Jharkhand
Tourism Development Corporation Limited argues that in terms of
Clauses of the Agreement, petitioner was required to carry out operation
and maintenance of all constituent parts of the ropeway and it is an
admitted fact as per para-7(q)(2) of the writ petition filed by the petitioner
that a new shaft was replaced with the old one by the petitioner-Company
in the year 2016. The said shaft was manufactured by M/s. NMW India
(P) Limited. As per clause 7(n) of the agreement, petitioner was required
to carry out Ultrasonic Testing (NDT) for all critical components annually
of the ropeway. Learned counsel submits that the incident took place on
10.04.2022 due to failure/breaking of return shaft during operation. The
failure/breaking of shaft caused the bull wheel to shift from its position
and impacted the existing front structure. It resulted into dislocation of the
rope from the return bull wheel. As the disk was dislocated, at the same
time a cabin leaving the return station was unable to grip/catch at the UTP
Station's end point, which resulted in fall of the cabin to ground due to
RC 10 W.P.(C) No. 3858 of 2024
which one person died and another was seriously injured. The rescue
operation was performed by the help of District Administration, Indian Air
Force, National Disaster Rescue Force, Indian Tibet Border Police, Indian
Army and the local people. The admitted position is that the accident took
place due to breakage of shaft and the reason for breakage of shaft was
entrapment of hydrogen at the stage of manufacturing of shaft.
24. Learned counsel further argues that after the accident, the Expert
Committee was constituted by the Department of Tourism, Art, Culture,
Sports and Youth Affairs, Government of Jharkhand, vide Notification No.
25, dated 19.04.2022 to determine cause of accident with the help of
experts/specialized institutions across the country. The CSIR in its report
has opined that during manufacturing of shaft, hydrogen got entrapped in
the steel of shaft. Hydrogen has a tendency to get entrapped during
manufacturing stage of the shaft and is generally removed by vaccum
degassing. Such entrapment of hydrogen at the manufacturing stage of
shaft being a flaw in the component should have been detected using more
sensitive NDT Equipment i.e. Ultrasonic Testing Equipment. Learned
counsel further argues that on the basis of report of CSIR and other
agencies, the Expert Committee came to the conclusion that cause of
accident was failure/breaking of return shaft during operation. Learned
counsel gives emphasis towards the various reports and submits that there
is total laches on part of the petitioner-Company and as such the impugned
order needs no interference.
25. Learned counsel argues that there is no requirement in law to give
any opportunity of hearing at the stage of enquiry being conducted by the
expert committee. The expert committee was constituted for enquiring
into the cause which led to the accident. The said enquiry committee was
an independent enquiry committee and was not directed against the
petitioner-Company rather it was constituted to enquire into the cause of
accident. The experts of the committee reported that there was
manufacturing defect in the shaft which was replaced by the petitioner-
Company in the year 2016, in terms of the Agreement, as a part of
operation and maintenance activity. After the investigation committee
RC 11 W.P.(C) No. 3858 of 2024
report, petitioner-Company was specifically confronted with the report of
the Committee and was directed to give its comments/written explanation
to the findings of the investigating report. There was no violation of
principles of natural justice and there is no requirement in law to give any
opportunity of hearing to the petitioner at the stage of independent
investigation of the cause of accident.
26. Learned counsel further argues that after report of the Committee,
show-cause notice vide letter no. 426/2023, dated 04.05.2023 was issued
to the petitioner-Company to show-cause as to why it be not
penalized/blacklisted and as to why the agreement be not terminated,
which was replied vide letter dated 22.05.2023. Petitioner-Company,
according to its own convenience, has tried to make out a case that the
entrapment of hydrogen content in the steel from which shaft was
manufactured, was beyond its purview as it was concerned with the
operation and maintenance of the ropeway only. Another notice vide letter
no. 103/2024, dated 31.01.2024 was issued to the petitioner-Company
wherein it was informed that the reply filed by the Company was not
found satisfactory and as such it was directed to explain as to why it
should not be blacklisted on account of receipt of unsatisfactory
clarification. The same was replied by the petitioner-Company vide letter
dated 09.02.2024 primarily contending that the fault lied at the
manufacturing end of the shaft and petitioner-Company was not
responsible for the same. Petitioner was thereafter again issued notice vide
letter no. 102/2021, dated 31.01.2024, asking therein as to why the losses
suffered to JTDC on account of Lease Rent, Charges for Air Rescue by the
Indian Air Force and the Estimated expenses for repair and maintenance
of the ropeway to make it re-operational, be not recovered from the
Company. This show-cause was replied by the petitioner-Company vide
letter dated 09.02.2024. When reply of the petitioner-Company was not
found satisfactory, the impugned order was passed and the same need no
interference. Petitioner-Company has not been able to prove as to how the
findings of the expert committee was perverse.
RC 12 W.P.(C) No. 3858 of 2024
27. To buttress his arguments, learned counsel has placed reliance upon
the following Judgments:
(i) Navneet Kaur Harbhajansing Kundles alias Navneet Kaur Ravi
Rana Vs. State of Maharashtra and others reported in 2024 SCC
OnLine SC 494
(ii) State of Odisha and others Vs. Panda Infraproject Limited and
another analogous case reported in (2022) 4 SCC 393;
ARGUMENTS ON BEHALF OF STATE
28. Mr. Piyush Chitresh, AC to learned Advocate General opposes the
contention of Mr. Prashant Pallav regarding different reports and further
submits that there is only one report i.e. the report regarding greasing and
report regarding shaft by two independent agencies and both are two
different components. Learned counsel further adopts the arguments
advanced by Mr. Sumeet Gadodia, learned counsel representing
respondent no. 2 and justifies the impugned order. The loss to the life and
property is serious issue and the agency involved cannot be left scot free
on the ground that it was a rarest of the rare accident and could have
happened due to technical lapses. Such an excuse cannot be accepted in
view of reports and involvement of the Petitioner-Company cannot be
overlooked. The serious issue of laches on part of Petitioner-Company
resulted into serious injuries and death of innocent people. Learned
counsel submits that there is no illegalities or any infirmities and as such
the writ petition is fit to be dismissed.
DISCUSSION AND CONCLUSION
29. Heard rival submission of the parties across the bar. Before delving
deep into the matter, it would be appropriate to examine the important
issues involved in the instant writ petition:
(I) Whether the impugned order was passed without following the
cardinal principles of natural justice?
(II) Whether it was incumbent upon the Expert Committee before
coming to the finding to hear the petitioner?
(III) Whether before passing the impugned order, any adequate
opportunity of hearing was given to the petitioner?
RC 13 W.P.(C) No. 3858 of 2024
(IV) Whether petitioner can be held responsible and was rightly inflicted
punishment in view of the manner in which occurrence took place
and the reasons behind the occurrence as per the enquiry report?
(V) Whether in view of report of the Expert Committee, petitioner can
be directly held responsible for the incident?
(VI) Whether the report of the Expert Committee is perverse on the face
of it in absence of any opportunity of hearing to the petitioner?
30. It is an admitted fact that the occurrence took place due to
entrapment of hydrogen in the shaft. After the fatal incident which resulted
into death and fatal injuries to many people, vide Notification No. 25,
dated 09.04.2022, a Committee was constituted by the Department of
Tourism, Art, Culture, Sports & Youth Affairs, Government of Jharkhand
to inquire into the cause which led to accident on 10.04.2022. The
constitution of the Enquiry Committee was to inquire into the cause of the
accident and was never prejudiced against the petitioner-Company. A
detailed investigation was done and one of the major cause for the
accident was found to be breakage of the return shaft. It was reported by
the Expert Committee that there was the manufacturing defect in the shaft
which was admittedly replaced by the petitioner-Company in the year
2016 in terms of the agreement as a part of its operation and maintenance
activity, which is clear from Clause-5 of the Agreement dated 28.05.2014.
It would be relevant to quote clause 5 of the said agreement, which reads
as under:
"5. Scope of operation & maintenance work for the Trikut Ropeway
to be undertaken by the Operator/DRIL.
(a) The Operator/DRIL shall run, maintain the ropeway system to
ensure steady, smooth operation under the supervision of the
Owner/ JTDCL or his representative.
(b) The entire ropeway system including building and complex
appurtenant thereto with terminal building will be maintained by
Operator/ DRIL.
(c) The Operator/ DRIL shall maintain attendance register of their
employees and all employees shall wear uniform with identity
Card.
(d) The annual maintenance of ropeway systems for about 15 to 20
days may be taken up and the period shall be decided on
mutually agreed basis during the lean season.
RC 14 W.P.(C) No. 3858 of 2024
(e) In the annual maintenance all the steel structures and cabins are
to be painted before the month of October every year with two
coats of paint approved by the Owner/ JTDCL
(f) The monthly maintenance of ropeway shall be carried out on a
fixed date of every month (or) as instructed by the Owner/
JTDCL.
(g) It shall be the responsibility of the Operator/ DRIL to replace
all spares including rope and any other material as may be
required at his own cost in maintenance of the ropeway. All
cabins should be maintained periodically.
(h) The Operator/ DRIL shall engage his own personnel to carry out
the operation and maintenance activity with prescribed uniform
and DRIL shall provide contributory Provident Fund, ESI
Coverage, minimum wages duly complying with the Labour
Laws.
(i) The maintenance of the equipment is to be carried out in
conformity of BIS (Bureau of Indian Standards) of Ropeways.
(j) The Operator/ DRIL should maintain necessary maintenance
records, log books and history sheets concerning the various
equipment, change of spares and consumables details etc.
(k) The Operator/ DRIL agrees to comply with all laws, rules and
regulations applicable to the nature of work and any reasonable
suggestions or instructions issued by the officials of the Owner/
JTDCL/ Safety Committee.
(l) The Operator/ DRIL shall maintain the Gen-Set also.
(m) The Operator/ DRIL shall maintain electrical fixtures in both
station buildings.
(n) The Operator/ DRIL agrees to take insurance policies to all
ropeway plant/ machinery/ equipment/system/ passengers/ other
personnel and meet all labour liabilities & claims during
operation & maintenance during the period of agreement.
(o) The Operator/ DRIL shall provide and maintain First aid facility
at site.
(p) The Operator/ DRIL is entirely responsible for any loss or
damage, mishappenings to passsengers, Owner/ JTDCL plant &
machineries due to any deficiency/negligence on the part of the
DRIL in operation and maintenance until the plant is taken over
by the Owner/ JTDCL.
(q) The Operator/ DRIL agrees to take insurance to cover the
ropeway plant & machines.
(r) The Operator/ DRIL will take passenger insurance also.
(s) Operator/ DRIL will arrange facilities like ticketing, security,
traffic control, Housekeeping, building maintenance etc. during
operation & Maintenance period.
(t) The expenditure towards maintenance, running of DG sets shall
be borne by the DRIL.
(u) The Operator/DRIL shall properly maintain the cleanliness of the
premises, restaurant building and public amenities/ facilities at
its own cost.
RC 15 W.P.(C) No. 3858 of 2024
(v) If any tax, levy or duty is imposed by the Central/State
Government, the same will be paid by the Operator/ DRIL.
(w) Operator/DRIL agreed to provide effective communication
system between LTP and UTP.
(x) To run operate, maintain the restaurant at LTP on is own and to
get the required licenses for compliance of the issues relating to
operation of the restaurant.
(y) To cooperate the officials of Owner/ JTDCL or the safety
committee formed by the Owner/ JTDCL for inspection of the
ropeway system and any equipment used or to be used in
operation of the ropeway.
(z) To provide complete manning of daily operations and all
maintenance shut downs.
(aa) To provide consumable like brake oil, gear oil eye, diesel,
welding rods, greases, gases for oxy acetylene cutter, ropes and
any other consumable for day-to-day maintenance of spares
required.
31. From Clauses (g) and (i) hereinabove, it is apparent that it was the
responsibility of the Operator/ DRIL to replace all spares including rope
and any other material as may be required at his own cost in maintenance
of the ropeway and all cabins had to be maintained periodically. The
maintenance of the equipment was to be carried out in conformity of
Bureau of Indian Standards of Ropeways. It is an admitted fact that the
Enquiry Committee consisting the experts from the CSIR and other
agencies, reported that there was manufacturing defect in the shaft due to
entrapment of hydrogen which was present more than the permissible
quantity and could have been detected at the time of manufacturing itself.
From Clause 6(n) of the said agreement, it is crystal clear that it was
responsibility of the Petitioner-Company for carrying out Ultrasonic
Testing (NDT) for all critical equipment. Clause 6(n) reads as under:
"6. The Operator/ DRIL also agreed to perform the work
mentioned below:
n. Carrying out Ultrasonic Testing (NDT) for all critical
components (to be mutually decided with Owner/JTDCL)
and Non-destructive Testing for rope with defectograph,
annually."
It further appears that the Committee, after examination of reports of
Ultrasonic Testing submitted by the petitioner-Company, which was also
examined by the experts from CSIR and other agencies, it was opined that
RC 16 W.P.(C) No. 3858 of 2024
such defects in manufacturing of shaft should have been detected in the
Ultrasonic Testing reports, which were carried out subsequently by the
Petitioner-Company. From the reports, it was found that admittedly there
was manufacturing defect in the shaft but even the said manufacturing
defect was not detected in subsequent Ultrasonic Testing reports submitted
by the petitioner.
32. As regard opportunity of hearing to the petitioner is concerned, a
show-cause notice vide letter no. 426/2023, dated 04.05.2023 was issued
with respect to the report submitted by the Investigating Committee of the
Trikut Ropeway, Deoghar acceded on 10.04.2022. After report of the
investigating committee, Petitioner-Company was confronted with the
report of the Investigating Committee and was directed to give comments/
written explanation to the findings of the investigating report. From the
aforesaid, it can comfortably be gathered that the principles of natural
justice were duly complied with and proper opportunity of hearing was
granted to the Petitioner-Company. From reply to the show-cause notice
letter no. 426/2023, dated 04.05.2023, it can comfortably be inferred that
the Petitioner-Company was given ample opportunity to meet specific
finding of the investigating committee and also the JSTDC before passing
of the impugned order. From the impugned order it appears that due
consideration was given to the reply submitted by the Petitioner-Company
and thereafter a decision was taken to blacklist the Petitioner-Company for
five years. It further appears that the Committee was an independent
Committee and independent investigation for coming to the conclusion
regarding the cause of accident, it was not required to hear the Petitioner-
Company as the same was not directed against the petitioner-Company but
was constituted in order to inquire into the cause of accident and as such,
contention of Mr. Prashant Pallav, learned counsel that the Investigating
Committee did not consider proper to hear the petitioner while coming to
the finding, is not acceptable to this Court.
33. Petitioner-Company is also aggrieved by the imposition of penalty
and as such whether imposition of penalty is justified or not, has to be
looked into. Admittedly, the accident took place due to sheer negligence
RC 17 W.P.(C) No. 3858 of 2024
on part of the Petitioner-Company. Due to the accident, operation of the
ropeway has been suspended with effect from 10.04.2022 and the
respondent-Corporation is suffering loss of yearly royalty amount. Apart
from that, great loss has been caused towards the reputation of the
Corporation. The Corporation has further suffered loss towards repair of
the Ropeway and to make it operational, loss of lives and loss during
operation of rescue system. As per Clause 6(h), it appears that the
Operator/DRIL had agreed to perform the work towards operation of
rescue system and its maintenance. Thus, the respondent - Corporation
was justified in imposing cost.
34. This Court has to examine whether there is any perversity in the
impugned order and whether there is any reappraisal of the evidence.
Admittedly, in view of settled principles of law, this Court would not sit in
appeal to reappraise the evidence for holding the petitioner guilty, from
the independent findings of the investigating committee and after
affording ample opportunity of hearing to the Petitioner-Company and
giving show-cause reply, this Court is of the view that neither report is
perverse nor there is any appraisal of evidences. What has been derived by
the investigating committee, the Petitioner-Company cannot be left scot-
free in view of the admitted facts that it was the duty and responsibility of
the Petitioner-Company to maintain operation in view of terms and
conditions of the agreement. Petitioner-Company itself being a
manufacturer since the year 2009 and while changing the shaft in the year
2016, was very much aware that the said incident may take place and the
petitioner cannot shirk from the responsibility. The shaft which was
replaced in the year 2016, was of the inferior quality which led to the
accident. The report of Central Mechanical Engineering Research Institute
(CMERI) also clearly reveals that the fractured surface had significant
curvature from periphery towards centre. It further reveals that no surface
flaw could lead to such catastrophic failure and the final fracture occurred
from the interior which led to rapid/fast fracture. The entrapped hydrogen
was therefore investigated using an CHNS (Carbon-hydrogen-nitrogen-
sulphur) analyzer and was found to be 5.62 ppm, which is much higher
RC 18 W.P.(C) No. 3858 of 2024
than the acceptable range of 2-3 ppm. The concentration of hydrogen is
responsible to generate flakes within the material. The report says that in
the instant case the hydrogen content in the steel was approximately 87%
more than the permissible limit. The entrapped hydrogen molecules also
produce flaky surfaces which are extremely weak and produces network
of cracks (numerous sub-surface cracks, possibly due to generation of a
critical stress state by hydrogen trapped at inclusions). Such evidences
were seen on the fracture surface. Hydrogen has a tendency to get
entrapped during manufacturing stage of the shaft and is generally
removed by vacuum degassing. It may be possible that the degassing
process was not done appropriately. The report further says that the
presence of such flaw in components should have been detected using
more sensitive NDT equipment (Ultrasonic equipment). The chances of
overlooking such planer defects always remain, if the equipment's
sensitivity does not match as per requirement. The NDT reports (provided
by JTDC Officials for 2019 and 2021) did not reveal presence of such
planner defects possible due to location or may be due to procedure
undertaken (Calibration) by the NDT Personnel, being not fully perfect. It
is evident from all the analysis made, that the hydrogen gas got entrapped
during manufacturing of the raw material of shaft itself which colluded
with large number of inclusions present and created an elliptical flaw in
the central region. The elliptical flaw once reached to critical size after
certain years of operation thereafter it failed instantaneously. The mobility
of the tensioning devises was to be ensured at all times but the same was
not complied with.
35. Nowhere it has been disputed by the Petitioner-Company that they
were not aware of the enquiry report. It was only after handing over
enquiry report and going through the reply, the impugned order was
passed. So, it can be inferred that ample opportunity was afforded to the
petitioner and there was no breach of principles of natural justice. From
the reply, nowhere it is reflected that the Petitioner-Company had taken
the stand that opportunity of hearing was not given by the original enquiry
committee.
RC 19 W.P.(C) No. 3858 of 2024
36. Here it is relevant to quote the findings arrived at by the Expert
Committee on the basis of report of CSIR and other agencies, which reads
as under:
"From the above it can be concluded that the cause of accident of
Trikut Ropeway on 10.04.2022 was the failure/breaking of return
shaft during operation. The failure/breaking of shaft caused the bull
wheel to shift from its position and impacted the existing front
structure. It also resulted in the dislocation of the rope from the
return bull wheel. As the rope was dislocated, at the same time a
cabin leaving the return station (UTP) was unable to grip/catch the
rope at the UTP station's end point, which resulted in fall of the
cabin to ground due to which one person died and another was
seriously injured. The dislocation of the rope also led to stopping of
the Ropeway which resulted in the passengers being stranded in air
who had to be evacuated by personnel of Indian Army and Indian
Air Force in a span of nearly 2 days. It is to be noted that shaft was
tested earlier multiple times. It was tested twice in 2016, once in
2018, once in 2019 and once in 2021 but on any of these five
occasions the abnormalities which have been reported by CSIR-
Central Mechanical Engineering Research Institute, Durgapur were
not reported/detected. The test reports submitted by ID & RL in
2016 and 2018 itself mentions that 100% shaft was not tested."
Thus, the enquiry Committee, on the basis of the report of the experts
from the premier institutions of metallurgy of the Government of India,
formed an opinion that there was manufacturing defect of the shaft which
was admittedly replaced by the petitioner and further, the enquiry
committee observed that not only there was manufacturing defect but the
said manufacturing defect would not be detected in the Ultrasonic Test
Reports submitted by the petitioner as the said Ultrasonic Test Reports
were obtained from the institutions which did not deploy more sensitive
NDT Equipment (Ultrasonic Equipment) and thus, the chances of
overlooking planner defects remained. The said committee also obtained
the opinion of M/s. RITES Limited on 'graphite grease and came to the
conclusion as under:
Ïn the above reproduced report it is mentioned that Graphite
flake content of grease has been observed to be 0.96 against the
specified value of minimum 6. The significance of grease lies in
its role in reducing friction between the shaft & beatings and
inside the bearings. Reduced flake content of the grease may lead
to enhanced friction between the shaft & bearings and inside the
bearings which may in turn cause enhanced stress on the shaft.
RC 20 W.P.(C) No. 3858 of 2024
This appears to be an operation and maintenance issue."
The said Committee also examined the practice of operation and
maintenance undertaken by the Petitioner-Company and in terms of Code
of Practice framed by Bureau of Indian Standard, observed as under:
"2. Clause 4.1(a) of the Code of Practice for Operation and
Maintenance of all types of Ropeways intended for transportation
of passengers is 17234:2019 states that "Deployment of trained
operating personnel." Clause 4.2.8 of the Code stages that "Rescue
operation should be carried out by trained personnel only and with
utmost safety." The educational qualification of the manpower has
not been specified in the Code. Damodar Ropeway & Infra limited
has not provided the training details of the personnel who were
engaged in the Trikut Ropeway operation. However, from the
perusal of the above reproduced document, it appears that most of
the maintenance personnel were not adequately qualified. It is
pertinent to note that quality of human resources deployed may
have an impact on the quality of operation and maintenance of the
Ropeway."
37. The Hon'ble Apex Court in the case of State of Odisha and others
Vs. Panda Infraproject Limited and another analogous case reported in
(2022) 4 SCC 393 has held that the findings recorded by the inquiry
committee can be said to be the basis for initiating the action of
blacklisting against the contractor. The findings recorded by the inquiry
committee can be said to be a prima facie opinion while initiating the
proceedings for blacklisting. Merely because show-cause notice was
issued and the blacklisting order was passed on consideration of the
inquiry report, that by itself it cannot be said that the blacklisting order
was pre-decided. Paragraps-17 to 20 of the said Judgment reads as under:
"17. Merely because the show-cause notice was issued after the
inquiry committee report was considered and thereafter the State
Government took the decision to initiate proceedings for
blacklisting, that by itself cannot be said that the order of
blacklisting was pre-determined as observed by the High Court.
The communication dated 10-10-2017 by the State Government to
the Chief Engineer can be said to be a proposed decision to
initiate the proceedings for blacklisting. In the communication
dated 10-10-2017, it has been specifically mentioned that the
action be taken for blacklisting after following the procedure as
per the OPWD Code.
18. Before any show-cause notice is issued for any action
when a tentative decision is taken, it cannot be said that
RC 21 W.P.(C) No. 3858 of 2024
subsequent decision followed by a show-cause notice and the
proceedings as per the OPWD Code can be said to be pre-
determined. Before initiation of any proceedings for blacklisting,
there can be a tentative decision on the basis of the material
available forming a tentative/prima facie opinion that action is
required.
19. In the instant case a committee submitted a detailed report
which was the basis for issuance of the show-cause notice to the
respondent. The action initiated against the respondent was not in
a vacuum but after considering the committee's report and after
following the due procedure as required. Therefore, the High
Court has erred in holding that the blacklisting order was pre-
determined.
20. So far as the findings recorded by the High Court that the
blacklisting order was in breach of principles of natural justice is
concerned, it is to be noted that the blacklisting order was passed
after issuing a show-cause notice to which the respondent
contractor was called upon to reply and show cause as to why he
be not blacklisted. A detailed show-cause notice was issued with
specific allegations to which the respondent contractor submitted
a detailed reply. After considering the allegations in the show-
cause notice, considering the reply and also by considering the
material available on record the order of blacklisting was passed.
We fail to appreciate, how in such a case the blacklisting order
can be said to be in breach of principles of natural justice.
21. In Grosons Pharmaceuticals (P) Ltd. v. State of U.P. [Grosons
Pharmaceuticals (P) Ltd. v. State of U.P., (2001) 8 SCC 604] , the
order of blacklisting was challenged by the contractor on the
ground that the contractor was not supplied with all the materials
on the basis of which charges against him were based. It was the
case on behalf of the contractor that non-supply of such material
resulted in violation of principles of natural justice. To that, this
Court observed that it was sufficient requirement of law that an
opportunity of show cause was given to the appellant before it was
blacklisted. This Court observed that the contractor was given an
opportunity to show cause and it did reply to the show-cause to the
State Government and therefore the procedure adopted by the
Government while blacklisting the contractor was in conformity
with the principles of natural justice."
38. The question which is posed for consideration of this Court is,
whether, in the facts and circumstances of the case the contractor was
required to be debarred/blacklisted. In Kulja Industries [Kulja Industries
Ltd. v. Western Telecom Project BSNL, (2014) 14 SCC 731], Hon'ble
Supreme Court has observed that "debarment" is never permanent and the
period of debarment would invariably depend upon the nature of the
RC 22 W.P.(C) No. 3858 of 2024
offence committed by the erring contractor. In the said decision this Court
emphasised on prescribing guidelines by determining the period for which
the blacklisting should be effective. It is observed and held by this Court
that while determining the period for which the blacklisting should be
effective, for the sake of objectivity and transparency it is required to
formulate broad guidelines to be followed. It is further observed that
different periods of debarment depending upon the gravity of the offences,
violations and breaches may be prescribed by such guidelines. The
duration of blacklisting cannot be solely per offence. Seriousness of the
lapse and the incident and/or gravity of commission and omission on the
part of the contractor which led to the incident should be the relevant
considerations. In a given case, it may happen that the commission and
omission is very grave and because of the serious lapse and/or negligence,
a major incident would have taken place. In such a case, it may be the
contractor's first offence, in such a case, the period/duration of the
blacklisting/banning can be more than three years. However, as the said
guidelines are not under challenge, it is upon the State Government to
suitably amend and/or modify the said office memorandum. However, the
observations made herein can be a guide while determining the period of
debarment/blacklisting.
39. In the case of Navneet Kaur Harbhajansing Kundles alias Navneet
Kaur Ravi Rana Vs. State of Maharashtra and others reported in 2024
SCC OnLine SC 494, the matter relating to factual issues has been dealt
with. It has been held that the High Courts as well as the Supreme Court
should refrain themselves from deeper probe into factual issues like an
appellate body unless the inferences made by the concerned authority
suffers from perversity on the face of it or are impermissible in the eyes of
law. It has been held that the writ of certiorari is expended as a remedy
and is intended to cure jurisdictional error, if any, committed by the
Courts/ forums below. It should not be used by superior Court to substitute
its own views by getting into fact-finding exercise unless warranted. The
findings of fact recorded by a fact-finding authority duly constituted for
the purpose and which ordinarily should be considered to have become
RC 23 W.P.(C) No. 3858 of 2024
final, cannot be disturbed for the mere reason of having been based on
materials or evidence not sufficient or credible in the opinion of the writ
Court to warrant those findings at any rate, as long as they are based upon
such materials which are relevant for the purpose or even on the ground
that there is yet another view which can be reasonable and possibly
undertaken.
40. It appears that three show-cause notices were given to the petitioner
i.e. on 04.05.2023 and 31.01.2024 followed by 31.01.2024 regarding
financial and other loss to the Corporation in view of Clause - 5 and 6 of
the agreement, which has not been denied by the petitioner.
41. In view of backdrop of findings of the investigating committee as
well as the reasonings assigned by the respondents and observations made
by this Court hereinabove, this Court cannot shut its eyes in considering
seriousness of the incident in which due to omission and commission
wholly on part of the petitioner-Company, the incident took place causing
death, injury, loss to life and property and reputation of the Corporation.
The manner in which occurrence took place caused loss to life and
property and reputation of the Corporation due to callous and lethargic
approach of the petitioner, the impugned order is fully justified and
warrants no interference.
42. On thoughtful consideration to submission and after going through
the materials available on record, this Court is of the considered view that
no interference is warranted in the instant writ petition. Accordingly, this
writ petition stands dismissed. The issues framed are inter-related and as
such answered accordingly.
43. Pending Interlocutory Application, if any, also stands disposed of.
(Dr. S.N. Pathak, J.)
Navneet Kumar, J.
(Navneet Kumar, J.)
Jharkhand High Court,
Ranchi
Dated : November 12, 2024
