AI Structured Summary
Not yet generated for this judgment
Judgment
Heard Ms. Jigyasa Singh, learned counsel for the petitioner, Sri Mahesh Narain Singh, learned counsel for the NOIDA and learned Standing Counsel for the State of U.P.
The instant writ petition has been primarily preferred for a relief of quashing the order dated 12.01.2023 passed by respondent no.4 by which a penalty of Rs.5 lacs was imposed upon the petitioner.
Learned counsel for the petitioner has submitted that the order impugned dated 12.01.2023 was passed without affording an appropriate opportunity to defend since the said order was preceded with a notice dated 02.01.2023, which was founded on an ex parte inspection held on 02.01.2023. She submits that infact no such inspection took place. She submits that although the petitioner has submitted a reply but the same has also not been considered apart from the fact that the inspection report/note dated 02.01.2023 was never provided to the petitioner so as to properly refute the same and the same being ex parte was also in violation of the general guidelines of the CPWD which provided that whenever such an inspection be conducted, the presence of concerned contractor was required.
Per contra, learned counsel representing the respondent-NOIDA submitted that the petitioner was awarded a contract for plantation and maintenance of the trees from Section 71 Crossing to Section 62, 63, NH-24, Road No.6 under Metro Line including roundabout and triangle NOIDA, which the petitioner had failed to do and inspite of various notices wherein shortcomings were pointed out, the petitioner has not agreed to rectify the same. He submits that prior to passing of the order impugned dated 12.01.2023, the petitioner was served with a notice on 02.01.2023 wherein opportunity was given to the petitioner. He further submits that there is a contract inter se the parties and therefore, the petitioner be relegated to raise such dispute before the arbitrator.
Heard learned counsel for the parties and perused the record.
We find that the show cause notice dated 02.01.2023 issued to the petitioner prior to the passing of the order impugned does recite that some inspection took place on 02.01.2023 and on the basis of which certain shortcomings were pointed out. The allegation of not providing of the inspection report/note dated 02.01.2023 has not been categorically denied by the respondent-NOIDA in its counter affidavit. In fact the said note/report dated 02.01.2023 has also not been brought on record. This fortifies the submission of the petitioner that there existed no such inspection report. Further in the order impugned there is a recital of a notice dated 03.12.2022, the said recital loses its relevance since prior to passing the order impugned a fresh notice reciting shortcomings based on inspection report dated 02.01.2023 has been stated. The order impugned also do not consider the reply dated 08.01.2023 given by the petitioner.
It is settled law that even in contractual matters violation of principles of natural justice which led to prejudice to the contractor need to be interfered in exercise of the jurisdiction conferred under Article 226 of the Constitution of India.
We find forfieted in the said view by observations of the Hon'ble Supreme Court inre: Unitech Limited and Others v. Telangana State Industrial Infrastructure Corporation (TSIIC) and Others1.The Hon'ble Supreme Court in its paragraph nos.39.5 and 39.6 has held as under:
“39.5.Therefore, while exercising its jurisdiction under Article 226, the Court is entitled to enquire into whether the action of the State or its instrumentalities is arbitrary or unfair and in consequence, in violation of Article 14. The jurisdiction under Article 226 is a valuable constitutional safeguard against an arbitrary exercise of state power or a misuse of authority.
39.6In determining as to whether the jurisdiction should be exercised in a contractual dispute, the Court must, undoubtedly eschew, disputed questions of fact which would depend upon an evidentiary determination requiring a trial. But equally, it is well-settled that the jurisdiction under Article 226 cannot be ousted only on the basis that the dispute pertains to the contractual arena. This is for the simple reason that the State and its instrumentalities are not exempt from the duty to act fairly merely because in their business dealings they have entered into the realm of contract. Similarly, the presence of an arbitration clause does oust the jurisdiction under Article 226 in all cases though, it still needs to be decided from case to case as to whether recourse to a public law remedy can justifiably be invoked.”
In view of the aforesaid discussion, we are of the opinion that the respondent-NOIDA has acted in an arbitrary manner and in utter violation of Natural Justice, as the respondent-NOIDA has neither provided the copy of the inspection nor the petitioner was present at the time of inspection, which is the foundation of the order impugned. The order has also not considered the reply and under such circumstances the imposition of penalty to the tune of Rs.5 lacs cannot be sustained. Consequently, the writ petition is allowed and the order impugned dated 12.01.2023 is hereby quashed.
No order as to cost.
Footnotes
- 1.(2021) 16 SCC 35