Dismissed

M/S Aptech Ltd. v. U.P. Power Corporation Ltd. and Another

Allahabad HC7 Aug 2019WRIC/19639/2019

Case brief

AI extract

What is this about?

The High Court dismissed the petitioner's writ petition challenging the blacklisting order against M/s Aptech Ltd. The court held that the petitioner failed to maintain examination secrecy, leading to paper leakage, and the blacklisting was a valid exercise of state power to prevent future contractual engagement.

What did the court decide?

The prayer for quashing the impugned order of blacklisting was refused, and the writ petition was dismissed for lack of merit.

M/S Aptech Ltd. Vs U.P. Power Corporation Ltd. and… — Service and Employment | Allahabad HC (2019)

AFR

Court No. - 1

Civil Misc. Writ Petition-C 19639 of 2019

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M/s Aptech Ltd. vs. U.P. Power Corporation & Anr.

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Hon'ble Ramesh Sinha,J.

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Hon'ble Ajit Kumar,J.

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(Per Ramesh Sinha, J. for the Bench)

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Heard Sri Prashant Chandra, learned Senior Advocate assisted by Sri Satyawan Shahi, learned counsel for the petitioner, Sri Amit Saxena, learned Senior Advocate assisted by Sri Abhishek Srivastava, learned counsel for the respondents and perused the record.

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It would not be out of place of mentioned that a counter affidavit has been filed on behalf of respondent nos. 1 and 2 and on a query being made by the Court, counsel for the petitioner states that he does not wish to file reply to the counter affidavit and prayed that the Court may hear the matter, hence the Court proceed to hear the matter.

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By means of this writ petition, the petitioner has prayed for quashing of the impugned order dated 23.5.2019 passed by respondents and further a direction to the respondents not to treat the petitioner as disqualified on account of impugned order dated 23.5.2019 issued by the respondents and allow the petitioner to participate in future tenders floated for contracts.

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Brief facts of the case are that the petitioner being a Company providing IT Infrastructure Solutions, on 1.9.2016, was engaged by the respondents for conducting online

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examinations for recruitment of Office Assistant-III, Stenographer-III, Office Assistant-III (Accounts), Additional Personal Assistant, Additional Personal Assistant (Deptt.), Assistant Reviewing Officer, Junior Engineer (T) Electrical vide order dated 21.12.2016. Agreement was signed between the petitioner Company (hereinafter referred to as 'the petitioner') and the respondents on 1.9.2017 and 9.10.2017 respectively and the said examination for all the aforesaid posts was conducted by the petitioner on 8.2.2018.

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In March, 2018, some complaints were made by certain unsuccessful candidates, who appeared in the examination for the post of Junior Engineer held on 11.2.2018, alleging malpractices which occurred during the examination. The Chief Minister of the State of U.P. took cognizance of the complaints made by the unsuccessful candidates and ordered for preliminary enquiry to be conducted by the Special Task Force (for short 'S.T.F.') U.P. Lucknow in which the representative of the petitioner also participated. On 28.3.2018, the S.T.F. completed its preliminary enquiry and submitted its report in pursuance of which on 29.3.2018, a First Information Report (for shot 'F.I.R.) No. 0005 of 2018 was lodged by the S.T.F. under sections 419, 420, 467, 468, 471 I.P.C., Sections 66/66 (C)/66(D) I.T. Act, 2000 and Section 3, 4 and 10 of Examination Act, 1982 with the Cyber Crime Police. The F.I.R. into the alleged bungling in the examination for the post of Junior Engineer was registered against 12 accused persons. The petitioner, however, was not named in the said F.I.R. On 3.4.2018, pending investigation, the examinations conducted by the petitioner was cancelled by the respondents.

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On 9.4.2018, a show cause notice was issued to the petitioner calling upon the petitioner to explain as to why it should not be black listed for not conducting examination for various posts of respondents properly. On 11.4.2018, the petitioner requested that it may be provided a copy of the S.T.F. report on which the show cause notice was founded so as to enable it to furnish an effective reply. In the meanwhile on 23.3.2018, it appears that the police submitted charge-sheet against 13 accused persons before the Court of Special C.J.M. (Customs) Lucknow which includes some students and owners of the centres where examination for the post of Junior Engineer was held.

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The show cause notice dated 9.4.2018 issued by the respondents was challenged by the petitioner vide Civil Misc. Writ-C No. 28097 of 2018, M/s Aptech Limited vs. U.P. Power Corporation Limited and another, which was disposed of by a co-ordinate Bench of this Court on 28.8.2018. By the said order the said show cause notice was quashed on the ground that it does not contain details of imputation of charges as it only makes reference to the report submitted by the S.T.F. stating in short the gist of allegations. The Court directed the respondents to issue fresh show cause notice to the petitioner to furnish its reply.

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On 18.9.2018, a fresh show cause notice was issued to the petitioner by the respondents which was again challenged by the petitioner in Civil Misc. Writ-C No. 35785 of 2018 M/s Aptech Limited vs. U.P. Power Corporation Limited and another which was dismissed by Co-ordinate Bench of this Court on 2.1.2019 whereby this Court held that the challenge to

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the impugned notice was ill-founded. The petitioner submitted its reply on 5.10.2019 with respect to the show cause notice issued to him on 18.9.2018 which has been considered by the respondent no. 2 and rejected the same. Being aggrieved by the same, the petitioner has preferred the instant writ petition.

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Learned counsel for the petitioner has firstly submitted that the impugned order passed by the respondent no. 2 is in gross violation of the order dated 28.8.2018 passed by this Court in Civil Misc. Writ-C No. 28017 of 2018 wherein the respondent no. 2 was directed by this Court to issue fresh show cause notice expeditiously preferably within a period of two weeks from the date of passing of the said order and hence the impugned order is liable to be set aside on this ground alone.

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In support of his above arguments, learned counsel has placed reliance on the judgment of the this Court in the case of Abhishek Prabhakar Awasthi vs. New India Assurance Company Ltd. 2014 (6) ADJ 641 and he argued that in view of the legal proposition laid down in the said case, the respondent no. 2 could not issue the notice without the leave of the Court. 11. It was next submitted by learned counsel for the petitioner that no opportunity of hearing was afforded to the petitioner by the respondent no. 2, hence there is gross violation of principles of natural justice. It is further submitted that the order of black listing the petitioner by respondent no. 2 is violative of Article 14 of the Constitution of India as the respondents have acted in an unreasonable manner just and this entire action was only aimed at shielding the higher officials of the U.P. Power Corporation Ltd., who were responsible for the paper leakage. He argued that in the F.I.R. which was lodged in

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the present matter on the basis of enquiry held by the S.T.F. the petitioner was not named nor has been charge-sheeted, instead, the petitioner has been made as a witness in said the case.

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He next urged that the petitioner has an unblemished record and the entire examination was conducted by the petitioner in a fair manner and only at two centres there was paper leakage of J.E examination where computer hacking took place and the petitioner has no role to play in the papers leakage at the said two centres.

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On the other hand, Sri Amit Saxena, learned Senior Advocate assisted by Sri Abhishek Srivastava, learned counsel for the respondent-U.P. Power Corporation has vehemently opposed the arguments of learned counsel for the petitioner and has invited the attention of the Court towards the terms and conditions of the agreement dated 9.10.2017 specially Clause 2 and 7 regarding the venue selection and seat arrangements, and Clause-IX for examination. A perusal of which shows that as per Clause-2 of the contract containing the 'scope of work' which includes the inviting and processing of applications, venue selection and seat arrangements, maintaining attendance sheets, designing and developing question papers and numerous other pre-examination stage, examination stage and post examination stage activities. As per Clause-7 of the contract, the petitioner was required to carry out all the works covered under the 'scope of work' with 100% accuracy and as per Clause-2, petitioner was required thus Ensure complete secrecy of examination process. Aptech shall deploy a highly secure system and conduct of security tests to verify that there are no vulnerabilities for exam conduct process." Thus, the petitioner's

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failure to change the IP address of the computer, sanitizing the computer device and isolation of network ports apart from other things to be done by petitioner proves that the petitioner created an opportunity to software hackers to install remote access software AMMY ADMIN and to leak the question paper to solve it from outside examination centre. The petitioner's fault while on the one hand caused a great loss and hardship to the Corporation as the examination had to be cancelled; on the other hand a fresh agency, namely, EDCIL (among the "MINIRATNA" PSU of the Central Goverment) had to be given contract for safeguarding the future of the candidates and to maintain a clean image of the Commission in holding competitive examination. He submits that the petitioner has failed to give proper explanation to the charges levelled against him in the show cause notice and his reply is self contradictory in nature which shows his failure in performing his duties as per the contract and resulted in a serious incidence of hacking and cancellation of examination.

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He further submits that from a perusal of the F.I.R., it is evident that it contained the averment in regard to Aptech Limited being the examination conducting agency its failure to ensure that the computer systems which were installed at the examination centres, namely, J.K. Public School, Lucknow and Mahabir Prasad Degree College did not contain any virus/hacking software. Thus, from the F.I.R. it is clear that the Aptech Limited had not only failed to ensure that the computer systems were properly sanitized and free from hacking etc. but also facilitated the accused persons to install AMMY ADMIN software which gave access to such systems to the hackers to hack the examination papers and to benefit certain of the

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candidates illegally. The report of the S.T.F. U.P. police spells out the technical shortcoming/anomalies at the end of the petitioner.

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In reply to the argument of learned counsel for the petitioner that no opportunity of hearing was given to the petitioner by the respondents, he submitted that the said contention of the petitioner is wholly unfounded because as per the impugned order, it is apparent that show cause notice was issued to the petitioner on 18.9.2018 by the respondents in pursuance of the order of this Court dated 28.8.2018 passed in Writ-C No. 28097 of 2018 for which a detailed reply was given by the petitioner on 5.10.2019 to respondent no. 2 which has been very well considered and after finding the petitioner at fault for not discharging its duties as per the agreement executed between the parties on 9.10.2017 and the petitioner having failed to carry out its work covered under the scope of work with 100% accuracy and also having failed to ensure complete secrecy of examination process, there appears to be no violation of any process of natural justice in black listing the petitioner by respondent no. 2. He submits with vehemence that the impugned order passed by respondent no. 2 does not suffer from any illegality, hence the petition be dismissed.

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Considered the submissions advanced by learned counsel for the parties and perused the material available on record. 17. It is evident from the record that the petitioner was entrusted with the task of holding online examination for the recruitment of various posts including Junior Engineer (T) (Electrical) by respondent no. 2. An agreement was also executed between the petitioner and the respondent no. 2 on

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9.10.2017 for conducting the examination of J.E. (T) (Electrical) which was scheduled on 8.2.2018 and 23.2.2018 and at two centres, i.e., Mahabir Prasad Degree College and J.K. Public School, Lucknow. There was a complaint of paper leakage on which the entire examination was cancelled by respondent no. 2 and on the complaint made by unsuccessful candidates in March, 2018, the Chief Minister of the State ordered a preliminary enquiry by the STF which submitted its report on 28.3.2018 in pursuance of which on 29.3.2018 an F.I.R. was lodged against 12 persons except the petitioner. The charge-sheet has been submitted against the accused persons and the petitioner has been made by the S.T.F. to be a witness in the case against the accused persons. The petitioner was issued a show cause notice on 9.4.2018 for which a reply was given by the petitioner on 11.4.2018 for supplying of the documents, i.e., S.T.F. report but on 2.9.2018, the petitioner was black listed by the respondent no. 2 and the petitioner challenged the same before this Court in Writ-C No. 28097 of 2018 in which the said show cause notice was quashed by Co-ordinate Bench of this Court on 28.8.2018 and remanded the matter to the authorities concerned and directed to issue fresh notice as only the gist of allegations was mentioned in the notice dated 9.4.2018 in pursuance of which a fresh show cause notice was issued to the petitioner on 18.9.2018 and again the petitioner challenged the same before this Court in Writ-C No. 35785 of 2018 which was dismissed by Co-ordinate Bench of this Court on 2.1.2019 as it found that the challenge to the said notice was ill founded. The petitioner submitted his reply to the notice on 5.10.2019 and the same was rejected by the respondent no. 2 against which the petitioner preferred the present petition challenging the same.

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In order to test the impugned order as well as arguments of learned counsel for the parties, it would be appropriate to take into consideration the terms and conditions of the agreement dated 9.10.2018 executed between the parties for the conduct of online examination for the post of J.E. (T) (Electrical).

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As per Clause-2 of the contract containing the 'scope of work' which includes inviting and processing applications, venue selection and seat arrangements, maintaining attendance sheets, designing and developing question papers and numerous other pre-examination stage, examination stage and post examination stage activities.

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As per Clause-7 of the contract, the petitioner was required to carry out all the works covered under the 'scope of work' with 100% accuracy.

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It would not be out of place of mention here that in the preliminary enquiry which was conducted by the S.T.F. it found certain anomalies which are reproduced as under:-

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"(i) No MAC of any network attached device were captured at any times in the whole course of exams

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(ii) No physical Network switch/Hub were checked or sanitized

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(iii) Unused network media were not discarded before the commencement of examination

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(iv) IP's of the machines dedicated for the exam were not changed

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(v) The computer machines were not sanitized of any Remote Access Tools, Key loggers, Screen Casting Application, Network bridging tool etc.

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(vi) The computer network ports were not isolated.

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(vii) The dynamic network diagram was not created before and after examination.

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(vii) VPS access logs for the examination were not preserved for future audit."

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The respondent no. 2 while black listing the petitioner found that he has failed to provide 100% secrecy in carrying out the required work covered under the scope of work as per Clause 7 and he has also failed to comply with the provisions as per Clause-11 to ensure complete secrecy of examination process which was the sole responsibility of the petitioner by deploying high security system and conduct of security tests to verify that there are no vulnerabilities for examination conduct process and due to said act and omission on the part of the petitioner, who failed to changed the IP address of the computer, sanitizing the computer device and isolation of network ports apart from other things to be done by him, proves that he created an opportunity to software hackers to install remote access software AMMY and to leak the question paper and solve it from outside examination centre which caused a great loss and hardship to the Corporation which had to cancel the examination and further had to engage a fresh agency, namely, EDCIL (among the "MINIRATNA" PSU of the Central Goverment) and had to be given contract for safeguarding the future of the candidates and to maintain a clean image of the Commission in holding competitive examination.

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As we have already noticed that as per the contract the scope of work, venue selection and seat arrangements were all detailed out specifically in the terms of agreement and this was all aimed not only at providing absolute transparency in matters of selection in public employment but also to maintain absolute secrecy to make the competition healthier and unquestionable. However, the findings that have come to be arrived in the enquiry report submitted by the S.T.F. in which it has been categorically recorded that the centres/colleges where the

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computer lab was to be utilized were virtually insecured as AMMY software had already been installed before the examination and the ID and password were used through Whats App messages to arrange answer to the question in advance and this was found to be identical mistake that resulted in absolute hacking of the server and this all happened only because the systems were not sanitized before uploading the question papers through the desired software and resulted in easy access to the mobile because of hacking of the password and the IDs. This above finding has resulted in the charges that show cause notice contained. In reply thereto, an expert opinion of Professor Manish Salvi was relied upon to justify innocence of the petitioner. It has been argued before this Court that the Expert opinion was to the effect that MAC address can be hacked and cloned as well. Much emphasis has been laid upon the reply of the Expert regarding question no. 2. For better appreciation question no. 2 and answer submitted by the Expert in his opinion dated 26th September, 2018 are reproduced hereunder:-

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"Que. 2 Can the MAC address be hacked or cloned? If Yes or No, Pl. Elaborate.

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Ans. Yes, MAC address can be hacked accordingly Cloned....

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If the hacker wants to confuse the switch and other users, Hackers can present a duplicate MAC on he same LAN. This cause a service "irregularity" for whomever they are duplicating. It not the standard behavior for a duplicate MAC, but it is not really possible (nor necessary) to 'snoop' that way. If the hacker wanted to snoop, since ETHERNET is a broadcast medium, they just need to be connected and listening.

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If the hacker wants to blast the Ethernet interface of a given user, they can ignore the transmit rules and send, i.e., Hot Spot. Of Mobile.

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It is possible to locate a device using MAC address.

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Impersonate another computer on a network, usually a WiFi one is commonly used to bypass MAC filtering, connect for free to paid hotspots, perform some WiFi cracking techniques, or perform various man-in-the-middle techniques.

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Track a computer across different sessions and networks. This requires some degree of privileged access to the computer but it's useful for things like identifying individual nodes in a botnet."

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In our opinion this answer alone is half way answer because question no. 3 is more crucial and important which is reproduced hereunder:-

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"Que. 3 Within a LAN network, what are the possibilities of accessing the systems through remote? Can the system/IP be hacked even if the IP addresses are secured?

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Ans. No. If someone knows your IP address, they they might try. They may become successful or fail in their attempts depending on how secure your system is. If you have a firewall, antivirus and updated OS, then there is no possibility of someone hacking you."

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Taking both the questions as one question and reading both the answers together it comes out very clear an opinion of the Expert that attempt of hacking may be successful or may even fail depending upon how secure is the system and if the firewall, antivirus and updated OS the system is equipped with then there is no possibility of hacking. Thus in our considered opinion, the Expert opinion runs counter to the very argument advanced by learned counsel for the petitioner in support of the his reply to the crucial charges contained in the show cause notice and argument deserves rejection and is hereby rejected.

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The argument of learned counsel for the petitioner that the petitioner has not been given opportunity of hearing by respondent no. 2 before black listing him and there has been gross violation of principles of natural justice is wholly unfounded as from the record it is apparent that the petitioner

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had given a detailed reply on 5.10.2019 to the show cause notice dated 18.9.2019 which was issued to him after the orders of this Court dated 28.8.2018 and the charges were framed against him on the basis of preliminary enquiry report of the S.T.F. The respondent no. 2 considering parawise reply to the show cause notice has considered each and every ground of the petitioner and it is, thus he has come to the conclusion that the petitioner being solely responsible for the conduct of the examination in question with 100% accuracy, however failed to maintain the secrecy of examination process. Thus respondent no. 2 rejected his reply and ordered for black listing the petitioner for a period of three years from the date of impugned order. The other argument of learned counsel for the petitioner that the notice dated 18.9.2018 which was issued to the petitioner in pursuance of the order dated 28.8.2018 was also in violation of this Court's order as it was issued beyond time as had been provided by this Court, is not of much significance as a fresh show cause notice was issued to him. Moreover, the second show cause notice dated 18.9.2019 which was further challenged by him before this Court and the writ petition was dismissed by a co-ordinate Bench of this Court on 2.1.2019 holding that challenge to the said notice was ill founded and the said order of this Court was not challenged by the petitioner before the Apex Court and same has become final.

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In matters of black listing, the Courts have held it to be sufficient if a show cause notice is given of the proposed action and reply is sought. Right to make the contract has been held to include a right not to make a contract as well and said right has been held to be with every person capable to enter into a contract but the discretion of the State, has been said to be

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subject to the constitutional obligation in consonance with the spirit of article 14 of the Constitution which ensures that every such discretion should not be an arbitrary one. The Apex Court in the case of Patel Engineering Limited vs. Union of India (2012)11 SCC 257 has observed that the State can decline to enter into contractual relationship with a person or class of persons for a legitimate purpose. The authority of the State to black list a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose etc. So, there need not to be a statutory grant of such power and only legal limitation upon the exercise of such an authority is that the State is to act fairly and rationally without in any way being arbitrary act thereby such a decision can be taken for some legitimate purpose . It was further observed that the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors.

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As we find in the present case that the State having considered the enquiry report submitted by the S.T.F. and having found the petitioner to be quite negligent in carrying out the onerous examination for selection and recruitment and the expert report having been in tune with the findings, reply submitted by the petitioner to plead its innocence was rightly rejected. Notice of show cause having been held to be mandatory, it is necessarily required to be issued to pass an order and once issued obligation stands discharged. Even if no reply is submitted it has been held in the case of the Nova Steel (India) Limited vs. M.C.D. and others reported in (1995) 3 SCC 334, the decision of the authority to black list such a contractor was held to be not arbitrary.

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On the scope of judicial review of the State action in black listing for a certain period which amounts to debarrment of such persons from entering into a contract the Apex Court in the case of Kulja Industries Ltd. vs. Chief General Manager Western Telecom Project B.S.N.L. and others reported in (2014) 14 SCC 731 considered the scope of judicial review and permissibility of interference with the orders of black listing on the ground of natural justice referring to various decisions like Erusian Equipments & Chemicals Ltd. vs. State of West Bengal (1975) 1 SCC 70 regarding, Southern Painters vs. Fertilizers & Chemicals Travanacore Ltd. 1994 Suppl. (2) SCC 699, Patel Engineering Ltd. vs. Union of India (2012) 11 SCC 258, B.S.N. Joshi and sons vs. Nair Coal Services Ltd. and others (2006) 11 SCC 548. In that regard as in the present case, we find that sufficient opportunity was afforded. We do not see that those judgments are in any manner attracted in the present case in so far compliance of principles of natural justice is concerned. So far as arbitrariness and discrimination in State action is concerned and further proportionality of the decision taken we refer to the decision in the case of Patel Engineering Ltd. (supra) in which elaborating the doctrine of proportionality, the Court referred to paras-45 and 46 of the judgment in the case of Teri Oat Estates (P) Ltd. vs. UP, Chandigarh (2004) 2 SCC 130 which reproduced hereunder:-

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"45. The said doctrine originated as far back as in the 19th century in Russia and was later adopted by Germany, France and other European countries as has bee noticed by this Court in Om Kumar v. Union of India.

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46. By proportionality, it is meant that the question whether while regulating exercise of fundamental rights, the appropriate or least restrictive choice of measures has been made by the legislature of the administrator so as to achieve the object of the legislation or the purpose of the

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administrative order, as the case may be. Under the principle, the Court will see that the legislature and the administrative authority

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'maintain a proper balance between the adverse effects which the legislation or the administrative order may have on the rights, liberties or interests of persons keeping in mind the purpose which they were intended to serve."

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Applying the above test to the facts of the present case, we find that the basic task performance with which the petitioner was entrusted to under the agreement reached between the petitioner and the respondent authorities, it was only on account of the absolute trust reposed with the petitioner not only the online software developed by the petitioner was permitted to be applied to but even the selection process, centres and systems were also left to the discretion of the petitioner to maintain absolute secrecy of the online examination and absolute discretion was to be exercised by the petitioner to ensure free and fair examination for selection but the manner in which, it appears, the things were so much taken for granted by the petitioner as far as the computer systems and centres are concerned that software became vulnerable to unhealthy design of unscrupulous hackers. The company of hackers succeeded but for want of proper sanitization. If the exercise of online examination process or the examination conducting exercise that had been virtually out sourced to the petitioner resulted in cancellation of the examination because of the paper leakage like unhealthy practice. It eroded faith of the people as well in the system and charged the State owned corporation for failing to provide a full proof system for conducting free and fair selection and, resultantly warranted for an appropriate action, and so, we do not find any arbitrariness in the State action in the present case.

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It is very surprising to note that the F.I.R. which was lodged by the S.T.F. against 12 accused persons finding that there were serious latches on the part of the petitioner, who failed to install anti virus and further found certain anomalies which have been referred above such as No MAC of any network attached device were captured at any time in the whole course of exams; No physical Network switch/Hub were checked or sanitized; Unused network media were not discarded before the commencement of examination; IP's of the machines dedicated for the exam were not changed; the computer machines were not sanitized by any Remote Access Tools, Key loggers, Screen Casting Application, Network bridging tool etc; The computer network ports were not isolated; The dynamic network diagram was not created before and after examination; VPS access logs for the examination were not preserved for future audit and yet for reasons better known to S.T.F. that petitioner was not named in the F.I.R. and this above fact is being taken as a ground by the petitioner to claim benefit in the present case and has been cited as a witness in the said case. One must notice that, the trial is still going on and it cannot be said that the petitioner cannot be summoned as an accused in the second ongoing criminal case by the trial court. Moreover, the arguments of learned counsel for the petitioner and the reply which has been submitted by the petitioner in para-17 of the show cause notice dated 18.9.2018 are self contradictory to the agreement executed between the parties.

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In view of the forgoing discussions, we do not find any good ground to quash the impugned order, hence the prayer for quashing the same is refused.

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The petition lacks merit and is, accordingly, dismissed.

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(Ajit Kumar, J.) (Ramesh Sinha, J.)

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Order Date :- 7.8.2019 Shiraz

M/S Aptech Ltd. v. U.P. Power Corporation Ltd. and Another

Case brief

What is this about?

What did the court decide?

M/S Aptech Ltd. v. U.P. Power Corporation Ltd. and Another

Case brief

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What did the court decide?

What the court decided

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