Quashed

M/S Sri Avantika Contractors (I) Limited v. State of U.P. and 4 Others

Allahabad HC19 Feb 2020WRIC/5195/2020

Case brief

AI extract

What is this about?

The High Court quashed a non-speaking order passed by the Collector denying a royalty claim. The order was issued without considering the petitioner's reply. The court directed the authority to reconsider the matter based on a fresh representation.

What did the court decide?

The order dated 28.12.2019 is quashed. Petitioner permitted to submit a fresh representation within two weeks for final orders within three months. No coercive action for four months.

M/S Sri Avantika Contractors (I) Limited… — Contract and Commercial Disputes | Allahabad HC (2020)

¶1

¶2

Court No. - 4

¶3

Case :- WRIT - C No. - 5195 of 2020

¶4

Petitioner :- M/S Sri Avantika Contractors (I) Limited Respondent :- State Of U.P. And 4 Others Counsel for Petitioner :- Manu Khare Counsel for Respondent :- C.S.C.

¶5

Hon'ble Bala Krishna Narayana,J. Hon'ble Prakash Padia,J.

¶6

Heard Sri Manu Khare, learned counsel for the petitioner and learned Standing Counsel for the respondents.

¶7

The petitioner has preferred the present writ petition with following prayers:

¶8

“(a) Issue a writ order or direction in the nature of certiorari quashing the order dated 23.10.2019 passed by the respondent No.2 to the extent it directs to the Collector Jhansi/respondent No.4 to pass fresh modified order and modified consequential order dated 28.12.2019 passed by the Collector Jhansi/respondent No.4.

¶9

(b) Issue writ, order or directions in the nature of mandamus directing the the respondents not to take any coercive action against the petitioner in pursuance to the impugned order dated 23.10.2019 and 28.12.2019.

¶10

(c) to pass any other order or orders as this Hon’ble Court may deem fit and proper in the facts and circumstances of the case and to which the petitioner is entitled in law.

¶11

(d) to award the cost of the Petition.”

¶12

The petitioner is a construction company. The petitioner-company awarded a contract for construction of Babina Canal System from right of Mtatial Dam for providing irrigation facilities to 15 villages of Babina Block, District Jhansi. The aforesaid contract was awarded by irrigation department Matatila, Lalitpur through letter No.V-2/Babina Sinikh/Ma/180 dated 18.06.2015.

¶13

A notice dated 05.03.2016 was issued by the office of the Collector Jhansi/respondent No.4 asking the petitioner to deposit a sum of

¶14

¶15

Rs.1,15,69,748/- as balance amount of royalty against the quantity of soil used in completing West Canal Project failing which again as per Rules 3, 57 and 70 of the U.P. Mines and Minersal (Concessions) Rules, 1963 (hereinafter referred to as “the Rules, 1963”) and Section 4/21 of Mines and Minerals (Development) and Regulation) Act, 1957 (hereinafter referred to as “the Act, 1957”) would be taken against the petitioner.

¶16

A detail reply was submitted by the petitioner on 18.3.2016 clearly stating that the petitioner has already deposited the amount of royalty as per invoice of Irrigation Department. It is further stated in the reply that in fact the royalty was deposited by Irrigation Department itself and the petitioner was paid after deducting the royalty amount for the work done. The respondent No.4 without considering the reply submitted by the petitioner to the show cause notice as well as in violation of conditions of agreement/contract, passed an order dated 1.5.2017 directing the petitioner to deposit a sum of Rs.6,89,20,920/- as balance amount of royalty and mineral price.

¶17

Aggrieved against the aforesaid order, a statutory appeal was preferred by the petitioner before the Commissioner Jhansi Division Jhansi/respondent No.3 on 27.6.2017 along with the Stay Application for interim relief. On the said application, an interim order was granted in favour of the petitioner by the respondent No.3 on 05.07.2017 with the condition that the petitioner would deposit a sum of Rs.38,28,940/- being 1/3^rd of the royalty amount. Ultimately, the aforesaid appeal was rejected by the respondent No.3 vide its order dated 09.10.2017. Against the aforesaid order, a revision was preferred by the petitioner as provided under Rule 78 of the Rules, 1963 on 16.12.2017 along with Stay Application before the State Government. An interim relief was also granted in favour of the petitioner on 14.6.2019. Ultimately, the aforesaid revision was party allowed by the Revisional Authority vide its order dated 23.10.2019. By the aforesaid order, the order passed by the Appellate Authority was set aside and directions were given to the

¶18

¶19

respondent No.4/Collector Jhansi to pass fresh order keeping in view of the Government Order dated 15.10.2015. After the aforesaid order was passed, a show cause notice was issued by the respondent No.4 to the petitioner on 18.11.2019 and a reply to the aforesaid show cause notice was given by the petitioner on 02.12.2019 to the respondent No.4. After the aforesaid reply was submitted by the petitioner, an order dated 28.12.2019 was passed by the respondent No.4 rejecting the claim of the petitioner.

¶20

By the aforesaid order, the petitioner was directed to deposit a sum of Rs.2,39,46,248/- within 15 days. Aggrieved against the order passed by the respondents, the petitioner has preferred the present writ petition.

¶21

Apart from various other arguments, it is argued by Sri Manu Khare, learned counsel for the petitioner that though a detail reply was submitted by the petitioner before the respondent No.4 in response to the notice dated 18.11.2019 but without considering the reply of the petitioner, directions were given by the respondent No.4 to the petitioner to deposit a sum of Rs.2,39,46,248/- within 15 days. It is further argued by Sri Manu Khare, learned counsel for the petitioner that the order dated 28.12.2019 passed by the respondent No.4, copy of which is appended as Annexure No.16 to the writ petition is absolutely non-speaking order.

¶22

It is further argued from perusal of the order passed by the respondent No.4 that the order was passed on the basis of some report/letter of the Executive Engineer, Irrigation Department dated 21.12.2019 but the copy of the aforesaid letter/report was never provided to the petitioner.

¶23

Heard learned counsel for the petitioner and learned Standing Counsel for the respondents. With the consent of learned counsel for the parties, the present writ petition is disposed of finally at the admission stage itself.

¶24

From perusal of the record, it appears that vide order dated 23.10.2019 passed by the State Government in the revision preferred by

¶25

¶26

the petitioner, directions were given by the State Government to the respondent No.4/Collector Jhansi to pass fresh modified order, keeping in view the Government Order dated 15.10.2015. Though the reply was submitted by the petitioner on 02.12.2019 but the same was not taken into consideration in its correct perspective by the respondent No.4 and passed the order dated 28.12.2019.

¶27

We have heard learned cunsel for the petitioner and learned Standing Counsel for the respondents and perused the order dated 28.12.019 passed by the respondent No.4. In paragraph 3 of the aforesaid order reference has been made in respect of reply submitted by the petitioner dated 02.12.2019 and in paragraph 4 of the writ petition there is a reference of report/letter submitted by the Executive Engineer Irrigation Department dated 21.12.2019 but without discussing anything further in the matter, order impugned has been passed directing the petitioner to deposit a sum of Rs.2,39,46,248/-.The reasoning given in the order impugned reads as follows:-

¶28

vr,o vc vkidk i{k lquus ds mijkUr rFkk flapkbZ fuek.kZ [k.M] ekrkVhyk] yfyriqj ls iqf"V ds mijkUr vkids ij ns;rk dh fLFkfr fuEuor gS%&”

¶29

The Supreme Court in the case Mahabir Prasad Santosh Kumar v. State of U.P. and Others AIR 1970 SC 1302 held that recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. The relevant portion of the judgment is quoted below:-

¶30

"The practice of the executive authority dismissing statutory appeal against orders which prima facie seriously preju- dice the rights of the aggrieved party without giving rea- sons is a negation of the rule of law."

¶31

“Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has

¶32

¶33

rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may deter- mine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just."

¶34

Again the Supreme Court in the case of Woolcombers of India Ltd. case AIR 1973 SC 2758 was pleased to hold that giving reasons in respect of their conclusion by judicial and quasi judicial authorities without giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is essential for various reasons. The relevant paragraph of the aforesaid judgement is quoted below:-

¶35

"The giving of reasons in support of their conclusions by judicial and quasi-judicial authorities when exercising initial jurisdiction is - essential for various reasons. First, it is calculated to prevent uncon scious unfairness or arbitrariness in reaching the conclusions. The - very search for reasons will put the authority on the alert and min - imize the chances of unconscious infiltration of personal bias or un fairness in the conclusion. The authority will adduce reasons which will be regarded as fair and legitimate by a reasonable man and will discard irrelevant or extraneous considerations. Second, it is a wellknown principle that justice should not only be done but should also appear to be done. Unreasoned conclusions may be just but they may not appear to be just to those who read them. Reasoned conclusions, on the other hand, will have also the appearance of justice. Third, it should be remembered that an appeal generally lies from the decision of judicial and quasi- judicial authorities to this Court - by special leave granted under Article 136 A judgment which does not disclose the reasons, will be of little assistance to the Court."

¶36

Again similar view was taken by the Supreme Court in the case of Siemens Engineering & Manufacturing Co. of India Limited AIR 1976 SC 1785. In this case Supreme Court held that every quasi-judicial order must be supported by reasons. Relevant portion of the aforesaid judgement is reproduced below:-

¶37

"It is now settled law that where an authority makes an order in exercise of a quasi-judicial function it must record its reasons in support of the order it makes. Every quasi-judicial order must be supported by reasons."

¶38

¶39

16. Taking into account the aforesaid pronouncement, a constitution Bench of the Supreme Court further in case of S.N. Mukherjee vs Union Of India AIR 1990 SC 1984 was pleased to hold that an administrative authority exer - cising judicial or quasi-judicial functions is required to record the reasons for its decision. Relevant portion of the aforesaid judgement is quoted below:-

¶40

39. For the reasons aforesaid, it must be concluded that except in cases where the requirement has been dispensed with expressly or -

¶41

by necessary implication, an administrative authority exercising ju dicial or quasi-judicial functions is required to record the reasons for its decision.

¶42

17. The Supreme Court in the case of Kranti Associates Private Lim - ited and another Vs. Masood Ahmed Khan and others (2010) 9 SCC 496 was pleased to hold that a quasi-judicial authority or even an administrat - ive authority should give reasons in support of its decision. The relevant extract of the judgement is quoted below:-

¶43

15. The expression ‘speaking order’ was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of Writ of Certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order.

¶44

This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the ‘inscrutable face of a Sphinx’.

¶45

The Supreme Court in case of Assistant Commissioner, Commercial Tax Department, Works Contract and Leasing, Kota Vs. M/s Shukla and Brothers reported at 2010 AIR SCW 3277 dealt with the principles of law while exercising power of judicial review on administrative action. It was held by the Supreme Court in the aforesaid case that the doctrine of audi alteram partem has three basic essentials(i) A person against whom an order is required to be passed or whose rights are likely to be affected adversely must be granted an opportunity of being heard.

¶46

(ii) The concerned authority should provide a fair and transparent procedure.

¶47

¶48

(iii) The authority concerned must apply its mind and dispose of the matter by a reasoned or speaking order.

¶49

Paragraph 9 of the aforesaid judgment is quoted below-

¶50

The increasing institution of cases in all Courts in India and its resultant burden upon the Courts has invited attention of all concerned in the justice administration system. Despite heavy quantum of cases in Courts, in our view, it would neither be permissible nor possible to state as a principle of law, that while exercising power of judicial review on administrative action and more particularly judgment of courts in appeal before the higher Court, providing of reasons can never be dispensed with. The doctrine of audi alteram partem has three basic essentials. Firstly, a person against whom an order is required to be passed or whose rights are likely to be affected adversely must be granted an opportunity of being heard. Secondly, the concerned authority should provide a fair and transparent procedure and lastly, the authority concerned must apply its mind and dispose of the matter by a reasoned or speaking order. This has been uniformly applied by courts in India and abroad."

¶51

In view of the aforesaid, we are of the opinion that since the order impugned is absolutely non speaking order and was passed without considering the reply submitted by the petitioner, therefore, the order impugned dated 28.12.2019 is liable to be quashed and the same is hereby quashed.

¶52

In this view of the matter, the present petition is disposed of finally permitting the petitioner to submit a fresh representation along with certified copy of this order in the office of respondent No.4 within a period of two weeks from today. If such a representation is made within time stipulated hereinabove, the respondent No.4 will pass appropriate orders on the same strictly in accordance with law within a period of three months from the date of submission of representation by the petitioner before him.

¶53

For a period of four months or till the decision is taken by the respondent No.4 in the matter whichever is earlier, no coercive action be taken against the petitioner.

¶54

Order Date :- 19.2.2020 saqlain

M/S Sri Avantika Contractors (I) Limited v. State of U.P. and 4 Others

Case brief

What is this about?

What did the court decide?

M/S Sri Avantika Contractors (I) Limited v. State of U.P. and 4 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M/S Raghubanshi Stone Product Vs State of U.P. and 2 Others

Meera Devi and 119 Others Vs State of U.P. and 2 Others

Dr. Deepak Shukla Vs State of U. P. through Its Principal Secretary and 3 Others

Praveen and 9 Others Vs State of U.P. and 2 Others

Ram Sanehi and Another Vs State of U.P. and 3 Others

Balendu Shekhar Dwivedi Vs State of U P and 4 Others