Allowed

M/S Infotech Computer Educatuion v. the Karnataka Institute of Medical Science

Karnataka HC5 Nov 2019WA/100387/2018

Case brief

AI extract

What is this about?

This High Court of Karnataka set aside an order dismissing a writ petition regarding illegal termination of a service contract and blacklisting. The court held that the respondents violated natural justice by passing an order on grounds not mentioned in the earlier show cause notice.

What did the court decide?

The order dated 30.10.2018 and the order dated 6.7.2018 were quashed, and the respondents were granted liberty to issue a fresh show cause notice indicating all grounds within two months.

M/S Infotech Computer Educatuion Vs the… — Contract and Commercial Disputes | Karnataka HC (2019)

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IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH

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DATED THIS THE 5^TH DAY OF NOVEMBER 2019

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PRESENT

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THE HON’BLE MR.JUSTICE ALOK ARADHE

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AND

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THE HON’BLE MR.JUSTICE P.G.M. PATIL

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WRIT APPEAL NO.100387/2018 (GM- TEN)

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BETWEEN:

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M/S INFOTECH COMPUTER EDUCATION (A PROPRIETARY CONCERN) OFF. KOPPIKAR ROAD, MALLIAKRJUN AVENUE SHOP NO.12/6, DESHPANDE NAGAR HUBBALLI-580029 BY ITS PROPRIETOR SHRI SRINIVAS P. KYARKATTI AGE: 35 YEARS, OCC: BUSINESS R/O. NO.19, CHAITANYA NAGAR R.N. SHETTY FACTORY ROAD GOKUL ROAD, HUBBALLI-580030 TQ: HUBBALLI, DIST: DHARWAD

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... APPELLANT.

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(BY SRI F V PATIL, ADVOCATE.)

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AND:

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THE KARNATAKA INSTITUTE OF MEDICAL SCIENCE REP. BY ITS DIRECTOR KARNATAKA INSTITUTE OF MEDICAL SCIENCE HUBBALLI 580022, TQ. HUBBALLI DIST. DHARWAD

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THE DIRECTOR THE KARNATAKA INSTITUTE OF MEDICAL SCIENCE HUBBALLI 580022, TQ. HUBBALLI DIST. DHARWAD

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THE CHIEF ADMINISTRATIVE OFFICER THE KARNATAKA INSTITUTE OF MEDICAL SCIENCE, HUBBALLI 580022 TQ. HUBBALLI, DIST. DHARWAD

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... RESPONDENTS

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(BY SRI VIDYASHANKAR G DALWAI, ADVOCATE.)

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THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT, 1961, PRAYING THAT THE ORDER OF LEARNED SINGLE JUDGE DATED 30.10.2018, PASSED IN DISMISSING THE WRIT PETITON NO.104524/2018 MAY KINDLY BE SET ASIDE, BY ALLOWING THIS WRIT APPEAL, ETC.,.

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THIS APPEAL COMING ON FOR PRELIMINARY HEARING THIS DAY, ALOK ARADHE, J, DELIVERED THE FOLLOWING:

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JUDGMENT

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Sri F.V.Patil, learned counsel for the appellant. Sri Vidyashankar G. Dalwai, learned counsel for the respondents.

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The appeal is admitted for hearing. With consent of the learned counsel for the parties, the same is heard for final disposal.

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In this intra Court appeal, the appellant has assailed the validity of the order dated 30.10.2018, passed by the learned single Judge in W.P.No.104524/2018, by which the writ petition preferred by the petitioner against the order of termination of his contract and black listing has been dismissed.

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Facts giving rise to filing of this appeal briefly stated are that, respondent No.1 called for e-procurement tender for providing out sourcing, services for manpower to Karnataka Institute of

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Medical Sciences, Hubballi, through e-procurement portal in package No.1 and 2, on 18.6.2016 and 22.6.2016 respectively. The appellant participated in the aforesaid tender and was declared successful bidder and work order was issued in his favour, thereafter an agreement was executed between the parties. On 5.12.2017, a notice was issued to the appellant, by which the appellant was informed that he has not paid difference of salary to the tune of `7,41,588/to the employees. On receipt of the notice, the appellant submitted the reply. However by impugned order dated 6.7.2018, the order of allotment of tender in favour of the appellant was cancelled on 10 grounds, which were not indicated in the show cause notice dated 5.12.2017 and the appellant was black listed.

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Being aggrieved, the appellant filed a writ petition before the learned single Judge.

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However the learned single Judge by impugned order dated 30.10.2018, dismissed the writ petition. In the aforesaid factual background this intra Court appeal has been filed.

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Leaned counsel for the appellant submitted that the learned single Judge ought to have appreciated that the impugned order has been passed in violation of principles of natural justice as only one ground with regard to non payment of salary to the tune of `7,41,588/- was indicated in the show cause notice, whereas the contract of the appellant has been terminated on the grounds which were not mentioned in the show cause notice. In support of aforesaid submission, learned counsel for the appellant has placed reliance on the decision of the Supreme Court in M/s.Erusian Equipment and Chemicals Limited vs. State of West Bengal and another, (1975) 1 SCC 70 and Gorkha Security Services

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vs. Government (NCT of Delhi) and others, (2014) 9 SCC 105 . On the other hand, learned counsel for the respondents has supported the order passed by the learned single Judge.

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We have considered the rival submissions made at the Bar and have perused the records. It is well settled in law that the material/grounds on which the action is sought to be taken against a person should be made known to him and his response has to be sought. In other words, such person has to be appraised with regard to the case set up against him which he has to meet. It is further been held that when it becomes black listing, the aforesaid requirement becomes of the more imperative having regard to the fact that it is the hardest possible action (See Gorkha Security Services case (supra).

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In the background of aforesaid well settled principles of law, the facts of the case in

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hand may be examined. The relevant extract of the show cause notice dated 5.12.2017 reads as under:

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Wherefore, you shall remit difference of the salaries to your 58 workmen amounting to Rs.7,41,588-00 compulsorily within 3 days from the date of receipt of this notice and to submit documents to this office. In case of failure, your company would be blacklisted as already stated and FIR complaint would be filed and initiation of stringent legal action would be inevitable and you would be absolutely responsible for the same.

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The impugned order dated 6.7.2018, by which contract of the appellant has been terminated as well as he has been black listed without specifying any specific period of time has been passed as many as on 10 grounds. Thus, from perusal of the notice issued to the appellant

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as well as the impugned order dated 6.7.2018, it is evident that the order dated 6.7.2018 black listing the petitioner and cancelling his contract has been passed on the grounds which were not even indicated in the show cause notice and the appellant was not appraised of an opportunity to respond to the same. Therefore the action taken by respondents No.1 to 3 is clearly in breach of principles of natural justice and therefore the same cannot be sustained in the eye of law. However the aforesaid aspect of the matter has not been appreciated by the learned single Judge. We, therefore, quash the order dated 30.10.2018 passed by the learned single Judge in W.P.No.104524/2018 as well as the order dated 6.7.2018 (Annexure-E) as the same cannot be sustained in the eye of law.

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However respondents No.1 to 3 are

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granted liberty to issue a fresh show cause notice

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indicating all the grounds on the basis of which it proposes to take action against the appellant herein. Needless to state that an opportunity to the appellant to submit his response shall be granted and it shall also be afforded an opportunity of being heard before an order is passed. Let the aforesaid exercise be carried out within a period of two months from today. Accordingly the appeal is disposed of.

Sd/-

JUDGE

Sd/JUDGE

Mrk/-

M/S Infotech Computer Educatuion v. the Karnataka Institute of Medical Science

Case brief

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What did the court decide?

M/S Infotech Computer Educatuion v. the Karnataka Institute of Medical Science

Case brief

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