Allowed

Rana Manpower and Placement Services (P) Ltd., v. Apsrtc

Telangana HC20 Nov 2024WP/8207/2015

Case brief

AI extract

What is this about?

The High Court allowed a writ petition seeking the quashing of termination proceedings and blacklisting imposed by APSRTC. The Court held that adverse administrative orders, particularly those involving blacklisting, violate principles of natural justice if passed without affording the concerned party a personal hearing.

What did the court decide?

Set aside the impugned termination proceedings No.E3/122(3)/2013-RM:KR dated 11.03.2015. The writ petition is allowed.

Rana Manpower and Placement Services (P) Ltd., Vs… — Service and Employment | Telangana HC (2024)

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|^32s21

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HIGH COURT FOR^{THE STATEOF TELANGANA} AT HYDERABAD (SPecial Original^{Jurisdiction)}

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WEDNESDAY,^{THE TWENTIETH DAY OF NOVEMBER} TWO THOUSAND^{AND TWENTY FOUR}

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PRESENT

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THE HONOURABLE^{MRS JUSTICESUREPALLI NANDA}

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WRIT PETITI^{ON NO: 8207 0F 201s}

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Between:

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Viiri"u. Rana Manpower rVi*r.ondur^{and lrilandal, Placement Karimnagar Services} -(P)^District, . !td,^{Rep H-No by A 3-104'Rana} MunjampallyPratap, s/o A.Ko-teswara Rao,^{Director, aged about42 yearc'}

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.....PETITIONER

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AND

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APSRTC, O/o^{Regional l'/lanager,Karimnagar,rep by RegionallVlanager'} Karimnagar Region,^{Karimnagar District'}

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APSRTC,^Karimnagar-1 ,^{Rep.by Depot Manager' KarimnagarDistrict'}

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3- State of^{Telangana, Transport Department, Secretariat'HyderabadRep by} its Principal Secretary^{to Government'}

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....,RESPONDENTS

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Petition Under^{Article 226 of lhe Constitutionof lndia prayingthat in the} circumstances^{stated in the affidavit filed therewith' the High Court may be} pleased to issue a writ,^{orderor direction,moreparticularlya writ in the nature of} Writ of MANDAIT/US^{declaringthe action of the '1st respondentie" APSRTC'o/o} Regional Manager,^{Karimnagar, rep by Regional lt/anager'Karimnagar Region'} KarimnagarDistrict,inpassingfinalordersofterminationofcontractby proceedings No.E3l122(3)t2013-RM-KR,^{dated11-03-20't5 for the contractof} supplying of^{security guards to APSRTC KarimnagarBus Stand and Zonal} Hospital at Karimnagar,^{as bad, illegal, arbitrary, opposed to law' contrary to the} Deed of Contract.

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, .1- ,}. .rr. ': -.

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t. A.NO:1 OF 2015 (W PMP .NO:108't4 OF 20 15

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Petition undi:r Section 151 cpc praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to susPEND the proceedings No.E3/'122(3)/2013-RIr/:KR, dated 11-03-2015 0f the 1st respondent i.e., ApSRTC, o/o Regional Manage:, Karimnagar, rep.by Regional Manager, Karimnagar Region, Karimnagar District, so ias to enabre the petitioner to continue the contract for suppry of security guards at ApsRTc Karimnagar Bus sternd and Zonar Hospitar at Karimnagar, pendinq disposar of the main writ petitior .

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Counsel for the Petitioner : SRI M.VIDYASAGAR

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Counsel for the Respondent Nos.1 & 2 : Gp FOR TRANSPORT

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Counsel for the Respondent No.3 : SRI G.SRINIVAS

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The Court made the following ORDER

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MRS JUSTICE SUREPALLI^NANDA

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WRIT PETI ON No. 2O7 ot o15

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ORDER:

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Heard Sri M. Vidyasagar,^{learned counsel} appearing on behalf of^{the petitionerand learned} Assistant Government^{Pleaderfor Transport,appearing} on behalf of the^{respondent No.3 and Sri Gaddam} Srinivas, learned Standing^{Counsel. forTSRTC,} appearing on behalf^{of respondentNos.1 and 2.}

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The^petitioner approached^{the Court seeking} prayer as under:

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"...to issue to a writ order or direction^more particularly a writ in the nature of^{Writ of} MANDAMUS declaring the^{action of the 1st} respondent i.e. APSRTC^{o/o RegionalManager,} Karimnagar, rep by^{RegionalManager, Karimnagar} Region, Karimnagar^{District in passing final orders} of termination of contract^{by proceedings No'} E3/L22(3)/2013-RM:KR^{dated 11-03-2015for the} contract of supplying^{of security guards to APSRTC} Karimnagar Bus Stand^{and Zonal Hospital at} Karimnagar as bad,^{illegal,arbitraryopposed to} law contrary to the^{Deed of Contract and pass..."'}

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SN, J \vP 8207 2015

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3. The case of the petitioner in brief is as follows:

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The petitioner company is in the field of supplying security personnel and was assigned a contract of supplying security guards at Karimnagar Bus station and zonal Hospital at Karimnagar vide prccAs. No.E/122(3)/2013_RM:KR, dated 29.06.2073. On 13.01.2015 a show cause noticed was issued by the respondent to the petitioner company for non_payment of wages to security guards. Subseouently,. the respondents issued proceedings dated 11.03.2015 terminating the contract of the petitioner and by virtue of the order of termination of contract by, the 1't respondent vide proceedings No'E3/722(3)/2013-RM:KR, dated 11.03.2015 the petitioner firm had not only lost the security deposit but also made to suffer from further execution of contract in the APSRTC; as the petitioner company is blacklisted. Hence the writ petition. P RUSED TH REco D

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4 T n N 2 R :K dat 11. 3.2 o1s ts u bv he Re^qio nal m on h n comoanv, reads as under:

SN, J wP 8207^20ls

"Through the final^{notice oftermination of} Contract vlde^{reference 8th cited, you were finally} advised to submit^{the monthlyremunerationbillsfor} the months^{fromSeptemb er-2114 to January-2015 in a} proper way and as^{per the terms and conditionsof the} agreement^{for statutorypayments on or before 28-02-} 2015 failihg^{which the contractwork allotted to you will} be terminated^{and Security Deposit outstandingagainst} you is foffeited to the^{revenuesof the Corporation'} besides^{placingyou and your firm in Black list for the} contracts of^{entireAPSRTCin future'}

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But, even after^{acknowledgingto the Final Notice} of Termination^{of Contract, you have neither reported} this office^{nor submittedany explanation to the Final} Notlce.

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Further, the^{DepotManager, Karimnagar-Ihas} also informed^{vide lefter loth cited that you have not} submitted any^{claims/billsat his office till date'}

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Thus, it clearly^{revelsthat you have violatedthe} terms and^{conditionsintentionally' Thereby caused} non-payment^{of wages to the Security Guards engaged} by you.

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r il r H r rl n r n r P future".

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.Please acknowledoe the receipt,,

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DIscusSION AND coN LUSION

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Learned counsel appearing on behalf of the petitioner submits that no opportunity of personal hearing was provided to the petiti,)ner prior to issuing the impugned proceedings dated 11-03-2015 blacklisting the petitioner for the contracts of entire APSRTC in future. Hence the order impugned is illegal and liable to be set aside.

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6, Sri Gaddam Srinivas, learned Standing Counsel for TSRTC, appe,aring on behalf of respondent Nos.1 and 2 placing reliance on the averments made in the counter affidavits, surbmits that initially show cause notice for termination of contract was issued to the petitioner on 13.01.2015 and the petitioner had submitted his explanation dated 27.01.2015. Thereafter another notice was issued to the petitioner but the petitioner failed to submit any explanation. In those circumstances, the impugned proceedings dated 11.03.2015 had been issued in pursuance to final notice issued to the petitioner on 20.O2.ZOLS. The petitioner submitted written explanation and furnished the

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same to the 2nd respondent^{and also to the Executive} Director, A.P. Road^{Transport Corporation, Regional Offic€,} Karimnagar. Though the^{said explanationto the final notice} had been filed as material^{document to the present writ} petition in support of the^{petitioner's case, the learned} Standing Counsel appearing^{on behalfof respondents submits} that the representations^{are undatedand unacknowledgedby} the respondents herein^{and in those circumstancesthe} impugned^{proceedingshad been passed.}

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7 The Apex Court in its^{judgment (2020)18 SCC 55O} ff r ml nd he Sta ofU rP desh a dAn er in its head note observed as under^:

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Tenders A. Government Contracts^and Blacklisting - Effect^{of Hearing concerned person} prior to blacklisting Essentially of^{Passing of} idve.se order based^{on assumption,that too} without complying^{withprinciplesofnatural} Justice-ImpermissibilitY^of

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Unilaterally^{passing adverse order against} appellant for certain^{actions of itserstwhile} oiiector who had left^{companylong back-on facts} held, order^{preventingprocurementfrom} appetlant was of indefinite^durationand diiproportionate as it^{was passed on basis of} assumption without hearing^appellant

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SN, J \vP 11207 2015

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Considering long duration of operation of adverse order. Supreme Court itseli decidea matter without remanding matter to original iuthorities, and quashed the adverse order

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Held, blacklisting has the effect of preventing a person from privitege and advantage of entering into lawiul .j"ti"rrrt ip with 9.orgl11.lt^{for purposes of gains_ rhe ralt} tnat a orsaDtltty is created by the order of btacklisting indicates that the relevant authority is to trave an objective satisfaction -,Fundamentits oifair play require that person concerned shoulJ Ot given an opportunity to represent his case before lie is put on the blacklist.

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The Apex Court in the aforesaid Judgment, tn particular, at para L4 observed as under:

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h in Er V B h h

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h v ct n v cl r a a v d n or n r a n k a n n n U h T k s t m al

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2O. Blacklisting has the effect of preventing a person from the privilege and ad_vantage of entering lnto^-iirrr relationship with the tor"rnln.ni-'Jo, purposes of gains. The fact that a disabitit, i" created by the order of blacktistinjl;;;;;i." that the retevant authority i;- lJ ;;;;"

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SN, J wP 8207 2015

objective satisfaction. Fundamentals of fair play require that the person concerned shoutd be given an opportunity to represent -his case before he is put on the blacklist."

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The Apex Court in its judgment in Kulia Industries Ltd., vs. BSNL reoorted in^,(20L4) t4 SCC 731. very clearly held that before proposing to^pass a black listing or debarring orders the parties had to be given hearing followed by an appropriate reasoned order,

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1O. On perusal of the record, it is evident that the^petitioner had not been provided with an opportunity of^personal hearing prior to blacklisting the^petitioner though the final notice had been issued to the petitioner on 20.02.2015 indicating proposed action for blacklisting the^petitioner for the contracts of entire APSRTC in future^vide Lr.No.E3l122(3)/2013-RM:KR, dated 20.02.2015.^The material papers had been issued to the^{petitionerindicating} the proposed action for blacklisting the^{petitioner for the} contracts of entire APSRTC in future and the^{same is however} silent insofar as^providing the opportunity of^{personalhearing} to the petitioner and only called for an explanation^{from the} petitioner.

SN, J \vP 8207 2015

This Court vide its order dated }O.LO.2O24 observed as under in present W.p. No.g2O7 of 2OL5. "Heard lea rned counsel appearing on behalf of the petition€rr.

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Learned counsel appearing on behalf of the petitioner submits that the impugned order No.E3l122(ir)/2013-RM:KR dated 11.03.2015 have been passed without giving an opportunity of personal hearing to the petitioner, which is contrary to law laid down by thr: Hon'ble Apex Court and the ,judgments reported for the following:

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1 ln ;r decision of a three-Ju dqe Be ch of pex

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Cou ft reported in (1981) 1 SUoreme court Ca ses 664in ADE HI TT MIL ON IND the issue was whether the Central Government was required to comply with the requirements of audi alteram partem before it took over the management of an industrial undertaking under Section 1B_AA(1)(a) of the Industrir:s (Development and Regulation) Act, 1951. R.S. Sarkaria, J.speaking for the majority consisting of himself and D.A. Desai, J. Iaid down the following principles of law: (SCC p. 689, para 44) observed as under:

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".!a._ In short, the general principle _ as distinguished from arr ibsolute iute of uniform application seems to be that where a statute does not, in terms, exctude this rule of prior hearing but contemplates a post- decisional hearing amounting to a full review ot the originat order on

ll^,

SN, J w? 6207²⁰¹⁵

merits, the^{n such a statutewould be construed as} excluding^{the audialteram Partem rule at the} statute decisional^stage. ConverselY,^ifthe conferring^the Powe^{r is silent with regard to the} giving of a^pre-d eclsional^{hearing to the Person} and the^{administrativedecisiontaken bY} the authoritY involves civil^{consequences of a} and no full^{reviewor apPeal on} grave nature, merits against^{that decision is P} ided, courts wil! be extremelY^{reluctant to con} strue such^a statute as^{excluding the dutVof affording even a} minim al hearing^{shownof all itsformal traPPings} and dilatorY features at the Pre cisional^stage, unless,^viewed P^{ragmaticallY'itwould ParalYse} the administrative^{processor frustrate the need} for utmost Pro^{mptitude. In short,this rule of fair} be^jettiso ned save^invery y 'must not iona! circu mstances where^comPulsive except e court must^make necessitY so demands'.^Th every effort^{to salvage this cardinal rule to the} with situational maximum extent Possible, words of to recal!^the modifications.^But, core of it^{must, however,} Bhagwati, J.,^the remain,^namelY, relati ons^exerclse."

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2 he e c rt t en re rt *U A AT P D t rsv 2 S T TE F TT P D H o E ,,a ra o '1 ob erv u er

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"Para 10:^{The adherence to principlesof.natural justice} .^supreme ur- r.ignir"d^{by all civilized States is of} tpo.ti,i."^{when a quasi-judicial bodY-embarkson} J"["iining^{disputes betweenthe parties' or any}

SN, J \?-8207 2015

f-i,

administrative a ction involving civil consequences is in issue. These pri nciples are well settled. The first anel condemned unheard. Notice is the best limb of th is principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Tim e given for the purpose should be adequate so as to enable him to make h is representation. In the absence.of a notice of the kind and such reasonabl e opportunity, the order passed becomes whr:lly vitiated. Thus, it is but essential that a party should be put on notice of the case befo re any adverse order is passed against him. Thi s is one of the most importan t principles of natural justice..It is after all an approved rule of fair play. The conce pt has I^ained significa nce and sha des with time. When the h istoric docu ment was mad e at Runnymede in 1215 the first statutory recognition of this princi ple found its way into the "Manga Cafta The classic exposition of Sir Edward Coke of natura I justice requires to .'vocate rnterrogate and adjudicate" In the celebrated case o f Cooper v. Wandsworth Board of Works the principle was thus stated: ( ER p.420). t -) H St tho note ten oi e tree wh e fI CO ma d

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Since then the principl e has been chiselled, honeC and refined, en riching its content. ludicial treatment has adcied light and luminosity to the concept, like polishing of a diamond.

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whichP r hav1 e nneen laisddf !vnt bv thestico os r es rts as beinqth e tn m e to e h it div du ai t tr r re h m a t d while al si- u ci d d tnt r IV AU or maki nq an order a c ncr rhose ft q hts. These injustice".e a t d o n S h u o t o d n

l F.

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SN, J wP E207 2015

3 In "M NGILAL V. STATE OF M.P reportedin 2004 C a 447 at eBe fA e Court held that the Drinci oles of^{naturali ustice needto} be observed even if^{the statute is silent in that reqard.} In ot er words. a^{statutorvsilence Should be takento} imolv the need to^{observe the orinioles of natural} e where substa ntia I riq^hts of oaft^{ies are affected:} (SCC oo.453-54. oara 10) observed as nder:

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" 10- Even if a^s tatute^{is si lenta ndthere arenop} itive words in theA or.thd Ru les made^{thereunderthere} tdb ln wro s elli t the to he e a hose r s and rest ar kel to ff the' ers.., t m ssed kin re utr nt t6 ivaf roce befo re takinq a^decision .^{unlessthestatute Droides} otherwise The Dnnc ioles of natural UStice must^be read into unoccu^{Died interstices of thestatute. u n less} the IS a clearmandate^{tothe contrarv. No form or} procedure should 'evtir be.^permitted to^exc lude the presentation of a litigant's defence^{or stand' Ev} en in the absence of a^{provisionin procedural laws, power} inheres in every^{tribunal/courtof a judicial or quasi-} judicial character, to adopt modalities^necessaryto Lchieve requirements^{of naturaljustice and fair play to} ensure better and^{proper discharge of their duties'} Procedure is mainly^{grounded on the principlesof} natural^justice irrespective^{ofthe extent ofits} application by^{express provisionin that regard in a} giuen situation. IL has alwiys^{been acherished} [rinciple.^{Where the statute issilent about the} observance of lhe^{principlesof natural justice, such} statutory silence^{is taken to imply compliancewith the} principles.of natural^{justicewhere substantialrights of} parties are considerably^{affected. The applicationof}

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b.',4r -

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.-. -,ai.rt , *1:.ti!::x -_ '

SN, J \vP 8207 2015

natural justice becomes presumptive, unless fou nd excluded bli express words of statute or necessary intendment. Its aim is to sec re iustice or to Drevent miscarri aqe of iustice. Princioles of natu ral iusticedo not suoolantthel w. but su o olement it. These les oDerate onlv in are AS not covered bv anv I AW VA lidlv ade e f am t end d not nen themselves. "

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The said orders dated 30.10.2024 passed in present W.P. No. 8207 of 2015 are in force as on date.

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L2. Sri Gaddam Srinivas, learned Standing Counsel for TSRTC, appearing on behalf of respondent Nos.1 and 2 relied upon para No.7 of the counter affidavit which reads as under:

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In reply to the Para Nos. 7 & g of the Affldavit it is submitted that the petitioner has not submitted the claims for payment of s;rlaries for the months of September 14 and October 14. The Respondents issued notice dated 30.01.2015 to the petitioner stating that he has committed the following irreg urlarities:

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Not given the cheques to the Out_sourcing Security Guards in the presence of the Chief Security Inspector.

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(The Account payee is) not crossed on the cheques issued to them.

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Last lr4onth bank reconciliation statement not enclosed the latesl. bilt.

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The Outsourcing Secui"ity Guards signatures are not obtained on the payment sheet of October 2014.

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Further,^{Sri K' Srinivas has put two signature on the} payment sheet^{of September2014 one his himself and} another^{on- the name of sri D' Tirupathi which is irregular'}

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ThestatementinalsonotcertifiedbytheChiefSecurity Inspector,^{Karimnagarstatlng that the Cheques are not} issued in^his Presence'

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In view^{of that, the Petitioner advisedto re-submitthe} bills duly^{attendingthe irregularities and advise to re-submit} the bills^{for the months November 14 and December 14'}

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ItissubmittedthattheRespondentCorporationissued another^{notice dated20 '02 '2015 to the Petitionerstating} that the^{Petitioner hasviolated the terms and conditions'of} the agreement^{videclause No 8 (c) & 18'}

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The Petitioner^{failed to resubmit the bills for the month} of September^{2o:r4 and October2014 dulyattendingthe} irregularities^{as mentioned in it and to submit the bills for} November-2o14^{and Decembet 2ol4 for arranging the} payments.^{The Petitioner was finallyadvisedto submitthe} billsforthemonthsfromseptember2o|4to]anuary2015 according^{to the terms and conditionsof the agreement} through^{the noticedated20 'O2'2O15 'The Petitioner} submittedaletterdatednilstatingabouttheweeklyoffsof the Security^{guards but not submitted the bills for payment} wages to^{the securitYguards'}

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Itissubmittedthatthepetitionerhasnotpaidthewages to the^{Security Guards engagedby him from October2014} to February^{2015 and theyhave stoppedthe work w'e'f'} 21.o2.20t5.

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i{1 a, i'. -.i1rii ::r i: .t

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It is^{submittedthat thePetitioner neither} submitted^{any explanationJrg' submitted any claims}

SN, J wP 8207 2015

at office of the Corporation. In view of violating the terms and conditions of the agreement dated 05.06.2013 and in view of failure to pay the wages to the outsourcing Security Guards and there is no alternative, the Contract was terminated vide order dated 11.03.2015.

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It is submitted that after termination of petitioner,s agreement, alternative arrangements were made and contract work was given on nomination basis for a period of one year from 01.05.2015 to 30.0S.2016 to M/s. Manikanta Social Senrice Society, Karimnagar for smooth functioning of security activities at Karimnagar bus station as well as Zonal Hospita l, Karim nagar.

¶135

It is submitted that the petitioner agency is intentionally delayinq to submit the bills and causing delay in payment of wages to the outsourcing security guards,,.

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In view of the fact as borne on record and even accepted by the learned counsel appearing on behalf of the respondents that no opportunity of personal hearing admittedly had been provided to the petitioner, this Court opines that the impugned proceedings No.E3l122(31/2073_ RM:KR, dated 11-03-2015 of the 1't respondent is liable to be set aside.

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15 SN. J wP 8207-2015

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Taking^{into consideration} (a) The^{submissions made by the learnedcounsel} on behalf^{of the Petitionerand sri Gaddam} appearing Counsel^forTSRTC' learned^Standing Srinivas, appearing^{on behalf of respondentNos'1 and 2'}

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(b) The averments^{in the counteraffidavit filed on} behalf^{ofrespondentNos'1 and 2 referred toand} extracted^above,

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(C.) The^{Interimorders of this Court dated} So.Lo.zo2|passedinpresentwritpetitionwhichare.n force^{as on date (referredto and extractedabove'} (d.) The^{decisions of the ApexCourt of India i'e''}

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18 SCC^{55O in} Deffodills (i)⁽²⁰²⁰⁾ Another^{Y State of} Pharmaceuiicals^{Limited and} Uttar^{Pradesh and another'} (ii) (2014)^{14 SCC 731 in Kulja IndustriesLtd" v}

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BSNL,

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(iii)^{(2OO9) t2 SCC 40 in Uma Nath Pandev and} others^{v State of UttarPradesh and another"'} (iv)^{(2004) 2 SCC Page 447' in Mangilalv State} of M.P.

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SN, J WP_8207-2r:)15

¶151

The impugned proceedings No. E3/L22(3)/2OL3RM:KR, dated 11.O3.2O1S is set aside. It is however, observed that at is open to the respondents to initiate actaon against the petitioner if they intend to do so in accordance to law, tn conformity with principtes of justace after providing an opportunity of personal hearing to the petitioner.

¶152

Accordingly, the writ petition is allowed. However, there shall be no order as to costs.

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Thr: ;1;56s;i.neous applications, if any, shall stand

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closed.

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SD/. P. PADMANABHA REDDY ASSISTANT REG ISTRAR //TRUE COPY// \t $ a6'TION OFFICER

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¶157

The Reqionat t,4anaoer .|.PlRTCag/q Regionat Manager, KariTnagar, ^^{SgriTnaSalRe gion -KarimnagarDistrict.} z. I ne Uepot \rlartaoer. APSRTC , Karimnagar_1, Karimnagar Disl.rict.

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r ier ruPvr I rr

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1. rhe^principar sec-retarv ro Gou;;;;;;i. +;;.;r;;;'ii"parrment Secrerariat, .^{StateoI Telangana at AyderabiJ.-"'}

¶160

" t!Io""rt"o?lt fll]iiTRANSPoRT' Hish court for the State or relangana at I. 9n"^{CC to SRI C SRtrutVnS,} Advocate IOPUCI 9 9r"^{CC ro riRr N/.vtDyASAtAn} eo""*Ilio?uct 7. Two CD Cocies; SA

GJP

, ;&t

HIGH COURT

DATED:2011112024

ORDER

WP.No.8207 of 2015