IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN MONDAY, THE 3RD NOVEMBER 2008 / 12TH KARTHIKA 1930 WP(C).No. 28929 of 2008(R) -------------------------- PETITIONER(S): --------------- M.HANEEFA, KUREEKATTIL HOUSE, CHITTUR WARD, PATHANAMTHITTA. BY ADV. SRI.S.ABDUL RAZZAK RESPONDENT(S): --------------- 1. THE PATHANAMTHITTA MUNICIPALITY, REPRESENTED BY ITS SECRETARY, MUNICIPAL OFFICE, PATHANAMTHITTA 689 645. 2. GOVERNMENT OF KERALA, REPRESENTED BY SECRETARY, LOCAL SELF GOVERNMENT DEPARTMENT,GOVT. SECRETARIAT, THIRUVANANTHAPURAM. ADV. SRI.V.K.SUNIL FOR R1 GOVERNMENT PLEADER SMT. K.R. DEEPA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 03/11/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 28929 of 2008 EXT.P1: COPY OF AGREEMENT NO.E1-5058/07 DT. 14.9.2007 WITH SCHEDULE AND ESTIMATE. EXT.P2: COPY OF PETITIONER'S LETTER DT. 19.9.07. EXT.P2(a): COPY OF LETTER DT. 01.10.2007 TO R1. EXT.P2(b): COPY OF LETTER DT. 24.12.07 TO R1. EXT.P3: COPY OF PROGRESS REPORT DT. 30.7.08 TO R1. EXT.P4: COPY OF NOTICE DT. 12.08.08 FROM R1. EXT.P5: COPY OF PETITIONER'S EXPLANATION DT. 25.8.08. EXT.P6: COPY OF R1'S NOTICE DTD 27.8.2008. EXT.P7: COPY OF REPLY TO R1 DT. 01.9-08. EXT.P8: COPY OF R1'S NOTICE DT. 09.9.08. EXT.P9: COPY OF REPLY DT. 15.9.2008. EXT.P10: COPY OF QUALITY INSPECTION NOTICE DT. 18.9.08. EXT.P11: COPY OF QUALITY INSPECTION REPORT DT. 22.9.2008. EXT.P12: COPY OF 6 IMAGES FROM VIDEO RECORDING DT. 24.9.2008. EXT.P13: COPY OF TERMINATION ORDER NO.E1-5058/07 DT. 23.9.2008 EXT.P14: COPY OF CHRONOLOGICAL LIST OF EVENTS. EXT.P15: COPY OF COMPUTER GENERATED COPY OF VIDEO RECORD. R1'S EXHIBITS EXT.R1(a): COPY OF THE WORK ORDER NO,E1-5058/07 DT. 20.9.2007 ISSUED TO THE PETITIONER. WP(C).No. 28929 of 2008 EXT.R1(b): COPY OF THE LETTER (REPORT) NO.2/3 OF MARCH 2008 SENT TO THE CTE, THIRUVANANTHAPURAM. EXT.R1(c): COPY OF NOTICE PREPARED TO ISSUE THE PETITIONER AS PER THE DIRECTION OF THE MUNICIPAL ENGINEER ON 30.7.2008. EXT.R1(d): COPY OF THE ENVELOP OF EXT.P3. EXT.R1(e): COPY OF THE LETTER DATED 12.8.2008 ISSUED BY THE CHAIRPERSON OF THE MUNICIPALITY TO THE SECRETARY TO THE GOVERNMENT. EXT.R1(f): COPY OF THE LETTER NO.E1-5058 DT. 19.8.2008 ISSUED BY THE MUNICIPAL ENGINEER TO THE CHIEF ENGINEER LSGD. EXT.R1(g): COPY OF THE REPORT SUBMITTED BY THE CHIEF ENGINEER, LSGD NO.D.D.2/4927/C.E.LSGD/08 DATED 29.08.2008. EXT.R1(h): COPY OF THE LETTER NO.53777/DAI/2008/LSGD DATED 8.9.2008 ISSUED BY THE SECRETARY TO THE GOVERNMENT TO THE SECRETARY OF THE MUNICIPALITY. EXT.R1(i): COPY OF THE COUNCIL RESOLUTION NO.9/23.9.2008. TRUE COPY PA TO JUDGE. S. SIRI JAGAN, J. ------------------------------------ W.P.(C)No. 28929 OF 2008 ---------------------------------------- Dated this the 3rd day of November, 2008 JUDGMENT The petitioner is a contractor, who undertook certain works on behalf of the 1 st respondent – Municipality. The Municipality was not satisfied with the way the petitioner was executing the contract. Therefore, Exts.P4, P6 and P8 notices were issued to him. The petitioner has filed Exts.P5, P7 and P9 replies to the notices. The petitioner had earlier filed Ext.P3 representation also. Subsequently, the Municipality issued Ext.P10 notice directing the petitioner to appear for an inspection of the metal unloaded at the site to satisfy the petitioner about the lack of quality of the metal unloaded by him at the site and the inspection was conducted on 22.9.2008, the minutes of which is Ext.P11. The petitioner recorded his objections to the conclusions in the inspection, by endorsement in the minutes of the inspection itself. Thereafter, on 23.9.2008, the Municipality passed Ext.P13 order terminating the contract between the Municipality and the petitioner and deciding to get the work done W.P.(c)No.28929/08 2 at the risk and cost of the petitioner. The petitioner is challenging Ext.P13 order in this writ petition. The petitioner also submits that the Municipality has destroyed the metal already unloaded by the petitioner at the site by removing it to a marshy place as evident from Ext.P12 photographs. The petitioner is challenging the action of the 1 st respondent – Municipality in destroying the metal unloaded by the petitioner at the site, also. 2. The petitioner's contention is that even in contractual matters this Court is empowered to decide as to whether the decision of an authority answering the definition of “State or authority” under Article 12 of the Constitution especially a statutory authority, is arbitrary. He relies on the decisions of the Supreme Court in STATE OF KARNATAKA AND ANOTHER V. ALL INDIA MANUFACTURERS ORGANISATION AND OTHERS [(2006(4) SCC 683], RELIANCE ENERGY LTD. AND ANOTHER V. MAHARASHTRA STATE ROAD DEVELOPMENT CORPN. LTD AND OTHERS [2007(8) SCC 1] and a Division Bench decision of this Court in Den & Co. V. Mathai [2006(3) KLT S.N. 43(Case No.61)]. According to W.P.(c)No.28929/08 3 the petitioner, as is evident by the report now produced as Ext.R1(g) by the 1 st respondent themselves, delay in the matter is on account of the action of the Municipality themselves and therefore this Court can interfere with the decision of the Municipality and direct the Municipality to permit the petitioner to execute the contract in accordance with the original agreement. He also raises a contention that the action of the Municipality is in violation of the principles of natural justice since after conducting the inspection on 22.9.2008, Ext.P13 order has been passed on 23.9.2008 without affording an opportunity to the petitioner to explain the matters, especially since he had objected to the conclusions in the report and offered to cure the defects pointed out in Ext.P10. 3. The contentions of the petitioner are stoutly opposed by the learned counsel for the Municipality. He would point out that before taking Ext.P13 decision, several communications were issued to the petitioner as evidenced by Exts.P4, P6 and P8. The petitioner has not even taken up W.P.(c)No.28929/08 4 appropriate steps to see that the infirmities pointed out in those notices are duly rectified. According to the learned counsel for the respondents, Ext.P10 was not for an inspection regarding the quality of the metal. The quality inspection was earlier done and the Municipality was satisfied that the metal unloaded by the petitioner is of substandard quality. He would submit that Ext.P10 notice was to satisfy the petitioner about the lack of quality so that in any future proceedings that may be initiated by the petitioner, the petitioner would not raise disputes regarding the same. He would submit that none of the contentions raised by the petitioner are sustainable. According to him very many defects pointed out in the counter affidavit have been intimated to the petitioner directing to cure the defects, which the petitioner has not chosen to do. He would submit that in view of the decision of the Supreme Court in M/s. Radhakrishna Agarwal and others V. State of Bihar and others [AIR 1977 SC 1496], in contractual matters the question of principles of natural justice does not arise. W.P.(c)No.28929/08 5 4. I have considered the rival contentions in detail. 5. At the outset I must note that the contentions of the petitioner are stoutly opposed by the 1 st respondent – Municipality. In order to ascertain who is correct and who is not, I would have to embark on the exercise of taking evidence which cannot be done, ordinarily, in proceedings under the Article 226 of the Constitution of India. Still I am impressed by one argument of the petitioner regarding violation of principles of natural justice. The petitioner had filed replies to the notices issued by the 1 st respondent which are not disputed by the Municipality. After Ext.P9 reply to Ext.P8 notice, the Municipality had chosen to issue Ext.P10 for a joint inspection. A joint inspection was conducted on 22.9.2008 and Ext.P11 minutes have been recorded in respect thereof. Regarding the findings in the inspection, in Ext.P11 itself the petitioner has recorded certain objections. On 23.9.2008, Ext.P13 order has been passed terminating the contract at the risk and cost of the petitioner. In Ext.P13, the joint inspection report Ext.P11 has also been relied upon. W.P.(c)No.28929/08 6 When the petitioner has consistently objected to the proposals by filing reply to all the notices and objected to the findings in the inspection on 22.9.2008, I am not satisfied that the action of the municipality, without affording an opportunity of being heard to the petitioner on the proposed action, is in compliance with the principles of natural justice. The reliance by the 1 st respondent on the decision in M/s. Radhakrishna Agarwal's case (supra) is misplaced. In fact that decision is of the year 1977. The Supreme Court has rendered numerous decisions thereafter in respect of contractual matters, in which the State is one of the contracting parties, wherein the Supreme Court has held that although in respect of questions of facts the parties should be relegated to the remedy by way of suit, this Court is not prevented from considering whether the action of the State or other authority is tainted by arbitrariness and discrimination. In other words, the action of the State or other authority even in contractual matters can be tested in the anvil of Articles 14 and 16 of the Constitution of India. If that be so, then necessity to comply with principles of W.P.(c)No.28929/08 7 natural justice is ingrained in the State action. Here, I am satisfied that the action of the municipality in passing Ext.P13 order, the next day after making the inspection, that too without a hearing to the petitioner, when the petitioner has consistently objected to the notices issued to him, is unsustainable, especially when the findings during the inspection are disputed by the petitioner. I am of opinion that the Municipality could have taken the final decision only after affording the petitioner an opportunity of being heard. In the above circumstances, Ext.P13 order is quashed and the Municipality is directed to take a fresh decision, after affording an opportunity of being heard to the petitioner. The writ petition is disposed of as above. S. SIRI JAGAN, JUDGE Acd W.P.(c)No.28929/08 8