MANILAL GUPTA AND CO Vs. UNION OF INDIA

JUDGEMENT

(1.) THE petitioners, the approved Army Service Corps (ASC) contractors, are aggrieved by the orders passed by the Major General Army Service Corps removing their names from the list of approved contractors due to poor performance of the contracts awarded to them and in exercise of the authority conferred under para 19(c)(i) of the Procedure for Conclusion of ASC Contracts for Perishable Items (in short the Procedure) laid down by the Government of India, Ministry of Defence. Since in both the writ petiions identical orders are put to challenge and the issue involved is same, those are taken up for disposal together as agreed to by the learned counsel for the parties.

(2.) THE petitioners in WP(C) Nos. 6847/2010 and 6879/2010 were issued with the notices dated 23.10.2009 and 12.12.2009 respectively asking them to show-cause, as to why their names should not be removed from the list of approved ASC contractors for their poor performance, as they have failed to deliver supplies on a number of occasions during the currency of contracts awarded to them for supply of ration items to Army Service Corps at different points and also for grading their services as poor. THE petitioners on receipt of show-cause notices submitted almost identical replies on 10.11.2009 and 26.12.2009 respectively, basically contending that there was no intentional failure to perform the contract as during the relevant period of time the crop conditions were not normal and there was natural calamities affecting the food market in the country apart from affecting crop by diseases, which resulted in heavy crop failure and very high price in the market. THE petitioners in their replies pleaded force majeure and contended that for the said reason they cannot be penalized by removing their names from the list of approved contractors. THE Major General thereafter upon consideration of the replies submitted by the petitioners, passed 2(two) separate orders, one dated 15.04.2010 and the other dated 02.03.2010 which are challenged in WP(C) Nos. 6847/2010 and 6879/2010 respectively, removing their names from the list of approved contractors due to poor performance against the contracts in exercise of the power conferred under the aforesaid Procedure. Both the petitioners thereafter preferred appeal before the Deputy Director General of Supply and Transport, which were dismissed by 2(two) separate orders dated 16.07.2010 and 04.10.2010. THE petitioners in these petitions apart from challenging aforesaid initial orders passed by the Major General and have also challenged the subsequent orders passed by the Deputy Director General on appeal.

(3.) THE learned Asst. Solicitor General appearing for the respondents, on the other hand, supporting the orders passed by the Major General as well as by the Deputy Director General on appeal has submitted that before passing the impugned orders all reasonable opportunities of being heard were afforded to the petitioners and they were issued with the show-cause notices, which were replied by the petitioners and all relevant materials were taken into consideration by the authorities while passing the orders as is reflected from the records maintained by the authorities. THE learned Asstt. Solicitor General submits that the petitioners on earlier two occasions were also removed from the list of approved contractors and as the petitioners could not perform their contract and their performance were found to be poor, they were accordingly removed from the list of approved contractors for a period of 2(two) years after affording due opportunities and as such the impugned orders cannot said to be passed in violation of the principle of natural justice as has been contended by the petitioners. It has also been submitted that it is evident from the records that other contractors during the same period could perform the contracts and supply the similar perishable items to other units of the Army Service Corps and hence the grounds taken by the petitioners relating to the natural calamities resulting in high rise of the price of the commodities and affecting the crop by different diseases are not at all sustainable. It has also been submitted that the records reveal consideration of those grounds by the authority and the appellate order passed by the Deputy Director General reflects consideration of the grounds taken while rejecting the appeal filed. It has also been submitted that in any case no prejudice has been caused to the petitioners in not reflecting the point wise consideration of the grounds taken in the show-cause replies filed by the petitioners in the initial orders passed by the Major General. THE learned Asstt. Solicitor General submits that since the contract is relating to the supply of ration items and other commodities for the consumption by the Army personnel in Army Service Corps, it involves public interest and the petitioners being the contractors cannot refuse to supply the articles on the ground that price has gone up because of the natural calamities or for the reasons cited in the replies to the show-cause notices issued. THE learned counsel, therefore, submits that the writ petitions deserve to be dismissed.