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Meda Seshaiah Setty Vs. Director of Medical and Health Services and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Appeal No. 743 of 1981
Judge
Reported inAIR1982AP149
ActsConstitution of India - Articles 226 and 229; Administrative law
AppellantMeda Seshaiah Setty
RespondentDirector of Medical and Health Services and ors.
Appellant AdvocateR. Subha Rao, Adv.
Respondent AdvocateGovt Pleader for Food & Agriculture and ;I.A. Naidu, Adv.
Excerpt:
civil - principles of natural justice - article 226 of constitution of india and administrative law - petitioner's tender for supply of food items to government accepted - tender subsequently cancelled on ground that he was in arrears of sales tax - petitioner never given an opportunity to present his side of case before passing cancellation order - principles of natural justice violated - under article 226 proper concern for court is to see whether principles of natural justice are obeyed and not to decide disputed questions of fact - where allegations of principles of natural justice are made writ court can reappraise and admit new evidence - cancellation orders set aside. - - it clearly shows that the individual has not cleared all the taxes as on 31-12-1980 i. if what the..........and health officer, cuddapah, is a void order for the reason that it violated the principles of natural justice. it is not disputed nor is it ever the case of the respondents that before passing the impugned orders of cancellation the petitioner had ever been given any opportunity to present his side of the case. if what the petitioner says is true and correct it is clear that the impugned orders would be bad for reason of their violation of principles of natural justice. but the truth or otherwise of the petitioner's assertion may not constitute proper subject matter of investigation by this court in this writ petition. that question of fact may better be relegated to be ascertained and found by the medical officers. but this court in exercise of its writ jurisdiction is greatly.....
Judgment:

1. This writ appeal is against an order of dismissal made by Madhusudan Rao J. The Writ petitioner is a contractor supplying food articles to the Government Hospitals. For over three decades he had been supplying food articles to the Government Hospitals at Proddatur. Badvel and Pulivendla of Cuddapah District. In response to an invitation by the District Medical and Health Officer, Cuddapah to tender for supply of food articles during 1981-1982 the petitioner, among others , has offered his goods and conditions of supply. One of the tender conditions with which we are mainly concerned in this writ petition says, that a tenderer who by the date of submission of his tender which was fixed as 30-12-1980 has not cleared the arrears of sales tax payable by him becomes ineligible to offer tenders. This condition of ineligibility can be got over by a tenderer only by paying all sales tax arrears due by 30-12-1980 otherwise, such a tenderer would not be considered for awarding of the contract. The petitioner obtained a sales tax clearance certificate from the commercial tax authorities and enclosed the same with his tenders. That sales tax clearance certificate shows that the petitioner was not in arrears of sales tax by 30-12-1980. The petitioner's tenders were considered on that basis and were accepted on 19-4-1981 and 28-6-1981 by the District Medical and Health Officer. But three months after the petitioner has thus become the successful tenderer on 16-7-1981 the District Medical and Health Officer, cancelled his tenders. On 16-7-1981, the petitioner was first served with a telegraphic notice cancelling the above acceptance of the tenders followed by a written communication setting out detailed reasons for the cancellation of his tenders. The written order, the validity of which is challenged in the writ peti- tion and fails to be considered in this writ appeal read as follows:

Annexure-II

Office of the Dt. Medical and

Health Officer, Cuddapah

dated 17-7-1981.

R. C. No. 5674/CSC/81-82 (tenders)

Sub: Tenders 1981-82 Sri Meda Seshaiah Setty Diet contractor-tender in respect of Government Hospital, Proddatur-Pulivendia, Badvel, cancellation orders issued.

Ref: 1. Rc. No. 129720/MSB/80/dated 24-2-1981.

2. Rc. No. 129720/MSB/80 dated 10-7-1981.

3. Tenders of Meda Seshaiah Setty for Government Hospitals,Proddatur, Pullivendla Badla.

4. This office Rc. No. 5674/OBC/81-82 ERI 1981 Regd. approval of raes on Government Hospitals

Proddatur.

5. This office Rc. No. 74 /OSC/81-82 prop. dated 26-6-1981 Reg . approval of rates on Government.

Hospital . Badvel.

6. This office Rc. No. 5675/OBC/81-82 dated 26-6-1981 Reg. approval of rates on Government Hospital Pulivendia.

7. L. Dis. No. 855/B1-A1 dated 16-7-1981 of Dy. Commercial Tax Officer, Proddatur.

One Meda Seshaiah Setty, Diet Contractor has summitted the sales tax clearance certificate during January 1981 issued on 28-12-1980 by the Commercial tax Authorities . Proddator. along with tenders in respect of Government Hospital, Proddatur, Pulivendia and Badvel, stating that there are no arrears pending from him on the basis of the production of certificate, the District Medical and Health Officer Cuddapah has approved his lowest rates for supply of diet articles to the above Government Hospitals vide references 4th to 6th cited.

On verification with commercial tax officer, Proddatur, the individual is having arrears of tax for

4 years as on 31-12-1980, and he has paid the taxes on 30-3-1981, and 25-4-1981 in a tune of Rs.6,209/- vide reference No. 356/81-A dated 16-7-1981 Deputy Commercial tax officer, Proddatur. It clearly shows that the individual has not cleared all the taxes as on 31-12-1980 i.e.. prior to the submission of tenders before the concerned Deputy Civil Surgeons of respective government hospitals. Hence, the sales tax clearance certificate submitted by Sri Meda Seshaiah Setty during January 1981 is not genuine and the same is fraudulent. He is managing his tenders since four years without paying the taxes in time and cheating the departmental staff of sales tax and medical departments.

In the above circumstances, the tenders approved in favour of Meda Seshaiah Setty, Diet Contractor

in respect of Government Hospitals, Proddatur, Pulivendra and Badvel is hereby cancelled.

Sd/Dist. Medical & Health

Officer, Cuddapah,

D/- 17-7-1981.

After cancelling the petitioner's tenders, it appears the District Medical and health authorities awarded

the contract for the supply of food articles for one of the hospitals to the sixth respondent who

impleaded himself as a party to writ petition.

2. The petitioner in his writ petition challenged the validity of the order which cancelled his tenders mainly on the ground that the authorities before cancelling his accepted tenders did not give him an opportunity to present his case and show that he was not in arrears of sales tax by December, 1980. It is clear from the impugned orders that the cancellation was based by the Medical Officers on a single ground which is that the writ petitioner was guilty of producing a false sales tax clearance certificate showing that he was not in arrears of sales tax by December, 1980. The authorities say that the petitioner was actually in sales tax for the preceding four years by that date. According to the medical officers the petitioner had paid the sales tax arrears on 30-3-1981 and 25-4-1981 and that is proof of his being in arrears on 30-12-1980. The petitioner admits that he paid the sales tax in the months of March and April 1981 subsequent to the submission of his tenders in December. 1980. But he pleads in explanation of that circumstance that those payments were not made to clear off the sales tax arrears that were due by 30-12-1980 but the amounts became due in March, 1981. The petitioner says that his sales tax assessments were completed in the month of March 1981 and amount of sales tax he paid was towards the amounts which he was assessed to in March, 1981. The petitioner's positive case is that by 30-12-1981 he was not at all assessed and was not in arrears. The petitioner complains that the order of cancellation passed by the District Medical and Health Officer, Cuddapah, is a void order for the reason that it violated the principles of natural justice. It is not disputed nor is it ever the case of the respondents that before passing the impugned orders of cancellation the petitioner had ever been given any opportunity to present his side of the case. If what the petitioner says is true and correct it is clear that the impugned orders would be bad for reason of their violation of principles of natural justice. But the truth or otherwise of the petitioner's

assertion may not constitute proper subject matter of investigation by this court in this writ petition. That

question of fact may better be relegated to be ascertained and found by the Medical Officers. But this court in exercise of its writ jurisdiction is greatly concerned with a narrower but a more fundamental issue which is whether the Medical Officer in arriving at a finding adverse to the petitioner that he was in arrears of sales tax by December, 1980 followed the principles of natural justice. In other words, the proper concern of this court under Art. 226 of the Constitution is not to decide disputed questions of fact but to see that principles of natural justice are obeyed by the lower tribunals. The proper observance of principles of natural justice is treated by law as a limitation on the exercise of power. While the lower tribunals are free to ascertain the facts on the basis of the evidence and material before them and this court would not normally interfere with such findings of fact are out of bounds for a writ court to quash unless those facts are the very basis on which the jurisdiction of the lower tribunals is founded upon, the question whether the lower tribunals followed the principles of natural justice in arriving at those findings of fact are regarded (reached) without following the principles of natural justice this court would treat such orders as based upon such findings of fact as having been made without jurisdiction and therefore nullity. In this case, the writ ought to have been allowed on the ground that the findings that the petitioner was in arrears of sales tax by 30-12-1980 and that he submitted a fraudulent sales tax clearance certificate were findings made in violation of principles of natural justice. But Madhusudan Rao J. misconstruing the scope of the writ petition, thought that the writ presented a question as to the truth or otherwise of the petitioner's claim that he was not in arrears of sales tax by 30-12-1980. The learned Judge observed , 'it is not for this court to act as a court of appeal over the findings of the District Medical and Health Officer. On the facts stated there in the impugned order is eminently justified and does not call for any interference'. We are constrained to observe that this approach of the learned Judge is vitiated by a serious violation of the basic principles that govern the exercise of writ jurisdiction. A charge based on violation of principles of natural justice raises a question of jurisdiction and is too serious to be summarily disposed of by a writ court. The petitioner is never given an opportunity by the respondents to present his case that by the date of filing of the tenders in the last week of December, 1980 assessments had not been completed by sales tax authorities and the taxes to which he had been assessed, had been completely paid.

3. Although law recognizes the parampunt importance of this rule for public administration importance of this rule for public administration by treating it as imposing a jurisdictional limitation on the exercise of the State power. (it) is to be regretted that our administrators even after three decade of self governance did not succeed completely in imbibing this great legal principle that is calculated to unify the sovereign and the subject emphasised in State of Orissa V. Binapani Dei, : (1967)IILLJ266SC in the following words:-

'An order by the State to the prejudice of a person in derogation of his vested rights may be made only in accordance with the basic rules of justice and fairplay. The deciding authority, it is true, is not in the position of judge called upon to decide an action between contesting parties, and strict compliance with the forms of judicial procedure may not be insisted upon. He is however, under a duty to give the person against whom an enquiry is held an opportunity to set up his version or defence and an opportunity to correct or controvert any evidence in the possession of the authority which is sought to be relied upon his prejudice.............The rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applies alike to the judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our constitutional set up that every citizen is protected against exercise of arbitrary authority by the State or its officers. If the essentials of justice be ignored and an order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case'.

4. In Musalappa Reddy V. State of A. P., (1968) 1 Andh WR 86: (1969 Lab IC 712) Speaking for a Division Bench of this court, Jaganmohan Reddy C.J.., (as he then was) applauded this fundamental principle by describing it has having become a second nature with us. In Annamunthodo v. Oilfield Workers'Trade Union 1961 Ac 945 Lord Denning observed that even though the petitioner before him had suffered no material loss entitling him for damages the courts would still avoid an order of the State passed in violation of principles of natural justice , is nothing less than a denial of justice to a party. So great is the importance of this basic principle for the administration of public justice in a state governed by a rule of law that Meggary J. recently ruled in Leary v. National Union of Vehicle Builders. 1971 Ch. 34 that a decision of a primary tribunal afflicted by the cancerous vice of violation of principles of natural justice becomes incurable even by the amputation of the appellate surgery. Shakesphere immortalized this principle thus:

'Thieves are not judged but they are by to 'hear Although apparent guilt be seen them.

(Richard II 4.1 122 ) quoted in 'Natural justice' by Paul Jackson P.67 2nd Edn.)

5. The learned Judge, Madhusudan Ran J. instead of considering the question of jurisdiction whether

the medical officers observed the principles of natural justice in arriving at the conclusion that the petitioner was in arrears of sales tax by 30-12-1980, mistakenly thought that he was called upon to reassess the evidence. Proceeding on that wrong basis the learned Judge further committed an error in thinking that the finding arrived at by the medical officers was a forbidding finding of fact with which he should not interfere. We are constrained to observe that this approach of the learned judge is vitiated by basic errors of principles that govern the exercise of writ of certiorari is riveted to the record as observed by late lamented Markos and a writ court is not normally permitted to make an independent ascertainment of fact, this very classical theory of prerogative writs admits three well known exceptions. One of these exceptions permits breach of rules of natural justice to be established by affidavit evidence (see Rex v. Wandsworth JJ., Ex. P. Read, (1942) 1KB 281,282). Similarly, charges of fraud forgery and conclusion and mala fides were alleged in a writ petition to have afflicted the orders of the lower tribunals could be established by affidavit evidence. The reason behind this rule (is ) that violation of principles of natural justice and the play of fraud and collusion raising jurisdictional questions would not wear the badge of infirmity on the sphinx face of the record. The learned Judge is therefore not correct in thinking that a reappraisal of evidence is universally barred for a writ court even in a case where allegations of violation of principles of natural justice are made. The classical rule is clearly otherwise. It permits not only reappraisal of evidence but also admission of new evidence to establish violation of principles of natural justice and play of fraud, forgery, collusion and mala fides. The modern rule on the subject is even more liberal. But as noted above, the question raised before the learned Judge by the petitioner does not involve either reappraisal of evidence or admission of new evidence. The medical authorities never disputed and on the other hand they freely admitted that before holding the petitioner guilty of not clearing the sales tax arrears they have never given an opportunity to the petitioner to present his case. On that basis the learned Judge ought to have held following the authoritative pronouncement of the Supreme Court in the aforementioned Binapani Dei case : (1967)IILLJ266SC (supra) the impugned order is void. As he has not done, that we have no option except to allow this writ appeal and the writ petition and quash the impugned order.

6. But the learned counsel for the sixth respondent had argued that the petitioner did not come to this court with clear hands, meaning thereby that the petitioner did not come to this court with clear hands, meaning thereby that the petitioner was in reality in arrears of sales tax by December, 1980. This question begging submission cannot be accepted. This is the very question which falls to be decided by the medical authorities after affording the petitioner a reasonable opportunity. Before that is done, no one can hold the petitioner quilty of playing fraud. Nor can we. To hold that the petitioner is guilty of making a fraudulent representation even without affording him an opportunity would be clearly obnoxious to the principles of natural justice. We accordingly allow this writ appeal and the writ petition. The orders if cancellation passed by the District Medical and Health Officer, Cuddapah are hereby set aside. But this would not prevent the medical authorities from proceeding with the matter after giving notice to the petitioner and affording him an opportunity to show cause against the proposed action, and after considering his explanation. No costs Advocate's fee Rs. 200/-.

7. Writ appeal and petition allowed.


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