Case Note & Summary
The petitioner, Sujyoti India (P) Limited, a private limited company and authorized distributor of SKF India Limited, entered into a rate contract with Western Coalfields Limited (WCL) on 11.12.1995 for supply of SKF imported bearings. Pursuant to the contract, WCL placed orders and the petitioner supplied bearings. However, WCL withheld payment of admitted dues of Rs.1,46,66,383.33 based on a letter dated 26.04.2011 issued by the General Manager (M.M.) WCL and a vigilance report dated 10.04.2015 from the Chief Vigilance Officer, Coal India Limited. The petitioner filed a writ petition seeking quashing of the letter and report and direction for payment with interest. The court found that the impugned actions were taken without any notice or opportunity of hearing to the petitioner, violating principles of natural justice. The court quashed the letter and report and directed WCL to pay the admitted amount with interest at 9% per annum from the date of filing of the petition till realization.
Headnote
A) Administrative Law - Natural Justice - Right to be Heard - Withholding of Payment - The petitioner, a supplier, challenged the withholding of its admitted dues by Western Coalfields Limited based on a vigilance report. The court held that the impugned letter and vigilance report were issued without affording any opportunity of hearing to the petitioner, violating principles of natural justice. Consequently, the court quashed the letter dated 26.04.2011 and the vigilance report dated 10.04.2015, directing payment of the admitted amount of Rs.1,46,66,383.33 with interest at 9% per annum from the date of the petition till realization. (Paras 1-10)
Issue of Consideration
Whether the withholding of payment of admitted dues by Western Coalfields Limited based on a vigilance report without giving an opportunity of hearing to the petitioner is sustainable in law.
Final Decision
The court allowed the petition, quashed the letter dated 26.04.2011 and the vigilance report dated 10.04.2015, and directed respondent no.1 to pay the admitted amount of Rs.1,46,66,383.33 with interest at 9% per annum from the date of filing of the petition till realization.
Law Points
- Natural justice
- right to be heard
- quashing of administrative orders
- payment of admitted dues
- interest on delayed payment
Case Details
2017 LawText (BOM) (03) 155
Writ Petition No. 2443 of 2013
B.P. Dharmadhikari, Mrs. Swapna Joshi
Mr.M.G.Bhangde, Sr.Adv. with Mr.R.M.Bhangde Adv. for petitioner; Mr.S.P. Dharmadhikari, Sr.Adv. with Mr. M.Anilkumar, Adv.for Res.No.1; Mr.A.S. Jaiswal, Sr.Adv. with Mr. Shantanu Khedkar, Adv.for Res. No.3; Mr. C.S.Samudra, Adv. for Respondent no.4
Sujyoti India (P) Limited
The Western Coalfields Limited, The Central Vigilance Commission, SKF India Limited, The Union of India, Coal India Limited
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Nature of Litigation
Writ petition seeking direction to quash letter and vigilance report and to direct payment of admitted dues with interest.
Remedy Sought
Petitioner sought quashing of letter dated 26.04.2011 and vigilance report dated 10.04.2015, and direction to respondent no.1 to pay Rs.1,46,66,383.33 with interest.
Filing Reason
Withholding of payment of admitted dues by Western Coalfields Limited based on a vigilance report without giving opportunity of hearing.
Issues
Whether the withholding of payment of admitted dues by Western Coalfields Limited based on a vigilance report without giving an opportunity of hearing to the petitioner is sustainable in law.
Submissions/Arguments
Petitioner argued that the impugned letter and vigilance report were issued without any notice or opportunity of hearing, violating principles of natural justice.
Respondents contended that the withholding was justified based on vigilance findings.
Ratio Decidendi
Any administrative action that adversely affects a party must be preceded by an opportunity of hearing. Withholding of admitted dues based on a vigilance report without affording any hearing violates principles of natural justice and is liable to be quashed.
Judgment Excerpts
By this petition, the petitioner seeks a direction that the letter dated 26.04.2011 issued by Mr.C.M.Shukla, G.M. (M.M.) WCL HQ. directing to declare that the withholding of payment of admitted dues of the petitioner stands revoked and further to direct the respondent no.1 to withdraw the said letter dated 26.04.2011 and to make the payment of Rs.1,46,66,383.33 to the petitioner with interest.
Procedural History
The petitioner filed Writ Petition No. 2443 of 2013 before the Bombay High Court (Nagpur Bench) challenging the letter dated 26.04.2011 and the vigilance report dated 10.04.2015. The court reserved judgment on 08.03.2017 and pronounced on 31.03.2017.
Acts & Sections
