2026 (2) TMI 658 - HC - GST

Payment for hired hotel accommodation where allegations remained uncontroverted; verification without hearing quashed and payment directed with interest.

Uncontroverted plaint allegations of hiring hotel accommodation for protected persons between 18.11.2020 and 05.10.2021 operate as admitted facts and ... Admission by failure to specifically deny under Order VIII Rule 3 and Rule 5 CPC - effect of admissions in pleadings under Order XII Rule 6 CPC and Section 58 of the Evidence Act - right to be heard in bill verification proceedings / audi alteram partem in verification of claims - quashing of ex-parte bill verification report as violative of principles of natural justice - liability of the State for accommodation requisitioned for protected persons and remedial mandamus to liquidate undisputed dues - Admission by failure to specifically deny under Order VIII Rule 3 and Rule 5 CPC - effect of admissions in pleadings under Order XII Rule 6 CPC and Section 58 of the Evidence Act - HELD THAT:- In terms of Order VIII Rule 3 of the Code of Civil Procedure, it is not sufficient for a defendant in his written statement to make a general denial of the grounds alleged by the plaintiff, he is required to specifically deal with each allegation of fact of which he does not admit the truth and it is a settled principle of law of pleadings that if every allegation of fact in the plaint is not denied specifically or by necessary implication, it shall be taken to be an admission in terms of Rule 5 of Order VIII of the Code. Now, when law relating to admission is examined in the light of Order XII Rule 6 CPC, I need not say anything more than what the legislature has intended in its framework that where admission of fact is made in the pleadings or otherwise, the Court at any stage of the proceedings has the jurisdiction to pass such order or give such judgment as it needs fit, having regard to such admission. It is also settled in law that such admission includes one that can be inferred from facts and circumstances of a case without any dispute, as held by Hon’ble Supreme Court in “Charanjit Lal Mehra vs. Kamal Saroj Mahajan”; [2005 (3) TMI 815 - SUPREME COURT] It is also settled in law that facts admitted need not be proved in terms of Section 58 of the Evidence Act and a party’s admission is substantive evidence ex proprio vigore. In the light of afore-stated statutory and crystallized position of law, insofar as first claim of the petitioner, is concerned that pursuant to circular dated 07.11.2020 and communication dated 12.12.2020 issued by Divisional Commissioner, Kashmir, its Hotel came to be hired by the respondents to accommodate protected persons on sharing basis w.e.f. 18.11.2020 to 05.08.2021, same having not been denied by the respondents amounts to admission and petitioner is entitled to the relief prayed for. Right to be heard in bill verification proceedings / audi alteram partem in verification of claims - HELD THAT:- There is difference between a fact-finding committee and Bill Verification Committee. The fact-finding committee has a different job altogether to perform. It is constituted to investigate, gather evidence and establish the facts surrounding a specific incident. Even a fact-finding committee would ordinarily follow the principles of natural justice. On the other hand, the Committee constituted for the verification of bills would embark upon verifying the authenticity, calculation and validity of bills/invoices or claims presented by a claimant. The job of such Committee is to verify if services were rendered, goods were delivered, calculations made are correct and claims adheres to the policy/contractual norms or not. The claimant, in the circumstances and for the purpose for which the Committee is constituted, is to be accorded a right of hearing to submit explanations during the process of verification of bills, particularly when Committee proposes or intends to reject or reduce the claim. Principle of Audi alteram partem applies with full force if the rejection of a bill is based on allegations of fraud or misconduct or that claim is inflated. To ensure procedural fairness, the Committee must provide the claimant an opportunity to produce evidence, explain the discrepancies identified during verification and justify the claim. As stated, the premises in question came to be de-hired by the respondents on 01.06.2022, but Committee was constituted much later on 05.11.2022, and Committee submitted its report three months thereafter on 02.02.2023. There is nothing in the stand of the respondents to indicate that Committee has bothered to verify the record of the petitioner Hotel regarding actual occupancy of the persons, whose names were provided by them. As stated, since after the Hotel in question came to be hired and re-hired by the respondents, petitioner was obliged not only to provide accommodation to the protected political persons but also reserve the accommodation for the protectees, those were being guarded round the clock by the security forces, there is force in the contention of the respondents that after this arrangement, petitioner was not able to put the Hotel for any other use. The Bill Verification Committee has not verified that whether said accommodation was provided by the petitioner to anybody else during the period, the premises were hired by the respondents at the Divisional or District level. Under these circumstances, it is not open to the respondents, at this length of time, to dispute the claim of the petitioner. Thus, present petition is allowed and order dated 05.11.2022, by virtue of which respondents constituted a Committee for verification of Bills and ex-parte report dated 10.02.2023 of the said Committee are quashed. Respondents are directed to liquidate claims of the petitioner within a period of eight weeks from the date a copy of this judgment is made available, failing which they shall be liable to pay interest @ 6% per annum. Issues: (i) Whether the petitioner is entitled to payment for the period w.e.f. 18.11.2020 to 05.10.2021 for hotel accommodation provided to protected persons, where respondents did not specifically deny hiring; (ii) Whether the report of the Bill Verification Committee dated 10.02.2023 and the committee constituting order dated 05.11.2022 (for period w.e.f. 05.10.2021 to 31.08.2022) can be sustained where the petitioner was not afforded an opportunity of hearing and the accommodation remained under control/occupation of protected persons and security forces.Issue (i): Whether the petitioner is entitled to relief for the hiring period w.e.f. 18.11.2020 to 05.10.2021 in light of respondents' failure to specifically deny the factual allegations.Analysis: The respondents did not specifically deny the factual averments regarding hiring for the period in question. In terms of Order VIII Rule 3 and Order XII Rule 6 of the Code of Civil Procedure and the evidentiary effect of admissions (Section 58 of the Indian Evidence Act), uncontroverted allegations in the plaint stand admitted and require no further proof.Conclusion: In favour of Petitioner. The petitioner is entitled to the relief claimed for the period w.e.f. 18.11.2020 to 05.10.2021.Issue (ii): Whether the Bill Verification Committee's order and ex parte report reducing the petitioner's claim to Rs. 89,736/- and evidencing discharge of liability are sustainable where the petitioner was not given an opportunity to be heard and occupancy/possession was under security forces.Analysis: The committee was constituted and rendered its report long after de-hiring; there is no material to show the petitioner was associated with the verification process or given an opportunity to explain or produce occupancy evidence. Where a verification process proposes to reject or reduce a claimant's bill, principles of natural justice and audi alteram partem apply and the claimant must be afforded a right of hearing to justify the claim. The hotel premises were under continuous occupation/guard by security forces and keys/possession issues were not disputed by respondents.Conclusion: In favour of Petitioner. The order constituting the Bill Verification Committee dated 05.11.2022 and its ex parte report dated 10.02.2023 are quashed; respondents are directed to liquidate the petitioner's claims within eight weeks, failing which interest at 6% per annum shall accrue.Final Conclusion: The petition is allowed insofar as the petitioner's substantive claims for the hiring periods are upheld and the administrative verification process which produced an ex parte reduction of the claim is set aside, requiring respondents to discharge the outstanding liability within the timeframe directed.Ratio Decidendi: Where factual allegations of hiring are not specifically denied they are admitted and must be treated as substantive evidence; a bill verification process that results in rejection or reduction of claimed amounts must accord the claimant an opportunity of hearing under principles of natural justice before issuing a final adverse determination.