TaxTMI 
TaxTMI 
TaxTMI 
2013 (2) TMI 702
X X X X Extracts X X X X
X X X X Extracts X X X X
.... same. It is in that view unnecessary for us to recount the entire factual background in which the controversy in this appeal arises except to the extent it is absolutely necessary for us to do so for the disposal of this appeal. 3. National Highway Authority of India Ltd. (NHAI for short) invited tenders for award of a contract for collection of fee for the use of National Highways from Km. 61.00 to Km.103 on Morena-Gwalior Section of National Highway No.3. Appellant too among others made an offer which was accepted by the NHAI in terms of its letter dated 14th March, 2006 asking the appellant to submit a demand draft for a sum of Rs. 2,20,00,125/- towards performance security and a bank guarantee for a similar amount to be valid for a period of 15 months for the due observance of the terms and conditions contained in the contract. Both these requirements were satisfied by the appellant with the result that a contract for collection of user fee commencing from 1st April, 2006 to 31st March, 2007 was finally allotted in its favour. It is not in dispute that pursuant to the said allotment the appellant started collecting the prescribed fee as per the terms and conditions of the agr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... its order dated 8th August, 2007. The present appeal assails the correctness of the said order. 7. We have heard learned counsel for the parties at some length who have taken us through the record including the orders passed by the High Court from time to time. 8. It was argued on behalf of the appellant that termination of the contract between the parties was legally bad not only because the principles of natural justice requiring a fair hearing to the appellant were not complied with but also because there was no real basis for the respondent-authority to hold that the appellant had committed any breach of the terms and conditions of the contract warranting its termination. We find no merit in either one of the contentions. The reasons are not far to see. Rules of natural justice, it is by now fairly well settled, are not rigid, immutable or embodied rules that may be capable of being put in straitjacket nor have the same been so evolved as to apply universally to all kind of domestic tribunals and enquiries. What the Courts in essence look for in every case where violation of the principles of natural justice is alleged is whether the affected party was given reasonable oppor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions of Lord Reid in Ridge v. Baldwin, (1963) 2 W.L.R. 935 and said: "8. ... ... We do not think it either feasible or even desirable to lay down any fixed or rigorous yard-stick in this manner. The concept of natural justice cannot be put into a straight-jacket. It is futile, therefore, to look for definitions or standards of natural justice from various decisions and then try to apply them to the facts of any given case. The only essential point that has to be kept in mind in all cases is that the person concerned should have a reasonable opportunity of presenting his case and that the administrative authority concerned should act fairly, impartially and reasonably. Where administrative officers are concerned, the duty is not so much to act judicially as to act fairly. See, for instance, the observations of Lord Parker in In re H.K. (an infant), (1967) 2 QB 617. It only means that such measure of natural justice should be applied as was described by Lord Reid in Ridge v. Baldwin case (supra) as "insusceptible of exact definition but what a reasonable man would regard as a fair procedure in particular circumstances". However, even the application of the concept of fair-play requ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ould be pragmatic rather than pedantic, realistic rather than doctrinaire, functional rather than formal and practical rather than 'precedential'." xxx xxx xxx xxx xxx xxx 39. Decision of this Court in S.L. Jagmohan, (1980) 4 SCC 379, whereupon Mr Rao placed strong reliance to contend that non- observance of principle of natural justice itself causes prejudice or the same should not be read "as it causes difficulty of prejudice", cannot be said to be applicable in the instant case. The principles of natural justice as noticed hereinbefore, have undergone a sea change. In view of the decisions of this Court in State Bank of Patiala v. S.K. Sharma, (1996) 3 SCC 364 and Rajendra Singh v. State of M.P., (1996) 5 SCC 460 the principle of law is that some real prejudice must have been caused to the complainant. The Court has shifted from its earlier concept that even a small violation shall result in the order being rendered a nullity. To the principle/doctrine of audi alteram partem, a clear distinction has been laid down between the cases where there was no hearing at all and the cases where there was mere technical infringement of the principle. The Court applies the principles of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ow-cause notice issued to the appellant and a hearing provided to it by the competent authority. The show-cause notice issued to the appellant on 24th November, 2006 enclosed with it all relevant documents including the complaints received against the appellant from various quarters and a copy of the report submitted by the agency engaged for verifying the allegations against the appellant. The appellant had unsuccessfully challenged the show-cause notice in Writ Petition No.6338 of 2006, before the High Court. The High Court had while refusing to interfere in the matter directed the appellant to submit a reply to the notice. The appellant had accordingly appeared before the authority on 12th January, 2007, submitted its written statement and was heard in support of its case that it had not committed any default. In the reply or at the hearing, the appellant had not alleged any mala fide, bias or prejudice against the officers dealing with the matter or the agency employed by them for collecting and verifying facts. Principles of natural justice thus stood substantially complied with. The contention that the appellant should have been given an opportunity to cross-examine the perso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y the respondents have acted in a manner which is violative of the principle of natural justice. The report submitted was placed before the petitioner he was given opportunity of submitting his defence and explanation both in writing and personally. Records indicated that petitioner was unable to produce any cogent material to show that this report is unsustainable and cannot be relied upon." 17. In the appeal preferred against the above order, the appellant had made a grievance only in regard to two aspects covered by question nos. (III) and (V) , formulated by the Single Judge in the following words: (III) Whether the action for termination of the contract is done by the competent authority and whether cancellation of the contract is based on proof of breach committed by the petitioner? (V) Whether the provision of Section 74 of the Contract Act applies in the present case and forfeiture of the performance security and revocation of bank guarantee is arbitrary and unfair warranting interference by this Court?" 18. While dealing with question No.III above, the Division Bench held: "In respect of issue No. III, the learned Writ Court while relying upon various facts brought on....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oth extraordinary and discretionary in nature. We may in this connection refer to the following passage from Halsbury's Laws of England Fourth Edition Vol.-16 pages 874-876, which sums up the legal position in England as to the right of a party who has not come to the Court with perfect propriety of conduct and with clean hands, to claim an equitable relief. 1305. He who comes into equity must come with clean hands. A court of equity refuses relief to a plaintiff whose conduct in regard to the subject matter of the litigation has been improper. This was formerly expressed by the maxim "he who has committed iniquity shall not have equity", and relief was refused where a transaction was based on the plaintiff's fraud or misrepresentation, or where the plaintiff sought to enforce a security improperly obtained, or where he claimed a remedy for a breach of trust which he had himself procured and whereby he had obtained money. Later it was said that the plaintiff in equity must come with perfect propriety of conduct, or with clean hands. In application of the principle a person will not be allowed to assert his title to property which he has dealt with so as to defeat his creditors....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in extenso at this stage: "18. Penalty for charging excess fee : a) In case, it is observed and/or established to the satisfaction of the Authority that the Contractor has charged fee in excess of the prescribed rate, the Authority may terminate the contract forthwith and/or may impose a penalty of Rs. One lakh or an amount equivalent of one day's fee receivable by the Authority, which ever is higher and may provide the Contractor another opportunity of continuing the Fee Collection. However, in no case, the authority shall afford more than one opportunity to the Contractor. b) The Authority also, reserves the right to estimate the excess collection of fee made by the Contractor and recover the same, which will be over and above the penalty imposed and to be recovered from the Contractor. c) The termination under this clause shall make the Contractor liable for unconditional forfeiture of the Performance Security." 24. It is evident from a simple reading of the above that the Authority was competent to terminate the contract if the appellant was found charging in excess of the prescribed rate of fee. Apart from termination of the contract any violation in the nature of exce....