TaxTMI 
TaxTMI 
1992 (1) TMI 343
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....firm has been supplying various parts/spares for locomotives to respondents I to 3 against the global tenders floated by them. (5) In the year 3988, Diesel Locomotives Works, Indian Railways, Varanasi (for short DLW), respondent No. 3 hersia, floated a tender (Tender No. 7021/10-100336;/ I 1571PRODiCIT- 1) to be opened on I November 1988 'for the supply of imported air and exhaust va'lves. It is stated that , tender stipulated payment in indian rupees and the bidders had to impact valves against their own import license. In response to the paid tender notice, the firm offered to supply the imported valves vide their letters dated 2S October 1988 and 4-April 1989. One of the terms of the said quotation was: "goods offered will be of either EATON/TRW make made in USA". On acceptance of petitioners two quotations, two purchase orders dated 16 May 1989 and 17 May 1089 were placed by Dlw for supply of 5000 pieces and 14000 pieces of the said valves respectively on the terms and conditions as stipulated in the purchase order for "air and exhaust valves Allocate No. 2231129 TRW/ Eaton make Dwl part No. .10240494". Thus, admittedly the order stipulated that the....
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....lways, a show cause notice in the form of a memorandum, dated 19 July 1990, along with statement of charges/misconduct was issued to the firm, calling for representation, if any, from the firm against the proposed action by the railways of banning business dealings with the firm and its sister concerns for a period of three years. (8) The firm asked for copies of documents which were being relied against it. In response thereto, photo copies of some documents were supplied to the firm on 16 November, 1990. Not being satisfied the firm shot back another letter on 19 November 1990 asking tat authenticated copies of some documents. Some correspondence ensued between the firm and the Railway Board, the former insisting upon inspection of original documents. It appears that personal discussions also took place between the representative of the firm and the officials of the Railway Board. However, on 13 February 1991 the firm was finally granted 30 days time to reply to charge/allegations levelled against it in memorandum of 19 July 1990. From the documents placed before us, it appears that no reply was filed by the firm on merits and instead it insisted on inspection of original docume....
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....9;s letter dated 20 January 1991, Annexure X-1 to the present writ petition, it appears that .inspection of all the documents, which are available on the record, was allowed to the firm's lepresentative. It, however, appears that some of the documents so shown were not the originals. None the- less, in the same letter the firm gave a detailed reply to the memorandum of 19 July .1990,-denying therein each and every charge vehemently, though mentioning that all the documents purportedly issued by Trw were placed on record by its competitors with the active connivance of General Manager of Dlw, it also appears from the firm's letter dated 3 July 1991 (Annexure Z-4) that a personal hearing was also granted to the firm on 1 July 1991. (12) Not being satisfied with the explanation submitted on behalf of the firm the competent authority came to the conclusion that the firm had willfully tried to supply the said. valves to Dlw in contravention of contractual obligation, as the valves were not of Trw mark, on the strength of works test certificate of Trw which was not genuine. The Board found it to he gross misconduct on the part of the firm and, therefore, decided to ban the busin....
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.... based on any cogent material, (ii) denial of principles of natural justice, and (iii) exercise of power by the respondents for collateral purposes. While elaborating his arguments on the first two points, with more emphasis on the non-observance of principles of natural justice, the counsel has urged that action of the respondents in relying on the statements and documents of the Dri, without putting the petitioners to notice is per se bad. He further submits that respondents failure to show to the petitioners original documents and also non supply of authenticated copies thereof is a grave violation of the principles of natural justice which makes the impugned action of black listing the petitioners void ab initio. Relying on the judgment of the Supreme Court in the case of S. L. Kapur v. Jagmohan, Mr. Jaitley has contended that the alleged supply of documents to the firm by the Dri officials does not satisfy the requirements of natural justice. In support of his third contention that the impugned action of the respondents is tainted with malafides, inasmuch as it was resorted to throw the film. out of business at the behest of his business rivals, the learned counsel has pla....
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.... over Trw and at the relevant time neither valves were being manufactured nor were these marketed by Cmc under the trade name Trw, we feel, not only raises strong suspicion but is a clear indicator of the motive of the firm to pass on the valves to Dlw of a make other than TRW. Our view gets further strengthened from the report of DLW's Inspector, Mr. S. A. Khan, which, as noted above, expressly records' that "works test certificate of M/s. Trw for 1957 numbers" is attached thereto. Even assuming for the sake of arguments that the inspection report of Mr. S. A. Khan, available on respondents' record, is not genuine, as submitted by the learned counsel for the petitioners, the fact remains that the inspection report which is placed on record by the petitioners themselves as genuine cne, also refers to TRW's work test report. Thus, in so far as the filing of TRW's work test report before Mr. Khan is concerned, both the inspection reports, one filed by the petitioners and the other placed before us by the respondents, are not materially different on this crucial point. We, however, hasten to add that we have otherwise no reason to disbelieve the inspectio....
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....r to a judgment of the Supreme Court in Mahabir Auto Stores v. Indian Oil Corp. & others, 1990 Scc 752. In this judgment the Supreme Court while dealing with the rights and obligations of both the parties under Article 298 of the Constitution of India held that the decision of the State or its instrumentality, engaged in commercial transactions is an adminisrative' decision and can be impeached on the ground that the decision is arbitrary or violative of Article 14 of the Constitution of India on any of the grounds available in public law field. However, on the question as to how far the State or its instrumentality has to got to comply with the requirements of natural justice., the Court held as under :-- "THEREFORE it is necessary to reiterate that even in the field of public law, the relevant persons concerned are to be affected, should be taken into confidence. Whether and in what circumstances that confidence should be taken into consideration cannot be laid down on an" strait racket basis. It depends on the nature of the right involved and nature of the power sought to he exercised in a particular situation. It is true that there is discrimination between power ....