Judgment:
ORDER
Shyamal Kumar Sen, J.
1. The case of the writ petitioner isthat the petitioner became an approved contractorunder the Eastern Railway and was allowedRegistration No. being 28356. A copy of thecommunication dated. 24th May, 1977 wherebythe petitioner was placed on the list of approvedcontractors initially for a period of 2 yearsprovisionally has been annexed with the writpetition.
2. Thereafter, the tenure of the petitioner as registered contractor with the concerned respondents was extended from time to time by communications made to that effect. Copies of the extensions granted to the petitioner by the respondent authorities as registered contractor have been annexed with the petition marked as 'B'.
3. In terms of the conditions laid down by the respondent for supply for electrical goods and equipments the petitioner from time to time duly supplied the said goods as required by the respondent No. 3 since 1977 which were received by them and used and/or utilised by the respondents -without raising any objection with regard thereto.
4. On or about 11th April, 1990 search and seizure was conducted under Sections 103 and 165 of the Criminal Procedure Code at the residence of the petitioner at 28-6-87. Tollygunge Circular Road, Calcutta-700 053 and his office at 91, Netaji Subhash Road, Calcutta.
5. Such search and seizure was conducted pursuant to the complaint made by one Mr. R.P. Rai, Inspector of Police, CBI/SBE Patna. A copy of the said First Information Report relating thereto has been annexed to the petition and marked as 'D'
6. By the memorandum dated 12th November, 1990 along with a statement of charges and misconduct, it has been alleged that the petitioner secured orders of number of items mostly requisitioned by the Official of the Eastern Railway at an exorbitant price causing wrongful loss to the railways. By the said memorandum, the respondent authorities proposed to suspend dealings with the petitioner and called for a representation from the petitioner within a period not later than 30 days from the date of the said memorandum. A copy of the said memorandum dated 12th November, 1990 along with the statement of charges and/or misconduct has been annexed to the petition and marked 'E'.
7. Even in the early part of the said year when the said memorandum was sent to the petitioner, the concerned respondent authorities had placed orders for supply of electrical goods urgently and such supplies have been duly made by the petitioner and duly received by the respondent authorities without any objection whatsoever either with regard to the quality or price.
8. The petitioner replied to the said memorandum by letter dated 16th November, 1990 and lodged the petitioner's protest and contended that the allegations made in the said memorandum are baseless. A copy of the said letter dated 16th November, 1990 has been annexed with the petition and marked as 'F'
9. It may be noted that in the statement of charges annexed to the show cause notice issued on 12th November, 1990, it was pointed out that the matter was being taken up for detailed investigation as it had become necessary in the public interest to temporarily suspend business dealings. The petitioner replied to the said show cause notice by his letter dated 16-11-90 and requested for a personal hearing. By a letter dated 31st July, 1991 the writ petitioner was advised to meet the appropriate authority on 30th August, 1991 for making of oral representation. On the said date, the writ petitioner appeared before the appropriate authority and submitted, inter alia that--
(a) The items being subject-matter of the impugned proceedings was sold by the petitioner pursuant to the purchase order placed by the respondents wherein the rates have been specified. The petitioner's offer was accepted by the respondents in preference to other offers and therefore the petitioner could not have made any offer worse than that submitted by the petitioner's business rivals. The prices being fixed by the purchase orders could not be subject to any variation.
(b) The petitioner submitted a quotation dated 22nd December, 1988 being that of M/s. P.V.C. Wires & Cables Ltd., a company belonging to 'Usha Shriram' Group where from it would be evident that the price of the subject items prevailing at the relevant time was approximately the same as that charged by the petitioner.
10. The submissions of the petitioner were also recorded in their letter dated 14th August, 1991 which is Annexure 'L' to the writ petition.
11. It is pertinent that the Eastern Railway, Chief Electrical Engineer by a letter dated 15th October, 1990 addressed to the controller of stores Eastern Railway certified that the price charged by the petitioner were most reasonable and the bills of petitioner should be paid at the earliest.
12. No response was, however, received fromthe respondents regarding the fate of the showcause notice. In the meanwhile, CBI enquiry wasconcluded in the writ petitioner's favour as wouldappear from the final report dated 3rd June, 1992whereby it has been specifically observed that'from the facts and evidences collected during thecourse of investigation it could not be proved thatthe requisitioning officers were in any mannerconnected with the supplier firms and these officerscaused any pecuniary benefit to the suppliers.Also there was no evidence found causinginvestigation to suggest that the rates charged bythe supplier firms were exorbitant regarding mostof the items supplied and in the circumstances ofthis case it is found not fit for prosecution in theCourt of Law.'
13. The said final report was accepted by the learned Special Judge, CBI, Patna on 26th August, 1992 and the case against the petitioner was dropped. The Railway Authorities have accepted the said decision and there is no challenge to the same by way of appeal or revision.
14. In the meanwhile, on or about June 1995 the petitioner having become loallly frustrated, approached this Court for reference by way of monetary claims for arbitration which was done by order of Misra, J. dated 7th June, 1995.
15. However, after a gap of 5 years, the respondents by a letter dated 30th October, 1995 informed the writ petitioner that 'The Ministry of Railways (Railway Board), New Delhi have decided to ban business dealings with the petitioner for five years w.e.f. the date of issue of the letter.'
16. The writ petitioner subsequently moved the writ petition on or about 8th December, 1995 challenging the ban on business dealings till 20th November, 2000.
17. It has been contended on behalf of the petitioner that in the instant case the respondents authorities have behaved in a highly arbitrary and whimsical manner and appeared to have taken vindictive and mala fide attitude against the petitioner. The CBI is the premier investigating authority in the country whose services are utilised at the highest level and very often both the High Courts and Supreme Court of India directed CBI to carry out investigations in important and difficult areas. In the instant case a detailed investigation has been carried out by the CBI. The contention of the petitioner is that documents, belonging to the writ petitioner were seized and scrutinised. The CBI however has given a clean chit and it has been specifically found that 'there was no evidence found causing investigation to suggest that the rates charged by the supplier firms were exorbitant.'
18. It was further found from the facts and evidence collected during the course of investigation, it could not be proved that requisitioning officers were in any manner connected with the suppliers of the firms and/or that these officers directly caused any pecuniary benefit to the suppliers. In view of this specific factual findings by the foremost investigating authorities completely exonerating the writ petitioner, it was highly arbitrary for the respondents not to accept the same. It is remarkable that the Railways Authorities have taken the stand that they did not accept the CBI findings. No reasons have been given for such a drastic and unusual stand. It is the usual practice that the Government agencies all over the country are bound by CBI investigations and it is not known under whose authority the Eastern Railway could think of deviating from the norm. No reason, however, has been assigned as to why the CBI findings should not be accepted but have merely observed that they are free to ignore the same and institute their own independent departmental enquiry.
19. It has been submitted that the respondent authorities should not have ignored the factual determination made by the CBI and there is no question of harassing the petitioner by banning further business dealings till November 2000. In this connection Mr. Banerjee learned Advocate for the petitioner has relied upon the judgment and decision of the Supreme Court in the case of Food Corporation of India v. Suraj Bhan reported in 1994 SCC (L&S;) 957.
20. It has been submitted that in the instant case admittedly the departmental proceeding and the CBI proceedings related to the same set of facts i.e. whether or not the rate charged by the petitioner for supply of electrical goods are exorbitant. Applying, the said ratio it has been argued on behalf of the petitioner that the petitioner having been acquitted the purported departmental proceedings in the instant case initiated by show cause notice and culminating in the banning order should be quashed in toto.
21. The contention of the respondents, on the other hand, is that they are entitled to carry out an independent departmental enquiry regardless of the results of the CBI investigation and the Railways have collected independent evidence to show that the petitioner has overcharged the Railways.
22. It has been alleged in the affidavit of Manoj Kumar Das stated to be Deputy Manager-Stores of Eastern Rly. being affidavit in opposition of the petitioner (hereinafter referred to as the said affidavit) affirmed on 1-3-96 that the CBI report did not take into account correct facts and instance of overcharging by the petitioner. Moreover it has been alleged in the said affidavit at paragraph 14 as follows :--
'Dehors the CBI investigation, the Railways, i.e. respondents had the right and decided to activate its own departmental mechanism to make a thorough enquiry into the matter upon taking evidence in respect of the subject transaction.
23. It has also been contended on behalf of the respondents that in any event in the instant case carrying out investigation by the CBI and/or the result thereof did not preclude or raise any bar on the respondent authorities to make their own departmental enquiries into and adjudicate upon the charges contained in the said show cause notice and come to its own conclusion based on best judgment and natural justice.
24. It has accordingly been alleged in the said affidavit in para 15 as follows :--
'Upon detailed consideration of all material facts on records, which included the oral and written representations of the petitioner before the Director, Railway Stores, Railway Board, the said decision was taken sometime on or about 30-10-95 by the said Director, Railway Stores, Railway Board for and on behalf of the President of India to ban business dealings with the petitioner and his business concern for a period of 5 years with effect from the date of issue of the said letter for the reasons stated before. The Rly. Board in the facts of the case could not allow the petitioner to carry on his business of defrauding Rly. with the help of some corrupt Riy. official. It would be relevant to mention that the Riy. have also taken disciplinary steps and proceedings against the erring Rly. Officers in this connection.'
25. It has also been alleged in the said affidavit that no case has been made out in the petition for which -the Court should interfere in the administrative decision to ban the petitioner to carry on business with the respondents which is purely a commercial transaction.
26. It has also been alleged that no infirmity has been shown in the said decision of such a nature so as to render the decision invalid requiring interference by this Court. It has been alleged that the said decision was valid and was taken by the Railways upon consideration of all facts and circumstances and should be upheld by this Court.
27. It has also been contended that the transaction being a commercial one requiring going through books of account and invoice, documents of the petitioner, no such exercise should not be undertaken by the writ Court.
28. It has also been submitted on behalf of the respondents that the claim of the petitioner has also been referred to arbitration by an order passed by this Court on 7-6-95 and since an alternative proceeding has already been pursued by the petitioner before the Arbitrator, the petitioner should not be allowed to agitate the same question in this Court.
29. The learned Advocate for the respondents Railways has also submitted that writ Court should not interfere in the contractual matters. He has submitted that it is not for the Court to determine whether a particular policy or particular decision taken in the fulfilment of that policy is fair. It is only concerned with the manner in which those decisions have been taken. He has also submitted that the Court should not interfere in matters of contract and decisions pertaining to contract relating to commercial nature.
30. In this connection learned Advocate for the respondents has relied upon the following decisions :--
(i) Tata Celluler v. Union of India reported in : AIR1996SC11 .
(ii) Radhakrishna Agarwal v. State of Bihar reported in : [1977]3SCR249 .
31. I have considered the submissions of both the parties. It appears that facts on record do not justify the stand taken by the Railways. From the documents annexed to the petition, it is very clear that the Railway authorities decided only to suspend business dealings till CBI investigation would be completed and the result known. The Railway authorities cannot take a different stand than that was taken in the letter of the Deputy Manager concerned and the Head of the Railways' i.e. the Minister of Railways who had represented that the bills could not be released as cases are under investigation by the CBI. It also appears that reply to the show cause notice was given on 1990 and the oral hearing was completed by July 1991. If the respondent authorities were of the view that they were not bound by the CBI investigation results, the decision could have been given in 1991 itself and the banning order would have spent its force by 1995. The respondent authorities however chose not to decide matter and represented that the entire thing was dependent only upon outcome of the CBI enquiry. The said enquiry was also completed and the prosecution dropped by August 1992, but even then the respondents took no decision either to pay the petitioner's bill or to withdraw the suspension order. However in November 1995 i.e. after the expiry of more than three years, the respondents awake from its slumber and decided to ban business dealings with the writ petitioner till the year November 2000. By this process the petitioner has effactively been prevented from doing business for more than 10 years.
32. It may also be noted that the banning order contains no reason whatsoever and as such cannot be sustained. In spite of the detailed submissions made by the writ petitioner showing that materials with the price charged was not at all exorbitant the decision does not contain any discussion regarding the same.
33. The contention of the respondents with regard to the purported high market price cannot be looked into as it is well settled that an order of administrative authority must stand by itself with reasons and reasons cannot be supplemented by way of affidavit. In this connection judgment and decision in the case of Moninder Singh Gill v. Chief Election Commissioner reported in : [1978]2SCR272 may be taken note of.
34. In the aforesaid decision the Supreme Court in paragraph 8 at page 858 of the said report held and observed as follows :--
'The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose J., in Gordhandas Bhanji, : [1952]1SCR135
'Public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the acting and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.'
Orders are not like old wine becoming better as they growolder. A Caveat.'
35. The principles decided in the aforesaid decision clearly apply to the facts of the instant case.
36. It also appears that there is complete non-application of mind in passing the said order. The materials given by the writ petitioner and the findings of CBI have not been considered. Learned Advocate for the petitioner has also relied upon another decision passed by me in the case of Abuzar M. Hakimuddin v. Union of India reported in (1994) 1 CLJ 13. In the aforesaid decision, after remaining silent for a considerable time, the respondents informed that investigation by CBI, against the petitioner firm was going on and that final decision in the matter of payment would have to wait till the outcome of the CBI, investigation. Thereafter the respondents avoided obligation to make payment of the admitted dues of the petitioner though CBI investigation was over. The petitioner accordingly preferred writ petition before this Court which was challenged on the ground that the rates claimed were exorbitant, that such forming part of the purchase orders contain an arbitration clause. Allowing the writ application the respondent was directed to make payment of the amount claimed.
37. In the aforesaid decision it was held that exclusion of Article 14 in contractual matters is not permissible in constitutional scheme. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, it can be said that the ultimate impact of all actions of the State or a public body being undoubtedly of public interest, the requisite public element for this purpose is present also in contractual matters. Therefore it would be difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14.
38. It was also held by me that a matter can only be referred to arbitration in respect of a dispute raised by the parties, and since no dispute has been raised by the Railway authorities with regard to the claim of the petitioner prior to the filing of the writ petition and under such circumstances respondent is estopped from contending that the dispute should be referred to arbitration in terms of the arbitration clause.
39. It was further held by me when there is manifest injustice and after coming to a finding that equity exists in favour of the petitioner, the writ Court would mould the relief in order to do justice between the parties. The concept of justice cannot be restricted to a strait-jacket formula, but is very wide and the law Courts exist to do justice and come in aid of a person who seeks justice against an administrative caprice and its ipse dixit.
40. It is well settled that the writ Court is entitled to interfere in contractual obligation where the State action appears to be arbitrary. Since the Railways have without any reason withheld payment, they should refund the amount to the petitioner with interest.
41. The facts in the said case are almost similar in nature to that of the instant case. In my view, the principles decided in the aforesaid decision apply equally in the instant case.
42. In the case of Mahabir Auto Stores v. Indian Oil Corporation reported in : [1990]1SCR818 it was held by the Supreme Court that the State acts in its executive power under Article 298 of the Constitution in entering or not entering into contracts with individual parties. Article 14 of the Constitution would be applicable to those exercise of power. Therefore, the action of State organ can be checked under Article 14. Every action of the Slate executive authority must be subject to rule of law and must be informed by reason. So whatever be the activity of the public authority, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. Rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination. It is well settled that there can be 'malice in law'. Existence of such 'malice in law' is part of the critical apparatus of a particular action in administrative law. Indeed 'malice in law' is part of the dimension of the rule of relevance and reason as well as the rule of fair play in action.
43. Judgment and decision in the case of Kumari Shrilekha Vodyarthi etc. v. State of U. P. reported in : AIR1991SC537 may also be taken note of. In the aforesaid decision, the Supreme Court held that the Stale actions in contractual matters can be also reviewed. The Supreme Court in the aforesaid decision further observed that personality of the State, requiring regulation of its conduct in all spheres by requirements of Article 14 does not undergo such a radical change after the making of a contract merely because some contractual rights accrue to the other party in addition. It is not as if the requirements of Article 14 and contractual obligations are alien concepts, which cannot co-exist. The Constitution does not envisage or permit contrary to the professed ideals in the preamble. Exclusion of Article 14 in contractual matters is not permissible constitutional scheme. The scope and permissible grounds of judicial review in such matters and the relief which may be available are different matters but that does not justify the view of its total exclusion. Even assuming that it is necessary to import the concept of presence of some public element in a State action to attract Article 14 and permit judicial review, it can be said that the ultimate impact of all actions of the State or apublic body being undoubtedly on public interest, the requisite public element for this purpose is present also in contractual matters. Therefore, it would be difficult and unrealistic to exclude the State actions in contractual matters, after the contract has been made, from the purview of judicial review to test its validity on the anvil of Article 14. Thus the wide sweep of Article 14 undoubtedly takes within its fold the impugned circular issued by the State of U.P. in exercise of its executive power irrespective of the precise nature of appointment of the Govt. Counsel in the districts and the other rights contractual or statutory, which the appointees may have, : [1989]2SCR751 and : [1990]1SCR818 Foll.
44. The Supreme Court also held in paragraph 31 at page 553 of the said report as follows :--
'It is this aspect which has been considered at length by Sabyasachi Mukherjee, J. (the learned Chief Justice then was) in (3) Dwarkadas Marfatia's case : [1989]2SCR751 , even though that was a case of statutory exemption granted under the Rent Act to an instrumentality of the State and it was in that context that the exercise of power to terminate the contractual tenancy was examined. All the same without going into the question whether the obligation of the instrumentality to act in pursuance of public purpose, was a public law purpose or private law purpose, it was held that the obligation to act in pursuance of public purpose was alone sufficient to attract Article 14. It was held that there was an implied obligation in respect of the dealings with the tenants/occupants of the authority to act in public interest/purpose. It was emphasised that every State action has td be for a public purpose and must promote public benefit. Referring to some earlier decisions, it was reiterated that all State actions 'whatever their mien' are amenable to constitutional limitations, the alternative being to permit them 'to flourish as an imperium in imperio'. It was pointed out that 'governmental policy would be invalid as lacking in public interest unreasonable or contrary to the professed standards', if it suffers from this vice. It was stated that every State action must be reasonable and in public interest and an infraction of, that duty is amenable to judicial review. The extent of permissible judicial review was indicated by saying that 'actions are amenable to judicial review only to the extent that the State must act validly for a discernible reason, not whimsically for any ulterior purpose'. It is sufficient to quote from the judgment of Mukherjee, J. (as the Learned Chief Justice then was) the following extract :
'.................,.....,.. Where there is arbitrariness in State action, Article 14 springs in and judicial review strikes such an action down. Every action of executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, it should meet the test of Article 14...................' This decision clearly shows that no doubt was entertained about the applicability of Article 14 of the Constitution to an action of the State or its instrumentality, even where the action was taken under the terms of a contract of tenancy which alone applied by virtue of the exemption granted under the Rent excluding the applicability of the provisions thereof.'
45. The Supreme Court also observed in para 32 of the said judgment at page 553 as follows :--
'In another recent decision in (4) Mahabir Auto stores v. Indian Oil Corporation : [1990]1SCR818 it was held that Article 14 was attracted even where the agrieved person did not have the benefit of either a contractual or a statutory right. The grievance in that case was made by a person who was not a dealer of the Indian Oil Corporation but merely claimed to have been treated as one by a long course of conduct. It was held by the learned Chief Justice that the impugned act of the Indian Oil Corporation was an administrative decision and could be impeached on the ground that it was arbitrary or violative or Article 14 of the Constitution. It was emphasised that the Indian Oil Corporation being an instrumentality of the State was bound to act fairly; and that fairness in such actions should be perceptible, if not transparent. If Article 14 was applied even without the benefit of a contract of dealership, the position cannot be worse with the added benefit of a contract. With respect, we concur with the view about the impact of Article 14 of the Constitution on every Stale action as indicated by the learned Chief Justice in these two recent decisions.'
46. In the case of Hindustan Sugar Mills v. The State of Rajasthan and reported in : AIR1981SC1681 it was held that the Central Govt. should honour its legal obligation arising out of contract and not drive the citizen concerned to file a suit for recovery of the amount. In a democratic society governed by the rule of law, it is the duty of the Slate to do what is fair and just to the citizen, and the State should not seek to defeat the legitimate claim of the citizen by adopting a legalistic attitude hut should do what fairness and justice demand.
47. It is well settled as I have already indicated that the writ court is entitled to interfere in contractual obligation where the State action appears to be arbitrary. In my view the Railways have without any reason withheld payment and they should refund the amount to the petitioner with interest. The Supreme Court in several decisions passed such direction for payment of interest.
48. The contention of the respondent that the respondent is fully entitled to ignore the CBI findings and proceed with its independent departmental enquiry cannot be accepted. The further contention of the respondent is that the monetary claim having been referred to arbitration this court should not go into the question of blacklisting/banning order as any decision on the same would prejudice the defence of the respondents in the arbitration. This submission of the respondent cannot also be accepted.
49. The monetary claim was referred to Arbitration in the writ petitioner's earlier writ petition which was dated 10th May, 1995 by an order of Sree Rang Mishra, J. dated 7-6-95, a copy which is annexed to the petition and marked 'E'. At that point of time the banning order which is the only subject-matter of the present writ petition had not yet been passed. The said banning order was passed on 30-10-95, and us such, the subject matter of the first petition was wholly different. The Arbitrator while considering the petitioner's claims has already passed an interim award to the extent of Rs. 3,33,887.42 and only a small amount of Rs. 1,39,801 is left pending adjudication, which would go to show the falsity of the respondents' defence. A copy of the said interim award is annexed and marked 'F' At that point of time, the petitioner was under temporary suspension only pending final decision and, therefore, the writ court could only direct that the monetary claims be referred to arbitration. There was, therefore, no question of the writ court concerning itself with the banni ng order which came much later nor was the Arbitrator concerned with the same. In fact, there is no prayer before the Arbitrator with regard to any black-listing/suspension/banning order. In fact, such a prayer would not be maintainable before any Arbitrator and the same can only be made before a Constitutional Court.
50. The order of ban imposed on the petitioner by letter dated 30-10-95 for a period of 5 years w.e.f. the date of issue of the said letter has been challenged on the ground that the same in effect amounts to blacklisting of the petitioner and the same affects the right of the petitioner to carry on trade under Article 19(1)(g) and also from the arbitrary action and hostile discrimination under Article 14 of the Constitution. The said banning order has been challenged and the petitioner has prayed for quashing the said order passed by the CBI.
51. The question whether the Railways are entitled to ban future dealings with the petitioner and for an alleged offence what should be the punishment meted out are not disputes arising out of the contract. The said questions are constitutional questions and the Court is to find out if the action taken by the Government or authority is based on fair play and devoid of arbitrariness and discrimination. Such question can never be decided in arbitration. It is the writ Court which can set aside the blacklisting order. If the Court declines to interfere or exercises its power in writ jurisdiction in such cases, the net result is that the petitioner would be without any remedy, since the said question is not arbitrable at all.
52. It has been brought to my notice that the enquiry by the CBI was jointly conducted against Abuzar Jukumuddin (M/s. S. K. Sales Corporation and Vijay Singh Nahata (National Electric Stores). Both the suppliers were investigated by the CBI from the report. It will appear that both the petitioner and S.K. Sales Corporation (Abusar Hukumuddin) were wholly exonerated. However, surprisingly in the instant case, the Railway authorities have chosen to conduct an independent enquiry against the petitioner whereas in the case of Abuzar Hukumuddin, the Railways chose to withdraw the banning order even prior to the conclusion of the CBI enquiry. In this connection judgment and decision in the case of Abuzar Hukumuddin v. Union of India (supra) may be noted wherein the petitioners succeeded as already stated hereinbefore. In the instant case, the aforesaid act clearly amounts to hostile discrimination of the worst possible kind and there, is no reason why the petitioner should not succeed.
53. The rationale of the decision in Abuzar M. Haminuddin (supra) is that CBI enquiry having been concluded in favour of the petitioner, the petitioner should not have been harassed in any way by with holding of dues. In the instant case, the Railways have chosen to treat the petitioner in a different manner although his case is similar to that of Hakinmddin by imposing fresh banning order although there existed valid or independent reason for the same.
54. Judgment and decision in the case of Radha Krishna Agarwal v. State of Bihar reported in : [1977]3SCR249 relied upon by learned Advocate for the respondent cannot be of any assistance in the instant case. The instant case is not one whether the petitioner is seeking to set aside a termination of contract or asking for any moneys due under the contract. The sole relief which is the subject matter of the writ petition is in relation to the challenge to the banning order dated 30th October, 1995 by which the business of the writ petitioner has been stopped till November 2000. This is not a question relating to the contractual field at all but rather infringes upon the petitioner's right to carry on business and is constitutional right under Article 19(1)(g) of the Constitution. In any event, the judgment in Radha Krishna Agarwal case has been fully explained by the Division Bench of this Court in Marine Engineer v. Siddcswar Halder reported in (1991) 1 CLJ 467. In the aforesaid decision the Division Bench of our Court has made it clear that where contract entered into between State and the person aggrieved is non-statutory and purely contractual but such contract has been cancelled on a ground dehors any of the terms of the contract the same is per se violative of Article 14 of the Constitution and the writ petition is maintainable. In the instant case the action of the Railways has been clearly dehors the contract; but in any event, as stated hereinbefore, the relief sought for does not relate to the contract at all and as such Radha Krishna Agarwal's case has no application.
.55, Judgment and decision in the case of Tata Cellular v. Union of India reported in : AIR1996SC11 has been relied upon by the learned Advocate for the respondent which, however, in my view, does not assist him in any way. The said case relates to the stage of awarding of tender and the principles in relation thereto. However, the observation in the said case fully support the petitioner and show that the Supreme Court has advanced much towards a more liberal activities policy regarding interference of the writ court in contractual matters. It has been clearly stated that principles of judicial review would apply to the exercise of contractual powers by Govt. bodies in order to prevent arbitrariness and favouritism. The respondents have chosen to refer to para 113 which the Supreme Court has pointed out that there should be judicial restraint in administrative action and the Court does not have the expertise to correct an administrative decision. In the said paragraph itself, however, the Supreme Court pointed out that the decision must not only be tested by the application of Wednesbury principle of reasonableness but must be free from arbitrariness not effected by bias and actuated by mala fides. The Supreme Court in para 86 goes on to deprecate unfairness and points out that unfairness by even in administrative matters is to be set right by judicial review and the power of judicial review is exercised to rein in any unbridled executive functioning. It is, therefore, clear that the mandate of the Supreme Count that the writ Court should look into the question of unfairness and arbitrary actions and the reasons given in support of any such action. In the instant case the respondents have wholly failed to justify or give any reason whatsoever in support of the decision to ignore the CBI determination which is a very rare and unusual course to follow. The respondents have also failed to give any reason in support of the banning order as would appear from the order itself. Such action falls wholly within the purview of arbitrary executive action and the Court, as per the ratio in Tata Cellular case, has not only the discretion but has the duty to interfere to set matters right.
56. Judgment and decision in the case of L.I.C. v. Consumer Education & Research Centre reported in : AIR1995SC1811 relied upon by learned Advocate for the petitioner may also considered in this connection. In the aforesaid decision the Supreme Court held and observed inter alia that 'in the sphere of contractual relations the State, its instrumentality, public authorities or those whose acts bear insignia of public element, action to public duty or obligation are enjoined to act in a manner i.e. fair, just and equitable, after taking objectively all the relevant options into consideration and in a manner that is reasonable, relevant and germane to effectuate the purpose for public good and in general public interest and it must not take any irrelevant or irrational factors into consideration or appear arbitrary in a decision. Duty to act fairly is part of fair procedure envisaged under Articles 14 and 21. Every activity of the public authority or those under public duty or obligation must be informed by reason and guided by the public interest.
57. It is therefore settled by several decision of the Apex Court that the writ Court is entitled to interfere whenever it is satisfied that there has been any unfairness or arbitrary action or decision whether or not it be an administrative decision or in the contractual field. The question of blacklisting and impugned order of ban imposed on the petitioner does not relate to contractual field at all but in the instance of arbitrary decision taking away the right of the petitioner to carry on business and the said action and decision cannot at all be said to be fair and also cannot stand the test of reasonableness, and is liable to be set aside. It also appears from records that the petitioner's business has been suspended from as far back as 5-6-95 pending the CBI enquiry. If that be so, the petitioner had already suffered loss of business of 5 years on 5-6-95 which is prior to the filing of the writ petition. Further, banning the writ petitioner from business dealings really involves double punishment. The petitioner has also suffered due to suspension order and there is no justified reason to impose any further ban on the petitioner.
58. The matter was fixed for judgment on 12-9-97 when the petitioner prayed for leave to file a supplementary affidavit since an award has already been published by the learned Arbitrator in respect of the claim of the petitioner for payment of the bills due. The said prayer was allowed and leave was granted to the petitioner to file a supplementary affidavit. Pursuant to the said leave granted, the petitioner filed a supplementary affidavit on 19- 9-97.
59. It is the contention of the petitioner that in the said award made and published by the learned Arbitrator on 21 -8-97, the Arbitrator held that the price charged by the petitioner is not exorbitant. Learned Advocate referred to the said award and submitted that the Arbitrator took into account the findings of the CBI which stated that 'there is no evidence found causing investigation to suggest that rates charged by the supplier were exorbitant regarding most of the items supplied and in the circumstances of this case. It is found not fit for prosecution in Court of Law.'
60. In that view of the matter the Arbitrator held that there is no reason to withhold payment of the bills and directed the respondent-Railways to make payment of the bill. It is not necessary for me to take into account the finding of the learned Arbitrator in the instant writ proceeding.
61. However, there is no dispute that in the instant case, the petitioner has been exonerated from the charges made against the petitioner. But the petitioner was made to suffer by the impugned order of suspension of business. Further imposition of ban on the petitioner is therefore totally uncalled for.
62. For the reasons aforesaid, the writ petitioner succeeds in the writ petition. The banning order communicated to the petitioner by letter dated 30- 10-95 stands quashed and set aside.
63. There will be no order as to costs.
64. All parties are to act on a signed copy of the operative portion of the Judgment on the usual undertaking.