Though it has been contended on behalf of the petitioner
that for any instance of licensee himself/his agent or staff, if found in
drunken condition/indulging in bad conduct or involved in activities
amounting to moral turpitude in Railway premises, the Contractor may be
penalized up to Rs. 5,000/- as per clause -19 of the Contract agreement,
we are of the view that Clause-23 referred to hereinabove is of
supervening import authorizing the Railway to terminate the contract
agreement in case of breach of any of the condition embodied therein and
effect forfeiture of the deposits as contemplated.
IN THE HIGH COURT OF ORISSA : CUTTACK
W.P.(C) No. 9555 of 2012
An application under Articles 226 & 227 of the Constitution of India.
M/s. Sagar Vision Advertising
-Versus-
Sr. Divisional Commercial Manager,
East Coast Railway, Khurda Road
Division & Another.
PRESENT:
THE HONOURABLE CHIEF JUSTICE MR. AMITAVA ROY
AND
THE HON’BLE DR JUSTICE B. R. SARANGI
Date of Order
:
26.08.2014
Citation;AIR 2015(NOC)349(ORISSA)
Being aggrieved and vexed by the termination of its
contract for installation and operation of Audio-Visual Closed Circuit
Television (CCTV) System at Bhubaneswar, Cuttack, Berhampur &
Sambalpur Railway Stations and at the forfeiture of the deposits made by
it by way of licence fees, security deposit, performance guarantee etc., the
petitioner is before this Court seeking its remedial intervention.
2.
We have heard Mr. S.K. Sahoo, learned counsel for the
petitioner and Mr. D.K. Sahoo, learned counsel for the opposite party.
3.
Briefly stated, the indispensable facts are that the
petitioner, in response to the tender notice dated 4.11.2010 floated by the
East Coast Railway, Khurda Road Division, Bhubaneswar for awarding
contract for installation and operation of Audio-Visual Closed Circuit
Television (CCTV) System for Cuttack, Bhubaneswar, Puri, Brahmapur,
Bhadrak and Jajpur Keonjhar Road Railway Stations under Khurda Road
Division, had submitted tender along with the application fees and
Earnest Money Deposit (EMD). In response to the NIT dated 17.02.2010
petitioner had offered its bid as well for the same work for Sambalpur
Railway Station along with the aforementioned deposits.
After opening
and on evaluation of the technical and financial bids of the tenderers, the
offers of the petitioner were accepted and as demanded, it made deposits
towards licence fees, security deposits and performance guarantee to the
tune of Rs. 27,07,509/- for these Railway Stations for the work in
question. According to the petitioner, together with the application fees,
EMD of Rs. 18,15,896/- was also deposited and as such, its total
investment summed up to Rs.45,23,405/-. It had also deposited ground
rent for 1 year and agreements were executed with the East Coast
Railways, Khurda Road Division. The petitioner has claimed also to have
paid towards electricity connection for making the CCTV System
functional eventually to commence the CCTV operation in Bhubaneswar,
Cuttack and Sambalpur Stations on 5.8.2011, 12.8.2011 and 8.6.2011
respectively. In course of the said operation, it also stated to have paid
the licence fees for the second six months. It is asserted that when the
matter stood thus, all of a sudden, by communications dated 14.01.2012
and 16.01.2012 the contracts were terminated by the opposite party.
Petitioner pleaded unsuccessfully with the opposite party-Railway on the
termination and has finally sought the refuge of this Court.
4.
In the counter filed by the opposite party, they while
admitting the pleaded facts pertaining to the tenders as averred by the
petitioner for Cuttack, Bhubaneswar, Brahmapur and Sambalpur Railway
Stations have asserted that the contract was subject to the the terms and
conditions as stipulated. They clarified that the scope of the work
extended to providing of information and entertainment to the travelling
public/passengers. Letter of acceptance was issued to the petitioner for
the installation and operation of the CCTV system in the above stations
and it accordingly had deposited licence fees, security deposit and
performance
guarantee
and
that
agreements
were
also
executed.
Thereafter control rooms were provided to it along with electricity for
making the system functional.
The opposite party stated that after
commencement of the telecast, it was reported to the office of the opposite
party No.1 (i.e. Sr. Divisional Commercial Manager, East Coast Railway,
Khurda Road Division, Bhubaneswar) that on 14.01.2012 at about 15.30
hours some passengers and railway staff had brought to the knowledge of
Station Master and Chief Ticket Inspector that objectionable and obscene
video clips were being shown on the audio-visual closed circuit television
(CCTV) system at Bhubaneswar Railway Station and that the same had
created huge public outrage and generated adverse publicity against the
Railways. The opposite party have stated that the enquiry that followed,
affirmed that the reports were correct. This was also affirmed by one Sri
Asutosh Swain, the operator of the CCTV system at Bhubaneswar Railway
Station in writing admitting his involvement in the episode. According to
the opposite party, this action of the CCTV contractor i.e. M/s. Sagar
Vision Advertising (petitioner), apart from generating serious public
resentment, also offended the sense of decency and immensely hurt
public sentiment, which was otherwise evident from the adverse coverage
in various electronic and print media and the queries made by the
members of the public in general. Due to such incident, tense situation
prevailed at the station accompanied brewing strong disaffection.
This
episode also got flashed in both print and electronic media in other parts
of the country. Further, various organizations resorted to picketing
outside
the
Bhubaneswar
Railway
Station
demanding
immediate
withdrawal of the petitioner's services, so much so, that there was
imminent possibility of disruption of public order. It was clear that the
public was not ready to accept such immoral telecast in public places.
They have asserted that thereby the petitioner breached/violated the
Clauses 1, 8, 14, 19 and 23 of the contract agreement.
Consequently,
the said incident was reported to the petitioner’s proprietor, namely, Shri
Bighnaraj Panda over his mobile No. 94399-40444 on the very same day
and he was requested to come to Bhubaneswar Railway Station to offer
explanation and to give him a hearing in connection with the incident.
The opposite party in categorical terms have stated that in
spite of this intimation, the petitioner did not respond. The opposite party
have further stated that as per the contract agreement, the contractor
-5-
was to take prior approval of the Railway Administration before
telecasting any material. The approval had been granted to the contents
of many other compact discs, but in none of those CDs any
objectionable/obscene video contents was approved. The opposite party
asserted that petitioner had used the objectionable CDs without taking
prior approval from the Railways and that such screening was clearly
prohibited in the contract agreement and hence there was a deplorable
breach of the terms and conditions of the contract agreement and
therefore, the petitioner-firm had lost its credibility and goodwill with the
Railways for which eventually the impugned decision had to be taken. The
opposite party dismissed the explanation/representation provided by the
petitioner subsequent to the termination of the contract agreements.
5.
In the rejoinder filed by the petitioner,
it apart from
denying its involvement or contribution or participation in the episode,
pleaded unfairness in the action contending that the impugned decision
was violative of the principles of natural justice in absence of any
opportunity to it to represent against the same. It has averred as well
that the forfeiture of its deposits in full, apart from termination of the
contract agreement, was not only arbitrary, unjust and unreasonable, but
also had the potential of ruining it financially.
6.
Learned counsel for the petitioner has insistently argued
that, even assuming without admitting that the telecast of some obscene
and objectionable clippings at the Bhubaneswar Railway Station on the
relevant date were made in its (petitioner) installed CCTV system, the
impugned action of terminating the contract agreement and forfeiture of
its deposits on all counts is ex-facie illegal, arbitrary and highhanded and
-6-
that too without affording it a reasonable opportunity of hearing prior
thereto.
Contending that the petitioner in its representation filed after
the termination of the contract and forfeiture had pleaded violation of
principles of natural justice for not having been called upon or provided
with reasonable opportunity of being heard, or called upon to submit its
explanation whatsoever,
Mr. S.K. Sahoo has mentioned that having
regard to the severe penal consequence foreseeable, the decision
impugned is ab initio void and is liable to be quashed as such.
He
submitted further that the proprietor of the petitioner-firm had invested
his life's earnings in the contract involved and with the forfeiture of his
entire deposits he will be ruined. In any view of the matter, the learned
counsel argued that, the forfeiture of the entire amount of deposits made
by the petitioner is grossly disproportionate to the alleged violation of
contract agreements and ought to be interfered with by this Court in the
interest of justice.
It has further been argued by the learned counsel for the
petitioner that though the contract agreements contain a clause for
Arbitration, the petition ought to be nonsuited on the ground of
availability of alternative remedy as the challenge laid has been founded
on the infringement of its right of fairness inaction on the part of a public
authority. To buttress his arguments, Mr. S.K. Sahoo, has placed reliance
on the decisions of the Hon’ble apex Court in the case of M/s. Nagarjuna
Construction Co. Ltd. Vs. Govt. of Andhra Pradesh and Ors., (2008) 16
SCC 276; Union of India & Ors. Vs. Tantia Construction Private Ltd.,
(2011) 5 SCC 697; and Satwati Deswal Vs. State of Haryana & Ors.,
(2010) 1 SCC 126; and also a decision of the Madras High Court in W.P.
-7-
No. 17905 of 2009 (M/s. K.M. Batcha & Company Vs. the Chief Regional
Manager, Hindustan Petroleum Corporation Ltd..
7.
Per contra, the learned counsel for the opposite party has
argued that admittedly on the concerned day, obscene and vulgar video
clippings had been displayed in the CCTV system, maintained and
operated by the petitioner, at the Bhubaneswar Railway Station and the
public
upsurge
and
condemnation
generated
thereby
prejudicially
impacted on the image of the Railways creating an environment of a law
and order situation and therefore, the impugned action cannot be faulted
with, more particularly, as the act/commission on the part of the
petitioner did amount to gross breach of terms and conditions of contract
agreements, which contemplates such a consequence.
He urged that as
the petitioner, in spite of intimation given to its proprietor prior to the
decision impugned, did not respond thereto, the cavil of violation of
principles of natural justice is wholly unfounded.
8.
The pleaded facts and documents on record have been
duly examined. The competing arguments have also been analysed. The
fact that on the relevant date i.e. 14.01.2012, the CCTV system functional
at the Bhubaneswar Railway Station was being operated by the
petitioner’s firm is admitted. It is also clearly demonstrable that on that
day obscene, objectionable and vulgar video clippings were telecast
through that system for public view. Understandably the display of such
indecent, immoral and obscene contents had the immeasurable potential
of causing unimaginable embarrassment and discomfort to the members
of the public present at the Railway Station. The outburst of mass
indignation and condemnation as well as the public vilification of the
-8-
Railways and the prevailing surcharged environment in and around the
Railway Station is quite conceivable. The pleadings of the petitioner do
not convincingly deny the assertion of the opposite party on solemn
affirmation that it gave no response to the intimation to it on the very
same day to explain the reasons for such inexcusable lapse and violation
of contract agreements. The admission of Mr. Asutosh Swain, the person
in-charge of the operation of CCTV system on behalf of the petitioner is
dismissive of its (petitioner’s) plea of not being involved or associated with
the offending telecast.
Though the petitioner in its post-decisional
representation did contend that it had been denied a reasonable
opportunity of being heard, it having failed to demonstrate with certainty
that it had not been intimated by the opposite party of the above episode
on the very same day calling for its explanation, we are left unpersuaded
to denounce the impugned action to be in violation of principles of natural
justice.
9.
It had been held by the Hon’ble apex Court in Chairman,
Board of Mining Examination & Anr. Vs. Ramjee, AIR 1977 SC 965 that
natural justice is no unruly horse, no lurking land mine, nor a judicial
cure-all. Their Lordships propounded that unnatural expansion of natural
justice, without reference to the administrative realities and other factors
of a given case, can be exasperating. Their Lordships further held that
Courts cannot look at law in the abstract or natural justice as a mere
artifact nor they ought to fit into a rigid mould, the concept of reasonable
opportunity. It was enunciated that if fairness is shown by the decision-
maker to the man proceeded against, the form features and the
-9-
fundamentals of such essential processual propriety are governed by the
facts and circumstances of each situation.
10.
Tested on this touchstone of the notion of fairness
hallowed by time, we are of the unhesitant opinion that the impugned
decision does not warrant for any interference on the ground of want of
fairness in action.
11.
Adverting to the contract agreements, the following sub-
clauses at Clause-8, Clauses 10 & 23 being relevant are extracted herein
below:
“8. Sharing of Telecast Timings and Screening of
Railway Messages & Contractor’s Commercial
Advertisement.
.......................................................................
B. A minimum of 8 1⁄2 hrs shall be utilized for
screening of Railway messages, announcements and
flashes of the Railway administration, Publicity of
national themes free of cost in co-ordination with the
announcement made through he existing Railways
public address system at the concerned Railway
Station.
C.
The CCTV contractor must accept for
telecasting the display material and the CD/Video
cassettes supplied by Railway Administration on
Railway subjects or on social/national themes.
D...................................................................
(i)
TV serials, features, etc. telecast by
Doordarshan or entertainment channels or
any other film sequences shall not be
shown on CCTV as such display attracts
crowed on the platforms obstructing free
movement of the travelling public.
(ii)
The contractor must submit the text of
advertisement and materials to
be
displayed such as slides, films, video clips,
etc.
to
the
Railway
Administration
(DRM/Sr.DCM/DCM of the division) well in
advance for approval before public
screening.
(iii) ...........................................................
(iv)
Advertisements pertaining to cigarettes,
tobacco, wines, alcoholic drinks, prohibited
drugs,
other
modes
of
transport,
- 10 -
propagation of any religion or religious
belief, pictorial representation of any
national leader and martyr for trade and
business purposes, scenes erotic in
character, private insurance companies
offering policies against railway accidents,
obscenity, vulgarity, any other aspect that
may offend the sense of decency of the
viewing public and such other aspects that
may show the Railways in adverse light
and any other subject/items, considered
objectionable under various Acts and laws
of the government shall not be permitted.
The licensee will be fully liable for any
contravention to the various state and
statutory laws relating to telecast of
advertisement in CCTV and shall be liable
for action under the laws for the land. The
licensee is also liable to pay other local
bodies/Sate Govt. Taxes/fees as in force or
modified from time to time. The Licensee
shall obtain permission from the local
authority
if
any
for
telecast
of
advertisement in CCTV and it may not
cause
inconvenience
to
the
public/passengers.
................................................................
10. The licensee shall have to ensure that all the
short films/Audio Visual brought by them for display
on CCTV are duly certified by competent film censor
Board. They should also obtain license required for
the purpose and shall comply with the terms and
conditions of such permission. The Licensee shall be
responsible for all consequences arising on account of
rules/Laws in connection with screening of Audio
Visual Films etc. In no case Railway Administration
shall be responsible for any such violation of
rules/regulations by the contractor.
...............................................................................
23.
In case of breach of any of the conditions
mentioned herein, this agreement shall be liable to be
terminated summarily without assigning any reason
and the decision of the Railway Administration in this
regard will be final and binding on the licensee. In
that event, the security deposit of the licensee shall be
forfeited. This is, however, subject to force measure
- 11 -
and reasons beyond the control of the licensee and
only upon giving proper opportunity of being heard.”
12.
Though it has been contended on behalf of the petitioner
that for any instance of licensee himself/his agent or staff, if found in
drunken condition/indulging in bad conduct or involved in activities
amounting to moral turpitude in Railway premises, the Contractor may be
penalized up to Rs. 5,000/- as per clause -19 of the Contract agreement,
we are of the view that Clause-23 referred to hereinabove is of
supervening import authorizing the Railway to terminate the contract
agreement in case of breach of any of the condition embodied therein and
effect forfeiture of the deposits as contemplated.
13.
True it is that invocation of power under Clause 23 has to
be proceeded by an opportunity of being heard. But, as held hereinabove,
such an opportunity had been granted to the petitioner on the very same
day of the incident to which petitioner did not respond.
Further, the
explanation furnished by it, in its subsequent representation, has been
rejected by the opposite party being construed as inadequate and
unconvincing.
In the face of such highly irresponsible and casual
disposition of the petitioner, the view taken by the opposite party is a
plausible one and thus in the exercise of power of judicial review, we do
not find any persuasive reason to interference even on merits.
14.
The decision cited at the Bar to repel the challenge to the
maintainability of the writ petition on the ground of availability of
alternative remedy need no dilation as the assailment of the impugned
decision has been rejected on merits.
15.
This notwithstanding, we are of the view that the forfeiture
of the entire amount of deposits of the petitioner is noticeably
disproportionate to the breach of contract agreement. To reiterate, it had
been argued that the proprietor of the petitioner-firm had invested his
life’s earning in the contract and that with the forfeiture of his deposits he
is facing imminent ruination.
In this view of the matter, balancing all
aspects, we feel that it would be in the ends of justice to sustain the
decision of termination of the contract agreement and modify the
impugned order with regard to forfeiture to the extent of 50% of the
deposits made by the petitioner. The balance amount would be refunded
by the opp. party to the petitioner. Ordered accordingly.
However, it is made clear that neither the petitioner nor
any person claiming under it would be entitled to any interest on the
refundable amount.
The petition stands disposed on the above terms.
..........................
CHIEF JUSTICE
Dr. B.R. Sarangi, J.
I agree.
...........................
JUDGE
Orissa High Court, Cuttack
The 26th day of August, 2014/A. Dash
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