M/S. Durga Bhavani Suppliers vs. Sri Durga Malleswara Swarny Varla Devasthnam,Indrakeeladri

Held

The Court held that the operative portion of the impugned proceedings dated June 19, 2022, was violative of the principles of natural justice. While the 1st respondent was convinced of alleged violations by the petitioner, they failed to follow the established procedure for taking action. Specifically, the Court noted that the learned standing counsel could not substantiate whether any inquiry was conducted or statements of complainants were recorded prior to the impugned decision. The material on record only disclosed the receipt of complaints and a surprise visit, but not a subsequent inquiry. Therefore, the Court set aside only the operative portion of the order, treating the rest as a show-cause notice. The petitioner was directed to submit an explanation within fifteen days. If the explanation was unsatisfactory or not submitted, the competent authority was to proceed with an inquiry, giving the petitioner a reasonable opportunity to participate, and pass final orders expeditiously, preferably within three months of receiving the explanation.

Facts

The petitioner was the highest bidder in a public auction for the license and maintenance of a cloakroom at a Devasthanam, for a period of two years from June 2, 2022, to May 1, 2024. The petitioner deposited Rs. 52,29,199/- plus 18% GST for the first year and an additional 10% for the second year, totaling Rs. 54 lakhs including a caution deposit. The petitioner was permitted to collect Rs. 5/- per item as luggage charges. However, the 1st respondent (Devasthanam) issued an order on June 19, 2022, cancelling the petitioner's license and blacklisting them for five years. The petitioner contended that this major punishment was imposed without any inquiry or opportunity to explain, violating principles of natural justice. The respondent argued that the petitioner was collecting Rs. 20/- per item, exceeding the permitted Rs. 5/-, and that multiple complaints were received, leading to a surprise visit and subsequent cancellation.

Key Issues

1. Whether the impugned order dated June 19, 2022, cancelling the petitioner's license and blacklisting them for five years, passed by the 1st respondent, is violative of the principles of natural justice, specifically the right to a fair hearing, as it was allegedly passed without conducting an inquiry or providing an opportunity for explanation? (Question of law and fact, turning on principles of natural justice and due process). Petitioner's Arguments: The petitioner argued that the cancellation of the license and blacklisting constituted a major punishment imposed without any inquiry or opportunity to submit an explanation, thereby violating the fundamental principles of natural justice. They relied on the general principles of natural justice requiring a fair hearing before adverse action is taken. Revenue/State's Arguments: The respondent contended that the petitioner was collecting excess charges (Rs. 20/- instead of Rs. 5/-) from devotees, supported by multiple complaints and a surprise visit. They argued that these violations, coupled with the removal of the rate display board, justified the cancellation. They referred to the terms and conditions of the auction and license, and an order from the Commissioner of Endowments.