Stigmatic: Allahabad High Court Quashes Food Corporation's Unilateral Order To Recover Alleged Excess Fee Paid To Empanelled Advocate

The Allahabad High Court has quashed orders issued by the Food Corporation of India for recovering alleged excess fees paid to an empanelled advocate, on the ground of violation of principles of natural justice.

The Court held that the authorities had overstepped their jurisdiction in passing a stigmatic order which was depriving the petitioner of the compensation for the services he had offered.

A division bench of Justice Shekhar B. Saraf and Justice Kshitij Shailendra observed that the inquiry report in question was not provided to the petitioner and no show cause notice was issued to him against the alleged excess payments made to him.

"The record clearly shows that the inquiry report of the Committee was never provided to the petitioner as also stated by the petitioner in response to the notice issued to him subsequent to the inquiry. Furthermore, the petitioner was never put to show cause with regard to any of the excess payments of professional fees made to him prior to issue of demand notice. In fact the demand notices were in the nature of orders to deposit the amount in bank account of the Corporation. It is not in dispute that the petitioner was never a part of the inquiry". 

Based on a Committee constituted to carry out an inquiry, the Food Corporation of India issued several orders for recovery of Rs.17,16,767 which were allegedly paid in excess to the petitioner-advocate for empanelling his services from the year 2017-2020.

The recovery orders were challenged on grounds that the inquiry report was never submitted on the petitioner, and consequently, there was violation of principles of natural justice. It was argued that the recovery orders casted a stigma on the petitioner which could be used to terminate his services at a later stage.

Per contra, counsel for Food Corporation of India argued that there was no provision in law to provide a copy of the internal audit inquiry to the petitioner. it was argued that a writ for recovery of fees by an advocate was not maintainable.

The court however said:

“Upon considering the various facts and circumstances of the case, we are of the view that any order that is passed by an Authority that has the flavour of stigma being cast upon a person is required to be carried out in a particular manner where there is a due process of law. Such process of law requires the person against whom such stigma is being cast to be granted an opportunity to place his case. The person should also be provided a copy of inquiry report, if any, and, thereafter, given a chance to submit his response to the same. The above ingredients are obviously missing in the present case.”

Reliance was placed on the decisions of the Supreme Court in Prithipal Singh vs. State of Punjab and others, State of Haryana and another vs. Jagdish Chander and U.P. State Road Transport Corporation & others vs. Brijesh Kumar & another wherein it was held that principles of natural justice ought to be followed and inquiry report must be provided to the delinquent where stigmatic orders are proposed.

Holding that this was not a case where the advocate had filed for recovery of fees but where he had approached the High Court against the recovery of alleged excess fees issued against him, the Court set aside the impugned orders and directed Food Corporation of India to start afresh, if at all, complying with the principles of natural justice.

Case Title: Vijay Kumar Dixit v. Union Of India And 7 Others [WRIT - C No. - 41735 of 2024]

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