Bombay High Court Grants Relief To Contractor Whose License Was Cancelled After He Barged Into Zilla Parishad Office Without Authorization

The Bombay High Court recently granted relief to a contractor whose licence was terminated by the Palghar Zilla Parishad after he barged into the Zilla Parishad hall without authorization, where a meeting was going on.

A division bench of Justice MS Sonak and Justice Kamal Khata quashed the termination of his license observing that the action of the Zilla Parishad failed the Wednesbury test of reasonableness.

“This is a case where relevant considerations like the petitioner's consistent satisfactory performance as a licensed contractor for several years are ignored. Instead, irrelevant considerations, having no nexus with the discharge of contractual obligations, are the foundation. Even assuming that the Petitioner, on one solitary occasion, entered the meeting hall, this could hardly be the ground to terminate the Petitioner's license.”

The impugned order, dated February 26, 2024, was challenged by the petitioner, a civil engineer, on the grounds that it was issued without granting him a hearing.

The petitioner had been issued a Class-5A contractor's license initially for five years from October 23, 2017, to October 22, 2022, which was renewed from January 11, 2023, to January 10, 2026. The petitioner had successfully completed various construction projects for the Zilla Parishad without any complaints regarding his work.

On January 10, 2024, he received a show cause notice alleging that he had unauthorizedly barged into a general meeting of the Zilla Parishad, disrupting government work. He was asked to explain why his registration certificate should not be cancelled.

The petitioner responded the next day, explaining that he and his elder brother were threatened by some individuals while entering their office. In an attempt to save himself, the petitioner entered the meeting hall and requested help from those present. He later sought assistance from the police.

However, his licence was cancelled, prompting him to file the present writ petition.

Advocate RD Suryawanshi for the petitioner submitted that when he entered the hall, he had no idea that any meeting was in progress and had no intention to disturb any proceedings. He contended that the termination of the license was a drastic and disproportionate response, effectively blacklisting the petitioner and preventing him from participating in future tenders.

Advocate Nikhil Pote, defending the Zilla Parishad's decision, argued that the termination was justified based on an executive instruction which stipulated conditions under which a contractor's license could be terminated. He asserted that the petitioner's conduct warranted the action taken.

The executive instruction cited by Pote referred to “unsatisfactory work” as grounds for termination, but there was no such allegation in this case, the court noted. The termination was based solely on the petitioner's alleged disruption of the meeting, which had no reasonable connection to his contractual obligations. The court also noted that the petitioner was not given a hearing, and the order did not explain why his explanation was found unacceptable.

The court relied on the Wednesbury principle of reasonableness, established in the case of Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation, which states that a decision can be quashed if it is one that no reasonable authority would have made.

The court highlighted that relevant considerations such as the petitioner's consistent satisfactory performance were ignored, while irrelevant considerations formed the basis of the decision. The court deemed the termination disproportionate, likening it to using a hammer to kill an ant.

The court referred to two facets of irrationality from the case of Tata Cellular v. Union of India (1994): (1) Courts can review a decision-maker's evaluation of facts and intervene if the conclusion is not logically supported by the facts. (2) A decision is unreasonable if it is partial and unequal among different classes.

Proportionality, as described by Leyland and Anthony in "Textbook on Administrative Law," suggests that administrative actions should not exceed what is necessary to achieve their goals, the court noted.

Applying these principles, the court found that the petitioner had not committed misconduct, performed defective work, misappropriated funds, or committed fraud. “In any event, the meeting was not disrupted by the Petitioner for any malafide intent to disrupt the proceedings but an unexpected incident which had nothing to do with the Petitioner's contractual work”, the court added.

The court concluded that terminating the petitioner's license was disproportionate and quashed the termination order.

Case no. – Writ Petition No. 6622 Of 2024

Case Title – Himalay Manohar Patil v. State of Maharashtra

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