The Allahabad High Court recently delivered a significant judgment in the case of A.K. Construction Company vs. Union of India and Others (Writ – C No. – 20223 of 2024). The petitioner, A.K. Construction Company, challenged the termination of its contract with the National Highway Authority of India (NHAI) for operating the Kaithi Fee Plaza. The contract was terminated by an order dated March 31, 2024, issued by the Chief General Manager, Commercial Operations, NHAI. Additionally, A.K. Construction Company was debarred from the list of pre-qualified bidders for six months.
Legal Issues
1. Pre-Meditation of Show Cause Notice: The petitioner argued that the show cause notice issued by NHAI was pre-meditated, rendering any subsequent hearing ineffective.
2. Violation of Natural Justice: The petitioner contended that the authorities failed to consider their detailed reply to the show cause notice, thereby violating principles of natural justice.
3. Proportionality of Punishment: The petitioner claimed that the termination of the contract and the six-month debarment were disproportionate, especially since a penalty of โน8,00,000 had already been paid for the alleged breaches.
4. Double Jeopardy: The petitioner argued that being penalized twice for the same offence amounted to double jeopardy.
Court’s Observations and Decision
The bench, comprising Justice Shekhar B. Saraf and Justice Manjive Shukla, quashed the impugned order, emphasizing several key points:
1. Pre-Meditation of Show Cause Notice: The court noted that the show cause notice appeared to be pre-meditated. Citing the Supreme Court’s judgment in Siemens Limited vs. State of Maharashtra and Others, the court highlighted that a show cause notice must not be issued with a pre-determined outcome. The relevant observation was: “When a notice is issued with premeditation, a writ petition would be maintainable. In such an event, even if the court directs the statutory authority to hear the matter afresh, ordinarily such hearing would not yield any fruitful purpose.”
2. Violation of Natural Justice: The court found that the NHAI had not adequately considered the petitioner’s reply to the show cause notice. The judgment stated: “The authority cannot be allowed to change the goal post while passing the order.”
3. Proportionality and Double Jeopardy: The court held that the punishment imposed was disproportionate and amounted to double jeopardy. The judgment noted: “The penalty had already been imposed on the petitioner, and without any further illegality committed by the petitioner, the petitioner was burdened with the ban amounting to double jeopardy.”
4. Direction for Fresh Show Cause Notice: The court directed the NHAI to issue a fresh show cause notice, allowing the petitioner to file a detailed reply and be heard before a reasoned order is passed.
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Parties Involved
– Petitioner: A.K. Construction Company
– Respondents: Union of India and Others
– Petitioner’s Counsel: Sri Anoop Trivedi, Senior Advocate, assisted by Sri Devansh Mishra and Sri Vibhu Rai
– Respondents’ Counsel: Sri Mahendra Pratap, Advocate for NHAI
