H I G H C O U R T O F J A M M U & K A S H M I R A N D L A D A K H HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU Reserved on:- 21.05.2025 Pronounced on:- 02.07.2025 WP(C) No. 1814/2022 CM Nos. 5076/2022 & 2808/2024 Anil Kumar Gupta Proprietor of Maa Durga Enterprises …..Petitioner(s) Through: Mr. Jagpaul Singh, Advocate. Vs 1. Jammu & Kashmir Minerals Ltd. (JKML) Th. its Managing Director at 5th Floor, Jawaharlal Nehru Udhyog Bhawan Rail Head Complex, Jammu; 2. Manager, Parlanka Gypsum Project at 5th Floor, Jawaharlal Nehru Udhyog Bhawan, Rail Head Complex, Jammu. …. Respondent(s) Through: Mr. Dewakar Sharma, Dy. AG. Coram: HON’BLE MR. JUSTICE JAVED IQBAL WANI, JUDGE JUDGMENT 1. The petitioner in the instant petition filed under Article 226 of the Constitution of India has prayed for the following reliefs:- “a. Certiorari for the quashment of the Order No. MM/PGP/22-430 dated 27.06.2022 issued by the respondent No. 2 vides which penalty to the tune of ₹43,33,771.00/- (Rupees Forty-Three Lac, Thirty-Three Thousand, Seven Hundred and Seventy-One) is imposed upon the petitioner w.e.f. 01.07.2021 to 01.03.2021 as the same has been issued by the respondent No. 2 in an unreasonable and arbitrary manner only with intent to cause undue inconvenience and harassment to the petitioner; b. Mandamus commanding the respondents to expedite the land acquisition process of the block outsourced to the petitioner at Parlanka Gypsyum Project by the respondent-Corporation so that petitioner can smoothly execute the work of extraction and sale of the gypsum as land owners are not allowing the petitioner to carry on extraction work due to non-acquisition of their land; c. any other order or direction which this Hon’ble Court deems fit and proper may kindly be issued in favour of the petitioner and against the respondents.” 2 WP(C) No. 1814/2022 2. The background facts under the shade and cover of which the aforesaid reliefs have been prayed and as are stated in the instant petition are that the petitioner herein being the proprietor of M/S Maa Durga Enterprises came to be awarded a contract work for extraction of Gypsum Mineral by the respondent 1 vide Order No. Mgr. (P&S)/J/2018-836 dated 20.12.2018 and an agreement thereto came to be executed by the respondent 1 with the petitioner’s concern as well along other three business concerns on 21.08.2018. It is stated that subsequent to the allotment of the work in question to the petitioner’s concern, a writ petition came to be preferred by one-Baba Chemicals against the said allotment before this Court and an interim order passed therein delayed the execution of the work in question as also owing to the dispute qua land acquisition of the land owners in the area wherein the work in question had to be executed by the petitioner’s concern. Besides, the closure of the national highway twice for security reasons as well as owing to the inclement weather in the area also delayed the execution of the work in question by the petitioner’s concern, which necessitated addressing of Communications on 22.05.2019, 27.08.2019, 03.09.2019 04.11.2019, 26.12.2019, 24.10.2020 & 23.06.2022 to respondent No. 1, indicating therein the inability of the petitioner’s concern to execute the work smoothly for the reasons beyond its control. It is further stated that after the vacation of the interim order passed in the writ petition of Baba Chemicals, the petitioner started execution of the work and in furtherance thereof, paid an advance amount of ₹50.00 Lacs to the respondent 1. It is further stated that however Office Order came be issued by the respondents bearing No. MM/PGP/22-43 dated 27.06.2022, whereby the 3 WP(C) No. 1814/2022 respondent 1 imposed penalty of ₹43,33,771/- upon the petitioner concern w.e.f. 01.07.2021 to 31.03.2022 on the ground that the petitioner’s concern despite being provided sufficient time to increase the production of the desired levels of the contract work, failed to achieve the targeted production, thus, calling upon the petitioner’s concern to deposit the said penalty amount within thirty days and in the event of failure provided that the process of termination of contract shall be initiated. The said order dated 27.06.2022 is stated to have been responded on 28.06.2022 through a representation, which is stated to have not been responded by the respondent No. 1, necessitating the filing of the instant petition. 3. The petitioner herein has maintained the instant petition on multiple grounds including on the star ground that the respondent 1 issued the impugned Office Order without issuing a prior notice and without affording an opportunity of hearing to the petitioner. 4. Objections to the petition have been filed by the respondents, wherein it is being admitted that the contract of extraction of Gypsum in Parlanka Project was allotted to the petitioner’s concern and on account of non- extraction of the prescribed quantity of Gypsum from the blocks allotted, losses were caused to the State exchequer, necessitating the imposition of penalty upon the petitioner’s concern. It is further stated that the order under challenge has been passed strictly in accordance with the terms and conditions of the agreement and since the petitioner’s concern failed to achieve the target of extraction of Gypsum which resulted into loss of public exchequer, the petitioner’s concern came to be imposed the penalty strictly in accordance with the terms and conditions of the agreement. Heard learned counsel for the parties and perused the record. 4 WP(C) No. 1814/2022 5. Having regard to the respective pleadings of the parties, inasmuch as, the rival submissions of the appearing counsel for the parties, the moot question that arises for determination of this Court would be as to whether the respondents were required to follow the minimal principles of natural justice while passing the impugned order against the petitioner’s concern. 6. Before adverting to the said question, it is significant to mention herein that the doctrine of “Audi Alteram Partem” and its application to judicial/quasi-judicial and administrative institutions is not new and that though the principles of “Audi Alteram Partem” has been held to be a procedural requirement, yet it has been consistent view of the Courts that the same ensures strong safeguard against any judicial administrative order or action adversely affecting the substantive rights of an individual. It is also pertinent to note here that the first principle of “Audi Alteram Partem” is that there should be no bias and the rule against the bias is expressed in the maxim that “no one must be judged in his own cause”, whereas the second broad principle of “Audi Alteram Partem” is that “no party should be condemned unheard”, in that, the right to be heard would mean that a party must know the case he or she has to meet and must have reasonable opportunity to present his or her case. The requirement of issuance of a show cause notice as also an opportunity of hearing has been held to be flowing directly from the said second principle of doctrine of “Audi Alteram Partem”. Here a reference to the judgment of the Hon’ble Apex Court passed in case titled as, “Dharampal Satyampal Limited Vs. Deputy Commissioner of Central”, reported in 2015 (8) SCC 519 would be appropriate, wherein at paras- 21, 24 &28, following has been held:- 5 WP(C) No. 1814/2022 “21. In Common Law, the concept and doctrine of natural justice, particularly which is made applicable in the decision making by judicial and quasi- judicial bodies, has assumed different connotation. It is developed with this fundamental in mind that those whose duty is to decide, must act judicially. They must deal with the question referred both without bias and they must give (sic an opportunity) to each of the parties to adequately present the case made. It is perceived that the practice of aforesaid attributes in mind only would lead to doing justice. Since these attributes are treated as natural or fundamental, it is known as 'natural justice'. The principles of natural justice developed over a period of time and which is still in vogue and valid even today were: (i) rule against bias, i.e. nemo debet esse judex in propria sua causa; and (ii) opportunity of being heard to the concerned party, i.e. audi alteram partem. These are known as principles of natural justice. To these principles a third principle is added, which is of recent origin. It is duty to give reasons in support of decision, namely, passing of a 'reasoned order'. 24. The principles have sound jurisprudential basis. Since the function of the judicial and quasi-judicial authorities is to secure justice with fairness, these principles provide great humanizing factor intended to invest law with fairness to secure justice and to prevent miscarriage of justice. The principles are extended even to those who have to take administrative decision and who are not necessarily discharging judicial or quasi-judicial functions. They are a kind of code of fair administrative procedure. In this context, procedure is not a matter of secondary importance as it is only by procedural fairness shown in the decision making that decision becomes acceptable. In its proper sense, thus, natural justice would mean the natural sense of what is right and wrong. 28. It is on the aforesaid jurisprudential premise that the fundamental principles of natural justice, including audi alteram partem, have developed. It is for this reason that the courts have consistently insisted that such procedural fairness has to be adhered to before a decision is made and infraction thereof has led to the quashing of decisions taken. In many statutes, provisions are made ensuring that a notice is given to a person against whom an order is likely to be passed before a decision is made, but there may be instances where though an authority is vested with the powers to pass such orders, which affect the liberty or property of an individual but the statute may not contain a provision for prior hearing. But what is important to be noted is that the applicability of principles of natural justice is not dependent upon any statutory provision. The principle has to be mandatorily applied irrespective of the fact as to whether there is any such statutory provision or not.” 7. Reverting back to the case in hand, a deeper and closer examination of the record available on the file manifestly tends to show that the respondent 1 has not at all either issued any show cause notice or afforded an opportunity of hearing to the petitioner before issuance of the impugned order, thus, having 6 WP(C) No. 1814/2022 indisputably violated the doctrine of “Audi Alteram Partem” and the principles thereby laid down by the Apex Court in the judgment (supra). 8. It is significant to mention here that although the relationship between the petitioner and respondent 1 is governed and regulated by the terms and conditions set out in the agreement (supra), which provides for resolution of a dispute or differences between the petitioner and respondent 1 through the mode of arbitration, yet owing to the non-adherence of the fundamental principles of natural justice by the respondents in the matter, it may not be appropriate for this Court to throw away the instant petition on account of the availability of alternate remedy of arbitration, inter-se, the parties in view of the law laid down by the Hon’ble Apex Court in case titled as, “U.P. Pradesh Power Transmission Vs. CG Power and Industrial Solutions, reported in (2021) 6 SCC 15”, it has been inter alia held that existence of an arbitration clause does not debar the Court from entertaining a writ petition. 9. Viewed thus, for what has been observed, considered and analyzed hereinabove, the instant petition succeeds and is, accordingly, allowed, as a corollary whereof, the impugned Order No. MM/PGP/22-430 dated 27.06.2022 issued by the respondent 1 is quashed. 10. Disposed of, along with connected applications. . (Javed Iqbal Wani) Judge Jammu 02.07.2025 Ram Krishan Whether the order is speaking? Yes/No Whether the order is reportable? Yes/No Rakesh Kumar 2025.07.08 10:08 I attest to the accuracy and integrity of this document