Authority: High Court of Jharkhand at Ranchi

Order Date: 14 November 2022

Case Overview

  • Petitioners: Aeros Sales (proprietorship firm of Kusum Kumari) and Techno‑Weld Services (represented by Tapati Mukherjee).
  • Respondents: Management of Bokaro Steel Plant, a unit of Steel Authority of India Limited (SAIL), including its CEO, Executive Director (Purchase), General Manager (Purchase), D.G.M. (Purchase), Manager (Purchase), and other purchase officials.
  • Writ petitions filed: W.P.(C) No. 7073 of 2013, W.P.(C) No. 7726 of 2013, and W.P.(C) No. 1705 of 2015, all under Article 226 of the Constitution seeking relief against recovery orders.
  • Background: On 26 October 2013, SAIL issued letters (Ref. P37/RCV/AS/-04 and Ref. P37/RCV/TWS/-08) directing the petitioners to deposit differential amounts of Rs 52,21,000 (W.P.(C) No.7073/2013) and Rs 50,97,423 (W.P.(C) No.7726/2013) within 15 days, failing which the sums would be deducted from pending bills. No prior notice or hearing was provided.
  • Petitioners argued that the lack of notice violated natural justice and that they could not substantiate that the amounts were recoverable.
  • Respondents contended that the letters themselves constituted a notice of recovery and that the amounts were legitimately recoverable.
  • The Court noted that the communication dated 26‑10‑2013 was a decision demanding payment, not a statutory notice, and that principles of natural justice require a prior notice and opportunity to be heard before imposing a civil liability.

Final Outcome

  • The Court quashed the recovery decisions dated 26‑10‑2013 for both amounts, holding that the authority failed to issue a proper notice.
  • The matter was remitted to the General Manager, Purchase (Respondent No.3) to reconsider the demand after providing a notice to the petitioners.
  • The authority must issue the notice within 15 days of receiving the copy of this order.
  • The individual writ petitioner must submit a reply within three weeks of receipt of the notice.
  • The competent authority must render its decision within four weeks of receiving the reply, observing the law.
  • If no reply is filed, the authority may decide at its discretion.
  • All three writ petitions are disposed of, and any pending interlocutory applications stand disposed of as well.

Topics: Legal Remedy, Natural Justice, Steel Industry