HONOURABLE SRI JUSTICE A. RAMALINGESWARA RAO WRIT PETITION Nos. 4976 and 28204 OF 2009 DATED 25th November, 2014.
BETWEEN P.Ahobala Rao ….Petitioner in WP.No. 4976 of 2009 S.Balasubramanyam ….Petitioner in WP.No. 28204 of 2009 And Commission of Inquiry appointed to conduct enquiry into The selection of M/s BHC Agro 9India) private Limited Pursuant to GOMS.No. 371, dt. 19.9.2005, Hyderabad, and ors …Respondents in WP.No. 4976 of 2009 The State of AP, rep. by its Chief Secretary & Secretary (Cabinet), Government of AP, Secretariat, Hyderabad and ors.] ….Respondents in WP.No. 28204 of 2009 …Respondents.
HONOURABLE SRI JUSTICE A. RAMALINGESWARA RAO WRIT PETITION Nos. 4976 and 28204 OF 2009
COMMON ORDER:
Heard learned Counsel for the petitioners in both Writ Petitions and learned Additional Advocate General appearing for the respondents.
These two Writ Petitions are being disposed of by this common order in view of common attack to the recommendations made by the Commission of Inquiry (first respondent in WP.No.4976 of 2009 and third respondent in WP.No.28204 of 2009).
The State Government issued G.O.Ms.No.371 dated 19.09.2005 appointing Justice T.H.B. Chalapathi, a retired Judge of Punjab & Haryana High Court (who is now no more) as Commission of Inquiry to conduct enquiry into the alleged irregularities in the manner of selection of M/s. B.H.C. Agro (India) Private Limited as consultant for Kuppam Project, misappropriation in payment of consultancy charges and undue benefit given to the said company. The term of references of the Inquiry Commission were modified in G.O.Ms.No.465 dated 02.12.2005. The said Commission of Inquiry conducted an inquiry and made certain recommendations while submitting its report to the Government. The said recommendations read as follows:
“ THE COMMISSION RECOMMENDS TO TAKE THE FOLLOWING STEPS:
1) As a commission found that there is misappropriation of funds and there is a criminal conspiracy and that the Government has been cheated in entering into the MOU with BHC Agro (India) Pvt. Ltd, an investigation into these aspects of the matter may be ordered by the Criminal Investigation Department headed by Honest officer by registering a case against Mr. Boaz Raam, Mr. P.Prabhakar Rao, Mr. Jacob Hadar, Mr. Ahobala Rao and other officers of Government who have been involved in making payment and misappropriation of funds under Section 120 B, Section 420, 408 and 409 under Indian penal Code.
2) The Government is also recommended to initiate departmental proceedings against Sri S.
Balasubramanyam, IAS, the then Dy. Secretary to CM since the Commission found that he took an active role in awarding the project and in entering into MOU with BHC Agro (India) Pvt. Ltd., the way in which conducted himself and his actions pressurizing the department to enter into MOU and also in regard to payment of BHC Agro (India) Pvt. Ltd., and without making in efforts either to reduce the amount of consultancy fee or to find out any other agency which is capable of undertaking the work which has been entrusted to BHC Agro (India) Pvt. Ltd.,.
3) The Commission recommends that the Government may order an inquiry why BHC Agro (India) Pvt. Ltd., sent the day to day expenditure to Mr. Boaz Ramm’s company namely Subcon Products, new Jersey, U.S.A. and why the payments have been made to the said company which is situated in New Jersey. The investigative agency may interrogate since Mr. Boaz Raam, who has been directed to be added as an accused in the FIR to be lodged against him and others as indicated in recommendation at S.No.1.
4) It is also recommended that the Government may obtain necessary information from the Regional Director, Reserve Bank of India in regard to sending the amount to U.S.A. in Dollars, whether any permission was obtained. This is suggested because in reply of the Reserve Bank of India stated that the only permission of repayment of loan was given but not to other remittances and no record available with the Regional office of Reserve Bank of India, Hyderabad the letter of the Reserve Bank of India is herewith enclosed.”
The names of the petitioners herein were mentioned in Paragraphs 1 and 2 of the above recommendations.
Learned Counsel for the petitioners submits that the above recommendations were made without complying the provision under Section 8-B of the Commissions of Inquiry Act, 1952 (‘the Act’ for brevity). It is further submitted that the said recommendations are illegal and contrary to law as no prior notice was issued to the petitioners before making such recommendations.
Non issuance of notice by the respondent-Commission of Inquiry is not denied by respondents 2 to 4 in WP.No.4976 of 2009 and respondents 1 and 2 in W.P.No.28204 of 2009. Thus it is an admitted fact that no prior notice was issued to the petitioners before making such recommendations.
Section 8-B of the Act reads as follows:
“8B-PERSONS LIKELY TO BE PREJUDICALLY AFFECTED TO BE HEARD; If, at any stage of the inquiry, the Commission:-
(a) considers it necessary to inquire into the conduct of any person; or
(b) is of opinion that the reputation of any person is likely to be prejudicially affected by the inquiry, the Commission shall give to that person a reasonable opportunity of being heard in the inquiry and to produce evidence in his defence.
Provided that nothing in this section shall apply where the credit of a witness is being impeached.”
A reading of the above provision makes it clear that the Commission of Inquiry shall give the affected persons a reasonable opportunity of being heard in the inquiry and to produce evidence in his defence if the reputation of any person is likely to be prejudicially affected by the inquiry. The said provision came up for discussion in State of Bihar Vs. Lal Krishna Advani and others { (2003) 8 SCC 361 = AIR 2003 SC 3357}, wherein the Apex Court held that a person is entitled to have and preserve one’s reputation and also has a right to protect it and if any authority in discharge of its duties fastened upon it under the law traverses into the realm of personal reputation adversely affecting him, must provide a chance to him to have his say in the matter. Keeping in view that Section 8-B of the Act was brought into the Statute book by Amending Act 79 of 1971, the Apex Court held as follows:
“ It may be noticed that the amendment was brought about 20 years after passing of the main Act itself. The experience during the past two decades must have made the legislature realize that it would but be necessary to notice a person whose conduct the Commission considers necessary to inquire into during the course of the inquiry or whose reputation is likely to be prejudicially affected by the inquiry. It is further provides that such a person would have a reasonable opportunity of being heard and to adduce evidence in his defence. Thus the principles of natural justice were got inducted in the shape of a statutory provision. It is thus incumbent upon the Commission to give an opportunity to a person, before any comment is made or opinion is expressed which is likely to prejudicially affect that person. Needless to emphasize that failure to comply with the principles of natural justice renders the action non est as well as the consequence thereof.”
While repelling the contention of the State that the petition is premature inasmuch as no action pursuant to the report was initiated against the concerned person, the Apex Court further held that the Government actually takes action or it does not or the fact that the report is yet to be considered from that angle, cannot be a reason to submit that it would not be the appropriate stage to approach the Court. Even though the Government may decide not to take any action against the person concerned, yet the observation and remarks may be such which may play upon the reputation of the person concerned and this aspect of the matter has been fully taken care of under Section 8-B of the Act. It is not therefore necessary that one must wait till a decision is taken by the Government to take action against the person after consideration of the report.
This Court while admitting the Writ petitions granted interim stay and the said interim order has been continued till today.
In view of the aforesaid ensconced legal principles and in absence of issuance of prior notice to the petitioners before making recommendations to the Government on the proposed remarks made against them (the petitioners) by the Commission of Inquiry, that part of the report of the Commission of Inquiry as against the petitioners is vitiated. Accordingly that part of the report of the Commission of Inquiry insofar as the petitioners are concerned is hereby set aside.
The Writ Petitions are allowed to the extent indicated above. Miscellaneous petitions pending consideration if any in the Writ Petitions shall stand closed in consequence. No order as to costs.
JUSTICE A. RAMALINGESWARA RAO DATED 25th November, 2014. Msnrx