IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4475 OF 2015
(Arising out of SLP (C) No.25607 of 2013
Manyata Devi …Appellant
Vs.
State of U.P. & Ors. …Respondents
J U D G M E N T
T.S. THAKUR, J.
1. Leave granted.
2. This appeal arises of out an order dated 2nd April, 2013, passed by
the High Court of Judicature at Allahabad whereby Writ Petition No.17398 of
2013 filed by the appellant has been dismissed and the order passed by the
District Magistrate, Basti, refusing to issue a character certificate in
favour of the appellant upheld.
3. The appellant appears to have applied to the District Collector,
Basti, for a character/enlistment certificate in her favour, which it
appears is one of the requirements prescribed for registration as a
contractor under the Irrigation Department of the State of Uttar Pradesh.
The appellant, as proprietor of M/s Krishna Construction was already
registered as a contractor but since the said registration was valid only
for a period three years ending 31st June, 2009, a fresh character/solvency
certificate was necessary for renewal of her registration.
4. The application made by the petitioner appears to have remained
unattended for some time forcing her to file Writ Petition No.17945 of 2010
which was disposed of by the High Court by its order dated 5th April, 2010
directing the District Magistrate, Basti, to consider and decide the
application of the appellant within a period of six weeks. The District
Magistrate in compliance with the said order issued a solvency certificate
in favour of the appellant on 24th May, 2010 but deferred the grant of
character certificate till such time the Superintendent of Police inquired
into the matter and submitted a report. On receipt of the report from the
Superintendent of Police, the District Magistrate passed an order dated
15th June, 2010 declining to issue the character certificate to the
appellant on the solitary ground that her husband was involved in four
criminal cases during the past.
5. Aggrieved by the refusal of the character certificate in her favour,
the appellant filed Writ Petition No.9875 of 2011 before the High Court
which was disposed of by the High Court on 14th February, 2012 with a
direction that the appellant should approach the Commissioner in appeal
against the order passed by the District Magistrate. The appellant
accordingly preferred an appeal before the Commissioner, Basti, who set
aside the order passed by the District Magistrate and remitted the matter
back to him for appropriate orders with the observation that the request
for grant of a character certificate must be considered on the basis of the
personal character of the person applying for the same and not of her
family members. Notwithstanding that direction, the District Magistrate
once again passed an order dated 12th December, 2012 rejecting the prayer
for the issuance of a character certificate on the ground that the
appellant did not have any knowledge of contract works which works were
being got executed by her through her son and other persons. The appellant
challenged the said order before the High Court in Writ Petition No.17398
of 2013 which came to be dismissed by the High Court by its order dated 2nd
April, 2013. Hence the present appeal.
6. We have heard learned counsel for the parties at length and perused
the orders passed by the District Magistrate and the Commissioner and those
passed by the High Court. The material facts are not in dispute. It is not
in dispute that the appellant is the sole proprietor of M/s Krishna
Construction. It is also not in dispute that the appellant was a
registered contractor with the Irrigation Department of the Government of
U.P. for executing civil works. It is also not disputed that the
registration was earlier granted in favour of the appellant pursuant to a
solvency and character certificate issued in her favour by the District
Magistrate, Basti. It is common ground that the registration of the
appellant remained valid upto 31st June, 2009, whereafter the same required
a renewal based on a fresh solvency certificate and a character certificate
according to the applicable norms prescribed by the Irrigation Department.
That a solvency certificate was issued in favour of the appellant is also
not in dispute. So also there is no dispute that the appellant is not
involved in any criminal case or activity of any objectionable kind. That
being the position, the District Magistrate should have simply certified
her character because that was the only question which the former was
called upon to examine while dealing with the request made by the
appellant. The District Magistrate, however, appears to have been swayed by
considerations wholly extraneous to the question whether the appellant had
a good moral character. In the first order of refusal passed by him, he
opined that since the appellant’s husband had criminal cases registered
against him, she was disentitled from claiming a certificate of good moral
character. Apart from the fact that the cases against the appellant’s
husband to which the District Magistrate appears to be referring had ended
in his acquittal, it is difficult to appreciate how criminal cases
registered against the husband of the appellant could possibly deny her a
certificate of good moral character. The Commissioner, Basti was,
therefore, perfectly justified in setting aside the order passed by the
District Magistrate and directing him to consider the request for the issue
of a certificate based on the character of the applicant and not her
relative or member of the family. Since there was nothing adverse about
the appellant, one would have expected the District Magistrate to issue the
requisite certificate in favour of the appellant. Instead of doing so, the
District Magistrate appears to have invented fresh reasons for denial of a
certificate. This time, the certificate was denied not because the
appellant or anyone in her family was implicated in any criminal case but
on the ground that she had no experience in getting the contract works
executed. We have not been able to appreciate as to how the District
Magistrate could have brought in the question of the appellant’s capability
as a contractor or her experience in executing works to bear upon her good
moral character. Even when the appellant may have had no experience in
getting government works executed she could still claim that she bore a
good moral character. The reasoning given by the District Magistrate was
wholly irrelevant to say the least. Inasmuch as the District Magistrate
ignored the order passed by the Commissioner and the considerations that
would go into grant or refusal of the character certificate, he committed a
mistake that is palpable on the face of record.
7. It was argued on behalf of the respondent-State that since the
appellant had no experience of executing contracted works, the refusal of a
character certificate was only meant to prevent her from getting registered
as a contractor with the department. It was also argued that the
registration of a contractor was necessary and unless such registration was
granted only in deserving cases, the very purpose of the registration would
stand defeated. There was, according to learned counsel for the respondent,
a “contractors mafia” operating in the State of Uttar Pradesh which
demanded that registration is granted only to people who have no criminal
background so that genuine contractors are not prevented from winning
contracts from the Government and competing for allotment of works. It was
argued that since the husband of the appellant could not himself be
registered on account of his criminal background, the appellant was being
projected for such a registration only to make it possible for the husband
to carry out the works in the name of his wife. Registration of the
appellant, in such a situation, would defeat the very purpose behind such
registrations, argued the learned counsel.
8. There is no quarrel with the proposition that registration can be
insisted upon by the State Government or its departments for purposes of
allotment of works and participation in auctions relating thereto. There is
also no difficulty in the State providing for production of a character
certificate as one of the conditions of eligibility. Experience of the
Contractor, if considered relevant for the purposes of such registration,
could also be stipulated as one of the requirements to be satisfied by the
applicants under the Rules or Regulations. That such regulation ought to
ensure participation of only genuine contractors and prevent the mafia from
hijacking the system cannot also be faulted. The question, however, is
whether that purpose which is indeed laudable could be achieved by a side
wind viz. by the District Magistrate denying a character certificate to an
applicant. Our answer is in the negative. We say so because the very fact
that a character certificate is issued does not mean that everyone who has
such a certificate gets a vested right to be registered as a contractor.
The District Magistrate did not have any authority under the rules
stipulating registration of contractors to consider such requests for
registration or to grant or refuse the same. It is the competent authority
in the Irrigation Department concerned who has to take a call. Inasmuch as
the District Magistrate took upon himself the duty of examining whether the
appellant was suitable for registration, he went beyond the legitimate
sphere of the jurisdiction vested in him which was limited to considering
the request for issuance of a character certificate.
9. Having said so, we must add that copy of the rules regulating the
registration of contractors has not been produced by the State. It is,
therefore, difficult for us to say whether the rules are comprehensive
enough to disentitle persons who do not have any experience in execution of
the contract works from claiming registration. But there is no manner of
doubt that, if the ground situation in the State of Uttar Pradesh so
requires, the department concerned can and indeed ought to strengthen the
registration procedure by framing new rules or amending the existing rules
on the subject making registration possible only upon satisfaction of such
conditions as may be prescribed by such rules including experience in
executing contracts as one such condition.
10. In the result we allow this appeal, set aside the order passed by the
High Court and direct the District Magistrate to reconsider the matter and
dispose of the application for grant of a character certificate keeping in
view the observations made herein. We make it clear that even when the
character certificate is issued by the District Magistrate in favour of the
appellant, the Competent Authority shall be free to examine the prayer for
registration or renewal in accordance with law having regard to the
requirements that already exist or may be prescribed on the subject by the
authority competent to do so. No costs.
……………………………………….…..…J.
(T.S. THAKUR)
……………………………………….…..…J.
(ROHINTON FALI NARIMAN)
……………………………………….…..…J.
(PRAFULLA C. PANT)
New Delhi
May 15, 2015