Placement Agency To Be Given Proper SCN On Alleged Failure To Perform Duties Coupled With Monetary Loss To JSBCL: Jharkhand High Court

The Jharkhand High Court has held that Rule 15 of the Jharkhand Excise (Operation of Retail Product Shops through Jharkhand State Beverages Corporation Limited) Rules, 2022, and the corresponding clauses of the contract have to be restricted only to those situations where the placement agency has been found, albeit after hearing the agency, to have failed to provide manpower to Jharkhand State Beverages Corporation Ltd. (JSBCL), which has resulted in pecuniary loss to the corporation. The bench of Justice Rongon Mukhopadhyay and Justice Deepak Roshan has observed that only when the placement agency fails to perform its duties and obligations falling within its scope of work, coupled with monetary loss to the JSBCL, can the said placement agency be held liable to that extent after following the due process of law. The bench relied on the decision of the Supreme Court in the case of Gorkha Security Services v. Government (NCT of Delhi) (2014), which highlighted the necessity of compliance with the principles of natural justice with reference to the person against whom an action of blacklisting is sought to be taken.In all the writ petitions, a common prayer has been made for declaring Rule 15 of the Jharkhand Excise (Operation of Retail Product Shops through Jharkhand State Beverages Corporation Limited) Rules, 2022, as being ultra vires the provisions of the Bihar (now Jharkhand) Excise Act, 1915, and also ultra vires the provisions of Articles 14, 19(1)(g), and 265 of the Constitution of India. However, from the facts pleaded in the respective writ petitions, it would transpire that writ petitioners, M/s. A2Z Infraservices Limited, M/s. Sumeet Facilities Limited, M/s. Primeone Workforce Private Limited, and M/s. Eagle Hunter Solutions Limited, pursuant to the tender dated April 10, 2023, issued by Respondent, Jharkhand State Beverages Corporation Ltd. (JSBCL), have entered into agreements with Respondent-JSBCL. During the subsistence of the agreements, penalties have been imposed upon petitioner-companies in terms of Rule 15 of the Rules of 2022, which are under challenge in the writ petitions.The State of Jharkhand, after its creation with effect from November 15, 2000, adopted the Bihar Excise Act, 1915, which contained provisions relating to the import, export, transport, manufacture, possession, and sale of certain kinds of liquor and intoxicating drugs.Section 20 provided, inter alia, for the grant of a license for the sale of liquor, and the said Section provided that no intoxicant can be sold except under the authority and subject to the terms and conditions of a license granted on that behalf by the Collector.Section 22 provided for the grant of exclusive privileges for the manufacture and sale of liquor and provided, inter alia, that the state government may grant to any person, on such conditions, the exclusive privilege of selling wholesale and retail liquor.Section 42 contained provisions for cancellation or suspension of a license, including the imposition of a penalty, and provided, inter alia, that the authority that granted any license, permit, or pass under the Act may cancel, suspend, or impose a penalty. Section 42(b) authorized the licensing authority to impose penalties upon the holder of the license if any duty or fee by the holder thereof was not duly paid.The State of Jharkhand, in exercise of its rule-making power under Section 89 read with Section 22 of the Act, formulated the „Jharkhand Excise (Operation of Retail Product Shops through Jharkhand State Beverages Corporation Limited) Rules, 2022. The Rules were notified via Notification dated March 31, 2022, and Rule 6 of the said Rules provided, inter alia, for the grant of exclusive privilege to JSBCL for operating retail outlet shops of liquor in the entire 24 districts of the State of Jharkhand. It may be noted here that JSBCL is a company registered under the Companies Act and is 100% Govt. of Jharkhand Undertaking. Under the Rules, exclusive privilege was granted to JSBCL for operating retail excise shops across the entire state of Jharkhand, and it was provided, inter alia, that a license in respect of each district would be granted for retail excise shops by the licensing authority, i.e., the Collector of a District.Rule 24 of the Rules enabled Respondent-JSBCL to appoint a placement agency, transport agency, cash collection agency, and security agency for the purpose of operating the licensed retail excise shops.Rule 15 of the Rules, which is impugned herein, stipulated, inter alia, that the Managing Director of JSBCL along with the Commissioner of Excise, on the basis of the figures of the last three years, would determine the sale target so that excise revenue is not affected, and it further provided, inter alia, that if Minimum Guarantee Revenue (MGR) is not achieved by any shop, the reason for not achieving the MGR would be determined and the responsibility of the concerned placement agency would be fixed.Rule 15...

Placement Agency To Be Given Proper SCN On Alleged Failure To Perform Duties Coupled With Monetary Loss To JSBCL: Jharkhand High Court

Mariya Paliwala

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