MANYATA DEVIversusSTATE OF U.P. & ORS.

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                         [2015]7S.C.R.183

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                           MANYATADEVI                               A
                                      v.
                       STATE OF U.P. & ORS.
                   (Civil Appeal No. 4475 of2015)
                                                                     B
                            MAY 15, 2015
                [T. S. THAKUR, R. F. NARIMAN AND
I
                      PRAFULLA C. PANT, JJ.]

            Administrative Law:                                      c
              Administrative order - Reasonableness of -
      Application for grant of character certificate- For the purpose
      of renewal of registration as a contractor under a department
    . of State Government- Initially grant of certificate denied on
                                                                      0
      the ground that her husband was involved in criminal cases
     - In appeal, the Commissioner remitted the matter to
      consider the application on the basis of personal character
      of the applicant - The Magistrate again refused to grant the
      certificate on the ground that the applicant did not have E
     experience in contract work - Writ petition against the order
     of Magistrate dismissed - On appeal, held: the jurisdiction
     of the Magistrate was limited to considen'ng the request for
     issuance of character certificate - The Magistrate, by bringing
     in the question of appellant's capability and experience as a F
     contractor to bear upon her moral character, went beyond
     the legitimate sphere of the jurisdiction vested in him. The
     Magistrate directed to reconsider the application for grant of
     character certificate.
                                                                      G
              Allowing the appeal, the Court

          HELD: The District Magistrate has been swayed
    by considerations wholly extraneous to tl:ie question
    whether the appellant had a good moral character. In             H
                                  183
184      SUPREME COURT REPORTS                [2015] 7 S.C.R.


A 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. The Commissioner,
  was, therefore, perfectly justified in setting aside the
B 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
C the District Magistrate to issue the requisite certificate in
  favo~r of the appellant. Instead of doing so, the District ,
  Magistrate invented fresh reasons for denial of a
  certificate. This time, the certificate was denied on the
  ground that she had no experience in getting the contract
0
  works executed. The District Magistrate could not 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. The reasoning given
E by the District Magistrate was wholly irrelevant.
  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
F record. [Para 6] (188-F; 189-A-E]

          2. Registration can be insisted upon by the State
   Government or its departments for purposes of allotment
   of works and participation in auctions relating thereto.
G 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
H requirements to be satisfied by the applicants under the
                                                _,
        MANYATA DEVI v. STATE OF U.P. & ORS.                  185


 Rules or Regulations. That such regulation ought to           A
ensure participation of only genuine contractors and
 prevent the mafia from hijacking the system cannot also
be faulted. However, that purpose cannot ·be achieved
by a side wind viz. by the District Magistrate denying a
character certificate to an applicant. This is because the     B
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       C
requests for registration. or to grant or refuse the same.
ltis 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             D
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. The District Magistrate is directed to            E
reconsider the matter and dispose of the application for
grant of a character certificate. [Paras 8 and 10) [190-C-
H; 191-D-E]

      3. If the ground situation in the State of Uttar F
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 G
such rules including experience in executing contracts
as one such condition. [Para 9) [191-B-C]

      CIVILAPPELLATE JURISDICTION: Civil Appeal No.
4475 of 2015.
                                                              H
     186        SUPREME COURT REPORTS                 [2015) 7 S.C.R.


     A           From the Judgment and Order dated 02.04.2013 of the
           High Court of Judicature at Allahabad in Writ Petition No.
           17398of2013.

            Prashant Kumar, Vaibhav Srivasatava, Joseph
     B Pookkatt for the Appellant.
                Ardhendumauli Kumar Prasad, Ram Kishore Singh
           Yadavforthe Respondents.
/'
                 The Judgment of the Court was delivered by
     c
                 T. S. THAKUR, J. 1. Leave granted.

              2. This appeal arises of out an order dated 2"d April,
       2013, passed by the High Court of Judicature at Allahabad
     D 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.

     E         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
     F M/s Krishna Construction was already registered as a
       contract8r 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.
     G
               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
     H District Magistrate, Basti, to consider and decide the
         MANYATA DEVI v. STATE OF U.P. & ORS.                       187
                  [T. S. THAKUR, J.]

application of the appellant within a period of six weeks. The A
District Magistrate in compliance with the said order. issued a
solvency certificate in favour of the appellant on 24th May, 201 O
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 B
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.
                                                                     c
        5. Aggrieved by the refusal of the character certificate
in her favour, the appellantfiled Writ Petition No.9875 of2011
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               D
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    E
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 121h December,          F
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        G
Writ Petition No.17398 of 2013 which came to be dismissed
by the High Court by its order dated 2"d April, 2013. Hence the
present appeal.

      6. We have heard learned counsel for the parties at H
length and perused the orders passed by the District
188        SUPREME COURT-REPORTS                   [2015] 7 S.C.R.


A 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
B 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
C valid upto 31 51 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
D 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
E 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
F 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
G 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
H him to consider the request for the issue of a certificate based
         MANYATA DEVI v. STATE OF U.P. & ORS.                      189
                  [T. S. THAKUR, J.]

on the character of the applicant and not her relative or member A
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 B
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. Vl/e
have not been able to appreciate as to how the District
Magistrate could have brought in the question of the appellant's C
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 D
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 . E
palpable on the face of record.

        7. It was argued on behalf of the respondent-Stat~ that
since the appellant had no experience of executing contracted
works, the refusal of a character certificate was only meant to F
prevent her from getting registered as a contractor with the
department. ft 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 G
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 H
                                 ~



190          SUPREME COURT REPORTS                     [2015) 7 S.C.R.


A 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
B 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
C     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
D     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
E     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
F     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
G     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
H     limited to considering the request for issuance of a character
      certificate.
          MANYATA DEVI v. STATE OF U.P. & ORS.                      191
                   [T. S. THAKUR, J.]

        9. Having said so, we must add that copy of the rules A           ..
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 B
manner of doubt that, if the ground situation in the State of
l)ttar 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 C
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 D
 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 · E
.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.                   ..
                                                                   F
Kalpana K. Tripathy                               Appeal allowed.