High Court sets aside suspension of private company by SAIL for ‘malpractice’

The Calcutta High Court recently set aside the suspension of a private company issued by the Steel Authority of India Limited (SAIL) for alleged malpractice.

The petitioner submitted that in an order communicated to them, it was alleged that the petitioner was found to have committed malpractices and was being considered for being banned from future business dealings by the Bokaro Steel Plant. It was further stated that all future business dealings with the petitioner were suspended till December 2023.

The petitioner, a private company, had emerged successful in a tender issued on behalf of the Steel Authority of India Limited (SAIL) for recovery of ferrous scrap and steel scrap for internal use and sale of processes ferrous scrap from slag dump sidings of the Bokaro Steel Plant in Jharkhand. After completion of the work, they had sought for a completion certificate from the authorities.

On June 12, 2023, they received the mentioned order and filed a case against the suspension order in the Calcutta High Court. The counsel for the respondents submitted that serious allegations had come up against the petitioner for which the matter was investigated by the Central Vigilance Commission (CVC) with regard to the work of recovery of processing ferrous scrap and steel scrap and other works contained in the work order.

The CVC in a memo dated December 16, 2022 issued their First Stage Advice wherein they had inter alia advised to initiate proceedings against two General Managers of BSP-SAIL and also against the petitioner. The proposals, according to the respondents, were placed before the Director of SAIL for approval, which was granted considering the alleged severity of the irregularities, leading to the decision to suspend the petitioner for a fair and transparent investigation.

Justice Sabyasachi Bhattacharyya stated: “In the affidavit-in-opposition, the most serious allegation levelled against the petitioner is perceived irregularities with regard to the work of recovery and processing and numerous other serious violations, which have not been specifically enumerated. The petitioner, it has been alleged, did not attain the quantity assigned to it as per work order in comparison to the work executed during the contract period. A shortfall has also been alleged and attributed to the petitioner. None of those allegations, even if those were to be true, can tantamount to a malpractice as envisaged in Clause 6.3. Hence, the very premise of the suspension order is suspect.”