Recovery from a contractor without hearing violates natural justice; compensation order set aside and remanded.

The petitioner challenged the deduction of ₹56,74,091 from his bill for work executed under the PM-JANAMAN Scheme. The deduction was made by the Tripura State Electricity Corporation Ltd. (“TSECL”) towards recovery of compensation paid to workers in proceedings relating to a separate contract under the RE-DDUGJY Scheme.

In proceedings numbered TS(EC) 01 of 2020 before the Commissioner, Employees’ Compensation, Dhalai Judicial District, Ambassa, an order dated 29 April 2023 directed payment of compensation to the claimants.

Although the petitioner’s bill was used for recovery, he was not impleaded in those proceedings and was not given an opportunity to present his case.

The petitioner therefore invoked Article 226 of the Constitution seeking quashing of the deduction and repayment of the deducted amount with interest.

Whether the recovery of ₹56,74,091 from the petitioner’s PM-JANAMAN contract bill, pursuant to compensation proceedings concerning the separate RE-DDUGJY contract, was lawful when the petitioner was not impleaded or heard in those proceedings.

Whether the order dated 29 April 2023 passed by the Commissioner, Employees’ Compensation, was liable to be set aside and the matter remanded for fresh adjudication after impleading and hearing the petitioner.

The Court exercised its jurisdiction under Article 226 of the Constitution of India.

It applied the principles of natural justice, particularly the requirement that a person directly affected by an adjudicatory order or recovery action must be impleaded and afforded a meaningful opportunity of hearing.

The Court further applied the procedural principle that a necessary party must be joined in proceedings where the decision may affect that party’s rights or financial interests; failure to do so vitiates the proceeding and requires reconsideration after proper notice and hearing.

No determination on the underlying entitlement to compensation or the legality of the deduction was made on merits.

The petitioner’s financial liability arose from the use of the compensation order to recover money from his bill, yet he had neither been made a party to the compensation proceedings nor given an opportunity to contest the claim.

Since the order directly affected his financial interests, the absence of notice and hearing constituted a clear violation of natural justice.

The Court consequently declined to adjudicate the substantive merits of the compensation claim or the deduction in the writ petition.

Instead, it set aside the order and directed fresh adjudication after bringing the petitioner on record and permitting the parties to file pleadings and adduce documentary and oral evidence.

The order was set aside, and the matter was remanded to the Commissioner, Employees’ Compensation, Dhalai Judicial District, Ambassa, for fresh adjudication in accordance with law after impleadment of the petitioner and completion of pleadings and evidence.

The writ petition was disposed of without deciding the merits of the petitioner’s claim for repayment, and any pending miscellaneous applications were closed.