Allahabad High Court
M/S Unicorn Seeds Private Ptd. Through ... vs State Of U.P.Through Its Prin. Secy. ... on 2 January, 2024
Author: Vivek Chaudhary
Bench: Vivek Chaudhary
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH
Neutral Citation No. - 2024:AHC-LKO:246-DB
Court No. - 2
(1) Case :- WRIT - C No. - 7360 of 2010
Petitioner :- M/S Unicorn Seeds Private Ptd. Through Its Senior Regional
Respondent :- State Of U.P.Through Its Prin. Secy. Deptt. Of Agriculture
Counsel for Petitioner :- Dipak Seth,Ratnesh Chandra
Counsel for Respondent :- C.S.C.,V.P.Nag
connected with
(2) Case :- WRIT - C No. - 7361 of 2010
Petitioner :- M/S Ganga Kaveri Seeds Pvt. Ltd. Through Its State Operation
Respondent :- State Of U.P.Through Its Prin. Secy. Deptt. Of Agriculture
Counsel for Petitioner :- Dipak Seth,Ratnesh Gupta
Counsel for Respondent :- C.S.C.,V.P.Nag
with
(3) Case :- WRIT - C No. - 7362 of 2010
Petitioner :- M/S Atash Sedds Pvt Ltd. Through Its Raj Kumar Singh Kushwah
Respondent :- State Of U.P.Through Its Prin. Secy. Deptt. Of Agriculture
Counsel for Petitioner :- Dipak Seth,Ratnesh Chandra
Counsel for Respondent :- C.S.C.,V.P.Nag
with
(4) Case :- WRIT - C No. - 7363 of 2010
Petitioner :- M/S Advanta India Ltd. Through Its Senior Regional Manager
Respondent :- State Of U.P.Through Its Prin. Secy. Deptt. Of Agriculture
Counsel for Petitioner :- Dipak Seth,Ratnesh Chandra
Counsel for Respondent :- C.S.C.,V.P.Nag
with
(5) Case :- WRIT - C No. - 7364 of 2010
Petitioner :- M/S Shriram Bioseed Genetics India Ltd.Through Its Manager
Respondent :- State Of U.P.Through Its Prin. Secy. Deptt. Of Agriculture
Counsel for Petitioner :- Dipak Seth,Ratnesh Chandra
Counsel for Respondent :- C.S.C.,V.P.Nag
with
(6) Case :- WRIT - C No. - 7422 of 2010
Petitioner :- National Seed Corporation Ltd. New Delhi
Respondent :- State Of U.P. Thru. Prin. Secy. Agriculture And Others
Counsel for Petitioner :- Sanjay Kumar
Counsel for Respondent :- C.S.C.,V.P. Nag
with
(7) Case :- WRIT - C No. - 7511 of 2010
Petitioner :- Nunhems India Private Ltd.Thru.Its Authorized Representative
Respondent :- State Of U.P. Thru. Prin. Secy. Agriculture And Others
Counsel for Petitioner :- Vijai Krishna
Counsel for Respondent :- C.S.C.,V.P. Nag
with
(8) Case :- WRIT - C No. - 7590 of 2010
Petitioner :- Ram Chandra Arvind Kumar Pvt. Ltd. Lucknow Thru M.D.
Respondent :- State Of U.P. Thru Principal Secretary Agriculture And Ors.
Counsel for Petitioner :- Sandeep Dixit
Counsel for Respondent :- C.S.C.,V.P. Nag
with
(9) Case :- WRIT - C No. - 7827 of 2010
Petitioner :- Monsanto India Ltd.
Respondent :- State Of U.P. Thru. Prin. Secy. Agriculture And Others
Counsel for Petitioner :- Ratnesh Chandra
Counsel for Respondent :- C.S.C.,V.P. Nag
with
(10) Case :- WRIT - C No. - 7440 of 2010
Petitioner :- Nuziveedu Seeds Limited
Respondent :- State Of U.P. Through Principal Secy.Dept.Of Agriculture Lko
Counsel for Petitioner :- Ratnesh Chandra
Counsel for Respondent :- C.S.C.,V.P.Nag
with
(11) Case :- WRIT - C No. - 12513 of 2010
Petitioner :- M/S Prabhat Agri Biotech Ltd.
Respondent :- State Of U.P. Thru. Prin. Secy. Agriculture And Others
Counsel for Petitioner :- Ratnesh Chandra,Dipak Seth
Counsel for Respondent :- C.S.C.,V.P. Nag
Hon'ble Vivek Chaudhary, J.
Hon'ble Om Prakash Shukla, J.
(1) Heard Shri Ratnesh Chandra, learned counsel for the petitioner and learned Standing Counsel for State-respondents.
(2) Petitioners have approached this Court challenging the impugned orders dated 09.07.2010, 19.04.2010 and 22.07.2010 whereby the petitioners' firm have been placed under blacklisting for unspecified period.
(3) Learned counsel for the petitioners submits that the impugned orders have been passed without giving due opportunity of hearing to the petitioners' firm and, in fact, by order dated 19.04.2010, petitioners' firm in all the connected petitions, are on the same ground, have been blacklisted.
(4) The ground taken for blacklisting is that Economic Offences Wing, State Police Department, after enquiry submitted a report and finds petitioners' firm guilty. On the basis of the said enquiry report, straightaway the impugned order for blacklisting has been passed against the petitioners firm without giving due opportunity of hearing or without providing copy of the report to the petitioner.
(5) Counter affidavit has been filed by the respondent No.2-U.P. Seed Development Corporation and respondent No.4-Additional Director of Agriculture, however, neither in the counter affidavit, there is any document filed which could show that petitioners were given any opportunity of hearing before passing of the impugned orders.
(6) In UMC Technologies Private Limited v. Food Corporation of India and Anr.: (2021) 2 SCC 551, the Apex Court, noticing the substance of the other relevant decisions while explaining the principles governing such actions of debarment/blacklisting, has inter alia underscored the requirement of specific show-cause notice and referred to the settled principles in the following terms: -
"13. At the outset, it must be noted that it is the first principle of civilised jurisprudence that a person against whom any action is sought to be taken or whose right or interests are being affected should be given a reasonable opportunity to defend himself. The basic principle of natural justice is that before adjudication starts, the authority concerned should give to the affected party a notice of the case against him so that he can defend himself.
Such notice should be adequate and the grounds necessitating action and the penalty/action proposed should be mentioned specifically and unambiguously. An order travelling beyond the bounds of notice is impermissible and without jurisdiction to that extent.
This Court in Nasir Ahmad v. Custodian General, Evacuee Property, (1980) 3 SCC 1 has held that it is essential for the notice to specify the particular grounds on the basis of which an action is proposed to be taken so as to enable the noticee to answer the case against him. If these conditions are not satisfied, the person cannot be said to have been granted any reasonable opportunity of being heard.
14. Specifically, in the context of blacklisting of a person or an entity by the State or a State Corporation, the requirement of a valid, particularised and unambiguous show-cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatisation that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into government contracts.
This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting take away this privilege, it also tarnishes the blacklisted person's reputation and brings the person's character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.
16. The severity of the effects of blacklisting and the resultant need for strict observance of the principles of natural justice before passing an order of blacklisting were highlighted by this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 in the following terms: (SCC pp. 74-75, paras 12, 15 & 20)
"12. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality.
15. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are "instruments of coercion".
20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."
17. Similarly, this Court in Raghunath Thakur v. State of Bihar, (1989) 1 SCC 229 struck down an order of blacklisting for future contracts on the ground of non-observance of the principles of natural justice. The relevant extract of the judgment in that case is as follows: (SCC p. 230, para 4)
"4. [I]t is an implied principle of the rule of law that any order having civil consequences should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order."
18. This Court in Gorkha Security Services v. State (NCT of Delhi), (2014) 9 SCC 105 has described blacklisting as being equivalent to the civil death of a person because blacklisting is stigmatic in nature and debars a person from participating in government tenders thereby precluding him from the award of government contracts. It has been held thus: (SCC p. 115, para 16)
"16. It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts."
In light of the above decisions, it is clear that a prior show-cause notice granting a reasonable opportunity of being heard is an essential element of all administrative decision-making and particularly so in decisions pertaining to blacklisting which entail grave consequences for the entity being blacklisted. In these cases, furnishing of a valid show-cause notice is critical and a failure to do so would be fatal to any order of blacklisting pursuant thereto."
(emphasis supplied)
(7) Having regard to the aforesaid proposition of law and going through the record available before this Court in the above-captioned writ petitions, what we find is that orders impugned in the above-captioned writ petition blacklisting the petitioners' firm were passed without giving any opportunity of hearing. Even otherwise, impugned orders have been passed without specifying any period of blacklisting which can be passed under law.
(8) In view of the aforesaid, the impugned orders are hereby set- aside. The matter is remanded back to the authority concerned to pass fresh orders after giving due opportunity of hearing to the petitioners' firm in accordance with law.
(9) Since petitioners' firm have already remained under blacklisted for around 13 years, we hope and trust that the authority concerned shall make an earnest endeavour to pass fresh order after affording due opportunity of hearing to the petitioners' firm, in accordance with law, expeditiously.
(10) The above-captioned writ petitions stand allowed in above terms.
(Om Prakash Shukla, J.) (Vivek Chaudhary, J.)
Order Date :- 2.1.2024
Shubhankar
