Allahabad High Court
M/S Mohit Rice Mill vs State Of U.P. And Others on 1 August, 2025
Author: Saral Srivastava
Bench: Saral Srivastava
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Neutral Citation No. - 2025:AHC:128971-DB
Court No. - 40
Case :- WRIT - C No. - 2657 of 2013
Petitioner :- M/S Mohit Rice Mill
Respondent :- State of U.P. and Others
Counsel for Petitioner :- Mayank Agrawal
Counsel for Respondent :- N.P. Singh,Sanjay Kumar Mishra
Hon'ble Saral Srivastava,J.
Hon'ble Arun Kumar Singh Deshwal,J.
1. Heard Sri Mayank Agrawal, learned counsel for the petitioner and Sri Sanjay Kumar Mishra, learned counsel for the respondents.
2. The petitioner by means of the present writ petition has assailed the orders dated 08.08.2012, 09.08.2012 and 20.11.2012 passed by the respondent Nos.3 & 5 respectively.
3. A short submission has been raised by learned counsel for the petitioner that the petitioner is a Rice Miller and has been duly registered with Food Corporation. The petitioner is engaged in the business of hulling the paddy and supplying the Custom Milled Rice at the behest of the State Government. For certain irregularities, the petitioner has been black-listed and consequential orders were also passed.
4. It is contended that the petitioner cannot be black-listed for an indefinite period and no notice or opportunity were given to the petitioner before black-listing it. In this respect, learned counsel for the petitioner has relied upon the following judgements:-
(i). Kulja Industries Ltd. Vs. Chief General Manager Western Telecom Project Bharat Sanchar Nigam Ltd. and Others (2014) 14 SCC 731;
(ii). B.C. Biyani Projects Pvt. Ltd. Vs. State of M.P. & Others 2016 SCC Online 2070;
(iii). Daffodills Pharmaceuticals Ltd. & Another Vs. State of U.P. and Another (2020) 18 SCC 550.
5. Learned counsel for the respondents submits that the petitioner has defaulted due to supply of Beyond Rejection Limit (BRL) Rice which signifies that the quality of rice was below standard. Thus, in such view of the fact, it is submitted that there is no illegality in the impugned order and this Court may refrain from interfering with the impugned order under Article 226 of the Constitution of India.
6. From perusal of the impugned order, it is clear that the fact of non-giving opportunity of hearing or any notice before passing the order of black-listing has been clearly pleaded in the writ petition and the same has not been specifically denied in the counter affidavit filed on behalf of the contesting respondents in the connected writ petition and also the fact that no specific period is mentioned in the impugned order black-listing the petitioner.
7. It is established law that black-listing or debarring of a contractor holds civil consequences before passing such orders opportunity of hearing must be given. Therefore, non-granting of opportunity itself vitiates the order of black-listing.
8. The Apex Court in the case of Kulja Industries Ltd. (supra) has observed that though debarment/black-listing is an effective method for disciplining deviant suppliers/contractors but such black-listing or debarment cannot be permanent. Paragraph 25 of the said judgement is being quoted as under:-
"25. Suffice it to say that 'debarment' is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the 'debarment' is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor."
9. The Apex Court in the case ofB.C. Biyani Projects Pvt. Ltd. (supra) has again considered and reiterated the earlier judgement of the Apex Court in the case of Kulja Industries Ltd. (supra) and observed that the order of black-listing cannot be for an indefinite period as the permanent black-listing is impermissible in law. Paragraph nos.7 & 8 of the said judgement are being quoted as under:-
"7. In Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and Others [(2014) 14 SCC 731], this Court held in paragraph 25 of the report that "debarment" cannot be permanent and the period of "debarment" would invariably depend upon the nature of the offence committed by the erring contractor. Paragraph 25 of the report reads as follows:
"25. Suffice it to say that "debarment" is recognized and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the "debarment" is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor."
8.As mentioned above, the order for blacklisting the appellant is a permanent one. This is impermissible in law."
10. The Apex Court in the case ofDaffodills Pharmaceuticals Ltd. (supra) has again reiterated the judgement of Apex Court in the case of Kulja Industries Ltd. (supra) and observed that normal black-listing order has a finite life span which should not be disproportionate to the default committed by the contractor or supplier but order of debarment/black-listing cannot be for indefinite duration. Paragraph no.13 of the said judgement is being quoted as under:-
"13. Although, State of U.P. has argued that the impugned order requiring that no procurement ought to be made from Daffodills, is neither a blacklisting nor a debarring order, in our opinion, in fact and in reality, that order is nothing but an order or a directive, debarring and preventing the State of U.P. from local purchase of medicines from Daffodills for an indefinite duration. Unlike a "normal" blacklisting order which has a finite life span (of three or maximum five years), the indefinite directive (which appears to be co-terminus with the lifetime of the criminal case) is facially far more disproportionate than a blacklisting order. Even as on date, it is not clear whether formal charges have been framed against the accused i.e. Surender Chaudhary."
11. The Division Bench of this Court had also occasion to consider the issue of permanent debarment/black-listing in the case of Vindhyawasini T. Transport Fazil Nagar, District Kushi Nagar through its Proprietor Vs. State of U.P. and Others 2018 SCC Online 6183. In this case, the Coordinate Bench of this Court after considering the judgement of Apex Court in the case of M/s Kulja Industries Ltd. (supra) have observed that debarment of a contractor can never be permanent and period should invariably be mentioned in the order of debarment. Paragraph no.22 of the said judgement is being quoted as under:-
"22. The aforesaid view has been reiterated in a recent judgment of B.C. Biyani Projects Pvt. Ltd. v. State of M.P. In view of law discussed above, and considering the recent authorities on the subject that debarment can never be permanent and period should invariably be mentioned in the order of debar, though it would depend upon the nature of defiance, breach or offence committed by erring person/Firm/Contractor, we find no hesitation in allowing writ petition partly and declare that impugned order dated 11.03.2015 will not be treated to be permanent debarment/blacklisting of petitioner. Respondent-Competent Authority, i.e., RFC, GKP shall pass a clarificatory supplementary order mentioning period of debarment of petitioner with regard to blacklisting pursuant to order dated 11.03.2015, looking to the nature of defiance, breach or offence committed by petitioner. This shall be done within one month from the date of production of a certified copy of this order."
12. From the above legal proposition, it is clear that the order of debarment cannot be for an indefinite period and it cannot be passed without giving an opportunity of hearing to the person concerned, but in the present case, it is clear that the impugned order of black-listing is not only for an indefinite period, but also passed without giving any opportunity of hearing or giving notice to the petitioner, therefore, the impugned orders black-listing the petitioner deserve to be quashed.
13. Accordingly, the orders impugned in the present petition are hereby quashed. However, a liberty is granted to the respondent no.2-Regional Food Controller, Bareilly Region, Bareilly to pass fresh order strictly in accordance with law after giving due notice and opportunity of hearing to the petitioner.
14. The writ petition is allowed subject to the observations made above.
Order Date :- 1.8.2025
SS
(Arun Kumar Singh Deshwal,J.) (Saral Srivastava,J.)
