Ch.Dayakar vs Andhra Pradesh State Civil ...
2023 Latest Caselaw 2724 AP

Citation : 2023 Latest Caselaw 2724 AP
Judgement Date : 2 May, 2023

Andhra Pradesh High Court - Amravati

Ch.Dayakar vs Andhra Pradesh State Civil ... on 2 May, 2023

Bench: Ravi Cheemalapati

      THE HON'BLE SRI JUSTICE RAVI CHEEMALAPATI

                 WRIT PETITION NO.2470 OF 2023
ORDER:

The present Writ Petition is filed seeking the following relief:

"....to issue an appropriate writ, order or direction, more particularly one in the nature of Writ Mandamus, declaring the proceedings No.P.Admin.A/Nellore/Mis-funds/2022 dated 11.10.2022 passed by the 1st respondent and the proceedings No.PDS/3/STII/2022-23 dated 07.10.2022 of the 2nd respondent as illegal and consequently to set aside the same by allowing the petitioner to transport the essential commodities in terms of the work orders dated 16.08.2022 and 24.08.2022...."

2. Heard Sri G.Ram Gopal, learned counsel for petitioner and Sri

P.Hema Chandra, learned Standing counsel for respondents.

3. Learned counsel for the petitioner submitted that, the petitioner

has entered into contracts i.e., two work orders dated 16.08.2022 and

24.08.2022 with the respondent corporation and the said work orders

were terminated by orders dated 07.10.2022 and 11.10.2022 and also

blacklisted the petitioner without issuing any notice. He further

contended that, without issuing notice the authorities cannot terminate

the contract and has drawn the attention of this Court to the conditions

of the contract. As such, the present writ petition has been filed. In

support of his contentions, he relied on the judgment of Apex Court in

M/s Erusian Eq 1 uipment & Chemicals Ltd Vs State of West

Bengal and another and prayed to pass appropriate orders in that

regard.

4. On the other hand, learned Standing Counsel contended that,

no notice is required to be issued and has drawn the attention of this

Court to the conditions of the contract to Clause (iv) and submitted

that if the petitioner indulges in any crime, the authorities can cancel

the contract without issuing any notice and without assigning any

reasons for termination. He further submitted that, the authorities

have rightfully cancelled the contract as petitioner has indulged in

financial scam for which crime was already registered and in so far as

black listing is concerned, he fairly admitted that the concerned

authorities ought to have issued notice before blacklisting. He further

submitted that, the petitioner has not made out any case for

consideration warranting the interference of this Court and accordingly

prayed to dismiss the writ petition.

(1975) 1 SCC 70

5. Perused the record.

6. The petitioner herein entered into contract for transportation of

essential commodities under Phase-II for the financial year 2022-23

vide proceedings No.PDS/3/STII/2022-23 dated 16.08.2022 for

transportation of essential commodities from MLS Points to F.P.Shops

attached to the Mandal of Nellore District and the period of contract is

up to 31.03.2023. Also, the petitioner entered into another contract

vide proceedings No.PDS/3/STII/2022-2023 dated 24.08.2022. Now

the grievance of the petitioner is that the authorities have cancelled

the said work contracts thereby blacklisting the petitioner without any

notice.

7. Learned Standing Counsel relied on Clause3(iv) of the conditions

of contract which reads as follows:

"3.Period of Contract:

...iv) Transport Contractor or his authorized representative is responsible for the quantity and quality of stocks as taken delivery by him for onward transportation to the destinations as per the Release Order and Truck Chit generated at MLS Point. Corporation shall have absolute right to suspend the contract at any time during the currency of the agreement, without any notice or without assigning any reasons if the Transport Contractor or his representative(s) is involved in a case under Essential Commodities Act or any other Acts or violation of any clauses under this agreement. Corporation shall have absolute right to terminate the contract with immediate effect in case of any diversion or misappropriation of stocks while in his custody without assigning any reasons whatsoever. Transport Contractor is also responsible for any Acts of his Partners, Agents, and Employees including Truck owners/ Drivers/ Cleaners of the Trucks in which stocks are loaded for transportation..."

8. On the other hand, learned counsel for petitioner relied on the

Clause(iii) of condition of contract and contended that the authorities

should give notice before terminating agreement by giving 10 days

notice. The said Clause(iii) reads as follows:

"3.Period of Contract:

"..iii) Corporation shall have absolute right to terminate the agreement at any time during the currency after giving 10 days notice to the Transport Contractor without assigning any reasons whatsoever and the Transport Contractor is not entitled to question the termination on any ground whatsoever..."

Learned counsel for petitioner also relied on judgment in M/s

Erusian Equipment & Chemicals Ltd Vs State of West Bengal

and another. The relevant portion reads as follows:

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.

21. With regard to the case of the petitioners, it is made clear that the authorities will give an opportunity to the petitioners to represent their case and the authorities will hear the petitioners as to whether their name should be put on the blacklist or not. This is made clear that the decision on this question will not have any effect on the proceedings pending in Calcutta High Court where the petitioner has challenged the adjudication proceedings under the Foreign Exchange Regulations Act. Any decision of the authorities on the blacklisting will have no effect on the correctness of any of the facts involved in those proceedings.

9. No doubt, it is settled principles of law that, before blacklisting

any company or firm the authorities should give prior notice. In the

present case, admittedly no notice has been issued, as such action of

the respondents in blacklisting the petitioner is unsustainable and

contrary to the settled principles of law. On perusal of the conditions

of the contract referred supra, it clearly shows that corporation should

give 10 days notice. But, the further condition shows that the

corporation can cancel the contract without notice and assigning any

reasons which cannot be taken into consideration as earlier conditions

shows that notice has to be given. In the present case, no notice has

been given to the petitioner by the respondent corporation and

terminated the contract and the order under which it was passed is