S.P. Timber Industries vs Union Of India And Anr.
1990 Latest Caselaw 90 Del

JUDGMENT

B.N. Kirpal, J.

(1) Rule D.B.

(2) The challenge in this writ petition is to the decision of the respondents to de-register the petitioner.

(3) Briefly stated, the facts are that the petitioner is carrying on the business of manufacture and supply of various types of wooden and plywood boxes. Crates etc. It appears that vide a letter dated 8th April, 1983 petitioner was registered with the respondents. This letter stated that the petitioner, firm has been registered for the manufacture of various types of ammunition boxes and crates both in plywood and timber, including plywood drums. Paragraph 3 of the letter further stated "Tender enquiries in respect of items falling within your range of production will be sent to you as and when the requirement arises". The case of the petitioner is that it it came to know that the respondents had blacklisted the firm and are not issuing any tender enquiries to the petitioner.

(4) A showcase notice was issued and the respondents bay filed their reply. The case of the respondents is that their were complaints against the petitioner and two letters dated 14th October, 1983 and 10th November, 1989 were sent to the petitioner. The complaints were with regard to the quality of the products. According to the respondents the petitioner's a name has not been blacklisted and all that has happened is that the petitioner has been deregistered.

(5) It is not in dispute that come action has been taken by the respondents. According to the respondents the action which has been taken is to deregister the petitioner. The petitioner's contention is that the deregistration in effect, amounts to blacklisting.

(6) The petitioner has placed on record a letter dated 2nd Novamber, 1989. This is a letter written by- the Government of India to the Secretary, ordnance Factory Board, Calcutta as well as to the DGS&D, New Delhi and Dgos, New Delhi. Copy of the, said letter has been issued to seven Technical Committees belonging to different organisations-within the Armed Forces. In this letter it is stated that the petitioner, along with four other firms, has been deregistered for supplying sub-standard material to defense. 'It has further been stated that it should be ensured that no further orders are placed on the said firms for supply of defense stores. The Ordnance Factory Board was requested by this letter to advise all the General Managers of all the Ordnance Factories of the issuance of this letter. Similarly, the Dgos was also requested to advise the Commandant of all Ordnance Depots. While endorsing the copy to all the Technical Committees it was stayed that "PLEASE ensure similar action from your side. The names of above firms may please be deleted from the respect of compendiums."

(7) It is clear from the aforesaid letter dated 2nd November 1989 that the respondents have taken a decision that the petition and the other firms mentioned in the said letter should not supply any further defense stores. It may be that the said letter has been issued for a good reason, but in our opinion, this letter, in effect and spirit, amounts to blacklisting By a blacklisting order the Government decides not to have any future dealings with the firm which is blacklisted. By the impugned order, in this case, the decision is similar, namely, that the respondents are not to place any further orders for the purchase of materials on the petitioner, and other firms mentioned therein. Technically speaking, the petitioner had been deregistered, but the effect of this is that no orders are now to be placed on the petitioner as far as the defense stores arc concerned. This. in our opinion, amounts to blacklisting the petitioner and the principles enunciated by the Supreme Court in the decision of Eurasian Equipments v State of West Bengal are clearly applicable and applying the said ratio the respondents ought to have given a show cause notice to the petitioner before taking action This not having been done, the principles of natural justice have been violated. It is not for this Court to go into the merits of the decision, but all that we have to see is. whether the principles of natural justice are attracted to a case, like the present, and secondly, whether they have been complied with.

(8) For the reasons stated above, we have no hesitation in coming to the conclusion that when a person has been registered as a contractor or a supplier which entitled him to give his quotations which are to be considered, then the subsequent deregistration of the person would, in effect, amount to blacklisting. This can only be done by following the principles laid down by the Supreme Court in the Eurasian Equipments case. As no show cause notice was issued to the petitioner prior to the taking of the impugned decision, we have no hesitation ill issuing a Writ of Mandamus quashing the respondents decision contained in the letter elated 2nd November, 1989. No orders as two costs.