Delhi High Court
Whale Stationary Products Ltd & ... vs Union Of India & Another on 4 November, 2009
Author: Sanjiv Khanna
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 6523/2007
WHALE STATIONARY PRODUCTS
LTD & ORS ..... Petitioners
Through Mr. Jayant K. Mehta, Advocate.
versus
UOI & ANR ..... Respondents
Through Mr. Madan Gera, Adv.
CORAM:
HON'BLE MR. JUSTICE SANJIV KHANNA
ORDER
% 04.11.2009
This is the second round of litigation. The three petitioners had filed the
W.P.(C) No.8076-78/2003, questioning the orders dated 15th January, 2003 and
17th January, 2003 whereby they have been blacklisted for a period of 10 years.
It was contended by the respondents in the said writ petition that the petitioners
are a subsidiary of Delhi Paper Products Company Private Limited and being
allied concerns were rightly black listed for the misconduct of Delhi Paper
Products Company Private Limited. The said writ petition was disposed of with
the following directions:-
"5. In my view the question as to whether
the petitioners are subsidiaries of Delhi Paper
Products Company Private Limited, cannot be
decided merely on the basis of one of the directors
being allegedly common to the said companies.
WPC NO.6523/2007 Page 1
The exercise for determining as to whether the
petitioner companies were subsidiaries of Delhi
Paper Products Company Private Limited or not,
has to be undertaken in the context of the
provisions of Section 4 of the Companies Act,
1956. For that purpose, it would be necessary to
obtain the submission and statements of the
petitioner companies. Clearly this was not done as
no notice whatsoever was issued to the petitioner
companies. The question of blacklisting is a
serious one and it is well settle that before any
person or company is blacklisted in respect of
dealings with the government, that person or
company must be provided an opportunity of
hearing. That can only be done if a notice is
issued and the party is heard. Unfortunately this
was not done in the present case. Accordingly, the
impugned orders dated 15.01.2003 and
17.01.2003 are set aside for want of following the
principles of natural justice. It is open to the
respondents to issue a show cause notice to the
petitioners. Such a show cause notice, if issued,
shall be replied by the petitioner companies within
two weeks and if such a reply is made, they shall
granted an opportunity of personal hearing within
two weeks thereafter and orders would be passed
in accordance with law within four weeks
thereafter. It is made clear that the issue before the
authorities is as to whether the petitioner
companies were subsidiaries of Delhi Paper
Products Company Private Limited on 30.12.2002
and continue to be so till date. This writ petition
stands disposed of.
Dasti."
2. The petitioners again approached this Court by way of W.P.(C)
No.6523/2007, as the aforesaid order was not complied with by the
respondents. Court issued show cause notice and counter affidavit was filed by
the respondents. In the counter affidavit, the respondents admitted that the
WPC NO.6523/2007 Page 2
earlier writ petition filed by the petitioners being W.P.(C) No.8076-78/2003
was disposed of vide judgment dated 31st March, 2007. The respondents inspite
of the said decision, in the court affidavit submitted as under:-
"3.7 That the averments made in para
nos.3.5 to 3.7 of the Writ Petition save and except
what is a matter of record are wrong and hence
denied. It is submitted that the offer of the
petitioners against tender enquiry for conclusion
of Computer Stationery opened on 7.2.2007 was
considered on merits and they were not found
eligible for award of the rate contract. It is stated
that in terms of para 5.18.4 of DGS&D Manual,
no contract of any kind are to be placed with a
banned firm including its allied firms. Copy of the
said provision is annexed herewith and marked as
Annexure R-1. The rate contract was not awarded
to them, as petitioner companies are allied firm of
M/s Delhi Paper Product Co. Ltd. who has been
banned vide CVO Min, of Commerce, Deptt. Of
Commerce (Supply Division) Order No.C-
37011/8/2002-vig(DOC) dated 30.12.2002."
(emphasis supplied)
3. In other words, the stand taken by the respondents was that no show
cause notice is to be issued and no subsequent order of black listing is to be
passed in terms of their guidelines and para 5.18.4 of DGS&D Manual,. This
stand was not accepted by this Court and the writ petition was disposed of vide
order dated 20th August, 2008 reiterating paragraph 5 of the earlier order passed
in the W.P.(C) 8076-78/2003. By this order the Court has directed as under:-
"It is not in dispute that after passing of the
order dated 31.01.2007, the respondent did not
consider it necessary either to issue any show
cause notice to the petitioners nor pass any
subsequent order of blacklisting. In view of these
WPC NO.6523/2007 Page 3
facts, in case, the petitioners have filed their rate
contracts after 31.01.2007, the respondents shall
consider the same in accordance with law and if
the petitioners are found to be eligible, they shall
be granted supply orders, as per law. With these
directions, nothing further survives in this writ
petition and the same stands disposed of
accordingly."
4. The petitioners have now filed an application being C.M.No.13547/2008
alleging non-compliance of the two earlier orders mentioned above. In the
prayer clause of the application, the petitioners have prayed for clarification of
the order dated 20th August, 2008 and for directing the respondents to treat the
petitioner companies as independent entities from Delhi Paper Product
Company Pvt. Ltd. The respondents in their reply to this application have again
reiterated the same contention as was stated in their counter affidavit quoted
above. The said stand of the respondents was not accepted by this Court in its
order dated 20th August, 2008 and is accordingly rejected. The respondents are
directed to comply with the order dated 20 th August, 2008, within a period of
four weeks from the date copy this order is received. The said order will
equally apply to future and new orders. The black listing order against the
petitioners will be treated as dropped and void. It is open to the respondents to
issue show cause notice to the petitioners if permissible and allowed by law and
thereafter pass an order after considering their reply. The petitioners are
entitled to costs which are assessed at Rs. 5,000/- .
SANJIV KHANNA, J.
NOVEMBER 04, 2009
NA/P
WPC NO.6523/2007 Page 4
