Gujarat High Court

Devshibhai Ranabhai Nandaniya vs State Of Gujarat on 2 August, 2023

Bench: Vaibhavi D. Nanavati

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     C/SCA/10332/2023                             ORDER DATED: 02/08/2023

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       IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

        R/SPECIAL CIVIL APPLICATION NO. 10332 of 2023
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               DEVSHIBHAI RANABHAI NANDANIYA
                            Versus
                      STATE OF GUJARAT
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Appearance:
MS NAMRATA HARISHBHAI CHAUHAN(6534) for the
Petitioner(s) No. 1
MS. DHARITRI PANCHOLI, AGP for the Respondent(s) No. 1
DS AFF.NOT FILED (N) for the Respondent(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 2,3
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 CORAM:HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

                           Date : 02/08/2023

                             ORAL ORDER

1. RULE returnable forthwith. Ms. Dharitri Pancholi,

learned Assistant Government Pleader waives service of notice of

Rule for and on behalf of the respondent - State.

2. By way of present petition, the petitioner herein has

prayed for the following reliefs :-

"(a) The Hon'ble Court may be pleased to issue appropriate writ, order or direction to quash and set aside the action of the respondent no. 3 RTO of showing the status of the vehicle bearing Truck vehicle GJ-32-T-2134 as blacklisted from 'Vahan Portal' which is as Annexure - B.

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(b) This Hon'ble Court may be pleased to admit and allow this petition;

(c) This Hon'ble Court may be pleased to quash and set aside the action of the respondent in closing the online royalty account of the vehicle bearing Truck vehicle GJ-32-T-2134 of the ownership of the petitioner.

(d) Pending admission and final disposal of this petition, your lordships may be pleased to unlock the online royalty account of the vehicle bearing Truck vehicle GJ-32-T-2134 on appropriate terms and conditions that may be deem fit and proper to this Hon'ble court.

(e) Grant such other and further relief as thought fit in the interest of justice,"

3. Brief facts germane for adjudication of the dispute

read thus :-

3.1. It is the case of the petitioner herein that the

petitioner is the owner of the vehicle i.e. Truck bearing No. GJ-

32-T-2134. The said vehicle is used by the petitioner for the

purpose of transportation of the minerals from the valid lease

along the valid royalty and transit pass.

3.2. It is the case of the petitioner that while the

petitioner taking the online royalty pass for the mineral loaded in

his vehicle found that his vehicle is blacklisted and the online

Royalty account of the vehicle is closed/ locked. The blacklist

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status showed the pending court case of mines and mineral and

final order is not passed thereon dated 07.02.2022.

3.3. The vehicle of the petitioner was detained by the

respondent no.2 under the Gujarat Mineral (Prevention of Illegal

Mining, Transportation and Storage) Rules, 2017, thereafter,

approached this Court, wherein, this Court was passed an order

dated 19.01.2022.

3.4. It is the case of the petitioner that the petitioner

further inquired with the respondent no.3 and found that his

vehicle has been blacklisted due to the pending case before the

geologist and mining department, Junagadh, qua order dated

07.02.2022, wherein, the order states that the releasing of the

vehicle of the present petition in one of the condition that, till

the penalty is not paid by the petitioner with regard to the

impugned notice and till the subject matter is pending. Thus, the

vehicle has to be blacklisted and online royalty account to be

blocked / closed.

3.5. The petitioner is preferred the present petition with

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the limited request for unlocking the online royalty account of

his vehicle- Truck bearing registration No. GJ-32-T-2134.

4. Heard Ms. N.S. Chauhan, the learned advocate

appearing for the petitioner and Ms. Dharitri Pancholi, learned

Assistant Government Pleader appearing for the respondent- State.

5. Ms. Chauhan, the learned advocate appearing for the

petitioner submitted that the vehicle in question i.e. TRUCK

bearing No. GJ-32-T-2134 came to be blacklisted by the

respondent authority and the online Royalty Account of the

vehicle in question came to be closed/ blocked, without issuance

of show cause notice. The petitioner was unaware about the

same. Being aggrieved by the aforesaid, the petitioner herein

have approached this Court by filing the present petition.

6. Ms. Dharitri Pancholi, learned AGP, on instructions

from Law Officer Shri Abhijit Dubey, made a statement that the

petitioner herein has not been granted opportunity of hearing.

7. At this stage, this Court deems it fit to refer to the

following position of law :-

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(a) In the case of Dharampal Satyapal Ltd. v/s. Deputy

Commissioner of Central Excise reported in (2015) 8 SCC 519,

relevant para-27 of the order reads thus:

"27. From the aforesaid discussion, it becomes clear that the opportunity to provide hearing before making any decision was considered to be a basic requirement in the Court proceeding. Later on, this principle was applied to other quasi-judicial authorities and other tribunals and ultimately it is now clearly laid down that even in the administrative actions, where the decision of the authority may result in civil consequences, a hearing before taking a decision is necessary. It was, thus, observed in A.K. Kraipak's case (supra) that if the purpose of rules of natural justice is to prevent miscarriage of justice, one fails to see how these rules should not be made available to administrative inquiries."

(b) In the case of UMC Technologies Private Limited v/s.

Food Corporation of India and Anr. reported in AIR 2021 SC

(CIVIL) 833, relevant Paras-13, 14, 16, 17, 18, 19 and 26 reads

thus:

"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. Assistant Custodian General, Evacuee Property, Lucknow and Anr. , 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 notice to answer the case

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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, particularized and unambiguous show cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatization 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 takes 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 West Bengal in the following terms:

"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. XXX XXX 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 black lists are instruments of coercion. XXX XXX 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

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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, 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:

"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. Government (NCT of Delhi) and Ors. 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:

"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."

19. 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

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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.

26. In view of our conclusion that the blacklisting order dated 09.01.2019 passed by the Corporation is contrary to the principles of natural justice, it is unnecessary for us to consider the other contentions of the learned counsel for the appellant. Having regard to the peculiar facts and circumstances of the present case, we deem it appropriate not to remit the matter to the Corporation for fresh consideration."

8. Considering the facts of the present case and the

submissions advanced by Ms. Chauhan, learned advocate

appearing for the petitioner, this Court deems it fit to produce

Rule 5(4) of the Gujarat Mineral (Prevention of Illegal Mining,

Transportation and Storage) Rules of 2017, which reads thus:

"(4) The Authorized Officer shall issue a special security permit paper-sheet which shall be used by the holder of a mineral concession or a trader, to print the Transit Permit or the Delivery Challan, as the case may be. The special security permit paper- sheet shall be issued in such manner as may be specified by the Government. The Transit Permit or Delivery Challan shall be in triplicate and machine numbered with the book number and serial number thereof. [Provided that Government may, for the reasons to be recorded in writing, suspend issuance of transit permit as contemplated under subrule(2) above or delivery challan as contemplated under subrule (3) above, to the holder of a mineral concession or to a trader, as the case may be, in case (a) any dues or penalties have been levied by the Authorised Officer on such holder or trader and are outstanding; or (b) the trader or the owner of the relevant carrier has not procured registration for storage or transportation of mineral, as the case may be.]"