Jharkhand High Court
M/S Pama Pharmaceuticals vs The Ranchi Municipal Corporation ... on 2 September, 2024
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No. 4615 of 2024
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1.M/s Pama Pharmaceuticals, a proprietorship firm having
its registered office at Devi mandap, Ratu Road, P.O.-Ratu
Road, P.S. Sukhdeonagar, Dist-Ranchi through its proprietor
Birendra Kumar Singh S/o Late Manager Singh aged about
49 years, R/o Sukhdeonagar, Ratu Road, P.O.-Ratu Road,
P.S. Sukhdeonagar, Dist-Ranchi.
... ... Petitioner
Versus
1.The Ranchi Municipal Corporation through its
commissioner, officiating from his office at Ranchi Municipal
Corporation, New Building, P.O. Kotwali, P.S. GPO, Dist-
Ranchi.
2.Deputy Administrator, Ranchi Municipal Corporation,
officiating from his office at Ranchi Municipal Corporation,
New Building, P.O. Kotwali, P.S. GPO, Dist-Ranchi.
... ... Respondents
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CORAM: HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE ARUN KUMAR RAI
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For the Petitioner : Mr. Prashant Pallav, Advocate
Mr. Parth Jalan, Advocate
For the Respondents : Mr. L.C.N. Shahedeo, Advocate
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nd
Order No. 02 : Dated 2 September, 2024
Sujit Narayan Prasad, ACJ:
1. The instant petition, under Article 226 of the
Constitution of India, is directed against order dated
19.07.2024 issued under the Signature of Deputy
Administrator, Ranchi Municipal Corporation, by which, the
petitioner has been debarred for a period of one year.
2. The brief facts of the case, as per the pleading made in
the writ petition, reads as under:
3. Notice inviting tender being e-tender 3375 dated 2nd
July, 2022 was published for supply of certain medicines.
The petitioner participated in the tender and was declared
successful. Pursuant thereto, the petitioner entered into an
on 15th April, 2023 for supply of number of medicines for a
period of two years.
4. Thereafter, supply order dated 21.04.2023 was issued to
the petitioner directing him to supply a list of medicines,
which the petitioners supplied. But vide letter dated
28.10.2023 the petitioner was informed that certain
medicines were not in accordance with the specifications and
were found to be spoilt, as such he was asked to submit
clarification and replace the medicines.
5. It has been submitted that petitioner took immediate
steps and replaced the medicines which were found to be
spoiled. However, the petitioner informed the respondent-
authority that the role of the petitioner is only to supply
medicines procured from renowned manufacturers, who are
neither blacklisted nor rejected by the respondent. But in
spite of that notice dated 9th March, 2024 was issued to the
petitioner whereby it has been stated that certain medicines
were found to be below standards, which are contrary to
Clause 13 and 14 of the agreement.
6. The petitioner replied the said show cause on the very
same day i.e., on 9th March,2024 but the same being found
not satisfactory impugned order dated 19th July, 2024 was
passed by which the petitioner was blacklisted/debarred for a
period of one year.
7. It is evident from the factual aspect that in terms of the
Notice Inviting Tender for supply of medicine to the hospitals
having been controlled by the Ranchi Municipal Corporation,
Ranchi, the petitioner was issued work order. The medicines,
which were supplied by the petitioner was found to be
contrary to the terms and conditions of the agreement and as
such a show cause notice was issued asking the petitioner to
explain as to why action be not taken for violating the
clause/condition no. 13 and 14 of the bid document. The
petitioner replied stating therein that no condition of the
agreement has been flouted by the petitioner.
8. It has been stated that the respondent-authority,
without taking into consideration reply submitted by the
petitioner passed the impugned order.
9. It has further been submitted that impugned order
otherwise also suffers from error as the petitioner was not
knowing about the fact that the said show cause notice was
with respect to debarring the petitioner for any period for
making supply of the medicines to the hospitals.
10. Learned counsel for the respondents-RMC has
submitted that the allegation is very serious. It has further
been submitted that it is not a case that without affording
opportunity the impugned order has been passed rather show
cause was issued, which has been responded by the
petitioner and thereafter, the impugned order has been
passed. Hence, the impugned order suffers from no error and
as such the same may not be interfered with.
11. This Court has heard learned counsel for the parties
and gone across the pleading made in the writ petition as
also impugned order passed by the respondent-authority.
12. The issue on merit has been raised regarding
impropriety of the impugned order and in addition to that the
issue of violation of principles of natural justice has also been
raised.
13. It has been contended that the show cause cannot be
said to be proper since there is no reference of punishment
said to be inflicted i.e., debarring from supply of medicine,
save and except, the reference has been made in the show
cause that action will be taken, therefore, argument has been
advanced that in absence of any punishment said to be
provided to the writ petitioner, the impugned order is said to
be passed in violation of principles of natural justice.
14. However, the said issue has been disputed by the
respondent on the ground that the nature of allegation is
serious, as such the impugned order was passed.
15. This Court, on appreciation of the rival submissions
advanced on behalf of parties, is of the view that what is
being contended on behalf of petitioner is having substance
reason being that the principles of natural justice cannot be
said to be mere formality and when an adverse decision is
being taken then it is incumbent upon the authority
concerned to apprise the party concerned who is to suffer
from the adverse decision i.e., regarding the proposed action
which is to be taken against that party. If such parameter
has not been followed then it will be said that there is non-
compliance of principles of natural justice.
16. The natural justice is the cardinal principle, which
cannot be not said to be a mere formality rather it requires
consideration by the court of law, as has been held by
Hon'ble Apex Court in the case of Maneka Gandhi vs. Union
of India and Anr., (1978) 1 SCC 248.
17. For ready reference, the relevant paragraph is quoted
as under:
"221. It is well established that even where there is no specific
provision in a statute or rules made thereunder for showing cause
against action proposed to be taken against an individual, which
affects the rights of that individual, the duty to give reasonable
opportunity to be heard will be implied from the nature of the
function to be performed by the authority which has the power to
take punitive or damaging action. This principle was laid down by
this Court in the State of Orissa v. Dr (Miss) Binapani Dei [AIR 1967
SC 1269, 1271 : (1967) 2 SCR 625 : (1967) 2 LLJ 266] in the
following words: "The rule that a party to whose prejudice an order
is intended to be passed is entitled to a hearing applies alike to
judicial tribunals and bodies of persons invested with authority to
adjudicate upon matters involving civil consequences. It is one of
the fundamental rules of our constitutional set-up that every citizen
is protected against exercise of arbitrary authority by the State or
its officers. Duty to act judicially would, therefore arise from the
very nature of the function intended to be performed: it need not be
shown to be superadded. If there is power to decide and determine
to the prejudice of a person, duty to act judicially is implicit in the
exercise of such power. If the essentials of justice be ignored and
an order to the prejudice of a person is made, the order is a nullity.
That is a basic concept of the rule of law and importance thereof
transcends the significance of a decision in any particular case.
18. 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 Hon'ble Apex Court in the case of Erusian
Equipment & Chemicals Lts. V. State of W.B. [(1975) 1
SCC 70], wherein it has been held as under:
"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.
***
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 blacklists are "instruments of coercion".
***
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."
19. Further, in the case of black-listing, the Hon'ble Apex
Court in the case of Nasir Ahmad Vs. Custodian General,
Evacuee Property [(1980) 3 SCC 1], it has been 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 against him.
20. The Hon'ble Apex Court in the case of Gorkha
Security Services v. State (NCT of Delhi) (2014) 9 SCC
105] 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. The Hon'ble Apex Court further held
that 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. For ready reference, the relevant
paragraph is quoted as under:
"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."
21. Similarly the Hon'ble Apex Court in the case of UMC
Technologies Private Limited Vs. Food Corporation of
India & Anr. [(2021) 2 SCC 551], taking note of aforesaid
judgments has held that before passing the order of black-
listing the show cause notice is to be issued to constitute
valid basis of black-listing order so that the litigant concerned
be able to respond properly the allegation based upon that
the proposal has been taken to black-list.
22. For ready reference, the relevant paragraph is quoted as
under:
"21. Thus, from the above discussion, a clear legal position
emerges that for a show-cause notice to constitute the valid basis
of a blacklisting order, such notice must spell out clearly, or its
contents be such that it can be clearly inferred therefrom, that there
is intention on the part of the issuer of the notice to blacklist the
noticee. Such a clear notice is essential for ensuring that the person
against whom the penalty of blacklisting is intended to be imposed,
has an adequate, informed and meaningful opportunity to show
cause against his possible blacklisting."
23. Now, adverting to the factual aspect of the present case,
it is not a case wherein show cause notice has not been
issued rather the show cause notice was issued but it is not
with respect to the order of black-listing rather show cause
notice was issued, wherein it has been referred that why an
action be not taken against the petitioner since there is non-
compliance of the terms and conditions of the agreement as
contained under condition no. 13 and 14 of the agreement.
24. It is evident from the said show cause notice that there
is no reference that as to why the petitioner be not black-
listed or debarred from supplying the medicines. However,
the response was submitted by the petitioner, wherein the
ground has been taken of committing no irregularity.
25. Therefore, this Court is of the view that merely due to
the reason that show cause notice has been issued the
principles of natural justice cannot be said to be followed, as
in the facts and circumstances of the present case, the
requirement as per the law is that before debarring the writ
petitioner specific show cause notice was required to be
issued as to why he be not debarred due to commission of
irregularity as has been found to be committed.
26. This Court, therefore, is of the view that since in
absence of such averment in the show cause notice order of
debarment has been passed hence the order of debarment for
a period of one year is required to be quashed and set aside.
27. Accordingly, order dated 19.07.2024 issued under the
Signature of Deputy Administrator, Ranchi Municipal
Corporation, by which, the petitioner has been debarred for a
period of one year is hereby quashed and set aside.
28. The law is well settled that on technicality no one can be
allowed to take advantage and as such this Court is of the
view that the matter needs to be referred before the authority
concerned i.e., Administrator, Ranchi Municipal Corporation
to pass order afresh after issuing fresh show cause notice.
29. In view thereof, the Administrator, Ranchi Municipal
Corporation is directed to issue fresh show cause notice to
the petitioner by giving specific imputation therein within a
period of one week from the date of receipt/production of
copy of this order. The petitioner, in turn thereof, has
undertaken to submit reply within a period of two weeks from
the date of receipt of such show cause notice.
30. The concerned authority i.e., Administrator, Ranchi
Municipal Corporation is directed to take decision thereafter
within a period of two weeks from the date of receipt of reply
so submitted by the petitioner.
31. It is made clear that the final outcome with respect to
the issue of supply of medicine will depend upon the decision
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which is to be taken by the Administrator, Ranchi Municipal
Corporation.
32. With the aforesaid observations and directions, the writ
petition stands disposed of.
(Sujit Narayan Prasad, A.C.J.)
(Arun Kumar Rai, J.)
Alankar/
AFR
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