M/S. Ramsons Garment Finishing ... vs Government Of India
2022 Latest Caselaw 10566 Kant

      IN THE HIGH COURT OF KARNATAKA AT BENGALURU

          DATED THIS THE 08TH DAY OF JULY, 2022

                         BEFORE

         THE HON'BLE MR. JUSTICE C.M. POONACHA

               W.P.No.37569/2013(GM-RES)

BETWEEN

M/S. RAMSONS GARMENT FINISHING
EQUIPMENTS PVT. LTD
A COMPANY INCORPORATED UNDER THE
PROVISIONS OF COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
H.O 320, MYSORE ROAD
BANGALORE-560026
REPRESENTED BY ITS COUNTRY
MANAGER(LAUNDRY DIVISION)
AND AUTHORISED SIGNATORY
MR MUKESH KANTILAL
                                           ...PETITIONER

(BY DR.ADITYA SONDHI, SENIOR ADVOCATE
      ALONG WITH SMT.NIDHISHREE, ADVOCATE)


AND

1 . GOVERNMENT OF INDIA
    MINISTRY OF RAILWAYS
    (RAILWAY BOARD)
    RAIL BHAWAN, NEW DELHI-1
    REPRESENTED BY ITS
    DIRECTOR RAILWAY STORES(M)

2 . NORTHERN FRONTIER RAILWAYS
    MAILGAON,
    GUWAHATI-781 011
                                    2




   ASSAM
   REPRESENTED BY
   ITS CONTROLLER OF STORES
                                                   ...RESPONDENTS

(BY SRI ABHINAY Y.T, ADVOCATE)


     THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
IMPUGNED COMMUNICATION DATED 03.07.2013 ISSUED BY R1
AT ANNEXURE-K AND ETC.

     THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR   ORDERS    ON   24.06.2022, COMING  ON   FOR
'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT MADE
THE FOLLOWING:-

                               ORDER

The present Writ Petition is filed challenging the

Communication bearing No.2012/LS/54/3, dated

03.07.2013, issued by the Respondent No.1.

2. Brief facts of the case are as follows:

The Petitioner is engaged in the manufacturing of

modern laundry and dry cleaning equipment, having

clients across India and overseas, both in the private and

public sector. The Petitioner was the successful

tenderer/bidder pursuant to the Tender Notification dated

15.3.2010 issued by the Respondent No.2 and accordingly

was issued the purchase order dated 10.05.2010. It is the

contention of the Petitioner that the said order was

implemented to the satisfaction of the Respondent No.2.

        3.    The        Respondent           No.1       had    issued        a

Memorandum           dated        30.10.2012           notifying     various

malpractices/irregularities            which       the    Petitioner        was

charged      with         and      a        detailed      Statement          of

Charge/misconduct was enclosed along with the said

Memorandum. It was also notified about the proposal to

ban the business dealing of the Petitioner with the Indian

Railways for a period of 5 years. Vide the said

Memorandum, an opportunity of showing cause against the

proposed action taken was also notified to the petitioner.

4. In reply to the said Memorandum dated

30.10.2012, the Petitioner furnished replies dated

12.10.2012, 21.01.2013 and 13.02.2013. Vide Notice

dated 10.4.2013, the Petitioner was notified of an

opportunity of oral hearing that was to be afforded on

10.5.2013 to the Petitioner. The Petitioner, in response to

the Notice dated 10.4.2013, vide letter dated 07.05.2013,

confirmed their participation on the date of oral hearing

and further has furnished certain additional replies to the

Statement of Charge. The representatives of the Petitioner

attended the oral hearing, a copy of the Minutes of which

was also furnished to the Petitioner. Thereafter, the

Respondent No.1, vide order bearing No.2012/LS/54/3,

dated 03.07.2013, banned the Petitioner for a period of 5

years, which has been impugned in the present Writ

Petition.

5. The Respondents have entered appearance

and filed their statement of objections. In the statement

of objections, the Respondents have defended their action

of blacklisting the Petitioner and in detail furnished their

response with regard to the allegations made against the

Petitioner. It is also stated that the Petitioner has

admitted certain charges made against it. It is further

stated that the principles of natural justice were followed,

inasmuch as an opportunity was given and the

representations of the Petitioner were considered as also

an opportunity of oral hearing was provided before issuing

the impugned Communication. The process of banning

being an administrative process, subjective satisfaction is

sufficient and the banning order was sought to be justified.

It is denied that the competitors of the Petitioner was

responsible for initiation of action by the Respondents.

6. The Petitioner has also filed rejoinder to the

statement of objections filed by the Respondents.

7. Dr.Aditya Sondhi, learned Senior Counsel

appearing for the Petitioner put forth the following

contentions;

(a) a detailed explanation furnishing replies to all the

allegations made was given by the Petitioner to the

Respondents;

(b) there was no deliberate attempt by the Petitioner

to supply substandard machinery or to pass off machinery

of a particular make as that of the other;

(c) certain actions were taken by the Petitioner in

the interest of providing good and efficient service as

sought for by the Respondents within a specified time

framework and the moment the Respondents conveyed

their objections/dissatisfaction to certain aspects of the

work done by the Petitioner, the same was immediately

rectified in the form of supplying a new machinery or

redoing the work at the sole cost of the Petitioner;

(d) a business competitor of the Petitioner was

instrumental for initiation of action by the Respondents;

(e) large amounts of money were still due and

payable from the Respondents to the Petitioner and the

same was not insisted upon by the Petitioner to

demonstrate its bona fides;

(f) the Petitioner had successfully completed the

work specified in the Tender and letters recording

satisfaction of the same were also issued by the

Respondents;

(g) the Petitioner is a reputed company having

dominance in the market and is a successful Tenderer in

many Railway projects and has been doing work as per the

Tender specifications to the satisfaction of the Railways;

(h) the impugned Communication dated 03.07.2013

is a very casual and cryptic order without stating valid

reasons and the same casts a stigma upon the Petitioner

who is unable to participate in any other Tender floated by

the Government and costs irreparable harm to its goodwill

and economic interest;

(i) the impugned Communication dated 03.07.2013

refers to internal findings which have not been furnished to

the Petitioner; and

(j) in the impugned Communication dated

03.07.2013, the Respondents have recorded that the

Petitioner was involved in "fraudulent" acts, whereas in the

Memo of Charge, fraud was never alleged vis-à-vis the

Petitioner.

8. In support of his arguments, the learned

Senior Counsel for the Petitioner relied upon the following

decisions;

i) M/s Erusian Equipment & Chemicals Ltd., v. State of West Bengal and another1;

ii) UMC Technologies Private Limited v. Food Corporation of India and another2; and

iii) Mekaster Trading Corporation v. Union of India (UOI) and ors3.,

iv) Johnson and Johnson Pvt. Ltd., v. All India Institute of Medical Sciences, New Delhi,4

Putting forth the aforementioned contentions and

relying on the rulings, the Petitioner sought for quashing

the impugned Communication.

9. Sri Abhinay Y.T, learned Counsel for the

Respondents put forth the following contentions;

(a) the impugned Communication dated

03.07.2013 is an administrative action and judicial review

of the same is restricted and this Court ought not to

entertain the Writ Petition;

(1975) 1 SCC 70

(2021) 2 SCC 551

106(2003) DLT 573

2021 SCC OnLine Del 4154

(b) the process of affording an adequate

opportunity was provided, inasmuch as the Petitioner was

given an opportunity of responding to the allegations as

well as an opportunity of oral hearing and no right of the

Petitioner is violated by issuing the impugned

Communication;

(c) that a specific allegation of fraud has been

alleged as against the Petitioner and the charges were

made after a vigilance inspection;

(d) it is denied that a business rival of the Petitioner

is behind the action initiated by the Respondents; and

(e) that the charges made against the Petitioner are

in respect of deficiencies in the manner of not carrying out

the work stipulated in the Tender with regard to cleaning

of sheets and other laundry of the Indian Railway, which is

required to be carried out diligently in public interest. The

Petitioner having been found deficient for the same, action

initiated by the Respondents is justified.

10. In support of his contentions, the learned

Counsel for the Respondents relied upon the following

decisions;

i) Jagdish Mandal v. State of Orissa and Others5; and

ii) Patel Engineering Ltd., v. Union of India6,.

Putting forth the aforementioned contentions and

relying on the rulings, the Respondent sought for dismissal

of the Writ Petition.

11. Having regard to the rival contentions put forth

by the learned Counsel for the parties, the question that

arises for consideration of this Court is, "Whether the

impugned Communication bearing No.2012/LS/54/3, dated

03.07.2013, is liable to be interfered with by this Court?"

12. The arguments of the learned counsel for the

Petitioner and Respondents were heard and a detailed

reference has been made by both the counsel to the

(2007) 14 SCC 517

(2012) 11 SCC 257

various documentary material available on record vis-à-

vis, the charges/allegations that were made against the

Petitioner and response that was furnished to it. It is not

necessary to refer to all the material on record, except to

the extent necessary to decide the question that arise for

consideration in the present case.

13. It was contended by the learned Senior

Counsel for the Petitioner that the Tender did not mandate

it to supply Electrolux machines. Hence, the Petitioner did

not violate any norms of the Tender when it had initially

supplied Ramsons machines and thereafter supplied

Electrolux machines. It is not forthcoming from any of the

material available on record that the Petitioner under the

Tender was required to supply only Electrolux machines.

With regard to the allegation that a sticker was affixed on

the Electrolux machines supplied, while denying the said

allegation, the Petitioner has specifically stated that they

suspect the same to be the handwork of some mischief-

mongers. It was contended by the learned Senior Counsel

for the Petitioner that fraud was not a charge made by the

Respondents at the time of issuing the Memorandum

containing the charges. However, in the impugned

Communication dated 03.07.2013 the Petitioner was found

to have been involved in fraudulent activity. In response

to the same, the Respondents have contended that the

charges enclosed along with the Memorandum dated

30.10.2012 were of fraud that was alleged against the

Petitioner.

14. It was strenuously contended by the learned

Counsel for the Respondents that with regard to various

allegations/charges that were made against the Petitioner,

no response was furnished and as a result of which the

Petitioner is deemed to have admitted the charges.

However, the learned Senior Counsel for the Petitioner

disputes the fact that the Petitioner had admitted any of

the allegations and has specifically contended that in the

various replies issued by the Petitioner as also in the oral

hearing it was specifically denied by the Petitioner of any

wrong doing in carrying out the work as contemplated

under the Tender.

15. The learned Senior Counsel for the Petitioner

also contends that the act of the Petitioner in replacing the

machines that were pointed out by the Respondents was

not an admission of wrong doing, but was merely in the

interest of ensuring that the operations of the Respondents

were not hindered and the Petitioner has incurred huge

loss in the process of replacing the said machinery, which

they have not claimed from the Respondents; and that the

act of replacing the machinery should be seen as a bona

fide act done in good faith by the Petitioner to maintain a

business relationship with the Respondents.

16. Be that as it may, in the Communication dated

03.07.2013 the Respondent No.1 has not dealt in detail

with regard to various allegations/charges that were made

against the Petitioner as also response given by the

Petitioner to the charges/allegations. In the absence of the

Respondent Authority appreciating the various aspects

pertaining to the charges made against the Petitioner and

the replies furnished by the Petitioner to the same and

setting out its reasons for the decision arrived at, the

question of this Court re-appreciating the various material

available on record to adjudicate whether the decision of

the Respondent is in accordance with law does not arise.

The Communication dated 03.07.2013 under which

blacklisting of the Petitioner for a period of five years was

ordered is a grave one which will cast a stigma on the

Petitioner and has far reaching consequences.

17. In the case of M/s Erusian Equipment &

Chemicals Ltd1., the Hon'ble Supreme Court has held as

follows:

"12. .................. The Government cannot choose to exclude persons by discrimination. 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 does not pertain to any particular contract. 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".

"19. Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may be under a duty to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein."

"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."

18. In the case of UMC Technologies Private

Limited2, the Hon'ble Supreme Court has held as follows:

"14. ................. 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 take 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."

19. In the case of Mekaster Trading

Corporation3, a learned Single Judge of the Delhi High

court has held as follows:

"28. .................. Whether the contention raised by the petitioners in their replies are considered and addressed, is the main question? Perusal of the impugned order shows that after making recital of the events which transpired after the show cause notice, i.e. filing of replies by the petitioner, giving of hearings to both parties who explained their respective cases, the penultimate para records that case has been examined and heard and the sum and substance of the allegation made against the petitioner was that petitioner could not fulfilll its contractual obligation as Indian agent and replies submitted by the petitioner as well as oral representation made by them during hearing of the

case have not been found convincing. All the arguments of the petitioners are brushed aside by the following utterances "the reply submitted by them vide their letters dated 18.8.2001 and 6.2.2002 and oral representation by them during hearing of the case on 4.3.2002 have not been found convincing. The available evidence does not reveal that the firm has fulfillled its contractual obligations."

"29. Passing the order in such a slip shod manner which has the serious effect of blacklisting the petitioner for a long period of 5 years is certainly not act of good administration."

"30. It is abundantly clear that the aforesaid summation cannot be called as "reasons" in support of the order. It can, at best, be termed as conclusion. Apart from this conclusion there is nothing in the order to indicate any supportive reason. Thus, there is no indication in the order as to what are the elements which persuaded the competent authority to reject the contentions of the petitioner. The requirement that the reasons must meet the substance of the principle argument that the competent authority was required to consider is clearly lacking. No link between the material on which conclusions are based and the actual conclusion drawn is based, is found. If that has remained at the back of the mind of the authority passing the order, and has not surfaced on the records of the case, the ingredients of a reasoned order are not met. Reading of such an order would naturally not satisfy the aggrieved party's desire to know as to why decision was reached and what was the justification in rejecting his point of view. It would harbour the feeling that the authority proceeded with the matter with closed mind, whatever is stated in the show cause notice is final and giving of opportunity to show cause was empty formality as the defense was rejected summarily by

labelling the same as 'not convincing'. It has to be emphasised that reasons for a decision are distinct from the conclusions recorded in the order. Apart from repeating that the petitioner had not fulfillled its contractual obligation as Indian Agent which was stated in the show cause notice (may be in detail), what was required was to at least indicate in a concise manner as to why the defense of the petitioner was unconvincing."

(emphasis supplied)

20. In the case of Johnson and Johnson Pvt.

Ltd.,4 a learned Single Judge of the Delhi High Court while

placing reliance on the earlier judgment of the said High

Court in the case of Mekaster Trading Corporation3 has

held as follows:-

"13. ................... In this regard, reliance was placed on the decision of the Supreme Court in Kulja Industries Limited Vs. Chief Gen. Manager (2014) 14 SCC 731 to contend that the decision of the respondent to blacklist the petitioner had to withstand the test of fairness, natural justice, relevance, non- discrimination, quality and proportionality. ..............."

"31. This brings me to the next question, whether the impugned order had been passed after duly considering the defense put forth by the petitioner. Administrative orders, such as the impugned order, require the Authority

passing it to clearly set out the reasons as to why it arrived upon a decision to penalize an entity. This makes such administrative orders, and the manner in which they are written, of special interest to the affected party and the Courts that deal with their grievances. "

(emphasis supplied)

21. In the case of Patel Engineering Ltd5., the

Hon'ble Supreme Court while referring to its earlier

decision in the case of M/s. Erusian Equipment &

Chemicals Ltd1., has held as follows:

"14. ........... This Court also took note of the fact that the right to make a contract includes the right not to make a contract. By definition, the said right is inherent in every person capable of entering into a contract. However, such a right either to enter or not to enter into a contract with any person is subject to a constitutional obligation to obey the command of Article 14. Though nobody has any right to compel the State to enter into a contract, everybody has a right to be treated equally when the State seeks to establish contractual relationships. ................. The effect of excluding a person from entering into a contractual relationship with the State would be to deprive such person to be treated equally with those, who are also engaged in similar activity."

"15. ......... The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such

power. The only legal limitation upon the exercise of such an authority is that the State is to act fairly and rationally without in any way being arbitrary-- thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors."

22. In the case of Jagdish Mandal4, the Hon'ble

Supreme Court has held as follows:

"22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made "lawfully" and not to check whether choice or decision is "sound". When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such

interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

or Whether the process adopted or decision made is so arbitrary and irrational that the court can say: "the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached";

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action."

23. The requirement/necessity of giving reasons

even in administrative actions has been the subject matter

of many judgments. The Hon'ble Supreme Court in the

case of Union of India v. Jai Prakash Singh7 has held as

follows:

"11. Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. The absence of reasons has rendered the High Court's judgment not sustainable.

12. Even in respect of administrative order Lord Denning, M.R. in Breen v. Amalgamated Engg. Union [(1971) 2 QB 175 : (1971) 2 WLR 742 : (1971) 1 All ER 1148] observed : (All ER p. 1154h) 'The giving of reasons is one of the fundamentals of good administration.' In Alexander Machinery (Dudley) Ltd. v. Crabtree [(1974) 1 ICR 120 : 1974 IRLR 56] it was observed:'Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at.' Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the 'inscrutable face of the sphinx', it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The 'inscrutable face of a sphinx' is ordinarily

(2007) 10 SCC 712

incongruous with a judicial or quasi-judicial performance." [Ed. : Quoting from Cyril Lasrado v. Juliana Maria Lasrado, (2004) 7 SCC 432, p. 436, paras 11-12.]

24. In the case of Kranti Associates (P) Ltd., v.

Masood Ahmed Khan8, the Hon'ble Supreme Court has

set out certain principles on the requirement of disclosing

reasons, which reads thus;

"(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

(b) A quasi-judicial authority must record reasons in support of its conclusions.

(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.

(f) Reasons have virtually become as indispensable a component of a decision-making process as

(2010) 9 SCC 496

observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

(g) Reasons facilitate the process of judicial review by superior courts.

(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice.

(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system.

(j) Insistence on reason is a requirement for both judicial accountability and transparency.

(k) If a judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision-making process.

(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor(1987) 100 Harv. L. Rev. 731-37.)

(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain [(1994) 19 EHRR 553] , EHRR at p. 562, para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 : 2001 ICR 847 (CA)] , wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, 'adequate and intelligent reasons must be given for judicial decisions'.

(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of 'due process'."

25. It is clear from the enunciation of law as set

out in the aforementioned judgments that having regard

to the severity of the effects of blacklisting, the mandate

of law requires strict adherence to the principles of natural

justice. If an action of blacklisting is sought to be made,

the person/entity concerned is required to be duly notified

of the charges levelled against him/it and the

consequences that may follow if the charges are proved,

give adequate opportunity to the person/entity against

whom/which the allegations are made to put forth his/its

say and the order under which blacklisting is imposed

should disclose adequate reasons for imposing such

punishment after considering/dealing with the various

responses/explanations given by the person/entity against

whom the allegation is made.

26. No doubt, the Respondents have suitably

notified the Petitioner of the charges levelled against it as

well as given an adequate opportunity to put forth its

explanation in response to the allegations made as also

having given an opportunity of oral hearing. However, the

Communication dated 03.07.2013 whereunder the

Petitioner is sought to be blacklisted for a period of five

years has not dealt with the explanation offered by the

Petitioner as also set out adequate reasons for blacklisting

the Petitioner for five years. Under the circumstances, the

Communication dated 03.07.2013 does not meet the

requirement of law and hence, the same is required to be

quashed.

27. Accordingly, I pass the following:

ORDER

i) Writ Petition is allowed.

ii) Impugned Communication bearing

No.2012/LS/54/3, dated 03.07.2013, issued by

the Respondent No.1, is hereby quashed.

iii) It shall be open to the Respondent No.1 to

proceed with the matter by affording an other

opportunity of hearing to the Petitioner and

pass such orders as contemplated under law.

     iv)    No order as to costs.




                                         sd/-
                                        JUDGE


nd