Kerala High Court
C.K.Jacob vs State Of Kerala on 26 August, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE T.R.RAVI
THURSDAY, THE 26TH DAY OF AUGUST 2021 / 4TH BHADRA, 1943
WP(C) NO. 11503 OF 2020
PETITIONER:
C.K.JACOB
CHOWALLUR HOUSE, THAIKKAD P.O,
GURUVAYUR, THRISSUR DISTRICT.
BY ADVS.
DR.K.P.SATHEESAN (SR.)
SRI.P.MOHANDAS (ERNAKULAM)
SRI.K.SUDHINKUMAR
SRI.S.K.ADHITHYAN
SRI.SABU PULLAN
SRI.GOKUL D. SUDHAKARAN
RESPONDENTS:
1 STATE OF KERALA
REPRESENTED BY THE PRINCIPAL SECRETARY,
PUBLIC WORKS DEPARTMENT, GOVERNMENT SECRETARIAT,
THIRUVANANTHAPURAM 695 001
2 THE SUPERINTENDING ENGINEER,
OFFICE OF THE SUPEREINTENDING ENGINEER,
P.W.D (BUILDINGS), CENTRAL CIRCLE,
THRISSUR 680 001
3 THE EXECUTIVE ENGINEER,
OFFICE OF THE EXECUTIVE ENGINEER, PWD ROADS
DIVISION, THRISSUR 680 020
BY ADV RASHMI K.M. GOVERNMENT PLEADER
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION
ON 9.08.2021, THE COURT ON 26.08.2021 DELIVERED THE
FOLLOWING:
W.P.(C)No.11503 of 2020
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Dated this the 26th day of August, 2021
JUDGMENT
The petitioner, an "A" class contractor, who has been
undertaking works under the Public Works Department of the 1 st
respondent since the year 2003, has filed this Writ petition challenging
Exhibit P4 order dated 12.2.2020, whereby he has been blacklisted
and his license has been cancelled.
2. Heard Sri K.Sudhinkumar, Counsel for the petitioner and
Smt.K.M.Rashmi, Government Pleader, on behalf of the respondents.
3. The petitioner undertook the restoration work of
Chavakkad bypass road as per agreement dated 19.4.2018.
According to the petitioner, though the work was satisfactorily
completed on 13.3.2019, during the 2019 monsoon, certain potholes
had developed on the road and since the damage was during the
defect liability period, he was responsible to repair the road at his
expense. According to the petitioner, since the Honourable Chief
Minister had planned to visit Guruvayur on 23.9.2019, the officers of
the 1st respondent had directed him to carry out the repairs on
W.P.(C)No.11503 of 2020
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21.9.2019. The petitioner submits that the works were carried out as
directed and that since the day was a holiday, none of the officers
were available to oversee the work. By Exhibit P2 order dated
24.9.2019, the 3rd Respondent issued orders forfeiting the security
deposit of Rs.87,400/- as penalty. Soon thereafter, the petitioner was
issued with a notice directing him to show cause. By letter dated
30.10.2019, the petitioner was asked to be personally present on
7.11.2019 for a hearing on cancellation of his "A" Class Contractor
licence. It appears that the petitioner had contacted the office of the
respondents on 6.11.2019 and he was informed that the hearing will
be on 12.11.2019. The petitioner submits that on 12.11.2019 he had
submitted Exhibit P3 letter narrating the above said incidents and
requesting for time to submit reply, and that soon thereafter Exhibit P4
order was issued blacklisting him and cancelling his license. He has
stated in Ext.P3 letter that he is not in a position to submit his written
explanation since he has not been given a copy of the letter dated
28.9.2019 from the 2nd respondent, the contents of which he will have
to answer. The petitioner relies on Exhibit P5 judgment of this Court,
W.P.(C)No.11503 of 2020
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wherein this Court has found that poor workmanship is not a ground
stipulated in clause 1916 of the PWD Manual for blacklisting a
contractor. This Court had observed that it is high time to include such
a ground also in the PWD Manual. On the question of cancellation of
license, this Court in Ext.P5 judgment held that, since cancellation is
an extreme step, the Respondents can suspend the license for a
period and take a decision on the issue after hearing the aggrieved
party. The counsel for the petitioner submitted that the copy of the
letter dated 28.9.2019 of the 2nd respondent has not been issued to
him till date and hence there has been no effective hearing of the
petitioner prior to issuance of Exhibit P4.
4. The Government Pleader submitted that after Ext.P5
judgment, poor workmanship has also been included as a new ground
for blacklisting a contractor as per Government order dated 23.6.2020.
Apart from that, the Government Pleader points out that poor
workmanship can be a ground for removing a contractor from the
approved list, going by paragraph 1915 of the PWD Manual. It is
hence submitted that Exhibit P4 cannot be found fault with. Reference
W.P.(C)No.11503 of 2020
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is made to the counter affidavit filed by the 3 rd Respondent to submit
that, the petitioner had no authority to do any work on the road after
the defect liability period was over. It is stated that in the case on
hand, the defect liability period was over on 13.9.2019 and the
petitioner had in the absence of the officials and without permission of
the department officials, filled the potholes using waste bituminous
materials and cut earth, without following any specification in the PWD
Manual. It is further stated that a video showing the above repair work
carried out by the contractor was published through the social media,
thereby leaving a scar in the image of the PWD Department and its
officers.
5. Pending the Writ petition, the 2 nd respondent has issued
Ext.P6 order dated 28.4.2021, whereby the request made by the
petitioner to renew his "A" Class Contractor licence was rejected on
the ground that Exhibit P4 order has only been stayed by this Court
and has not been set aside. The petitioner contended that the non-
renewal of the license cannot be based on an order which is stayed by
this Court and it is contended that the petitioner is entitled to have his
W.P.(C)No.11503 of 2020
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application for renewal of license reconsidered. This Court had during
the hearing of the case directed the Government Pleader to place on
record any notice that was issued to the petitioner regarding the
proposal to blacklist him. The Government Pleader has filed a memo
on 27.7.2021, producing along with the letters dated 31.10.2019 and
11.12.2019 issued by the 2nd respondent to the petitioner and the
letter dated 15.1.2020 from the petitioner to the 2 nd respondent to
show that the petitioner had notice regarding proposal to blacklist. In
the letter dated 31.10.2019 referred to above, the 2 nd respondent has
directed the petitioner to appear on 7.11.2019, for a hearing regarding
cancellation of licence. The letter does not refer to the proposal for
blacklisting. In the letter dated 11.12.2019, the 2nd respondent has
informed the petitioner that the time for submission of his reply has
been extended by one month. The above letter also does not refer to
the proposal to blacklist the petitioner. The letter dated 15.1.2020 is a
reply submitted by the petitioner pursuant to the letters dated
31.10.2019 and 11.12.2019. This letter is referred to as Reference
No.4 in Ext.P4 order. It is stated in the letter that on 20.9.2019, the
W.P.(C)No.11503 of 2020
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Assistant Engineer, PWD Roads Section, Chavakkad, had called the
petitioner's son, from her mobile phone and directed him to fill up the
potholes formed in front of the Chavakkad Bus Stop on the very next
day, since the Chief Minister was visiting Guruvayur on 23.9.2019. On
the basis of the directions of the Assistant Engineer and considering
the urgency for carrying out the work, the petitioner states that he had
gone over to the spot on 21.9.2019 afternoon with his workers and
with the necessary materials and equipments and filled the potholes
which had been formed by the heavy rains which occurred during the
month of August, 2019. Since 21.9.2019 was holiday to the
government offices, it is stated that the officers were not present while
the work was being carried out. It was further stated that since the
Assistant Engineer had directed the petitioner to carry out the work on
the very next day, which happened to be a holiday, necessary steps
ought to have been taken to ensure that an official is present at the
time of carrying out the work. It is hence stated that the absence of the
PWD officials cannot be a reason to blame the petitioner. The
petitioner has also stated that in the letter dated 8.11.2019 sent by the
W.P.(C)No.11503 of 2020
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Executive Engineer, PWD, Roads and Bridges, it is admitted that the
petitioner had done the work on instructions over telephone given by
the Assistant Engineer. On the above reasons, the petitioner
requested the 2nd respondent to verify the files regarding the above
aspects before finalising on a decision against the petitioner. It is also
stated that going by the records of the PWD office, even the date of
completion cannot be clearly ascertained, which alone will be helpful
in finding out the actual defect liability period. Without ascertaining
when the defect liability period was over, it cannot be said for certain
that the work in question was done by the petitioner without any
authority; is the contention.
6. Blacklisting of a contractor is a punishment which has
serious civil consequences. It is well settled that such a blacklisting
should be done only after putting the affected person on notice and
after hearing him. In Erusian Equipment & Chemicals Ltd. v. State
of W.B. reported in (1975) 1 SCC 70, the Apex Court held that the
blacklisting order involves civil consequences and casts a slur and
that it creates a barrier between the persons blacklisted and the
W.P.(C)No.11503 of 2020
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Government in the matter of transactions and that the 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. In
Patel Engg. Ltd. v. Union of India, reported in (2012) 11 SCC 257,
the Hon'ble Supreme Court held that though the State in exercise of
its executive power to carry on the trade or business, has the power to
blacklist a contractor, such action should be fair and rational and not
arbitrary. In UMC Technologies (P) Ltd. v. Food Corpn. of India
reported in (2021) 2 SCC 551, the Hon'ble Supreme Court held that
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. In the context of
blacklisting of a person or an entity by the State or a State
Corporation, the requirement of a valid, particularised and
W.P.(C)No.11503 of 2020
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unambiguous show-cause notice is particularly crucial due to the
severe consequences of blacklisting and the stigmatisation that
accrues to the person/entity being blacklisted. In the case on hand,
there is no notice issued to the petitioner specifically and
unambiguously informing him of the proposed action of blacklisting. In
the light of the legal principles stated above, Ext.P4 order proposing to
blacklist the petitioner is bad in law and is liable to be quashed. Apart
from the above, a reading of Ext.P4 would show that the period of
blacklisting is indefinite. The High Courts of Delhi, Allahabad, Madhya
Pradesh, Jharkhand and Patna have held that blacklisting for an
indefinite period is impermissible in law. I am also in total agreement
with the above said proposition.
7. On the question of cancellation of the petitioner's license,
this Court had stayed the operation of Exhibit P4 at the time of
admission of this Writ petition. Pending the Writ petition, the validity
period of the license expired and the petitioner had requested for
renewal of the same. It is seen from Exhibit P6 that the renewal was
refused on the ground that this Court had not set aside Exhibit P4
W.P.(C)No.11503 of 2020
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order. The reason stated in Exhibit P6 for refusing renewal of the
license cannot be sustained in law. Regarding the reasons stated in
Exhibit P4 for cancelling the license, a reading of Exhibit P4 would
show that the explanation submitted by the petitioner has not even
been looked into while issuing Exhibit P4. It is true that in Exhibit P4,
reference has been made to the reply submitted by the petitioner on
15.1.2020. However, apart from stating that the said letter does not
give a satisfactory explanation, there is absolutely no consideration of
the aspects that have been pointed out in the letter. It can be seen
from the letter dated 15.1.2020, which has been produced by the
Government Pleader along with a memo, that the petitioner
specifically stated that he has carried out the work on the basis of
telephonic instruction from the Assistant Engineer. It is also pointed
out that the fact that the petitioner was instructed by the Assistant
Engineer is borne out by the records kept by the PWD itself and that it
is admitted in a letter written by the Executive Engineer on the issue.
Yet another contention that is taken in the reply submitted by the
petitioner is that there is no clarity regarding the date on which the
W.P.(C)No.11503 of 2020
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defect liability period ended. The specific contention of the Department
is that the defect liability period ended on 13.9.2019, and the work in
question was carried out on 21.9.2019. In the letter dated 15.1.2020,
the petitioner has pointed out that the measurement book will show
that measurement was taken on 25.3.2019. It is also pointed out that
in the completion Certificate, both 31.1.2019 and 13.3.2019 are shown
as dates of completion. None of the above aspects have been even
considered while issuing Exhibit P4. What appears to have weighed
with the respondents is the fact that a video recording of the petitioner
carrying out work on a holiday appeared in the social media. The
order Ext.P4 hence suffers from non-consideration of relevant
aspects.
In the above circumstances, Exhibit P4 order is quashed. The
Respondents were directed to reconsider the question whether the
license issued to the petitioner as "A" class contractor should be
cancelled, with particular reference to the contentions as noted above,
which are already contained in the objection submitted by the
petitioner on 15.1.2020, and with reference to the files which have
W.P.(C)No.11503 of 2020
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been referred to in the letter dated 15.1.2020. The Respondents shall
also consider the question of renewal of the license of the petitioner in
accordance with law, without being prejudiced in any way by the
contents of Ext.P4 order which is quashed by this judgment, since the
period of the license is already over. The quashing of the decision to
blacklist the petitioner is without prejudice to the Respondents' right to
initiate fresh proceedings for the same, if so advised. The writ petition
is allowed as above. The parties shall bear their respective costs.
All pending interlocutory applications are closed.
Sd/-
T.R.RAVI,
JUDGE
ami/
W.P.(C)No.11503 of 2020
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APPENDIX OF WP(C) 11503/2020
PETITIONER EXHIBITS
EXHIBIT P1 TRUE COPY OF THE CONTRACTOR'S
REGISTRATION CARD HAVING REG.NO.
14A/2003-04/SE/B & LW CC THSR ISSUED BY
THE 2ND RESPONDENT
EXHIBIT P2 TRUE COPY OF THE ORDER NO. A8-2018/107
DATED 24-09-2019 ISSUED BY THE 3RD
RESPONDENT
EXHIBIT P3 TRUE COPY OF THE REPLY GIVEN BY THE
PETITIONER TO THE 2ND RESPONDENT DATED
12-11-2019
EXHIBIT P4 TRUE COPY OF THE ORDER NO. F2-1887/2019
DATED 12-02-2020 ISSUED BY THE 2ND
RESPONDENT
EXHIBIT P5 TRUE COPY OF THE JUDGMENT DATED 19-02-
2019 IN W.P(C) NO. 21597/2017
EXHIBIT P6 TRUE COPY OF THE ORDER NO.F2-946/2020
DATED 28.4.2021 ISSUED BY THE 2ND
RESPONDENT
RESPONDENT'S EXHIBITS
EXHIBIT R3(a) TRUE COPY OF THE G.O.(Rt)NO.552/2020/PWD
DATED 23.6.2020
