M/S. Anjana Sravani Enterprises vs The State Of Telangana
2023 Latest Caselaw 1122 Tel

      THE HON'BLE MRS JUSTICE SUREPALLI NANDA

                      W.P. No. 42999 of 2022


      Heard the Learned Counsel for the Petitioner and

the   learned      Government      Pleader    for    Medical   and

Health.


2. This Writ Petition is filed to issue a Writ of Mandamus

declaring the action of respondent No.3 in blacklisting and

suspending the services of the petitioner vide

MemoNo.1511/ESI/HL/SNR/S1/2022 dated 24.11.2022

without looking into the explanation submitted by the

petitioner as illegal, arbitrary and violative of principles of

natural justice.

3. The case of the petitioner, in brief, is as follows:

a) Petitioner is a diet contractor and had participated in

the e-Tender notice No.989/ESI/SNR/2022 dated 22.10.2022

for supply of Patient and Duty Doctors diet for the period from

16.04.2022 to 14.04.2023 and was declared as successful

bidder and after inquiry, the contract was awarded to the

petitioner for supply of diet as per the norms.

b) Petitioner received a memo from the office of the 3rd

respondent vide Memo No.1280/ESI/HL/SNR/Stores dated

22.09.2022 stating that the experience certificate which was

furnished by the petitioner during the e-tender was fake and

called for explanation of the petitioner, along with original

documents to be produced within 7 days. The petitioner

submitted an explanation dated 30.09.2022 denying all

allegations.

c) The 3rd respondent without considering the reply of the

petitioner, issued the impugned memo i.e., Memo

No.1511/ESI/HL/SNR/S1/2022 dated 24.11.2022 stating that

in compliance to the DIMS order, petitioner's name had been

blacklisted and also the Diet Supply Services are suspended

from 30.11.2022 and further directed to handover the

utensils and other kitchen related material to the Kitchen

Department. Hence, the Writ Petition.

4. The case of the respondents, in brief, is as follows:

a) The Director, IMS, Telangana had directed to terminate

the Diet Contractor on basis of fake experience certificate and

accordingly the Diet Service has been suspended.

b) The petitioner did not meet the mandatory 3 (Three)

years' experience criteria as stated in the e-Tender Diet

Contract Terms and Conditions and the experience certificate

submitted is also fake.

c) Only after the confirmation from MIMS, Vijayanagaram,

A.P., DIMS had directed the 2nd respondent to take immediate

action and also instructed to blacklist the agency through

their memo issued vide Memo No.10560/P1/2021 dated

11.11.2022 and as per rules Diet Supply Services were

suspended from 30.11.2022. Hence the Writ Petition are

devoid of merits and the interim orders passed by this court

in I.A. No. 1 of 2022 in W.P. No. 42999 of 2022 are to be

dismissed.

PERUSED THE RECORD :

5. The order impugned dt. 24.11.2022 vide Memo

No.1511/ESI/HL/SNR/S1/2022, of the 3rd Respondent

(relevant portion) reads as under :

"In compliance to the DIMS orders 3rd & 4th cited, Sri K.Srinivas Rao, Diet Contractor represents M/s Anjana Sravani Enterprises; Hyderabad is blacklisted for allegedly using fake experience documents in Diet supply e-tenders (M.I.M.S.,). Accordingly the Diet

supply services to this Hospital will be suspended from 30.11.2022.

Further, M/s Anjana Sravani Enterprises; Hyderabad is hereby instructed to handover the kitchen utensils, steel plates and other material related to the kitchen department through Dietician to K.R.Vijay Kumar, Diet Contractor who stood (L2) in the e-tenders for patient Diet i.e., after serving Dinner to the in-patient and Duty Doctors on 30.11.2022.

6. The contents of DIMS Memo No.10560/P1/2021,

dt. 11.11.2022, in particular, relevant portion reads as

under :

"With references to the above, in view of the report submitted by the Medical Superintendent, ESI Hospital Nacharam, It is directed to take immediate necessary action as per the letter Ref.No.MIMS/ESI/Enquiry/SNR/2022 dt:10.10.2022 from Maharajah's Institute of Medical Sciences, Vizianagaram, AP and blacklist the agency as per rules.

This has got approval of the DIMS (FAC)."

7. The contents of the DIMS Memo 10560/P1/2021,

dated 20.11.2022 issued by the o/o the Director of

Insurance, Medical Services, read as under:

With reference to the 9th cited and in continuation to this Office Instructions issued in reference 10th cited, the Medical Superintendent, ESI Hospital Nacharam is informed that producing false experience certificates shall come within the ambit of forgery.

Therefore, the Medical Superintendent, ESI Hospital Nacharam is instructed to Immediately issue termination Orders to M/s Anjana Sravani Enterprises, Hyderabad (2) and process fresh e-tender for diet at

ESI Hospital Nacharam, in mean time (L2) may be issued Orders for supply of diet at ESI Hospital Nacharam till finalisation of fresh e-tenders for the Welfare of ESI Beneficiaries.

Further, it is also instructed to intimate the fake experience certificate furnished fake by M/s. Anjana Sravani Enterprises to concerned police authorities for taking further necessary action.

This has got approval of the DIMS (FAC).

8. The contents of the Memo dated 22.09.2022,

issued by the office of Medical Superintendent, ESI

Hospital, Hyderabad, reads as under:

"Dr. Gundlapally Sreenu, Activist RTI 2005 complained that the experience certificate furnished by you was fake certificate of MIMS, Vijayanagaram. A.P. (Authorized email reply) at the time of e-tender floated for diet supply to this Hospital.

In view of the above reason, it is ascertained that the certificate furnished by you is fake. Hence why your Diet Contract for patient diet supply to this Hospital shall not be terminated and your explanation in this regard along with proof of Original Document should be produced within (07) days from the date of receipt of this Memo. Failing which it will be construed that the certificate furnished by you is fake and necessary action will be taken as per rules in force."

9. The order dated 29.11.2022 in WP

No.42999/2022 reads as under :

"Notice before admission.

Learned Government Pleader for Medical and Health takes notice on behalf of the respondents and seeks time to get Instructions in the matter. A perusal of the material on record shows that though a show-cause notice was issued to the petitioner and petitioner has already submitted its explanation to the said show-cause notice, the impugned Memo, dated 24.11.2022 is issued without even making a reference to the said show cause notice and the explanation submitted by the petitioner.

Prima facie, the impugned Memo was issued in violation of the principles of natural justice. In the circumstances, there shall be interim suspension, as prayed for.

Post on 27.12.2022."

10. The counter affidavit filed by Respondent No.2, in

particular, Paras 6, 7 & 8 read as under :

Para 6: In reply to para 7, it is to submit that after receipt of confirmation from the MIMS, Vijayanagaram Dist, A.P. that the experience certificate furnished during the e-tender process by M/s Anjanasravani Enterprises, Hyderabad proved as fake. Thereafter, the DIMS has directed this office to take immediate action as per the fake certificate and also instructed to blacklist the agency as per rules Hence, the Diet supply at ESI Hospital, Nachara suspended from 30.11.2022.

Para 7 : In reply to para 8, It is to true that the termination orders issued to the petitioner as per the directions the DIMS., on the basis of confirmation received from the MIMS., Vijayanagaram Dist., A.P. as fake.

Para 8 : In reply to para 9, it is submitted that As per the DI Hyderabad, Telangana directions vide DIMS Memo 10560/P1/2021. Dt:- 11.11.2022. the petitioner agency been blacklisted accordingly.

DISCUSSION & CONCLUSION :

11. The main grievance of the Petitioner is that in response

to the Memo dated 22.09.2022 vide

No.1280/ESI/HL/SNR/Stores /2022, the petitioner was called

upon to submit his explanation on the complaint that the

experience certificate furnished by the petitioner was fake

certificate of MIMS, Vizayanagaram, A.P. at the time of e-

tender floated for diet supply to the hospital and though the

Petitioner submitted detailed explanation dt. 30.09.2022 to

the 3rd Respondent herein which has even been acknowledged

by the office of the 3rd Respondent, yet the 3rd Respondent

referring to DIMS Memo No.10560/P1/2021, dated

11.11.2022 and DIMS Memo No.10560/P1/2021, dated

18.11.2022 blacklisted the Petitioner herein unilaterally on the

alleged ground of the Petitioner using fake experience

documents in Diet Supply e-Tenders (MIMS) and accordingly

suspended the Petitioner Diet Supply services to the hospital

from 30.11.2022.

12. A bare perusal of the Memo dt. 11.11.2022 vide

Memo No.10560/P1/2001, indicates that a decision to

backlist the petitioner's agency took place as per letter

reference No.MIMS/ESI/Enquiry/SNR/2022, dated

10.10.2022 from Maharajhs Institute of Medical

Sciences, Vizianagaram, A.P.

13. A bare perusal of the contents of Memo No.10560/P1/

2021, dt. 18.11.2022 clearly indicates the direction of the

Director, Insurance Medical Services, to the 3rd Respondent

herein to issue termination orders to the Petitioner herein and

process fresh e-tender for Diet at ESI Hospital, Nacharam.

14. A bare perusal of the order impugned Memo

No.1511/ESI/HL/SNR/SI/2022dated 24.11.2022, and

Memo dated 11.11.2022 and 18.11.2022 clearly

indicates that the Petitioner had been denied the right

of hearing, right of reasonable opportunity to put forth

petitioner's case against the proposed action of

blacklisting and further that the order impugned is at

the instance of the Director, Insurance Medical

Sciences, and further the order impugned dated

24.11.2022 clearly indicates that the 3rd Respondent

passed the impugned orders without even considering

the Petitioner's explanation dt. 30.09.2022 to the Memo

dated 22.09.2022 issued to the Petitioner since the

order impugned neither refers to the Memo dt.

22.09.2022 calling for Petitioner's explanation on the

subject issue nor even refers to the Petitioner's

explanation or reply dated 30.09.2022 furnished by the

Petitioner to the said Memo dated 22.09.2022 issued by

the 3rd Respondent nor there is any whisper about the

same in the order impugned nor any discussion in

relation to the explanation furnished by the Petitioner

on the subject issue and the same is in clear violation

of principles of natural justice.

15. This court opines that fundamentals of fair play

requires the person concerned should be given an

opportunity to represent his case before he is put on

the black list. In the present case admittedly as borne

on record the explanation/reply dt. 30.09.2022 to the

Office Memo dt. 22.09.2022 had not been looked into or

even considered at all and the same amounts to

denying reasonable opportunity to the petitioner to

putforth his case against the proposed black listing of

the Petitioner in clear violation of principles of natural

justice.

16. The Apex Court in its judgment (2020) 18 SCC 550

in Deffodills Pharmaceuticals Limited and Another vs.

State of Uttar Pradesh and Another in its head note

observed as under :

A. Government Contracts and Tenders Blacklisting - Effect of Hearing concerned person prior to blacklisting Essentially of Passing of adverse order based on assumption, that too without complying with principles of natural Justice-Impermissibility of

- Unilaterally passing adverse order against appellant for certain actions of its erstwhile Director who had left company long back-On facts held, order preventing procurement from appellant was of indefinite duration and disproportionate as it was passed on basis of assumption without hearing appellant - Considering long duration of operation of adverse order. Supreme Court itself decided matter without remanding matter to original authorities, and quashed the adverse order

- Held, blacklisting has the effect of preventing a person from privilege and advantage of entering into lawful relationship with 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 person concerned should be given an

opportunity to represent his case before he is put on the blacklist.

17. The Apex Court in the aforesaid Judgment, in particular, at Para 14 observed as under :

14. The decisions in Erusian Equipment & Chemicals Ltd. v. State of WB and Raghunath Thakur v. State of Bihar as well as later decisions have now clarified that before any executive decision-maker proposes a drastic adverse action, such as a debarring or blacklisting order, it is necessary that opportunity of hearing and representation against the proposed action is given to the party likely to be affected. This has been stated in unequivocal terms in Raghunath Thakur as follows: (Erusian Equipment & Chemicals case. SCC p. 75. para 20)

"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. The Apex Court in its judgment in Kulja Industries

Ltd., vs. BSNL reported in (2014) 14 SCC 731, very

clearly held that before proposing to pass a black listing

or debarring orders the parties had to be given hearing

followed by an appropriate reasoned order.

19. This Court opines that the order impugned as

borne on record clearly indicates the fact that the

Petitioner's explanation/reply dated 30.09.2022 had

not been considered at all by the 3rd Respondent nor

the Petitioner had been provided a reasonable

opportunity of hearing or putting forth Petitioner's case

prior to passing the impugned order.

20. Taking into consideration the interim order of this

Court dated 29.11.2022 passed in WP No.42999/2022

and also the above referred facts and circumstances

and the law laid down by the Apex Court in the

judgment reported in (2020) 18 SCC 550 - in Deffodills

Pharmaceuticals Limited and Another vs. State of Uttar

Pradesh and Another and also the law laid down by the

Apex Court in Kulja Industries Ltd., vs. BSNL reported

in (2014) 14 SCC 731 and the specific averments in

paras 6 to 8 of the counter affidavit filed by Respondent

No.2 which clearly indicates that the order impugned

has been passed upon the directions of the DIMS on the

basis of confirmation received from the MIMS,

Vijayanagaram District, A.P. as fake and the same

admittedly was on an enquiry behind the back of the

Petitioner, without giving notice to the Petitioner

without even looking into or considering the

petitioner's explanation dated 30.09.2022 to the Office

Memo dated 22.09.2022 and in clear violation of

principles of natural justice, this Court opines that the

Petitioner is entitled for the relief as prayed for in the

writ petition and accordingly the writ petition is

allowed setting aside the order impugned i.e., Memo

No.1511/ESI/HL/SNR/S1/2022, dated 24.11.2022.

However, there shall be no order as to costs.

Miscellaneous petitions, if any, pending shall stand

closed.

_____________________________ MRS JUSTICE SUREPALLI NANDA Dated: 10.03.2023 Note: L.R.Copy to be marked b/o kvrm