J. Shravan Kumar vs Telangana Social Welfare Residential ...
2024 Latest Caselaw 3730 Tel

Telangana High Court

J. Shravan Kumar vs Telangana Social Welfare Residential ... on 10 September, 2024

Author: Surepalli Nanda

Bench: Surepalli Nanda

         HON'BLE MRS JUSTICE SUREPALLI NANDA


            WRIT PETITION No.15820 of 2024

ORDER:

Heard Sri Rama Rao Kilaru, learned counsel

appearing on behalf of the petitioner, Sri S.Bhoopal

Reddy, learned Standing Counsel for TSWREIS,

appearing on behalf of respondent Nos.1 and 3 and the

learned Assistant Government Pleader for Revenue,

appearing on behalf of respondent No.2.

2. The petitioner approached the Court seeking

prayer as under:

"...to issue a writ order or direction especially one in the nature of Writ of Mandamus declaring that a) action of the 2nd Respondent in issuing proceedings Rc.No. RCO/YDD/225/2024, dated 10.05.2024 keeping the Petitioner in blacklist for catering services for a period of 05 years and forfeiting the EMD payable to the Petitioner is illegal and arbitrary and therefore, the said proceedings are liable to be set aside. b) further direct the 2nd Respondent to permit the Petitioner to participate in the Tender Notification issued in Rc.No. A1/DCO/Ydd-Bngr/2024-2025, dated 19.06.2024 for catering contract and pass such other order or orders as

this Hon'ble Court deems fit and proper in the interest of justice".

3. The case of the petitioner in brief is that, in pursuance

of Tender Notification issued vide Rc.No.A1/DCO/YDD-

BNGR/2023-24, dated 20.05.2023, the petitioner submitted

his tender and the said contract was awarded to him for the

supply of catering material to the two institutions viz.,

TSWRCOE (B) and TSWRS/JC/G/Valigonda @ Bibinagar for

the academic year, 2023-2024. While the petitioner contract

was in existence, the Principal of the College has issued a

memo dated 16.04.2024 to the petitioner stating that due to

the petitioner's un-cleanliness, the children was suffering with

ill health. Immediately, the petitioner submitted his

explanation to the said memo on 17.04.2024. While the

matter stood thus, the Additional Collector/Chairman, D.P.C.

Yadadri Bhonigir District issued proceedings Rc.No.RCO/

YDD/225/2024, dated 10.05.2024 cancelling the services of

the petitioner for the remaining period of the year 2023-24

with immediate effect and the EMD amount of the catering

contractor is forfeited and the petitioner's catering services

are blacklisted for five years. Aggrieved by the proceedings of

the respondent No.2 dated 10.05.2024, the present writ

petition is filed.

4. This Court vide its order dated 24.06.2024 in I.A.No.1

of 2024 in the present writ petition, passed interim orders in

favour of the petitioner observing as under:

"Heard Mr.K.Rama Rao, learned Counsel, appearing on behalf of the petitioner and learned Government Pleader for Revenue appearing on behalf of respondents.

             A       bare     perusal            of    the     impugned
     proceedings           vide       Rc.No.RCO/YDD/225/2024,
     dated       10.05.2024            of     the      2nd    respondent
     indicates        as    borne           on    record       that,    the

respondent No.2 had not issued any notice to the petitioner prior to passing of the impugned proceedings dated 10.05.2024.

Taking into consideration the fact as borne on record that the order impugned dated 10.05.2024 had been issued by 2nd respondent stating that catering services of the petitioner had been blacklisted for carrying out the said services for a period of five years and further the EMD, amount of the petitioner/contractor is forfeited with immediate effect, this Court opines that, order impugned dated 10.05.2024 issued by the 2nd respondent herein, is

one which no reasonable person could have passed without providing reasonable opportunity of personal hearing to the petitioner herein.

Few observations in the Judgments of the Apex Court with regard to "Blacklisting".

(i) The Apex Court in its Judgment reported in 1975 (1) SCC Page 75 in "Erusian Equipment and Chemicals Ltd. v. State of West Bengal", at paras 17 and 20 observed as under:

"17 ...The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with anyone but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person's character and personality. Blacklisting tarnishes one's reputation.

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."

(ii) The Apex Court in the Judgment reported in 1989 1 SCC Page 230 in "Raghunath Takur v. State of Bihar", at para 4, observed as under:

"4. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the

appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence 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. In that view of the matter, the last portion of the order insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the blacklist in respect of future contracts under the Collector is set aside. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for blacklisting the appellant if the Government is so entitled to do in accordance with law i.e. after giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefor. We, however, make it quite clear that we are not expressing any opinion on the correctness of otherwise of the allegations made against the appellant. The appeal is thus disposed of."

(iii) The Apex Court in the Judgment reported in (2014) 9 SCC Page 105 in "Gorkha

Security Services v. Government (NCT of Delhi) and others", at paras 16 and 34, observed 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."

34. For the aforesaid reasons, we are of the view that the impugned judgment of the High Court does not decide the issue in the correct perspective. The impugned Order dated 11.09.2013 passed by the respondents blacklisting the appellant without giving the appellant notice thereto, is contrary to the principles of natural justice as it was not specifically proposed and, therefore, there was no show-cause notice given to this effect before taking action of blacklisting against the appellant. We, therefore, set aside and quash the impugned action of blacklisting the appellant. The appeals are allowed to this extent. However, we make it clear that it would be open to the respondents to take any action in this behalf after complying with the necessary procedural formalities delineated above. No costs."

Taking into consideration the aforesaid facts and circumstances and the view and the observations of the Apex Court in the Judgments reported in (i) 1975 (1) SCC Page

75 in "Erusian Equipment and Chemicals Ltd v. State of West Bengal", (ii) 1989 1 SCC Page 230 in "Raghunath Takur v. State of Bihar", and (iii) (2014) 9 SCC Page 105 in "Gorkha Security Services v. Government (NCT of Delhi and others" (referred to and extracted above), pending further orders there shall be an interim direction as prayed for."

The said orders dated 24.06.2024, passed in

I.A.No.1 of 2024 in present W.P.No.15820 of 2024 are in

force as on date.

5. This Court opines that admittedly, as borne on record,

no opportunity of personal hearing had been given to the

petitioner prior to issuing the impugned proceedings dated

10.05.2024 by the 2nd respondent herein. This Court opines

that no person can be condemned unheard. In the present

case on the ground that the petitioner had not performed his

duties as catering tenderer, and on the ground that as per the

terms and conditions of the subject tender proceedings, the

petitioner committed certain lapses and in view of the said

lapses, the petitioner catering tender services had been

cancelled for the remaining period of 2023-24 with immediate

effect and EMD amount of the catering contractor had been

forfeited and the petitioner's catering services had been

blacklisted for five years.

6. The Apex Court in the judgment reported in

(2009) 12 SCC 40 in "UMA NATH PANDEY & OTEHRS v.

STATE OF UTTAR PRADESH & ANOTHER" at para Nos.

10 & 11 observed as under :

"Para 10: The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram parte rule. It says that no one should be condemned unheard.

Para 11 : "Principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice".

7. In "MANGILAL V. STATE OF M.P., reported in

(2004) 2 SCC page 447, a two-Judge Bench of Apex

Court held that the principles of natural justice need to

be observed even if the statute is silent in that regard.

In other words, a statutory silence should be taken to

imply the need to observe the principles of natural

justice where substantial rights of parties are affected:

(SCC pp.453-54, para 10) observed as under:

"10. Even if a statute is silent and there are no positive words in the Act or the Rules made thereunder there could be nothing wrong in spelling out the need to hear the parties whose rights and interest are likely to be affected, by the orders that may be passed, and making it a requirement to follow a fair procedure before taking a decision, unless the statute provides otherwise. The principles of natural justice must be read into unoccupied interstices of the statute, unless there is a clear mandate to the contrary. No form or procedure should ever be permitted to exclude the presentation of a litigant's defence or stand. Even in the absence of a provision in procedural laws, power inheres in every tribunal/court of a judicial or quasi- judicial character, to adopt modalities necessary to achieve requirements of natural justice and fair play to ensure better and proper discharge of their duties. Procedure is mainly grounded on the principles of natural justice irrespective of the extent of its application by express provision in that regard in a given situation. It has always been a cherished principle. Where the statute is silent about the observance of the principles of natural justice, such statutory silence is taken to imply compliance with the principles of natural justice where substantial rights of parties are considerably affected. The application of natural justice becomes presumptive, unless found excluded by express words of statute or necessary intendment. Its aim is to secure justice or to prevent miscarriage of justice. Principles of natural justice do not supplant the law, but supplement it. These rules operate only in areas

not covered by any law validly made. They are a means to an end and not an end in themselves."

8. Taking into consideration:

(a) The facts and circumstances of the case,

(b) The law laid down by the Hon'ble Apex Court in

the judgments referred to and extracted above,

(c) The interim orders dated 24.06.2024 passed in

I.A.No.1 of 2024 which are in force as on date in

present W.P.No.15820 of 2024,

the writ petition is allowed as prayed for.

However, there shall be no order as to costs.

Miscellaneous petitions, if any, pending shall stand

closed.

____________________________ MRS JUSTICE SUREPALLI NANDA

10.09.2024 LPD