JUDGMENT - S.K. DESAI, J.:---In this petition the petitioners, who inter alia, are Railway contractors have impugned the order of circular letter of the Chief Engineer, Central Railway (Exhibit C-1 to the petition), by which the petitioners were removed from the approved list of Railway contractors. The said order, after indicating that a decision had been taken to remove the petitioners firm, purports to give reasons for the action but indicates clear that these reasons and even the facts for the order for removal are not to be communicated to the party. Paragraphs 2 and 4 of this order are material and may be set out : "2. The above decision has been taken as this firm has failed to execution certain contracts satisfactorily. * * * * * * 4. The facts and reasons for removal of the name from the approved list of contractors should not be communicated to the contractor or any other person. But if for any administrative reasons it is considered essential to make such a communication, it must be only a bare intimation of the removal from the approved list of contractors and if representatives are received, care must be taken not to assign any reasons for the action either orally or in writing". The petitioners have contended that the reasons given are erroneous and that the petitioners had never defaulted in carrying out any contracts. According to them, it was not true that they had failed to execute certain contracts satisfactorily. On the other hand, according to the petitioners, they had made genuine claims in respect of several contracts which were wrongly denied by or on behalf of the Railway administration, as a result of which the petitioners were compelled to seek reference to arbitrations. It was contended that in such arbitrations ultimately awards were made in favour of the petitioners. This has not been accepted on behalf of the respondents and attempts have been made on affidavit to indicate the various aspects of the unsatisfactory execution of contracts by the petitioners. In the view that I have taken, which will be shortly indicated, it is unnecessary to go into this aspect of the matter. Prima facie, however, I think the decision is that of the Railway administration. In the view that I have taken, which will be shortly indicated, it is unnecessary to go into this aspect of the matter. Prima facie, however, I think the decision is that of the Railway administration. If on certain facts two views are possible and the Railway administration takes the view against the petitioners, then, if it is a possible view, the Court may be able to say that it is not the view that the Court would have taken. In other words, the Court will not substitute its judgment for that of the Railway administration. Mr. Dhanuka, however, has impugned the order on the other grounds. In the first place, it has been submitted that the order of removal brings in its wake certain consequences which affect the petitioners right to carry on business and that in view of these consequences it was incumbent on the Railway Authorities to have passed the order after giving to the petitioners an opportunity to show cause against such proposed order. In other words, it has been contended that principles of natural justice have been violated and the right of the petitioners prejudiced by the order without giving them an opportunity to show cause. Alternatively it can be contended that the order is in violation of the requirements imposed by the Standardised Code which came into effect from after 1967. I propose to deal with the second point first. The Standardised Code of 1967 came in substitution of the earlier Code of December, 1958 and it appears to me that the order of removal of the petitioners (prima facie in conformity with the Standardised Code 1958) is in conflict with the requirement of the Code of 1967. Para 2 of the Code provides for removal from the list of approved firms, it reads as under : "2. Removal : Removal from the list of approved firms implies that an account of its performance or other disabilities, the firm concerned is no longer considered fit to remain on the approved list. Para 2 of the Code provides for removal from the list of approved firms, it reads as under : "2. Removal : Removal from the list of approved firms implies that an account of its performance or other disabilities, the firm concerned is no longer considered fit to remain on the approved list. Removal from the list of approved suppliers may at the discretion of competent authority be ordered if a firm :--- (a) fails or neglects to quote in response to 4 consecutive invitations to Tenders; (b) fails to secure contracts after twelve successive tenders or during a period of three years whichever is less; (c) fails to execute a contract or fails to execute it satisfactorily; (d) no longer has the technical staff of equipment considered necessary; (e) fails to furnish Income-tax Clearance Certificate as required under the rules, and, (f) is declared bankrupt or insolvent, During the period his name has been removed from the list, the supplier will be treated as an unregistered supplier. Orders removing a firm from the list of approved suppliers should be communicated to it, together with the reasons therefore. It shall not, however, be necessary to give the firm an opportunity of showing cause against the proposed action. Orders regarding removal or a firm from the list of approved suppliers may be passed by the Head of the office with which it is registered or such authority as may have been nominated for this purpose. Such orders will normally not be endorsed to other Government Departments which will in any case be at liberty to decide whether to pass similar orders or not. In respect of a firm which is registered for more than one item, orders regarding removal may apply to one item and not to others. Once removed the name of a firm may not be restored on the approved list unless it satisfied the normal registration requirements and the Head of the Department or such authority as may have been empowered to register the firms has satisfied himself that the firm should be registered. Tenders received from a firm whose name has been removed from the list of approved suppliers may be given the same consideration as is given to tenders from unregistered parties". It is clearly provided that "orders removing a firm from the list of approved suppliers should be communicated to it, together with reasons therefore". Tenders received from a firm whose name has been removed from the list of approved suppliers may be given the same consideration as is given to tenders from unregistered parties". It is clearly provided that "orders removing a firm from the list of approved suppliers should be communicated to it, together with reasons therefore". It is further provided, however, that no opportunity of showing cause against the proposed action should be given. It is clear, therefore, that what has been provided for in the impugned order viz. that the facts and reasons are not to be communicated to the contractor or any other person, clearly offends against the specific provision of the Standardised Code. It is however further contended that the provisions in the Standardised Code viz., that an opportunity of showing cause need not be given is also contrary to decide case law, and it is now necessary to consider such contention. For the purpose of this argument reliance has been placed on certain instructions given by the Railway Board to the General Managers of all Indian Railways in 1966, whereunder it is the agreed position that in case of works costing upto rupees five lakhs only tenders submitted by contractors on the approved list are to be entertained. In December 1966 this was adopted as an experimental measure, but I am told that it has been retained and was in force at the time when the order, Exhibit C-1, was made. Thus the consequences of the removal of the petitioners from the approved list of contractors by the impugned order would be that they would not be qualified to submit tenders in case of works costing upto rupees five lakhs. I may add here that as far as works of other types are concerned, i.e. for works costing rupees five lakhs and more it is made clear by the instructions that for such works open tenders are to be invited, so that the only difficulty of the non-approved contractors would be that there would be no standing earnest money but that they would be required to give earnest money to get with every submission of tender. However, the disability of non-approved contractors for works upto rupees five lakhs is a substantial disability and cannot be considered to be a minor impediment which I would characterise the requirement of submitting earnest money or every occasion of making a tender. However, the disability of non-approved contractors for works upto rupees five lakhs is a substantial disability and cannot be considered to be a minor impediment which I would characterise the requirement of submitting earnest money or every occasion of making a tender. In (Union of India v. Mithiberwala)1, 76 Bom.L.R. 659, a Division Bench of this High Court, to which I was a party, considered a black listing order, the effect thereof, and held that when such an order was passed without giving an opportunity to the party to be heard the procedure was violative of the principles of natural justice and was null and void. It appears that the effect of black listing is indeed much more serious that the effect of being removed from the list of approved contractors. However, as far as works upto rupees give lakhs are concerned, the effect of the order such as was passed against the petitioners would also mean that they became ineligible to complete in of such works. In my opinion an order having such a consequence would require principles of natural justice and fairpla to be observed. Particularly inasmuch as the order is now under the new Code required to be communicated to the party with reasons therefore. It would be more appropriate, that before such an order is made finally the proposed order together with the basis thereof is indicated to the party and its comments and answers invited, after which a proper and reasoned decision can be taken. This will not cost any real difficulty on the part of the Railway administration apart from proceeding properly and in a considered manner. In any case the order Exhibit C-1, cannot be sustained since it is patently in violation of the requirements of the Code which governs the Railway administration. The other aspects was required to be considered and my views on it have been briefly indicated inasmuch as even if this order is quashed, it would be open to the Railway administration to reconsider the matter and pass another order after complying with the requirements of the Code and requirements as to natural justice as indicated in this judgments. It becomes unnecessary to consider the challenges to the Code and other contentions of the parties in the view that I have taken that the order is required to be quashed. It becomes unnecessary to consider the challenges to the Code and other contentions of the parties in the view that I have taken that the order is required to be quashed. In the result, there will be an appropriate writ, direction or order quashing the said impugned circular letter, Exhibit C-1 to the petition, removing the petitioners from the list of approved contractors, and the respondents are directed to circulate the decision of this Court quashing the said order in the same manner and to the same authorities to whom the impugned order was circulated, as expeditiously as possible and in any case on or before 31st August, 1977. It is made clear that this order quashing the impugned order will be without prejudice to the right of the Railway administration to proceed again against the petitioners, if so advised, for the purpose or removing their name from the list of approved contractors in the manner as is consistent with the later Code and the principles of natural justice briefly indicated earlier and set out in detail in Mithiberwalas case. In the circumstances, the parties will bear their own costs of the petition. -------