M. K. SHARMA ( 1 ) THE petitioners in this writ petition under Article 226 of the Constitution of India have challenged the legality and validity of the order of the respondent; blacklisting/ banning the petitioners from having any business dealings with the respondents. ( 2 ) THE petitioner No. 1 is a registered partnership firm of which petitioner No. ;2 is a partner. The petitioner No. 1 was awarded a contract by the respondents for the work styled as "earth Work in embankment and cutting in zone No. XX between Tughlakabad and Ghaziabad from 3000 to 6850 in connection with Goods avoiding lines," within the operational jurisdiction of the Executive Engineer (Const.), Northern Railway. In pursuance of the aforesaid contract awarded in favour of the petitioner No. 1 an agreement was also executed in between the petitioners and the Chief Engineer (Construction), Northern Railway on behalf of the President of India. During the continuation of the execution of the work some disputes appeared to have arisen in between the parties to the contract and some correspondence in that respect appear to have been exchanged between the parties. Subsequently, the petitioners were directed to stop the execution of the work between chainages 3300 to 4400. The respondents decided to re-check the initial levels of the original ground between chainages 3300 to 4400 whereas the stand of the petitioners was that as more than 15% of the earthwork had already been executed by them such a re- checking would serve no useful purpose. It is alleged in the writ petition that the respondents ultimately agreed to the stand taken by the petitioners and the respondents vide their letter dated 11/ 12. 11. 65 again requested the petitioners to execute the balance work at new rates, in pursuance of which the work was again started on 25. 11. 1965 and completed on 21. 3. 1966. it is alleged by the petitioners in the writ petition that they were not being awarded any further contracts by the respondents nor any reason for the same was intimated to the petitioners. Accordingly, enquiries were made by the petitioners on the basis of which it came to their knowledge that the Railway Board had issued a circular on or about 11. 3.
Accordingly, enquiries were made by the petitioners on the basis of which it came to their knowledge that the Railway Board had issued a circular on or about 11. 3. 1968 to all the General Managers, Divisional Superintendents, various offices and Divisions of the Indian Railways and its projects blacklisting the petitioners for an indefinite period and the business dealings of the petitioners had been banned on all Indian Railways, Central Public Works Departments and the State Public Works Departments. ( 3 ) THE respondents in their counter affidavit admitted that the Railway Board had issued certain secret information relating to the petitioners to the respondents and that the contents of the said letters were secret and were not required to be disclosed to the petitioners. It is further stated in the counter affidavit that issue of such circular/instructions from the Railway Board to the Zonal Railways about dealing with contractors is not uncommon and a number of secret letters are being issued off and on. The aforesaid secret instructions issued by the respondents had neither been annexed along with the counter affidavit nor was it placed before me by the respondents. ( 4 ) MR. D. K. Kapur, learned counsel appearing for the petitioners submitted before me that the aforesaid circular which is stated to be secret in nature and issued on or about 11. 3. 1968 is unconstitutional, illegal and arbitrary inasmuch as the same has been passed without affording any opportunity to the petitioners to show cause against the proposed action. It is further submitted that as a result of the aforesaid blacklisting/banning orders the petitioners are not being considered for awarding of any construction work by the respondents as also CPWD and State Public Works Department. ( 5 ) MR. Jagjit Singh. learned counsel appearing on behalf of the respondents vehemently submitted before me that subsequent to the issuance of the aforesaid secret instruction the petitioners had never tendered and as such the question of awarding any contract to them could not arise at all. He further submitted that the petitioners having failed to cite clearly any instance of such deprivation of any contract by the respondents, no relief could be granted to the petitioners.
He further submitted that the petitioners having failed to cite clearly any instance of such deprivation of any contract by the respondents, no relief could be granted to the petitioners. ( 6 ) FROM the statements made in the counter affidavit it is apparent that certain secret instructions were issued by the respondents to its various offices inasmuch as, inspite of specific allegation of the petitioners that the aforesaid instructions contained an order of the Railway Board blacklisting/banning the petitioners from having any business dealings with the respondents, no specific denial to the same has been made in the counter affidavit denying such statement and/or stating that no such order has been passed by the respondents. Asa matter of fact, in paragraph 13 of the counter affidavit the respondents have admitted that certain secret instructions to the respondents were issued. The respondents have placed nothing on record to show that the said secret instructions did not contain any order either blacklisting the petitioners or banning them from getting any work order from the respondents. In view of the absence of any pleadings to that effect denying issuance of such circular blacklisting the petitioner it is well established that in fact such instructions blacklisting/banning the petitioners from getting any work from the respondents was issued by the respondents. Issuance of the circular by the Railway Board banning all dealings with a contractor for an indefinite period would definitely entail civil consequences for it cast a slur or stigma on the petitioners and have serious consequence in business dealings of the petitioners. ( 7 ) IT is a well established law that no decision must be taken which will affect the right of any person and visit him with civil consequences, without first being informed of the case and giving him an opportunity of representing his case. In the case of C. B. Gautam Vs. Union of India and Others; reported in 1993 (1) SCC 78 it has been held by the Supreme Court that before an imputation can be made against the parties concerned they must be given an opportunity to show cause and that the observance of the principles of natural justice is the pragmatic requirement of fair play in action; In D. K. Yadav Vs.
J. M. A. Industries Ltd. ; 1993 (3)SCC 259 it has been held by the Supreme Court that the application of the principles of natural justice that no man should be condemned unheard intends to prevent the authority from acting arbitrarily affecting the rights of the concerned person and that no decision must be taken which will affect the right of any person without his/her first being informed of the case and giving him/her an opportunity of putting forward his/her case. It is authoritatively laid down in the said judgment that the order involving Civil consequences must be made after observing the principles of natural justice and even an administrative order which involves civil consequences must be made consistently with the Rules of Natural Justice. ( 8 ) IN the case of Joseph Villangandan Vs. Executive Engineer; AIR 1978 SC 930 . it has been held by the Supreme Court that an opportunity to represent his case is to be given to a contractor before he is put on the blacklist. To similar effect is the decision of the Supreme Court in the case of M/s. E. E. and C. Ltd. Vs. State of West Bengal; AIR 1975 SC 266 . ( 9 ) FROM the ratio of the aforesaid decisions it is apparent that by now it is a settled law that when a person is sought to be adversely affected by an order visiting civil consequences he must be informed of the proposed action and materials in support of it and given an opportunity to represent his case before such an action is taken, failing which the action would suffer from the vice of being an arbitrary action. ( 10 ) IN the case in hand admittedly no such opportunity was given to the petitioners before issuance of the aforesaid secret instruction blacklisting the petitioners and/or banning them from having any business dealings with the respondents. Even a copy of the said intimation was not sent to the petitioners. Accordingly, following the ratio of the aforesaid decisions of the Supreme Court I set aside the impugned action of the respondents issuing the secret instructions blacklisting the petitioners and/or banning the petitioners from any business dealings with the respondents being violative of the principles of natural justice.
Even a copy of the said intimation was not sent to the petitioners. Accordingly, following the ratio of the aforesaid decisions of the Supreme Court I set aside the impugned action of the respondents issuing the secret instructions blacklisting the petitioners and/or banning the petitioners from any business dealings with the respondents being violative of the principles of natural justice. ( 11 ) IN the result, the writ petition is allowed and I set aside and quash the secret instructions issued by the respondents blacklisting the petitioners and/or banning the petitioners from having any business dealings with the respondents. The petitioners shall also be entitled to costs of the proceedings, which I assess at Rs. 2,000. 00.