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2002 DIGILAW 40 (JHR)

Ramesh Kumar v. State

2002-01-15

D.N.PRASAD, VINOD KUMAR GUPTA

body2002
ORDER 1. Heard the learned counsel for the parties. 2. Perused the order dated 6.10.1999 passed by learned Single Judge in CWJC No. 199 of 1999 (R) and also perused the earlier order passed by learned Single Judge on 21.7.1998 in CWJC No. 611 of 1998(R). 3. Pursuant to the direction issued in the order dated 21.7.1998, the impugned order was passed by the respondents and communicated to the writ petitioner-appellant vide letter No. 18 dated 15.1.1999. 4. The reason for black-listing the petitioner-appellant admittedly was the non supply of mollases and iodised salt which, according to the respondents, the petitioner was obliged to do pursuant to the supply order placed upon him. Even though the petitioner-appellant disputes the factum of his having received any supply order or the parties having entered into any such agreement, without going into that disputed question of fact, we find that the only ground upon which admittedly the appellant was black-listed by the respondents was his purported failure to supply the aforesaid commodities. No other act of omission or commission has been attributed to the appellant as a reason or ground for his being black-listed. 5. Admittedly, the appellant has already been penalised by the forfeiture of the security deposit. If, in a situation where a party to contract does not perform his part of the contract and there is a forfeiture clause and, as a penalty, the earnest money/ security deposit made by such a so-called defaulting party is forfeited, there may not thereafter exist any ground for black listing such a contracting party in the matter of participation in future contracts. Black listing is a very harsh and severe punishment of an extreme nature. By black listing, the contracting party is prevented from participation in all the contracts in future. Such an extreme penalty can be imposed only if a specified act of omission or commission relating to any contract is attributed to the contracting party. Mere failure to supply the commodities in normal circumstances should not be a ground for black listing the contracting party. Such an extreme penalty can be imposed only if a specified act of omission or commission relating to any contract is attributed to the contracting party. Mere failure to supply the commodities in normal circumstances should not be a ground for black listing the contracting party. This becomes all the more important when a condition in the contract that the contracting party would deposit the earnest money or make a security deposit is actually meant to cater to such a situation where the failure to conform to the conditions of contract may result in one of the contracting parties suffering loss and to compensate for such loss, the provision for forfeiture of the earnest money/security deposit is made. Admittedly, in the present case, the respondents had appropriated to themselves the security amount by forfeiting the security deposit of the appellant. 6. The respondents being the instrumentalities of the State were supposed to act objectively and fairly because that is the spirit behind Article 14. Article 14 strikes at arbitrariness. In black listing the appellant, the respondents appear not to have acted fairly and objectively because the penalty of black listing is something which was neither warranted nor called for and, in any event, the respondents having already forfeited the security deposit, black listing was not a punishment, which in the facts and circumstances, should have been awarded. 7. For the aforementioned reasons, therefore, the judgment of the learned Single Judge is set aside, the appeal is allowed. The order black listing the appellant is set aside with all the consequences. 8. No order as to costs. 9. Appeal allowed.