Judgment 1. Petitioner is a limited company incorporated under the Companies Act, 1956 having its registered office at Indore in the State of Madhya Pradesh. The company was incorporated on 17-4-1986. The respondents had invited tender for arranging the rate contract of the Dextrose fluid of various types by Tender Notice No. 09/2001-2002 which was to be opened on 16-7-2001. The petitioner submitted the tender on 12-7-2001 along with tender form and earnest money of Rs. 2,000/- by way of Demand Draft No. 483383, dated 10-7-2001. After opening of tender, the respondents had announced the rates in the presence of tenderer. The petitioner participated in the tender along with three other Firms. The details of the rates announced by the respondents is as under :- 2. The petitioner-Firm was directed to appear before the High Powered Purchase Committee on 13-8-2001 at 11.00 a.m. The petitioner-Firm attended the meeting through its representatives, namely, Mr. S. J.S. Sodhi and Mr. G. S. Akaal. At the negotiations, the petitioners revised the rates to Rs. 11.25 per bottle of 500 ml. However, while confirming the offer by letter dated 9-8-2001 (Annexure P-6), the petitioner stated as under :- Venus Remedies, Panchkula Albert David Ltd., Delhi Ives Drugs, Indore Inj. Dextrose 5% 13.10 13.52 14.30 Inj. Normal Saline 13.10 13.52 14.30 Dextrose Saline Injection 13.10 13.52 14.30 Inj. Ringer Electate 13.10 13.52 14.30 Type of bottle Glass Glass Glass F.O.R. Dest. Dest. Dest Sales Tax Inclusive Inclusive Inclusive ?We are pleased to reduce our price further for the supply of I. V. Fluid against above Tender. Sr. No. Description of Stores Packing Unit Per case Rate per Unit inclusive of 4% CST against ?D? Form 01. Inj. Dextrose 5% I.P. 500 ml (Glass Bottle) 15 11.25 + 0.75 02. Inj. Normal Saline (0.9% Sodium Chloride) 500 ml (Glass Bottle) 15 11.25 + 0.75 03. Dextrose Saline Inj. Inj. I.P. (5% Dext. in 0.9% Sod. Chl.) 500 ml (Glass Bottle) 15 11.25 + 0.75 04. Inj. Ringer Lectate I.P. 500 ml (Glass Bottle) 15 11.25 + 0.75 (attested) Note : 0.75 as FREIGHT PER BOTTLE The price quoted above are inclusive of 4% CST against D Form and all other terms and conditions will be as per quotation No. IVES/RV :SC/01/1039, dt. 12-7-2001. We trust you will find out offer most competitive and we are now looking forward to receive your valuable orders. 12-7-2001. We trust you will find out offer most competitive and we are now looking forward to receive your valuable orders. Yours faithfully, for IVES Drugs (India) Pvt. Ltd." 3 It is pleaded case of the petitioner that the respondents were not happy with the price stated in the letter Annexure P-6. They wanted the petitioner to stick to the original price quoted verbally by the representatives of the petitioner. It is accepted by the petitioner that its representatives had forgotten at the time of negotiations to mention .75 paise as freight charges. Due to variations in the rate quoted verbally and rate quoted in writing, respondents have issued show-cause notice on 25-6-2002, Annexure P-7. The operative part of the show cause notice is as under :- "(iii) That your Firm was called before the High Powered Purchase Committee on 13-8-2001 and Sh. G. S. Akal and Sh. J. S. Sodhi appeared before High Powered Purchase Committee from your Firm and they offered the rates @ Rs. 11.25 before High Powered Purchase Committee but added 0.75 per bottle as freight charges. The representatives of the firm were again called by the Committee and were asked to stick to the rates earlier agreed to by them. It was told to them that if they tried to back out then their Firm will be debarred from doing business with Haryana Govt. They did not agree to it and apologise that their rates should be read as Rs. 11.25 + 0.75 as freight Rs. 12/- per bottle. (iv) That by doing so, your performance has remained unsatisfactory in this case. You are hereby served with this Show Cause Notice to explain your position within 15 days from the date of issue as to why you may not be debarred for a period of three years from doing further business with Govt. of Haryana." 4 The petitioner submitted the reply to the aforesaid show cause notice and stated that the price quoted in the letter, Annexure P-6 is the correct price, it would not be feasible to offer the price of Rs. 11.25/-. It was also pointed out that no contract was ever awarded to the petitioner, and therefore, there was no breach of contract. The respondents have passed the order on 1-9-2003 debarring the petitioner from doing business with the Haryana Government for a period of three years. 11.25/-. It was also pointed out that no contract was ever awarded to the petitioner, and therefore, there was no breach of contract. The respondents have passed the order on 1-9-2003 debarring the petitioner from doing business with the Haryana Government for a period of three years. Order has been circulated to all the Heads of Departments in Haryana as well as the Registrar of this Court. The communication states as under:- "Sub :Debarring of M/s. Ives Drugs (India) Pvt. Ltd., Indore. Sir, I am directed to invite reference to the subject noted above and we say that Haryana Govt. have decided to debar M/s. Ives Drugs (India) Pvt. Ltd., 504, Chetak Centre, 12/2, R.N.T. Marg, Indore-I for doing business with Haryana Govt. for a period of 3 years with effect from the date of issue of this letter. Please ensure that no business dealing with the aforesaid supplier is carried out during the above-mentioned period. Yours faithfully, Sd/- Superintendent Industries-II, for Commissioner and Secretary to Govt. of Haryana, Industries Department. Endst No. 5/1/2002-5IB-II Dated 1-9-2003." 5 Respondents have also pleaded that writ petition is not maintainable as Sec. 18 of Schedule-B provides that any dispute between the parties shall be settled by way of arbitration. 6. We have heard the learned counsel for the parties at length. 7. It has been submitted by counsel for the petitioner that the order Annexure P-10 is without jurisdiction as there has been no breach of contract. It is further submitted that the impugned order is violative of Article 19(1)(g) of the Constitution of India. 8. Ms. Monga, on the other hand, submitted that as soon as the tender was accepted by the respondents, a valid contract came into being between the parties. The respondents have admitted that they had offered a lower rate of Rs. 11.25/- during the negotiations. This decision has been unilaterally changed by the respondents in the written communication dated 9-8-2001. She submits that the impugned order, Annexure P-10 was the only order which could have been passed to prevent any further lapses. Learned counsel further submitted that in any event the writ petition is not maintainable as the petitioner is entitled to take recourse to arbitration proceedings. 9. We have considered the submissions made by the learned counsel for the parties. Learned counsel further submitted that in any event the writ petition is not maintainable as the petitioner is entitled to take recourse to arbitration proceedings. 9. We have considered the submissions made by the learned counsel for the parties. A perusal of Order, Annexure F-10 clearly shows that it does not assign any reason as to why the petitioner has been debarred. The aforesaid order cannot be said to be a speaking order. Undoubtedly, the aforesaid order would seriously prejudice the business prospects of the petitioner. The order clearly causes civil consequences. In such circumstances, it would incumbent upon the respondents to pass a speaking order as the same should be subject to judicial scrutiny. The impugned order is liable to be quashed on this short ground. This apart it is to be seen that the petitioner has clearly admitted that its representatives have made a mistake in communicating the minimum price to the respondents at the time of oral negotiations. The mistake was corrected at the first opportunity when the petitioner confirmed the price on 9-8-2001. After receiving the confirmation from the petitioner, the contract was not awarded to them. Ms. Monga has stated that subsequently the contract was awarded by the respondents to some other party by entering into negotiations with them. Therefore, it is obvious that the respondents have not suffered in any manner whatsoever. 10. In view of the above, we are of the considered opinion that decision taken by the respondents is wholly arbitrary and violative of Article 14 of the Constitution of India. Furthermore, a perusal of clause 14 would show that the respondents would be entitled to take action to debar the Firm for unbusiness like dealing. This clause would become operative after the contract has been executed between the parties. In fact such a provision is made in clause 17(ii) of the Schedule-B. The aforesaid clause clearly talks of breach of contract. It also provides that in case of breach of contract, Government shall be entitled to terminate the contract forthwith and to blacklist the Contractor and to purchase the stocks from any other Firm. We are of the considered opinion that the matter was still at negotiation stage, therefore, the aforesaid clause would not have been applicable in the facts and circumstances of the present case. We are of the considered opinion that the matter was still at negotiation stage, therefore, the aforesaid clause would not have been applicable in the facts and circumstances of the present case. Blacklisting or debarring a viable commercial Firm has serious repercussions on the reputation of the Firm. The respondent-State is expected to proceed with responsibility against any such Firm before such drastic action is taken. In our opinion, the respondents have treated the petitioner unjustly. 11. In view of the above, the petition is allowed. Order, Annexure P-10 is quashed. In the facts and circumstances of this case, there will be no costs. Petition allowed