UDIPTA ENERGY & EQUIPMENT PVT. LTD v. UNION OF INDIA
2014-05-29
A.M.SAPRE, UJJAL BHUYAN
body2014
DigiLaw.ai
Judgment A.M. Sapre, J. This is an intra-court appeal filed by the writ petitioner of WP(C) No.4295/2013 under Rule 2(3) of Chapter V-A of the Gauhati High Court Rules against the order dated 19.12.2013 passed by the Single Judge in abovementioned writ petition. By impugned order, the learned Single judge dismissed the appellant’s writ petition and declined to grant any relief, which they had claimed in the writ petition. So the short question, which arises for consideration in this appeal, is whether learned single Judge was justified in dismissing appellant’s writ petition? At the outset, we may consider it apposite to mention that it may not be necessary to state the facts of the case in detail in view of the limited grievance now raised by the appellant in this appeal. Suffice it to say, the respondent (ONGC) – a Government of India Undertaking engaged in the business of exploration/manufacture and sale of oil/gas invited bid under tender notice no. R16DC12015 on 7.8.2012 for hiring of 16 numbers of Package Effluent Treatment Plant (PETP). The appellant was one of the tenderer whose tender was accepted and accordingly they were awarded contract by the respondent (ONGC) on 28.12.2012. It is this contract which was terminated by the respondent by letter dated 11.2.2013 which gave rise to filing of the writ petition out of which this appeal arises. In this writ petition, the challenge was to the termination of the contract on several grounds. The respondent opposed the writ petition and defended the impugned termination contending that it was done on valid grounds and hence it be upheld. The learned Single Judge by impugned order dismissed the appellant’s writ petition and upheld the impugned termination. This is what was held by the writ court in the concluding para. “In the impugned letter dated 11.2.2013 (Annexure-12) the ONGC has given two reasons for termination of contract and they are (i) the failure to mobilize and deploy the required manpower/equipment & to commence service within the period specified; (ii) Violation of Section 3 of the Integrity Pact. If we now apply the principle of Gordhandas Bhanji (supra) and Mohinder Singh Gill (supra) to test the legality of the impugned order, one finds that the reasons disclosed for the termination are germane and relevant and no supplementing by way of counter affidavit is being attempted by the ONGC in this case.
If we now apply the principle of Gordhandas Bhanji (supra) and Mohinder Singh Gill (supra) to test the legality of the impugned order, one finds that the reasons disclosed for the termination are germane and relevant and no supplementing by way of counter affidavit is being attempted by the ONGC in this case. Therefore since the impugned order discloses good and acceptable reasons, Court's interference is not found warranted on the ratio of the two case cited by the petitioner's lawyer.” It may be pertinent to mention that the appellant in this appeal has not challenged the impugned order including its reasoning, which resulted in dismissal of their writ petition, and upholding of the termination of contract. The challenge was confined only to one action of the respondent to the effect that appellant was prevented from submitting any fresh tender/bid in future by the respondent. In other words, the grievance of the appellant is that they were not being allowed to submit the tender/bid by the respondent thereby depriving them to participate in any tender/bid proceedings. This action of the respondent, according to the appellant, amounted to blacklisting them and it was bad because it was taken without affording to them any opportunity by the respondent. In support of this submission, reliance is placed on the well known decision of the Supreme Court reported in (1975) 1 SCC 70 M/s. Erusian Equipment & Chemicals Ltd. vs. State of West Bengal & Ano. The stand of the respondents on this submission is that the inquiry on the question as to whether the appellant should be blacklisted or not and if so, on what grounds/reasons is under way and likely to be over shortly at their end. In our opinion, the issue of blacklisting remains no more res integra and stands decided by the Supreme Court in a decision reported in (1975) 1 SCC 70 . It is in this decision, their Lordships held that a person cannot be blacklisted so as to deprive him to participate in the business activity with the State/and its authority unless he is given full opportunity and a right of hearing on the proposed grounds for his blacklisting. This is what was held by the Supreme Court: “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.
This is what was held by the Supreme Court: “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.” Applying the same principle to the facts of this case, we are of the considered view, that at this stage, since no order of black listing is passed against the appellant and the inquiry into such issue is pending with the respondent, the appellant cannot be deprived of doing business with the respondent during pendency of inquiry. In other words, the appellant can be blacklisted only after they are given opportunity of hearing by following principle of natural justice and so long as such order is not passed, they cannot be deprived of doing business with the respondent, notwithstanding termination of the contract in question. We therefore uphold the order impugned but direct the respondent to conclude the inquiry within 3 months strictly in accordance with law in relation to the issue of blacklisting of appellant and communicate its outcome to the appellant and depending upon the outcome of the inquiry to take appropriate action as may be permissible in law with communication to the appellant. We, however, make it clear that this order should not influence the respondent either way in concluding the inquiry because we have not applied our mind to the facts of the case and has made the aforementioned observations only on the basis of the law laid down by the Supreme Court in the case of M/s. Erusian Equipment & Chemicals Ltd (Supra). It is with these observations/directions, this appeal stands accordingly disposed of. No cost.