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Madhya Pradesh High Court · body

2014 DIGILAW 703 (MP)

Anuj Associates v. State of M. P.

2014-06-23

S.K.GANGELE, S.K.PALO

body2014
Judgment: 1. Heard. 2. The petitioner has filed this petition against the order dt. 2.5.2013 (Annexure P/1), by which the petitioner has been blacklisted. 3. The petitioner was granted a contract for construction of Kasna Nala dam and canal including structures vide order dt. 1.9.2011. In accordance with the terms and conditions of the contract, the petitioner had to complete the work within a period of 18 months including rainy reason. The allegation against the petitioner is that the petitioner did not complete the work within time in spite of repeated notices. The registration of the petitioner was cancelled for a period of three years. 4. A notice was issued to the petitioner on 30.3.2013. Copy of the notice has been filed as Annexure P/19. It is mentioned in the notice that the petitioner did not complete the work within time and he had completed only 31% of the work up to 30.3.2013, which was unsatisfactory. The petitioner was directed to show cause that why his registration be not suspended. The petitioner filed reply and pleaded that the villagers did not permit the petitioner to carry out the work and there was protest because the compensation to the villagers was not paid. The petitioner submitted a letter to the Executive Engineer, in spite of that, the petitioner was not given any assistance. The petitioner did not submit any application for extension of time, hence, the contract came to an end. Thereafter, the work of the petitioner was suspended and then vide impugned order petitioner has been blacklisted. The petitioner specifically pleaded in the petition that he had submitted reply to the show cause notice dt. 30.3.2013. Copy of the notice has been filed as Annexure P/19 alongwith the petition. Relevant pleadings and grounds have been mentioned in para ix of the petition. 5. The respondents in the return pleaded that the notices were issued to the petitioner on 6.3.2013 and 14.3.2013 and opportunity of hearing was granted to the petitioner and thereafter the order has been passed. Copy of the reply to the show cause notices have been filed as Annexure R/3 and R/4 alongwith the return. 6. We have perused reply (Annexure R/3 and R/4). These are the reply submitted by the petitioners of letters dt. 14.3.2013 and 19.3.2013. In these letters, there is no mention to the effect that the petitioner shall be blacklisted. Copy of the reply to the show cause notices have been filed as Annexure R/3 and R/4 alongwith the return. 6. We have perused reply (Annexure R/3 and R/4). These are the reply submitted by the petitioners of letters dt. 14.3.2013 and 19.3.2013. In these letters, there is no mention to the effect that the petitioner shall be blacklisted. It is mentioned in the show cause notice dt. 14.3.2003 that an action shall be taken against the petitioner in accordance with Clause 4.3.3.3 of the agreement. Copy of the notice has been filed as Annexure P/15 alongwith the petition. Clause 4.3.3.3 of the agreement is as under:- 4.3.3.3. - To measure up the work of the contractor and to take such part thereof as shall be unexecuted out of his hands and to give it to another contractor to complete, in which case any expenses which may be incurred in excess of the sum which would have been paid to the original contractor if the whole work had been executed by him for the amount (of which excess the certificate in writing of the divisional officer shall be final and conclusive) shall be borne and paid by the original contractor and may be deducted from any money due to him by Government under the contractor or otherwise, or from his security deposit or the proceeds of sale thereof, or a sufficient part thereof. If the work is carried out at lower rates, the contractor shall not be entitled for any refund on this account Savings, if any shall go to the Government. In the event of any of the above courses being adopted by the divisional officer, the contractor shall have no claim to compensation, for any loss sustained by reason of his having purchased or procured any materials or entered into any engagement or made any advances on account of, or with a view to the execution of the work or the performance of the contract. And in case the contract shall be rescinded under the provision aforesaid, the contractor shall not be entitled to recover or be paid any sum for any work thereof actually performed under this contract, unless and until the sub-divisional/divisional officer will have certified in writing the performance of such work and the value payable in respect thereof, and he shall only be entitled to be paid the value so certified. 7. 7. This clause is not in regard to blacklisting. The order of blacklisting has adverse civil consequences and such order can not be passed without giving proper opportunity of hearing as held by the Hon'ble Supreme Court in Joseph Vilangandan v. Executive Engineer and others reported in (1978) 3 SCC 36 , wherein the Hon'ble Supreme Court has held as under:- In the letter dated April 17, 1968, the crucial words are "after debarring you as a defaulter". They take their colour from the context and so constructed the words "debarring you as a defaulter" could be understood as conveying no more than that action with reference to the "contract in question" only was under contemplation. There are no words in the notice which could give a clear intimation to the appellant that it was proposed to debar him from taking any contract whatsoever in future under the P.W.D. A perusal of the appellant's reply also shows that by the word "debarring" the appellant understood as debarring him a defaulter and then getting the same work done by other agencies at his risk and loss. Therefore, the letter dated April 17, 1968 did not give any clear notice to the appellant that action to debar him from taking, in future, any contract whatsoever under the P.W.D. Was in contemplation. The appellant was thus not afforded adequate opportunity to represent against the impugned action which was necessary before blacklisting him. 8. Hon'ble Supreme Court further in the case of Southern Painters v. Fertilizers and Chemicals Travancore Ltd. and another reported in 1994 Supp (2) SCC 699 has held as under:- 11. The deletion of the appellant's name from the list of approved contractors on the ground that there were some vigilance report against it, could only be done consistent with and after due compliance with the principles of natural justice. That not having been done, it requires to be held that withholding of the tender form from the appellant was not justified. In our opinion, the High Court was not justified in dismissing the writ petition. 9. The aforesaid two decisions have been relied by the Division Bench of this court in Skynet Creations Vs. Municipal Corporation reported in 2013 (III) MPWN 45 . 10. In our opinion, the High Court was not justified in dismissing the writ petition. 9. The aforesaid two decisions have been relied by the Division Bench of this court in Skynet Creations Vs. Municipal Corporation reported in 2013 (III) MPWN 45 . 10. The principle of law as laid down by the Hon'ble Supreme Court is that before passing the order of black listing it is necessary to serve a notice on a person or party mentioning the fact of blacklisting and after giving opportunity of hearing, the order of blacklisting could be passed. In the present case, no specific notice of blacklisting was served on the petitioner. It means that the petitioner was denied opportunity of hearing. Hence, the order dt. 2.5.2013 (Annexure P/1) is against the principle of natural justice. 11. Consequently, the Writ Petition is allowed. The impugned order dt. 2.5.2013 (Annexure P/1) is hereby quashed. It is hereby clarified that the respondents are at liberty to pass appropriate order after following proper procedure. Petition is disposed of accordingly. No order as to costs.