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2014 DIGILAW 776 (PAT)

Rokhsar Social Welfare Society through its Treasurer v. State of Bihar through its Chief Secretary

2014-07-14

MIHIR KUMAR JHA

body2014
JUDGMENT : 1. Heard learned counsel for the parties. 2. The prayer of the petitioner in this writ application reads as follows:- “1(a) A writ in the nature of certiorari or any other appropriate writ, order or direction quashing Memo No. 327-2/Ra, Supaul dated 16.05.07 whereby the Collector, Supaul (Respondent no.3) has arbitrarily black listed the petitioner-society, confiscated security deposit amounting to Rupees Ten thousand only (10,000/-) and cancelled the agreement and had further directed to invite tenders by 30.5.2007 which would be opened on 01.06.2007. (b) A writ in the nature of Mandamus or any other appropriate writ, order or direction commanding the respondents not to blacklist the petitioner-society and continue with the agreement and security deposit stop the authorities concerned from inviting fresh tenders as envisaged vide annexure-1.” 3. Learned counsel for the petitioner in support of the aforesaid prayer has basically concentrated on the aspect that the impugned order dated 16.5.2007 blacklisting the petitioner and/or forfeiting the amount of security as also cancelling the agreement is in violation of the principle of natural justice because the petitioner was never given any show-cause notice prior to the impugned order. In this regard, he has submitted that from reading of the impugned order it becomes clear that in view of the decision taken in the meeting held on 11.5.2007 in presence of the Cabinet Minister for Revenue and Land Reforms at Purnia, certain decisions were taken for cancelling the contract of the petitioner and since the order was passed on 16.5.2007 i.e. within five days of such meeting, the obvious conclusion will be that there was no show-cause notice given to the petitioner. 4. Mr. Syed Firoz Raza, learned counsel for the petitioner in this regard has relied on a judgment of the Apex Court in the case of M/s Kulja Industries Limited Vs. Chief Gen. Manager, W.T. Proj. BSNL & Ors. reported in 2013(4)PLJR (SC) 447 to support himself that blacklisting of any firm of a person which goes to make him ineligible for grant of any future contract being a major punishment/stigma, the same cannot be resorted to unless there is a show-cause notice followed by an adequate opportunity of hearing. 5. Chief Gen. Manager, W.T. Proj. BSNL & Ors. reported in 2013(4)PLJR (SC) 447 to support himself that blacklisting of any firm of a person which goes to make him ineligible for grant of any future contract being a major punishment/stigma, the same cannot be resorted to unless there is a show-cause notice followed by an adequate opportunity of hearing. 5. Learned counsel for the State is not in a position to deny this plea regarding violation of principle of natural justice but, then, he has tried to read from the impugned order itself that sufficient notices were given to the petitioner for completing the work. 6. In the considered opinion of this Court, an order of the authority asking him to complete the work as per work order or agreement cannot be equated to a show-cause notice for taking penal action by way of blacklisting a firm. Way back in the case of M/s Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal & Anr. reported in 1975(1)SCC 70, the Apex Court had held that the blacklisting has an effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the Authority passing any such order was required to give a fair hearing before passing an order blacklisting a certain entity. In this regard, the Apex Court had held as follows:- “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.” 7. As a matter of fact, reliance placed by Mr. Syed Firoz Raza on the judgment of the Apex Court Kulja Industries (supra) is also apt and appropriate wherein the law laid down in the case of Erusian Equipment & Chemicals Ltd. (supra) has been also followed in letter and spirit. 8. As a matter of fact, reliance placed by Mr. Syed Firoz Raza on the judgment of the Apex Court Kulja Industries (supra) is also apt and appropriate wherein the law laid down in the case of Erusian Equipment & Chemicals Ltd. (supra) has been also followed in letter and spirit. 8. Thus, this Court, without going into any other aspect must hold that the impugned order of blacklisting is in violation of principle of natural justice and would accordingly quash the order of blacklisting or rescinding of the contract of the petitioner but, at the same time, it would give liberty to the respondents to proceed afresh after giving a show-cause notice to the petitioner. 9. It goes without saying that if and when such a show-cause notice is issued to the petitioner, it will have all the opportunity to put its defence where after the authorities will be required to pass their final order with reasons strictly in accordance with law. 10. With the aforementioned observation and direction, this application is allowed only to the extent indicated above.