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2017 DIGILAW 515 (PNJ)

Krishna Construction Company v. Bathinda Development Authority

2017-02-21

ANUPINDER SINGH GREWAL, S.J.VAZIFDAR

body2017
JUDGMENT : S.J. VAZIFDAR, J. The petitioner has challenged two letters both dated 30.11.2016 (Annexures P5 and P6) by which it has, inter alia, been blacklisted/debarred for one year by the respondents. 2. The parties had entered into a contract under which the petitioner was to provide and fix interlocking paver blocks. By the first letter dated 30.11.2016 addressed to the petitioner, the respondents stated that the petitioner had not commenced the work within the period stipulated; the agreement for the same was also not executed and the requisite bank guarantee was not deposited. The respondents, therefore, cancelled the allotment of work and forfeited the earnest money. By the other letter dated 30.11.2016, the respondents reiterated what is stated and further stated as follows:- “Keeping in view the above, by not executing the work allotted by this office, you have caused financial loss, loss of time to PUDA/BDA and due to non execution of the work within time, the image of BDA has also damaged. Inspite of repeated letters, you have not executed the work and as such, you are debarred for executing the works of PUDA and BDA for a period of one year.” 3. This is clearly an order of blacklisting/debarring. The contention that this is not an order of blacklisting/debarring as the petitioner is not empanelled with the respondents is not well founded. Whether a party is empanelled with a party inviting tenders or not makes no difference. The law relating to blacklisting/debarring would apply even to parties who are not empanelled with the party inviting tenders. Whether the party blacklisted is empanelled or enters into contracts even otherwise the effect is the same. The party is prevented from participating in the commercial ventures of the State or its instrumentalities. The law relating to blacklisting, therefore, applies to contracting parties irrespective of whether they are empanelled with the party inviting tenders or not. 4. Admittedly, no show cause notice was issued before addressing the impugned letters. We do not wish to express any view on the merits of the matter. We would, therefore, relegate the petitioner to any appropriate alternate remedy so far as the cancellation of the contract and forfeiture of the earnest money deposit is concerned. However, we must interfere so far as the impugned communications blacklist/debar the petitioner. We do not wish to express any view on the merits of the matter. We would, therefore, relegate the petitioner to any appropriate alternate remedy so far as the cancellation of the contract and forfeiture of the earnest money deposit is concerned. However, we must interfere so far as the impugned communications blacklist/debar the petitioner. They are liable to be set aside as the order was passed in violation of the principles of natural justice. The respondents are always at liberty to initiate proceedings for blacklisting after following the necessary procedure including by issuing a show cause notice and affording the petitioner an opportunity of being heard. 5. In these circumstances, the petition is disposed of by quashing the impugned orders in so far as they debar the petitioner for a period of one year.