Bindiya Enterprise Through Proprietor Brijalkumar Bharatbhai Shah v. State of Gujarat
2019-12-23
PARESH UPADHYAY, R.M.CHHAYA
body2019
DigiLaw.ai
JUDGMENT : R.M. CHHAYA, J. 1. By way of this petition under Article 226 of the Constitution of India, the petitioner has challenged the order dated 16.11.2018 passed by the respondent no.2 herein whereby the petitioner is blacklisted as supplier and has prayed as under - “9(A) That the Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction quashing and setting aside order dated 16.11.2018 passed in bearing order No. GEN./STORES/20587/2018 passed by Respondent No.2. (A-1) That the Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other appropriate writ, order or direction quashing and setting aside the order dated 16.02.2019 passed by Respondent No.2 bearing Order No. GEN./STORES/2754/2019” 2. The following noteworthy facts emerge from the record of the petition - 2.1 That the petitioner is the supplier of stationeries such as Answer Books and Stickers for examination. Pursuant to the advertisement given by the respondent University, which was in form of E-Tender issued on 10.10.2018 for supplying Work Order of Printing/Supplying Answer Books and Stickers for the examination to be conducted in the months of November-December, 2018, the petitioner applied for the same. The record indicates that the offer given by the petitioner in form of E-Tender was accepted by the respondent University and respondent no.2 issued supply order in form of letter dated 29.10.2018. 2.2 By further communication dated 30.10.2018, the respondent no.2 University directed the petitioner to supply items mentioned therein along with price mentioned in it upto 20.11.2018. As per the record, on the same day, the petitioner again approached the respondent no.2 University for extension of time for about 10-12 days and requested that the time to supply the items be extended till 01.12.2018. The respondent University by communication dated 31.10.2018, informed the petitioner that the Work Order has been cancelled. The petitioner thereafter also gave an explanation for extension of 10 days for fulfilling the Work Order by communication dated 11.11.2018, which was replied by way of the impugned order dated 16.11.2018, whereby the Work Order was cancelled and the petitioner came to be permanently blacklisted and barred the petitioner from conducting his business. Being aggrieved by the said order, the present petition is filed. 3. Heard Ms.
Being aggrieved by the said order, the present petition is filed. 3. Heard Ms. Dixa Pandya, learned advocate for the petitioner, Mr. Shivang Shukla, learned advocate for the respondent no.2 and Mr. Sahil Trivedi, learned AGP for respondent no.1. 4. As per the record of the petition, by an order dated 01.01.2019, the learned Vacation Judge passed a detailed order and though no interim relief was granted, the petitioner was asked to approach respondent no.2 with a request to reconsider the impugned decision dated 16.11.2018. The petitioner approached the respondent no.2 however, the said representation also came to be declined which is also under challenge in this petition. 5. Ms. Pandya, learned advocate appearing for the petitioner has contended as under - (1) That the impugned order of permanently blacklisting the petitioner is passed without giving any opportunity of being heard and the same is violative of principles of natural justice. Ms. Pandya, learned advocate has relied upon the decision of the Apex Court in the case of Erusian Equipment and Chemicals Ltd. vs. State of West Bengal reported in 1975 (1) SCC 70 to buttress her contention. It was contended that the impugned order is violative of Article 19(1)(g) of the Constitution of India. (2) Ms. Pandya, learned advocate further contended that as per the condition of the E-Tender, it was provided that the selected party has to deliver the answer-books and other material within 45 days of the receipt of the order whereas the time granted is only upto 20.11.2018, i.e., for only 20 days and therefore, it was contended that the respondent no.2 has not followed its own terms and conditions. (3) It was also contended by Ms. Pandya that the impugned orders are non-speaking orders and the petitioner may not be debarred permanently. On the aforesaid grounds, Ms. Pandya contended that the petition be allowed as prayed and particularly quash the order of permanent blacklisting. 6. Per contra, Mr. Shukla has relied upon his affidavit-in-reply. Mr. Shukla contended that the process of examination has to be completed within the stipulated time and the same was accepted by the petitioner.
On the aforesaid grounds, Ms. Pandya contended that the petition be allowed as prayed and particularly quash the order of permanent blacklisting. 6. Per contra, Mr. Shukla has relied upon his affidavit-in-reply. Mr. Shukla contended that the process of examination has to be completed within the stipulated time and the same was accepted by the petitioner. It was also contended that in order to see that the examinations are not stalled, the respondent University was compelled to give Work Order to one another Company named Crystal Forms Pvt. Ltd. who has successfully supplied the answer-books and stickers with strict adherence to the time limit, quality and quantity as prescribed in the E-Tender. Referring to conditions no.1 and 2 of the tender notice, it was contended by Mr. Shukla that the Work Order provides for penalty of forfeiture of security deposit and blacklisting in case of non-adherence/breach of conditions. It was also contended by Mr. Shukla that condition no.2 of the order provides for imposition of penalty in case of non-adherence to the time limit and as the petitioner itself approached the University with inability to supply and asked for extension of time, which was not granted, the impugned order was passed, which is legal and proper. Mr. Shukla also further contended that the representation filed by the petitioner has been duly considered and the said aspect was considered by the syndicate and the petitioner was duly informed about the same. It was also contended by Mr. Shukla, learned advocate appearing for the University that as per the conditions of the tender notice, on non-supply of the goods ordered as per the Work Order, the petitioner has been rightly blacklisted and debarred. According to Mr. Shukla, the petition being meritless, deserves to be dismissed. 7. Learned AGP Mr. Trivedi contended that this Court may pass appropriate order. 8. No other or further submissions have been made by the learned advocates appearing for the respective parties. 9. Upon considering the submissions made, it is a matter of fact that by Work Order dated 30.10.2018, the order was placed with the petitioner. On the same day, the petitioner requested to grant 10-12 days more to supply the material as per the order dated 30.10.2018. The petitioner accepted the Work Order and by communication dated 31.10.2018, requested to extend the time for 30 days instead of 20 days.
On the same day, the petitioner requested to grant 10-12 days more to supply the material as per the order dated 30.10.2018. The petitioner accepted the Work Order and by communication dated 31.10.2018, requested to extend the time for 30 days instead of 20 days. However, on the same day, by communication dated 31.10.2018, the order was cancelled and the petitioner was asked to file explanation within a period of three days. The said letter was replied by the petitioner vide communication dated 11.11.2018 and without giving any opportunity of being heard, the impugned order dated 16.11.2018 is passed. It is also a matter of fact that the respondent No.2 University immediately gave order to one Crystal Forms Pvt. Ltd. It deserves to be noted that by order dated 16.11.2018, the petitioner is not only blacklisted without hearing, but the request made by the petitioner to extend the time is construed as denial on the part of the petitioner to supply of goods. The question therefore which requires to be considered in this petition is to the effect that whether such action of blacklisting the petitioner. that too without hearing is admittedly a violation of the principles of natural justice or not. 10. Ms. Pandya, learned advocate appearing for the petitioner has rightly contended that before blacklisting a supplier, hearing is a sine qua non. It would be appropriate to refer to the judgment of the Apex Court in the case of Erusian Equipment and Chemicals Ltd. (supra), wherein the Hon'ble Apex Court has observed thus- “17. The Government is a government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one but 'if it does so, it must do as fairly without discrimination and without unfair procedure.
Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one but 'if it does so, it must do as fairly without discrimination and without unfair procedure. Reputation is a part of person's character and personality. Blacklisting tarnishes one's reputation. 18. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods by discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Just as exclusion of the lowest tender will be arbitrary similarly exclusion of a person who offers the highest price from participating at a public auction would also have, the same aspect of arbitrariness. 19. Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may 'be under a duty to 679 give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It win depend upon the nature of the interest to be affected, the circumstances in which a power is exercised the nature of sanctions involved therein. 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.” 11.
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.” 11. The University by the impugned communication/order dated 16.11.2018 after permanently blacklisting the petitioner asked the petitioner to give explanation within a period of three days, which itself is arbitrary and violative of principles of natural justice. The communication dated 31.10.2018, whereby the petitioner asked for extension is not at all considered by the respondent no.2 University while passing the impugned order dated 16.11.2018 and straightaway order dated 16.11.2018 is passed that too without hearing the petitioner. 12. The aforesaid facts clearly borne out from the impugned order itself and material on record. Consequently, the impugned order dated 16.11.2018 is violative of the principles of natural justice and the impugned order of blacklisting cannot be passed in facts of this case and hence, the impugned order dated 16.11.2018 blacklisting the petitioner as well as the order dated 16.02.2019 passed upon the representation of the petitioner by the University is quashed and set aside. 13. As the impugned order of blacklisting is hereby quashed and set aside, the petitioner would be entitled to return of security deposit, if any deposited with the respondent no.2 University. However, it is clarified that as items of tender are already supplied by the other agency to the respondent no.2 University, the cancellation of work order is not quashed. 14. The petition is thus partly allowed. Rule made absolute only to the aforesaid extent. However, there shall be no order as to costs.