Jagdish Enterprises West Market Road, Upper Bazar, Ranchi v. Central Coalfields Limited through its Chairman cum Managing Director
2019-02-14
ANUBHA RAWAT CHOUDHARY
body2019
DigiLaw.ai
1. Heard Mrs. Neeta Krishna, counsel appearing on behalf of the petitioner assisted by Mr. Krishna Kumar, Advocate. 2. Heard Mr. A.K. Das, counsel appearing on behalf of the petitioner. 3. This writ petition has been filed for the following reliefs: (i) For quashing the letter no. 1157-71 dated 13/14.01.2015 (Annexure – 2) whereby and whereunder it has been communicated that the petitioner has been blacklisted at C.C.L. with immediate effect and all concerned are being advised not to have any business deal(s) with the petitioner without, on the ground that the impugned order has been issued without giving any opportunity of being heard to the petitioner and further without taking into consideration the fact that in connection with the F.I.R. bearing F.I.R. No. RC-06(A)/2013-D, as also mentioned in the impugned order, on the basis of which the decision for black listing the petitioner was taken, but in the said case, the CBI after investigation submitted the charge-sheet and the petitioner has not been sent up for the trail, meaning thereby that nothing has been found against the petitioner in regard to allegation leveled in the said F.I.R. And (ii) For restraining the respondents not to give effect to the letter no. 1157-71 dated 13/14.01.2015 issued under the signature of respondent no.2, whereby and whereunder the petitioner has been black listed on the ground that before issuance of the impugned letter, no opportunity of being heard has been given to the petitioner and further the impugned order does not speak about any time period for which the petitioner has been black listed meaning thereby that the petitioner has been black listed for indefinite period which is not permissible under law. 4. Counsel for the petitioner submits that the impugned order of blacklisting as contained in Annexure – 2 to this writ petition has been passed solely on the ground that one criminal case was registered against the petitioner by the Central Bureau of Investigation Anti-Corruption Bureau, Dhanbad and on account of certain materials which were found during the investigation. He further submits that neither any show-cause was issued to the petitioner before passing the impugned order nor the impugned order indicates the period for which the petitioner has been blacklisted. 5. The counsel further submits that the criminal case which has been instituted against the petitioner has been quashed by an order dated 10.12.2015 by this Court in Cr.
He further submits that neither any show-cause was issued to the petitioner before passing the impugned order nor the impugned order indicates the period for which the petitioner has been blacklisted. 5. The counsel further submits that the criminal case which has been instituted against the petitioner has been quashed by an order dated 10.12.2015 by this Court in Cr. M.P. 262 of 2015 and other analogous cases so far it relates to the petitioner. He further submits that as the criminal case has been quashed, nothing survives in this case and the order of blacklisting may be set-aside. 6. Counsel for the petitioner has referred to an order passed by this Court in W.P.(C). No.3688 of 2008 dated 29.11.2008 wherein, the matter was remanded to the authority for fresh consideration. 7. Counsel appearing on behalf of the respondents on the other hand submits that the criminal case which has been quashed, the same has been quashed on technical ground. Further, the counsel could not dispute the fact that no show-cause was issued to the petitioner prior to issuance of the impugned order of blacklisting, and admittedly there is no period of blacklisting prescribed in the impugned order of this case. 8. Counsel for the respondents submits that the quashing of criminal case against the petitioner was on technical ground and the agent of the petitioner has been charge-sheeted and he further submits that quashing of the criminal case has no bearing in the matter. 9. After considering the judgments passed by the Hon’ble Supreme Court reported in (2014) 14 SCC 731 (M/s Kulja Industries Ltd Vs. Chief Gen. Manager) and after hearing the counsel for the parties and considering the materials on record, this Court finds that admittedly, the order of blacklisting contained in Annexure- 2 which is dated 13.01.2015 was passed without giving any show-cause to the petitioner or any opportunity of hearing to the petitioner. Further, it appears that the order of blacklisting of the petitioner was passed on account of one criminal case instituted by the Central Bureau of Investigation. 10. This Court further finds that there is no period of blacklisting prescribed in the impugned order and apparently the petitioner has been blacklisted permanently. 11. In the judgment passed by Hon’ble Supreme Court reported in (2014) 14 SCC 731 (Kulja Industries Limited Vs.
10. This Court further finds that there is no period of blacklisting prescribed in the impugned order and apparently the petitioner has been blacklisted permanently. 11. In the judgment passed by Hon’ble Supreme Court reported in (2014) 14 SCC 731 (Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and Ors.), it has been held in para 21 to 25, which is quoted herein in below: “21. The legal position governing blacklisting of suppliers in USA and UK is no different. In USA instead of using the expression “blacklisting” the term “debarring” is used by the statutes and the courts. The Federal Government considers “suspension and debarment” as a powerful tool for protecting taxpayer resources and maintaining integrity of the processes for federal acquisitions. Comprehensive guidelines are, therefore, issued by the Government for protecting public interest from those contractors and recipients who are non-responsible, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily. These guidelines prescribe the following among other grounds for debarment: (a) Conviction of or civil judgment for.— (1) Commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public or private agreement or transaction; (2) Violation of Federal or State antitrust statutes, including those proscribing price fixing between competitors, allocation of customers between competitors, and bid rigging; (3) Commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; or (4) Commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility; (b) Violation of the terms of a public agreement or transaction so serious as to affect the integrity of an agency program, such as.— (1) A wilful failure to perform in accordance with the terms of one or more public agreements or transactions; (2) A history of failure to perform or of unsatisfactory performance of one or more public agreements or transactions; or (3) A wilful violation of a statutory or regulatory provision or requirement applicable to a public agreement or transaction; (c) * * * (d) Any other cause of so serious or compelling a nature that it affects your present responsibility. 22.
22. The guidelines also stipulate the factors that may influence the debarring official’s decision which include the following: (a) The actual or potential harm or impact that results or may result from the wrongdoing. (b) The frequency of incidents and/or duration of the wrongdoing. (c) Whether there is a pattern or prior history of wrongdoing. (d) Whether the contractor has been excluded or disqualified by an agency of the Federal Government or has not been allowed to participate in State or local contracts or assistance agreements on the basis of conduct similar to one or more of the causes for debarment specified in this part. (e) Whether and to what extent did the contractor plan, initiate or carry out the wrongdoing. (f) Whether the contractor has accepted responsibility for the wrongdoing and recognized the seriousness of the misconduct. (g) Whether the contractor has paid or agreed to pay all criminal, civil and administrative liabilities for the improper activity, including any investigative or administrative costs incurred by the Government, and has made or agreed to make full restitution. (h) Whether the contractor has cooperated fully with the government agencies during the investigation and any court or administrative action. (i) Whether the wrongdoing was pervasive within the contractor’s organization. (j) The kind of positions held by the individuals involved in the wrongdoing. (k) Whether the contractor has taken appropriate corrective action or remedial measures, such as establishing ethics training and implementing programs to prevent recurrence. (l) Whether the contractor fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official.” 23. As regards the period for which the order of debarment will remain effective, the guidelines state that the same would depend upon the seriousness of the case leading to such debarment. 24. Similarly in England, Wales and Northern Ireland, there are statutory provisions that make operators ineligible on several grounds including fraud, fraudulent trading or conspiracy to defraud, bribery, etc. 25. Suffice it to say that “debarment” is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted.
25. Suffice it to say that “debarment” is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the “debarment” is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor.” 12. This Court finds that the arguments advanced on behalf of the petitioner in connection with the permanent blacklisting of the petitioner is covered by the judgment passed by Hon’ble Supreme Court report in (2014) 9 SCC 105 (Gorkha Security Services Vs. Government (NCT of Delhi) and Ors.), wherein it has been held that debarment is recognized and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts and omissions of fraud including falsification on records and other breaches of regulations under which such contracts were allowed. What is notable is that debarment is never permanent and the period of debarment would invariably depend on the nature of offence committed by the erring contractor. In the said judgment the Hon’ble Supreme Court has also held that in the show-cause notice itself it should have been mentioned as to the proposed period of debarment. Para 21 and 22 of the aforesaid judgment reads as under: “21. The central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of show-cause notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action. 22.
That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action. 22. The High Court has simply stated that the purpose of show-cause notice is primarily to enable the noticee to meet the grounds on which the action is proposed against him. No doubt, the High Court is justified to this extent. However, it is equally important to mention as to what would be the consequence if the noticee does not satisfactorily meet the grounds on which an action is proposed. To put it otherwise, we are of the opinion that in order to fulfil the requirements of principles of natural justice, a show-cause notice should meet the following two requirements viz: (i) The material/grounds to be stated which according to the department necessitates an action; (ii) Particular penalty/action which is proposed to be taken. It is this second requirement which the High Court has failed to omit. We may hasten to add that even if it is not specifically mentioned in the show-cause notice but it can clearly and safely be discerned from the reading thereof, that would be sufficient to meet this requirement.” 13. This Court finds that admittedly, no show-cause notice was issued in this case prior to the impugned order of blacklisting by which the petitioner has been permanently blacklisted, which amounts to capital punishment in the economic sense. 14. Accordingly, this Court finds that the impugned action and order of the respondents to the extent it relates to permanent blacklisting of the petitioner, is arbitrary and requires interference under Article 226 of the Constitution of India. Accordingly, the impugned order of blacklisting contained in memo dated 13/14.01.2015, is hereby set-aside to the extent it relates to permanent blacklisting of the petitioner as the same is in direct conflict with the law laid down in aforesaid judgments passed by Hon’ble the Supreme Court as the impugned action of blacklisting is violative of the principles of natural justice and amounts to permanent blacklisting of the petitioner. 15. The petitioner is directed to appear before the respondent no.2 along with a copy of this order latest by 30.04.2019.
15. The petitioner is directed to appear before the respondent no.2 along with a copy of this order latest by 30.04.2019. Upon his appearance, it will be open to the respondent no.2 to issue a show-cause in the matter of blacklisting which may include the gist of acquisition, if any, and also the proposed punishment. If any such show cause notice is issued, the petitioner may file the response to the show cause within a period of one month thereafter and upon the response of the petitioner, the respondent no.2 is directed to pass a reasoned order considering the facts and circumstances of the case and the reply to be filed by the petitioner and also give an opportunity of hearing to the petitioner, within a period of three months thereafter. 16. This writ petition is disposed of with aforesaid observations/directions.