Technosys Security Systems Private Ltd. v. State of M. P.
2020-02-10
AJAY KUMAR MITTAL, VIJAY KUMAR SHUKLA
body2020
DigiLaw.ai
ORDER Shukla, J. -- 1. The petitioner in the instant writ petition filed under Article 226 of the Constitution of India, has challenged the order dated 4.1.2020 (Annexure P-11), by which the petitioner has been blacklisted by the respondents. 2. The facts adumbrated in nutshell are that the petitioner a Private Limited Company incorporated under the Companies Act, is engaged in the work of supplying security systems and traffic management systems to various Government organizations including the police department and smart city corporations. The respondents No. 2 and 3 invited tenders for supply of inter alia three Mobile Command and Control Centre. In response to the aforesaid Notice Inviting Tenders (NIT), the petitioner submitted its offer which was accepted and the petitioner was supplied the items vide supply order dated 18.12.2014. It was mentioned in the supply order that in case the item is not supplied within the stipulated time or during the extended time, the respondents shall be at liberty to cancel the order and blacklist the petitioner. An agreement was executed between the petitioner and the respondents. According to the petitioner, he has duly supplied three Mobile Command and Control Centre to the respondents on 28.7.2015 strictly as per the specifications. The aforesaid vehicles were duly accepted and the respondents conducted a check test of all the three vehicles. It is further pleaded that the petitioner discharged his obligations under the contract strictly in accordance with the terms and conditions of the contract. The contract period ended on 31.7.2018. It is further stated that the petitioner was under obligation to provide warranty to the supply cost and the same was done satisfactorily by him. It is further stated that the petitioner performed his part of the contract of supplying the vehicles and providing warranty over the same. The contract period came to an end on 31.7.2018. It is urged that after more than one and half years from the date of determination of contract, the impugned order dated 4.1.2020 was issued, where by the petitioner has been blacklisted for a period of one year on the ground that the petitioner did not resolve the issues pertaining to the vehicles supplied by it before expiry of the warranty period. 3. The aforesaid order of blacklisting has been challenged on the ground that the impugned order of blacklisting has been passed without affording any opportunity of hearing to the petitioner.
3. The aforesaid order of blacklisting has been challenged on the ground that the impugned order of blacklisting has been passed without affording any opportunity of hearing to the petitioner. No show cause notice or opportunity of hearing was afforded to the petitioner before passing the impugned order of blacklisting. It is further argued that the impugned order is a non-speaking order passed without assigning any reason. Learned counsel for the petitioner further contended that the order of blacklisting entails serious civil consequences inter alia depriving the petitioner from freedom to do trade and profession thereby violating the rights guaranteed in the Constitution of India, therefore, the said order could not have been passed without following the principles of natural justice. 4. Learned Counsel for the State supported the order of blacklisting and stated that since the petitioner has violated the terms and conditions of the agreement, therefore, the order of blacklisting was passed by the respondents. 5. The apex Court in the case of Canara Bank v. V.K. Awasthy [ (2005)6 SCC 321 ], has held that the natural justice is another name of common sense justice. The Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. The expressions ‘natural justice’ and ‘legal justice’ do not present a watertight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. The relevant extracts of the said decision read as under : “8. Natural justice is another name for common-sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common-sense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine its form. 9. The expressions “natural justice’’ and “legal justice’’ do not present a water-tight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice.
It is the substance of justice which has to determine its form. 9. The expressions “natural justice’’ and “legal justice’’ do not present a water-tight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, no form or procedure should ever be permitted to exclude the presentation of a litigants’ defence. 10. The adherence to principles of natural justice as recognized by all civilised States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the “Magna Carta’’. The classic exposition of Sir Edward Coke of natural justice requires to “vocate interrogate and adjudicate’’. In the celebrated case of Cooper v. Wandsworth Board of Works [(1863) 143 ER 414] the principle was thus stated : “[E]ven God himself did not pass sentence upon Adam, before he was called upon to make his defence, ‘Adam’ (says God), ‘where art thou? Hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat?’” Since then the principle has been chiselled, honed and refined, enriching its content.
Hast thou not eaten of the tree whereof I commanded thee that thou shouldest not eat?’” Since then the principle has been chiselled, honed and refined, enriching its content. Judicial treatment has added light and luminosity to the concept, like polishing of a diamond. 11. Principles of natural justice are those rules which have been laid down by the Courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi-judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice.” 6. In the case of Raghunath Thakur v. State of Bihar [(1989)1 SCC 229], it is held that an order of blacklisting has the civil consequences and could not be passed without notice. In another case of Patel Engg. Ltd. v. Union of India reported in [ (2012) 11 SCC 257 ], the Court held that State is to act fairly and rationally without in any way being arbitrary thereby such a decision can be taken for some legitimate purpose. In the case of Kulja Industries Limited v. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Ltd. and others [ (2014)14 SCC 731 ], the Court held that order of permanent black listing the Contractor from entering into contracts making supplies tantamounts to rendering the Contractor jobless and economically defunct. The same view has been taken by a Co-ordinate Bench of this Court in W. P. No. 22807/2019 (M/s Aicons Engineering Pvt. Ltd. v. State of M.P. and others) decided on 5.11.2019 and W.P. No. 2778/2019 (UMC Technologies Private Limited v. Food Corporation of India and another, decided on 13.2.2019). 7. This aspect of the matter has also been considered by the Supreme Court in the case of M/s Kranti Associates Pvt. Ltd. and another v. Sh. Masood Ahmed Khan and others [(2010)9 SCC 496] wherein it is laid down that judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. It is further held that insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done, it must also appear to be done as well. The relevant extracts from the said judgment are reproduced as under:- “14.
It is further held that insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done, it must also appear to be done as well. The relevant extracts from the said judgment are reproduced as under:- “14. The expression “speaking order” was first coined by Lord Chancellor Earl Cairns in a rather strange context. The Lord Chancellor, while explaining the ambit of writ of certiorari, referred to orders with errors on the face of the record and pointed out that an order with errors on its face, is a speaking order. (See pp. 1878-97, Vol. 4 Appeal Cases 30 at 40 of the Report). 15. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the ‘inscrutable face of a sphinx’. *** *** *** 47. Summarising the above discussion, this Court holds : (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. (d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations. (f) Reasons have virtually become as indispensable a component of a decision-making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior Courts. (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision making justifying the principle that reason is the soul of justice. (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered.
This is virtually the lifeblood of judicial decision making justifying the principle that reason is the soul of justice. (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants’ faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision-making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or ‘rubber-stamp reasons’ is not to be equated with a valid decisionmaking process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision-making not only makes the judges and decision-makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-37). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision-making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See Ruiz Torija v. Spain (1994) 19 EHRR 553, at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405 (CA), wherein the Court referred to Article 6 of the European Convention of Human Rights which requires, “adequate and intelligent reasons must be given for judicial decisions”. (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “Due Process”. 8. Apparently, in the present case, no show cause notice was issued to the petitioner with regard to blacklisting in respect of which the impugned order has been passed. Further, it does not satisfy the test of being a reasoned speaking order. 9. In view of the foregoing reasons, the present petition is allowed and the order dated 4.1.2020 (Annexure P-11) is hereby quashed.
Further, it does not satisfy the test of being a reasoned speaking order. 9. In view of the foregoing reasons, the present petition is allowed and the order dated 4.1.2020 (Annexure P-11) is hereby quashed. However, liberty is granted to the respondents to pass a fresh speaking order in accordance with law after affording an opportunity of hearing to the petitioner. Needless to say, anything observed herein before, shall not be construed as expression of opinion on the merits of the controversy.