GANESH v. STATE OF KARNATAKA DEPARTMENT OF PUBLIC WORKS
2020-03-06
R DEVDAS
body2020
DigiLaw.ai
ORDER : R.DEVDAS, J. 1. The petitioner is a Class I Contractor. He was awarded works of contract in the year 2013 by the third respondent Executive Engineer, Minor Irrigation Department, Kolar. 2. It is an admitted fact that the petitioner completed the works and the petitioner has been paid by the third respondent in accordance with the bills submitted by the petitioner. Consequently, the Bank guarantee that was offered by the petitioner has also been returned to the petitioner by the third 3. The learned Counsel for the petitioner submits that the petitioner is taken by surprise that he has been blacklisted. After enquiries with the third respondent, it was given to understand that the bank guarantee that the petitioner had furnished during the works in the year 2013 was found to be fake and therefore, the petitioner has been blacklisted. 4. Learned Counsel for the petitioner submits that the very fact that the works had been completed, the bills submitted by the petitioner had been paid by the third respondent and he was permitted to take back the bank guarantee after completion of the entire works, would itself show that the reason given for blacklisting the petitioner is baseless. Further, the learned Counsel submits, while placing reliance on a judgment of the Apex Court in the case of respondent. It is submitted that the petitioner has been blacklisted by order dated 27.05.2019 at Annexure ‘A’. Gorkha Security Services Vs. Government (NCT of Delhi) And Others reported in (2014) 9 SCC 105 that by now, it is well settled that before blacklisting a party, issuance of a show-cause is mandatory. It is submitted that the respondents have blacklisted the petitioner without issuing a show-cause notice to the petitioner nor was the petitioner heard before the blacklisting was done. 5. Per contra, learned AGA submits that show-cause notices dated 21.12.2015 and 20.01.2016 have been issued to the petitioner. Copies of the said show cause notices dated 21.12.2015 and 20.01.2016 have been furnished along with a memo dated 16.01.2020. Along with the copies of the notices, the certificate issued by the Department of Posts for having sent the notices have been furnished. 6.
Copies of the said show cause notices dated 21.12.2015 and 20.01.2016 have been furnished along with a memo dated 16.01.2020. Along with the copies of the notices, the certificate issued by the Department of Posts for having sent the notices have been furnished. 6. Having heard the learned Counsel for the petitioner as well as the learned AGA, this Court finds that the respondents, though claim that show-cause notices dated 21.12.2015 and 21.01.2016 have been sent to the petitioner, admittedly there is no acknowledgement produced before this Court to show that the petitioner has received the registered posts. Moreover, the reason stated in the impugned order that the petitioner had furnished fake bank guarantee in the year 2013 and therefore that forms the basis for blacklisting the petitioner, seems to be very remote. The respondents have admitted that they have settled the bills tendered by the petitioner for the works undertaken during the year 2013. Consequent to the completion of the work and settling of the accounts, the petitioner was permitted to take back the bank guarantee. There was no reason furnished or even stated by the third respondent Executive Engineer before permitting the petitioner to take back the bank guarantee pointing out that the bank guarantee furnished was fake. It is also difficult to understand how the third respondent has come to a conclusion that the bank guarantee furnished by the petitioner was fake having permitted the petitioner to take back the bank guarantee after completion of the works and having settled the bills in favour of the petitioner. This itself shows that no opportunity was given to the petitioner before the impugned order blacklisting the petitioner was passed. 7. In the decision cited by the learned Counsel for the petitioner, the Apex Court has held that it is common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences flow. It is described as “civil death” of a person who is foisted with the order of blacklisting.
The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences flow. It is described as “civil death” of a person who is foisted with the order of blacklisting. It was therefore held that such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts. Therefore, the high handed action of the respondents in blacklisting the petitioner has prevented the petitioner from participating in any Government tenders since May 2019. 8. For the reasons stated, the petition is allowed. The impugned order dated 27.05.2019 at Annexure ‘A’ is hereby quashed and set aside insofar as the petitioner is concerned. Consequently, the petitioner should not be prevented from participating in Government tenders until and unless a show-cause notice is issued to the petitioner, he is heard and speaking order is passed. It is ordered accordingly.