ORDER : Heard learned counsel for the petitioner, learned Government Pleader for Irrigation appearing for respondent Nos.1, 3, 5, 7 and 8, and learned Assistant Government Pleader for Panchayat Raj appearing for respondent Nos.2, 4, 6 and 9. 2. In brief, the case of the petitioner is that he has been undertaking contract works as Class-I Contractor since 1999. Pursuant to tender notice dated 04.03.2008 issued by the 7th respondent for execution of the work i.e., Somasila Project - Kavali Canal – closing of breach and construction of additional surplus weirs, construction of two sluices and restoration of tank bund of Chinna Craca Balancing Reservoir, with an estimated cost of Rs.7,88,36,331/-, the petitioner submitted his tender within the stipulated period along with the requisite documents and certificates and paid EMD amount. Thereafter, the 7th respondent sent the technical bids of all the contractors to the 6th respondent for finalization and confirmation. Ultimately, the 6th respondent finalized and confirmed the tender in favour of one N. Ramesh Kumar. Subsequently, the 7th respondent issued a notice dated 23.06.2008 to the petitioner stating that the Invoice dated 26.10.1999 submitted by him towards purchase of a concrete mixture is false and calling upon him to submit explanation within fourteen days, for which the petitioner submitted a detailed explanation on 05.07.2008. Despite repeated requests for return of the EMD amount and even after submission of a detailed explanation, the 7th respondent did not choose to return the EMD amount. In such circumstances, having no other option, the petitioner preferred W.P.No.22002 of 2008 seeking a direction to the 7th respondent to return the EMD amount and it is pending. (i) While matters stood thus, the 7th respondent passed an order dated 30.09.2008 forfeiting the EMD amount and recommending to put the name of the petitioner in blacklist. Aggrieved thereby, the petitioner preferred another writ petition being W.P.No.22171 of 2008 and obtained an interim order of suspension of operation of the order dated 30.09.2008 in WPMP No.28869 of 2009, dated 10.10.2008. During pendency of the said writ petition, the petitioner made a representation to the 7th respondent on 07.12.2009 for re-consideration of the order of forfeiture of EMD amount. Ultimately, W.P.No.22171 of 2008 was disposed of on 18.02.2010 with a direction to the respondents to consider the representation of the petitioner dated 07.12.2009 and pass appropriate orders after following the principles of natural justice. Ultimately, W.P.No.22171 of 2008 was disposed of on 18.02.2010 with a direction to the respondents to consider the representation of the petitioner dated 07.12.2009 and pass appropriate orders after following the principles of natural justice. Pursuant to that, the 7th respondent addressed a letter dated 27.02.2010 to the 5th respondent requesting to obtain orders from the Government for the return of EMD amount. He opined that the invoice is not the prime factor for tender and the petitioner is Class-I Contractor and the registration certificate produced by him is not fake. (ii) While so, the then Superintending Engineer, Somasila Project (7th respondent), was retired from service and another person was placed as in-charge in his place, who issued the proceedings dated 18.03.2010 rejecting the representation of the petitioner dated 07.12.2009 without taking into consideration the proceedings dated 27.02.2010, without complying the orders of this Court and without observing the principles of natural justice. The same is questioned in this writ petition. 3. Learned counsel for the petitioner would submit that registration certificate was issued by the 3rd respondent vide proceedings dated 05.03.2004 and as the original copy was spoiled on account of rough handling, the petitioner obtained a certified copy thereof from the 3rd respondent and submitted the same along with his explanation. The learned counsel would contend that the impugned proceedings are passed without verification of the records and in violation of the directions of this Court in W.P.No.22171 of 2008 dated 18.02.2010. The learned counsel would also contend that when once the then Superintending Engineer, Somasila Project, opined that the Invoice is not the prime factor for the tender and the petitioner is the Class-I contractor and the registration certificate is not fake, the present Superintending Engineer, Somasila Project (7th respondent), cannot take a different view without verification of the records. The learned counsel would contend that the 7th respondent passed the order dated 30.09.2008 forfeiting the EMD amount and recommending to put the petitioner in blacklist, without issuing any prior notice of personal hearing to him is in violation of the principles of natural justice. In support of his contention, the learned counsel placed reliance on the decision of the Apex Court in M/s. Erusian Equipment and Chemicals Limited Vs. State of West Bengal, 1975 (1) SCC 70 . Therefore, the impugned proceedings are liable to be set aside. 4. In support of his contention, the learned counsel placed reliance on the decision of the Apex Court in M/s. Erusian Equipment and Chemicals Limited Vs. State of West Bengal, 1975 (1) SCC 70 . Therefore, the impugned proceedings are liable to be set aside. 4. On the other hand, learned Government Pleader for Irrigation would submit that as per G.O.Ms.No.94, Irrigation and CAD (PW-COD) Department, dated 01.07.2003, as well as the terms and conditions of the subject tender notice, the 7th respondent is empowered to put a contractor in blacklist, if he violates the conditions of the tender notice. The learned counsel also would submit that in fact, the petitioner submitted a fake Invoice regarding purchase of a concrete mixture and therefore, he was put in blacklist as per the terms and conditions of the tender notice as well as the aforesaid G.O. Therefore, the impugned orders do not warrant any interference. 5. As can be seen from the entire record, it is manifest that the 7th respondent issued the proceedings dated 18.03.2010 rejecting the representation of the petitioner dated 07.12.2009, without taking into consideration the proceedings of his predecessor i.e., the then Superintending Engineer, Somasila Project, dated 27.02.2010 addressed to the 5th respondent opining that the Invoice is not the document of primus for the tender as per tender conditions and the petitioner is the Class-I contractor and the registration certificate and work experience certificate are not fake and requesting to obtain orders from the Government to release the EMD amount as the representation of the petitioner has to be disposed of within four weeks from the date of orders of this Court dated 18.02.2010. Therefore, the 7th respondent cannot take a different view than that of the view taken by his predecessor, in the absence of new material and changed circumstances. 6. On the other hand, the respondents herein utterly violated the orders of this Court dated 18.02.2010 in W.P.No.22171 of 2008 wherein it is specifically directed as under : “In view of the above, the 2nd respondent is directed to consider the representation purported to have been submitted by the petitioner on 07.12.2009 and pass appropriate orders, as per law, within a period of four weeks from the date of receipt of a copy of this order and communicate the same to the petitioner.” 7. The case of the respondents is that the petitioner violated the conditions of the tender notice by producing a fake Invoice dated 26.10.1999 for purchasing a concrete mixer and also a fabricated contractor registration certificate and thereby, the 7th respondent by proceedings dated 30.09.2008 forfeited the EMD amount and recommended to put the petitioner in blacklist with immediate effect. Whereas, in the counter affidavit filed by the 7th respondent, it is stated that as per G.O.Ms.No.138, Irrigation & CAD (Projects Wing: COD) Department, dated 10.09.2003, some clauses are incorporated in the subject tender notice and Clause B (f) under qualification criteria of the tender notice stipulates as under : "If the information furnished with regard to annual turnover and works on hand etc. is found to be false while processing the tenders, the tenderer will be blacklisted duly forfeiting the EMD and if found subsequently, the contractor will be blacklisted, and the work/contract will be terminated duly forfeiting the EMD and value of work done but not paid as the case may be." 8. As per clause B (f) under qualification criteria of the tender notice, the 7th respondent is empowered to put a contractor in blacklist, if he furnishes information regarding his annual turnover and the works on hand. But, in the case on hand, the information alleged to have been submitted by the petitioner is with regard to the furnishing of fake invoice for purchasing a concrete mixture. Therefore, this Court is of the view that the petitioner cannot be put in blacklist and the impugned order is not sustainable in law. 9. It is the contention of the petitioner that the 7th respondent put him in blacklist, without issuing any prior notice and without providing personal hearing to him and in violation of the principles of natural justice. In support of his contention, he relied on a judgment of the Hon’ble Supreme Court in M/s. Erusian Equipment case (1 supra) wherein it is held as under : “15. The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates; a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are "instruments of coercion". xxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxx xxxxx 17. The Government is a government of laws and not of men. The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates; a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are "instruments of coercion". xxxxxxxxx xxxxxxxxxx xxxxxxxxxx xxxxxxxxxxxx xxxxx 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 anyone 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 give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. 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 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 will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and 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. 21. With regard to the case of the petitioners, it is made clear that the authorities will give an opportunity to the petitioners to represent their case and the authorities will hear the petitioners as to whether their name should be put on the blacklist or not. This is made clear that the decision on this question will not have any effect on the proceedings pending in Calcutta High Court where the petitioner has challenged the adjudication proceedings under the Foreign Exchange Regulations Act. Any decision of the authorities on the blacklisting will have no effect on the correctness of any of the facts involved in those proceedings.” 10. The principle laid down in the above judgment is also followed by the Hon’ble Supreme Court in Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project, Bharat Sanchar Nigam Limited, (2014) 14 SCC 731 , wherein it is held as under : “17. That apart the power to blacklist a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is in our opinion inherent in the party allotting the contract. There is no need for any such power being specifically conferred by statute or reserved by contractor. That apart the power to blacklist a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is in our opinion inherent in the party allotting the contract. There is no need for any such power being specifically conferred by statute or reserved by contractor. That is because 'blacklisting' simply signifies a business decision by which the party affected by the breach decides not to enter into any contractual relationship with the party committing the breach. Between two private parties the right to take any such decision is absolute and untrammelled by any constraints whatsoever. The freedom to contract or not to contract is unqualified in the case of private parties. But any such decision is subject to judicial review when the same is taken by the State or any of its instrumentalities. This implies that any such decision will be open to scrutiny not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. A fair hearing to the party being blacklisted thus becomes an essential pre-condition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The order itself being reasonable, fair and proportionate to the gravity of the offence is similarly examinable by a writ Court. 20. It is also well settled that even though the right of the writ Petitioner is in the nature of a contractual right, the manner, the method and the motive behind the decision of the authority whether or not to enter into a contract is subject to judicial review on the touchstone of fairness, relevance, natural justice, non-discrimination, equality and proportionality. All these considerations that go to determine whether the action is sustainable in law have been sanctified by judicial pronouncements of this Court and are of seminal importance in a system that is committed to the rule of law. We do not consider it necessary to burden this judgment by a copious reference to the decisions on the subject. A reference to the following passage from the decision of this Court in Mahabir Auto Stores and Ors. v. Indian Oil Corporation Ltd. (MANU/SC/0191/1990 : (1990) 3 SCC 752 ) should, in our view, suffice: (SCC pp.760-61, para 12) 12. We do not consider it necessary to burden this judgment by a copious reference to the decisions on the subject. A reference to the following passage from the decision of this Court in Mahabir Auto Stores and Ors. v. Indian Oil Corporation Ltd. (MANU/SC/0191/1990 : (1990) 3 SCC 752 ) should, in our view, suffice: (SCC pp.760-61, para 12) 12. It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this Court in Miss Radha Krishna Agarwal and Ors. v. State of Bihar and Ors. (MANU/SC/0053/1977 : [1977] 3 SCR 249) ...... In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable....... It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case. 28. 28. A remand back to the competent authority has appealed to us to be a more appropriate option than an order by which we may ourselves determine the period for which the Appellant would remain blacklisted. We say so for two precise reasons. 28.1 Firstly, because blacklisting is in the nature of penalty the quantum whereof is a matter that rests primarily with the authority competent to impose the same. In the realm of service jurisprudence this Court has no doubt cut short the agony of a delinquent employee in exceptional circumstances to prevent delay and further litigation by modifying the quantum of punishment but such considerations do not apply to a company engaged in a lucrative business like supply of optical fibre/HDPE pipes to BSNL. 28.2 Secondly, because while determining the period for which the blacklisting should be effective the Respondent-Corporation may for the sake of objectivity and transparency formulate broad guidelines to be followed in such cases. Different periods of debarment depending upon the gravity of the offences, violations and breaches may be prescribed by such guidelines. While, it may not be possible to exhaustively enumerate all types of offences and acts of misdemeanour, or violations of contractual obligations by a contractor, the Respondent-Corporation may do so as far as possible to reduce if not totally eliminate arbitrariness in the exercise of the power vested in it and inspire confidence in the fairness of the order which the competent authority may pass against a defaulting contractor.” 11. This Court had followed the same principle in M/s. ACPE Infrastructures Pvt. Ltd. Vs. The State of Andhra Pradesh, 2018 SCC Online Hyd 361, wherein it is held as follows : “Para 45 – It is also pertinent to note that by way of the impugned orders the respondents resorted to the action of blacklisting the petitioner herein also. Admittedly, the respondents herein have resorted to such an action of blacklisting without being preceded by issuance of any show cause notice and affording opportunity of being heard. This, in the considered opinion of this Court, is a patent violation of the principles of natural justice to the extent of such action. On this ground alone, the impugned orders to the extent of blacklisting the petitioner only, in the considered opinion of this Court, cannot be sustained.” 12. This, in the considered opinion of this Court, is a patent violation of the principles of natural justice to the extent of such action. On this ground alone, the impugned orders to the extent of blacklisting the petitioner only, in the considered opinion of this Court, cannot be sustained.” 12. On a perusal of the above-mentioned judgments relied on by the learned counsel for the petitioner, this Court is of the view that the said judgments are squarely applicable to the present case, since the petitioner herein was also not given an opportunity to represent his case before he was put in the blacklist and therefore, the impugned orders are liable to be set aside. 13. Accordingly, the Writ Petition is allowed and the proceedings dated 30.09.2008, as well as the subsequent proceedings dated 18.03.2010 issued by the 7th respondent, are hereby set aside. No order as to costs. Consequently, Miscellaneous Petitions, if any, pending in this Writ Petition shall stand closed.