Anvil Cables Private Limited, Kolkata v. Jharkhand Bijli Vitran Nigam Ltd. (earlier known as Jharkhand State Electricity Board)
2023-01-27
RAJESH SHANKAR
body2023
DigiLaw.ai
ORDER : 1. The present writ petition has been filed for quashing the order, as contained in letter no.874/S&P dated 27.09.2022 (Annexure-18 to the writ petition) issued by the General Manager (S&P), JBVNL, Ranchi-respondent no.4, whereby the petitioner has been blacklisted for a period of three years in the Jharkhand Bijli Vitran Nigam Limited (in short ‘JBVNL’) (erstwhile JSEB) and the Bank Guarantee or the amount deposited against the purchase orders for the period 2008 and 2009 being P.O. no.28 (S&P) dated 11.12.2008 and P.O. no.39 (S&P) dated 13.01.2009 has been forfeited. The petitioner also prayed for quashing the show cause notice as contained in letter no.1102 (S&P) dated 12.11.2021 issued by the respondent no.4, whereby it has been asked to submit its reply within a week. 2. In course of argument, learned senior counsel for the petitioner confines the prayer to the extent of challenging part of letter no.874/S&P dated 27.09.2022 issued by the respondent no.4, whereby the petitioner has been blacklisted for a period of three years. So far as forfeiture of bank guarantee (SBG & PBG) or the amount deposited against the aforesaid purchase orders is concerned, learned senior counsel for the petitioner submits that since the said issue is already pending before the Jharkhand Micro and Small Enterprises Facilitation Council, Directorate of Industries, Ranchi, he does not press the said part of the letter dated 27.09.2022. 3. Learned senior counsel for the petitioner submits that the respondent- JBVNL floated two notices inviting tenders being NIT No. 515/JSEB/PR/07-08 and NIT No. 514/JSEB/PR/08-09 for supply of 3860 kilometres ISI marked ACSR Weasel Conductor and 1460 kilometres ISI marked ACSR Rabbit Conductor. The petitioner participated in the said tender process and on being declared successful (L1), the said tenders were awarded in its favour. Thereafter, letters of intent were issued to the petitioner vide LOI nos.860 (S&P) and 857 (S&P), respectively, both dated 20.10.2008. Accordingly, Agreement nos.22/2008-09 and 21/2008-09 were executed between the competent authority of the JSEB and the petitioner followed by issuance of purchase orders dated 11.12.2008 and 13.01.2009 to it. The petitioner supplied the first and second lots of required materials pursuant to the aforesaid purchase orders and the respondent-JBVNL received the materials after pre-despatch inspection on being satisfied with quality of the materials, which were also duly utilized.
The petitioner supplied the first and second lots of required materials pursuant to the aforesaid purchase orders and the respondent-JBVNL received the materials after pre-despatch inspection on being satisfied with quality of the materials, which were also duly utilized. The petitioner made several requests to the respondent no.3 to make payment of supplied materials, however, the said respondent failed to make the said payment and due to non-availability of required capital, the petitioner being a Small Scale Industrial Unit was not able to supply remaining quantity of materials in time. The respondent no.3 vide letter no.606(S&P) and 607(S&P) both dated 15.07.2009 issued with respect to ACSR Weasel Conductor and ACSR Rabbit Conductor, respectively, cancelled the despatch instruction vide letters dated 23.01.2009 and 21.01.2009 earlier issued against the aforesaid purchase orders on the ground of non-supply of balance quantity of materials within the scheduled time of delivery. 4. It is further submitted that upon closure of the said purchase orders, the petitioner requested the concerned authority of erstwhile JSEB to release its payment with respect to the quantity of materials supplied by it. A Central Purchase Committee was constituted to redress the grievance of the petitioner and the said Committee convened its meeting on 14.09.2010, in which while considering the issue in question relating to the petitioner as agenda no.22/2010-11, it was decided to release admissible payment to it for supplied materials in terms with the aforesaid purchase orders after deducting the amount against short supply of materials and extra amount paid to it on price variation. The said decision of the Central Purchase Committee was communicated to the concerned authorities of erstwhile JSEB vide office order no.1504 dated 14.10.2010 issued by the respondent no.3. Pursuant to the aforesaid office order, the petitioner several times requested the respondent no.3 to release its outstanding payment against supply of materials as well as its security deposits, however, the same was not released. The petitioner then filed an application before the Director of Industries-cum-Chairman, Jharkhand Micro & Small Enterprises Facilitation Council, Ranchi (in short ‘Council’) for immediate release of its due amount along with interest as per section 16 of the Micro, Small and Medium Enterprises Development Act, 2016 (in short ‘Act, 2016’), which was registered as Case No.JHMSEFC-19/2016.
The petitioner then filed an application before the Director of Industries-cum-Chairman, Jharkhand Micro & Small Enterprises Facilitation Council, Ranchi (in short ‘Council’) for immediate release of its due amount along with interest as per section 16 of the Micro, Small and Medium Enterprises Development Act, 2016 (in short ‘Act, 2016’), which was registered as Case No.JHMSEFC-19/2016. Thereafter, the General Manager (HR), JBVNL, Ranchi vide letter no.920 dated 17.06.2021 raised the issue of irregularities in the said supply made by the petitioner for the first time that too after utilizing the materials supplied by it. Pursuant to the said letter, the petitioner’s representative visited the office of the respondent-JBVNL on 24.06.2021, however, the meeting could not take place. Thereafter, the petitioner did not receive any further notice for rescheduling the meeting. A show cause notice vide letter no.1102 (S&P) dated 12.11.2021 was issued to the petitioner by the respondent no.4, directing it to submit its explanation as to why a suitable action as per JBVNL norms and legal procedure be not taken against it including blacklisting/debarment etc. against alleged act of fraud and mischief committed by it in response to which the petitioner submitted its reply. In the meantime, the Director of Industries-cum-Chairman of the Council vide letter no.144/Ranchi dated 25.01.2022 requested the Managing Director of JBVNL to take necessary action within 90 days from the date of receipt of the said letter through amicable settlement between the parties with respect to payment of outstanding amount against supply of materials as claimed by the petitioner before the Council. However, the respondent no.4 vide letter dated 27.09.2022 passed an order of blacklisting the petitioner for a period of three years in JBVNL. 5. Learned senior counsel for the petitioner also submits that the impugned order of blacklisting the petitioner is in violation of the principles of natural justice since the reply submitted by it has not been considered by the respondent-JBVNL as well as the same does not contain any reason for blacklisting. In fact, the respondent no.4, in order to frustrate the claim of the petitioner pending adjudication before the Council, issued a show cause notice after lapse of more than 12 years from the date of closure of the purchase orders and after utilizing the supplied materials.
In fact, the respondent no.4, in order to frustrate the claim of the petitioner pending adjudication before the Council, issued a show cause notice after lapse of more than 12 years from the date of closure of the purchase orders and after utilizing the supplied materials. The petitioner had supplied required materials in accordance with the terms and conditions mentioned in the NITs., letters of intent as well as contract agreements executed between it and the respondent no.4. Utilization of the goods supplied by the petitioner was made without any complaint with respect to quality. It is also submitted that the show cause notice issued to the petitioner was also vague, as it did not indicate the manner in which the alleged fraud was committed. The show cause notice neither mentioned any specific penalty proposed to be imposed upon the petitioner nor it provided the period of blacklisting. Thus, the impugned letter of blacklisting is in absolute contravention of several judgments rendered by the Hon’ble Supreme Court laying down the requirements to be observed for debarment/blacklisting. 6. Per contra, learned counsel for the respondents submits that the decision to blacklist the petitioner was taken after proper enquiry of the anomalies committed by it during supply of materials against purchase orders dated 11.12.2008 and 13.01.2009. In course of inspection, it was found that the petitioner had committed fraudulent practice while supplying the required materials. The order of blacklisting was passed only after considering the response of the petitioner pursuant to the show cause notice. The petitioner had offered inspection call to the respondent no.3 vide letter dated “24.10.2008” sent through Fax on 31.10.2008 for inspecting the material to be supplied. The date 24.10.2008 as mentioned in the inspection offer letter was to gain advantage of price variation clause mentioned in the respective LOI Nos.860 (S&P) and 857 (S&P), both, dated 20.10.2008. Moreover, when the supplied materials were matched with the Challan made available by the petitioner, it was found that the same were underweight. Thus, the petitioner was blacklisted after analysing the reports submitted by the enquiry committee constituted by the Department of Energy, Government of Jharkhand and after approval of the Competent Authority. 7. It is also submitted that the hearing of Case No.JHMSEFC-19/2016 is still pending before the Medium and Small Enterprises Facilitation Council, Ranchi.
Thus, the petitioner was blacklisted after analysing the reports submitted by the enquiry committee constituted by the Department of Energy, Government of Jharkhand and after approval of the Competent Authority. 7. It is also submitted that the hearing of Case No.JHMSEFC-19/2016 is still pending before the Medium and Small Enterprises Facilitation Council, Ranchi. Nevertheless, it is apparent that the petitioner got itself registered under section 8 of the MSMED Act with effect from 11.08.2016 whereas its claim is for the prior period. As such, the provisions of MSMED Act are not applicable in the present case. The dispatch instruction of balance quantity against both the purchase orders were cancelled due to non-supply of required materials within scheduled time of delivery. 8. It is further submitted that the respondent no.3 vide office order no.1504 dated 14.10.2010 had clarified that the payment of the petitioner would be released after deduction of amount as suggested by the Central Purchase Committee. The said order demonstrates the details of amount to be deducted from the outstanding payment of the petitioner against specified particulars mentioning that a sum of Rs.18,51,165/- and Rs.27,84,896/- were wrongly paid to it on account of price variation apart from the amount to the tune of Rs.3,04,195/- and Rs.9,38,959/- on account of short supply of materials against both the purchase orders dated 13.01.2009 and 11.12.2008, respectively, 9. Heard learned counsel for the parties and perused the materials available on record. The petitioner is aggrieved with the order passed by the respondent no.4, blacklisting it for a period of three years in JBVNL and forfeiting the Bank Guarantee or the amount deposited against the purchase orders in question. 10. According to learned senior counsel for the petitioner, the impugned order of blacklisting the petitioner is in violation of the principles of natural justice, as the same has been passed in a mechanical manner without even considering the reply to the show cause notice dated 12.11.2021 filed by of the petitioner. 11. Before coming to the merit of rival contentions of learned counsel for the parties, it would be appropriate to refer a judgment of the Hon’ble Supreme Court rendered in the case of UMC Technologies Private Limited Vs. Food Corporation of India & Another, reported in (2021) 2 SCC 551 , wherein it has been held as under:- “13.
11. Before coming to the merit of rival contentions of learned counsel for the parties, it would be appropriate to refer a judgment of the Hon’ble Supreme Court rendered in the case of UMC Technologies Private Limited Vs. Food Corporation of India & Another, reported in (2021) 2 SCC 551 , wherein it has been held as under:- “13. At the outset, it must be noted that it is the first principle of civilised jurisprudence that a person against whom any action is sought to be taken or whose right or interests are being affected should be given a reasonable opportunity to defend himself. The basic principle of natural justice is that before adjudication starts, the authority concerned should give to the affected party a notice of the case against him so that he can defend himself. Such notice should be adequate and the grounds necessitating action and the penalty/action proposed should be mentioned specifically and unambiguously. An order travelling beyond the bounds of notice is impermissible and without jurisdiction to that extent. This Court in [Nasir Ahmad v. Custodian General, Evacuee Property, (1980) 3 SCC 1 ] has held that it is essential for the notice to specify the particular grounds on the basis of which an action is proposed to be taken so as to enable the noticee to answer the case against him. If these conditions are not satisfied, the person cannot be said to have been granted any reasonable opportunity of being heard. 14. Specifically, in the context of blacklisting of a person or an entity by the State or a State Corporation, the requirement of a valid, particularised and unambiguous show-cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatisation that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into government contracts. This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting take away this privilege, it also tarnishes the blacklisted person's reputation and brings the person's character into question.
This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting take away this privilege, it also tarnishes the blacklisted person's reputation and brings the person's character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person. 12. In the case of Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited & Others, reported in (2014) 14 SCC 731 , the Hon'ble Supreme Court has 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 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 precondition 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. 18.
A fair hearing to the party being blacklisted thus becomes an essential precondition 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. 18. The legal position on the subject is settled by a long line of decisions rendered by this Court starting with Erusian Equipment & Chemicals Ltd. v. State of W.B. [ (1975) 1 SCC 70 ] where this Court declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the authority passing any such order was required to give a fair hearing before passing an order blacklisting a certain entity. This Court observed : (SCC p. 75, para 20) “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.” Subsequent decisions of this Court in Southern Painters v. Fertilizers & Chemicals Travancore Ltd. [1994 Supp (2) SCC 699]; Patel Engg. Ltd. v. Union of India [ (2012) 11 SCC 257 ]; B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd. [ (2006) 11 SCC 548 ]; Joseph Vilangandan v. Executive Engineer (PWD) [ (1978) 3 SCC 36 ] among others have followed the ratio of that decision and applied the principle of audi alteram partem to the process that may eventually culminate in the blacklisting of a contractor. 19. Even the second facet of the scrutiny which the blacklisting order must suffer is no longer res integra.
19. Even the second facet of the scrutiny which the blacklisting order must suffer is no longer res integra. The decisions of this Court in Radhakrishna Agarwal v. State of Bihar [ (1977) 3 SCC 457 ]; E.P. Royappa v. State of T.N. [ (1974) 4 SCC 3 ]; Maneka Gandhi v. Union of India [ (1978) 1 SCC 248 ]; Ajay Hasia v. Khalid Mujib Sehravardi [ (1981) 1 SCC 722 ]; Ramana Dayaram Shetty v. International Airport Authority of India [ (1979) 3 SCC 489 ] and Dwarkadas Marfatia and Sons v. Port of Bombay [ (1989) 3 SCC 293 ] have ruled against arbitrariness and discrimination in every matter that is subject to judicial review before a writ court exercising powers under Article 226 or Article 32 of the Constitution. 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 v. Indian Oil Corpn. [ (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 Radhakrishna Agarwal v. State of Bihar [ (1977) 3 SCC 457 ].
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 Radhakrishna Agarwal v. State of Bihar [ (1977) 3 SCC 457 ]. … 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.” 13. In the case of Erusian Equipment & Chemicals Ltd. v. State of West Bengal & Another, reported in (1975) 1 SCC 70 , the Hon'ble Supreme Court has held as under:- “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.
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.” 14. This court also in the case of Lava International Limited Vs. The State of Jharkhand & Others. reported in 2022 SCC OnLine Jhar. 1011 while referring several judgments of the Hon’ble Supreme Court has summarized the law relating to blacklisting, which is quoted as under:- “21. Law laid down in the aforesaid cases is summarized as under:— (i) The power to blacklist is inherent in the party allotting the contract which is unqualified. There is no need for any such power being specifically conferred by the statute or reserved by contractor because the blacklisting is merely a business decision not to enter into contractual relationship with the party committing the breach. However, such decision is open to scrutiny on the touchstone of fairness, relevance, natural justice, non-discrimination, equality, reasonableness and proportionality. (ii) A person has no right to enter into a contract but is entitled to equal treatment. 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. (iii) Blacklisting has long-lasting civil consequences for the future business prospects of the blacklisted person. It also tarnishes the blacklisted person's reputation and brings the person's character into question. In the matter of blacklisting a valid, particularised and unambiguous show-cause notice should be served stating the grounds on which the action is proposed to be taken as well as the proposed action so as to enable the notice to answer the case. (iv) In order to fulfil the requirement of principle of natural justice, a show cause notice should meet two requirements i.e. the materials/grounds to be stated which according to the department necessitates an action and particular penalty which is proposed to be taken.” 15. In the case of Cantonment Board, Meerut & Another Vs.
(iv) In order to fulfil the requirement of principle of natural justice, a show cause notice should meet two requirements i.e. the materials/grounds to be stated which according to the department necessitates an action and particular penalty which is proposed to be taken.” 15. In the case of Cantonment Board, Meerut & Another Vs. Afzal, reported in (2019) 6 SCC 150 , as has been relied upon by learned senior counsel for the petitioner, the High Court had quashed the show cause notice observing that the reply filed by the original petitioners was not considered and no reason was assigned for rejecting the objection. It was further held that the primary as well as the appellate authorities had passed orders which were more or less identical and were passed in predetermined manner without providing any opportunity of hearing. The High court while quashing the impugned orders granted liberty to the appellants to proceed afresh in the light of observations made in the judgment. The matter having travelled to the Supreme Court, Their Lordships affirmed the order of the High Court holding that the notices were issued mechanically and in a causal manner. 16. Learned senior counsel for the petitioner also puts reliance on the judgment rendered by the Hon’ble Supreme Court in the case of Oryx Fisheries (P) Ltd. Vs. Union of India, reported in (2010) 13 SCC 427 , wherein the Hon’ble Apex Court quashed the show cause notice and order of cancellation of certificate of registration of the appellant having found that in the impugned order, there was no reference of the reply filed by the appellant except saying that it was not satisfactory. The relevant part of the said judgment is quoted as under:- “31. It is of course true that the show-cause notice cannot be read hypertechnically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence.
But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show-cause notice and prove his innocence. If on a reasonable reading of a show-cause notice a person of ordinary prudence gets the feeling that his reply to the show-cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show-cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence. 32. Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show-cause notice. 33. The principle that justice must not only be done but it must eminently appear to be done as well is equally applicable to quasi-judicial proceeding if such a proceeding has to inspire confidence in the mind of those who are subject to it.” 17. Reverting back to the present case. Several allegations were levelled against the petitioner in the show cause notice and it was asked to submit explanation with respect to alleged act of fraud & mischief within one week from the date of issuance of the said show cause notice with a direction that non-submission of reply within schedule time would mean that the firm had accepted the above acts and suitable action as per JBVNL norms & legal procedure including blacklisting, debarment etc. would be initiated. 18. The petitioner submitted its reply to the said show cause notice vide letter dated 24.11.2021, countering each and every allegation levelled against it.
would be initiated. 18. The petitioner submitted its reply to the said show cause notice vide letter dated 24.11.2021, countering each and every allegation levelled against it. However, on perusal of the impugned order of blacklisting, it appears that none of the petitioner’s explanations was discussed, rather the respondent no.4 after elaborating the allegations of fraudulent activities, straightway came to the finding that on analysing the fact and status by JBVNL, it was decided to blacklist the petitioner for three years in JBVNL mainly due to fraudulent practice adopted by it during the supply of materials against P.O No.28 (S&P) dated 11.12.2008 and P.O No. 39(S&P) dated 13.01.2009 and also to forfeit the amount of bank guarantee (SBG & PBG) or the amount deposited against said purchase orders. 19. The manner in which the respondent no.4 proceeded to issue the show cause notice to the petitioner and passed the impugned order of blacklisting, clearly suggests a predetermined mind as the issuance of show cause notice was merely an eye-wash just to complete the formality of passing the order of blacklisting. It is well settled principle of law that every state action must be fair otherwise it will fall foul of the mandate of Article 14 of the Constitution of India. An administrative authority must record reason for its decision unless the requirement has been expressly or by necessary implication done away. Duty to record reason is necessary where legal rights are at stake and the administrative action adversely affects such rights. The reason should be clear and explicit and it must indicate that the authority has given due consideration to the issue in question as well as the explanation submitted by the affected party. Very purpose of giving reasons is to enable the affected person to discover the reasoning behind such decision. An administrative decision is subject to judicial review by constitutional courts particularly when it affects the right of a citizen and thus it is imperative that the reasons should be assigned while taking any decision affecting the legal right of a person. 20. In view of the aforesaid discussions, the impugned order as contained in letter no.874/S&P dated 27.09.2022 to the extent of blacklisting the petitioner for a period of three years is hereby quashed.
20. In view of the aforesaid discussions, the impugned order as contained in letter no.874/S&P dated 27.09.2022 to the extent of blacklisting the petitioner for a period of three years is hereby quashed. Since the supply of material was made 12 years back, it will not be proper to remand the matter to the respondents for passing a fresh order in this regard. 21. The writ petition is partly allowed. 22. I.A. No.10993 of 2022 stands disposed of.