Colorplast Systems Private Limited v. State of Telangana
2025-04-17
RENUKA YARA, SUJOY PAUL
body2025
DigiLaw.ai
JUDGMENT : SUJOY PAUL, ACJ. 1. Sri A.Venkatesh, learned Senior Counsel representing Sri Sai Sanjay Suraneni, learned counsel for the appellant. Sri M.Vigneshwar Reddy, learned Government Pleader for Transport, for respondents No.1 and 2. 2. With the consent, finally heard. 3. This intra Court appeal takes exception to the order of the learned Single Judge passed in W.P.No.26439 of 2024, dated 13.03.2025. BRIEF FACTS OF THE CASE: 4. Learned Senior Counsel for the appellant submits that the appellant received a contract for supply of Smart Cards. However, some complaint was preferred against the appellant before the official respondents pursuant to which, it appears that certain chips were sent to National Informatics Centre (NIC) for testing. The NIC submitted its report. Thereafter, the appellant was served with a show cause notice dated 24.06.2024. In turn, the appellant filed its detailed reply on 06.07.2024. Subsequently, by order dated 18.09.2024, the Transport Commissioner rejected the reply and decided to debar the supplier/appellant from participating in any tender relating to Transport Department. Feeling dissatisfied with the order dated 18.09.2024, the writ petition was filed. The learned Single Judge has dismissed the writ petition by the impugned order dated 13.03.2025. CONTENTION OF THE APPELLANT: 5. The bone of contention of the learned Senior Counsel for the appellant is that the reply to the show cause notice has not been considered and no reasons were assigned for passing the order dated 18.09.2024 debarring the appellant from participating in any further tender. Such debarring amounts to “blacklisting”. It was not proposed in the show cause notice that if the reply is not acceptable, it may result into issuance of an order of debarring/blacklisting. This action, therefore, runs contrary to the binding judgment of the Supreme Court in Gorkha Security Services v. Government (NCT of Delhi) , (2014) 9 SCC 105 . Apart from this, the other infirmities pointed out in the reply to the show cause notice were not dealt with. 6. Learned Senior Counsel for the appellant submits that the learned Single Judge, in the impugned order, has reproduced the rival contentions raised by the parties at the bar and reproduced the citations relied upon by both sides. However, the reasoning and conclusions are mentioned only from paragraph 12 onwards. 7. Learned Senior Counsel for the appellant submits that the learned Single Judge relied on clause B.1(b) of the Request for Proposal (RFP) of February, 2023.
However, the reasoning and conclusions are mentioned only from paragraph 12 onwards. 7. Learned Senior Counsel for the appellant submits that the learned Single Judge relied on clause B.1(b) of the Request for Proposal (RFP) of February, 2023. However, the said RFP does not provide any power of blacklisting to the official respondents. The decision making process adopted by the official respondents was flawed and therefore, when the appellant has raised doubt about the chips in the reply to the show cause notice, the said point ought to have been dealt with. CONTENTION OF THE OFFICIAL RESPONDENTS: 8. Learned Government Pleader appearing for the official respondents supported the impugned order passed by the learned Single Judge and urged that in view of the report of NIC, which was accepted by the learned Single Judge, no fault can be found in the impugned order. 9. The learned counsel for the parties have confined their arguments to the extent indicated above and no other point is pressed. 10. We have heard the learned counsel for the parties at length and perused the record. FINDINGS: 11. This is trite that in a matter of this nature, the scope of judicial review is basically related to the decision making process. If the order dated 18.09.2024 is examined on the anvil of the said principle, it will be clear like cloudless sky that in the said order, there is no iota of discussion about the reply submitted by the appellant to the show cause notice. The appellant’s reply to the show cause notice, dated 06.07.2024, runs into almost four pages. The relevant portion of the order dated 18.09.2024, whereby the appellant was debarred/blacklisted, reads thus: “In response the NIC, vide reference 4 th cited, has furnished report stating that some of the sample cards are found in compliance with SCOSTA certificated issued by NIC, and some of the cards are found non-compliant. Basing on the report furnished by NIC, the Department vide reference 5 th cited, has issued show cause notice to the Vendor M/s. Colorplast Systems Private Limited, to offer his explanation within Ten days from the date of receipt of copy. The Explanation submitted by the Vendor M/s. Colorplast Systems Pvt. Ltd., vide reference 6 th cited, is not satisfactory.
Basing on the report furnished by NIC, the Department vide reference 5 th cited, has issued show cause notice to the Vendor M/s. Colorplast Systems Private Limited, to offer his explanation within Ten days from the date of receipt of copy. The Explanation submitted by the Vendor M/s. Colorplast Systems Pvt. Ltd., vide reference 6 th cited, is not satisfactory. As per NIC report the Vendor, M/s Colorplast Systems Private Ltd, New Delhi has supplied, Non-Compliant Cards, that amount to violation of the Contractual conditions among other issues. Further, the Transport Department, has decided to initiate various legal actions as per the Rules and contractual terms and conditions. Further, the Transport Department, has decided to debar the said Supplier i.e., M/s. Colorplast Systems Private Ltd., New Delhi, from participating in any tender related to Transport Department. In view of the above, the MD TGTSL, is requested to take necessary action. Yours faithfully, Sd/- Transport Commissioner” 12. A microscopic reading of the aforesaid paragraphs makes it clear that the argument of the learned Senior Counsel for the appellant has substantial force. The Transport Commissioner reached to a conclusion that “the explanation submitted by the vendor M/s. Colorplast Systems Pvt. Ltd., vide reference 6 th cited, is not satisfactory”. In our considered opinion, the said finding amounts to “conclusion” and not “reasons”. If the explanation of the appellant was not found to be satisfactory, the reasons therefor ought to have been assigned. The reasons are held to be heartbeat of the conclusion. In the absence of reasons, the conclusion cannot sustain judicial scrutiny, more so, when it has civil consequences on the other side. 13. The Apex Court emphasized the need of assigning reasons in administrative, quasi-judicial and judicial proceedings in the case of Kranti Associates (P) Ltd. v. Masood Ahmed Khan , (2010) 9 SCC 496 . The relevant portion reads as under: “12. The necessity of giving reason by a body or authority in support of its decision came up for consideration before this Court in several cases. Initially this Court recognised a sort of demarcation between administrative orders and quasi- judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipak v. Union of India, (1969) 2 SCC 262 . 13… 14.
Initially this Court recognised a sort of demarcation between administrative orders and quasi- judicial orders but with the passage of time the distinction between the two got blurred and thinned out and virtually reached a vanishing point in the judgment of this Court in A.K. Kraipak v. Union of India, (1969) 2 SCC 262 . 13… 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 the 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. 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 decision-making 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 Harvard Law Review 731-737. (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 EHRR, 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.” 14. If the impugned order is tested on the anvil of principles laid down in Kranti Associates (supra), it will be crystal clear that the order dated 18.09.2024 is an example of non-application of mind. 15.
Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of “due process.” 14. If the impugned order is tested on the anvil of principles laid down in Kranti Associates (supra), it will be crystal clear that the order dated 18.09.2024 is an example of non-application of mind. 15. In Gorkha Security Services (supra), the Apex Court opined that the blacklisting can be equated with “civil death” and therefore, a proposal should be given whether such an action can be taken. In the show cause notice dated 24.06.2024, no such communication was given that if the reply is not accepted, it may lead to debarring/blacklisting. 16. The learned Single Judge has not examined the decision making process adopted by the official respondents. There exists no discussion about the validity of the order dated 18.09.2024. The said order, as analysed above, suffers from non-application of mind and is devoid of any reasons. For this reason, the order dated 18.09.2024 deserves to be axed. The learned Single Judge has failed to examine the order dated 18.09.2024 on the basis of settled principles and the judgment cited by the appellant. 17. Resultantly, the order passed by the learned Single Judge in W.P.No.26439 of 2024 dated 13.03.2025 is set aside. The order debarring the appellant dated 18.09.2024 is also set aside. Liberty is reserved to the official respondents to either cancel the show cause notice and issue a fresh show cause notice or pass a fresh order by considering the reply of the appellant. 18. Accordingly, the Writ Appeal is allowed to the extent indicated above. It is made clear that this Court has not expressed any opinion on the merits of the case. No order as to costs. Miscellaneous petitions pending, if any, shall stand closed.