Quashed

Sri.Ashok Ballolli S/O Nagappa Ballolli v. State of Karnataka

Karnataka HC3 Jul 2020WP/109265/2019

Case brief

AI extract

What is this about?

The High Court quashed a blacklisting order against two PWD contractors under Article 226. The bench held the order was arbitrary, non-speaking, and devoid of reasons, violating Rule 13 of the Department Code which mandates a detailed speaking order and opportunity to explain before such civil consequences.

What did the court decide?

Writ petitions allowed; impugned order bearing No.CBS/RCO/CSB/2017-18 dated 23.02.2019 quashed with liberty to take action after hearing.

Sri.Ashok Ballolli S/O Nagappa… — Constitutional and Fundamental Rights | Karnataka HC (2020)

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 3^RD DAY OF JULY 2020

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BEFORE

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THE HON’BLE MR. JUSTICE S.G. PANDIT

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WRIT PETITION NOS.109265-109266/2019 (GM-RES)

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BETWEEN

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SRI.ASHOK BALLOLLI S/O NAGAPPA BALLOLLI AGED: 57 YEARS, CLASS I PWD CONTRACTOR, R/AT: VEERABHADRESHWAR NAGARA TAWARGERA, KOPPAL, KOPPAL DISTRICT-583279.

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SRI.CHANNABASAPPA S/O SUKUMUNEPPA AGED: 51 YEARS, CLASS I PWD CONTRACTOR, R/AT: NEAR BASAVANA TEMPLE, MYLAPUR, MYLAPUR ROAD, KOPPAL, KOPPAL DISTRICT-583229.

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... PETITIONERS

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(BY SRI.SHIVARAJ.C.BELLAKKI, ADVOCATE)

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AND

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STATE OF KARNATAKA REPRESENTED BY ITS PRINCIPAL SECRETARY, PUBLIC WORKS DEPARTMENT PORTS, INLAND WATER TRANSPORT DEPARTMENT, VIKASA SOUDHA, BENGALURU-560001.

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SECRETARY TO GOVERNMENT MINOR IRRIGATION & PWD DEPARTMENT, VIKASA SOUDHA,

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BENGALURU-560001.

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THE CHIEF ENGINEER COMMUNICATIONS & BUILDING (SOUTH), K.R. CIRCLE, BENGALURU-560001.

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THE CHIEF ENGINEER MINOR IRRIGATION & PWD, (NORTH), VIJAYAPURA-586101, VIJAYAPURA DISTRICT.

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THE SUPERINTENDENT ENGINEER MINOR IRRIGATION DEPARTMENT, KALABURGI-585101, KALABURGI DISTRICT.

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THE EXECUTIVE ENGINEER MINOR IRRIGATION & PWD DIVISION, KOPPAL-583231, KOPPAL DISTRICT.

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THE EXECUTIVE ENGINEER MINOR IRRIGATION, KUSHTAGI-583277, KALABURGI DISTRICT. ... RESPONDENTS

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(BY SRI.V.S.KALASURMATH, HCGP)

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THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI AND QUASH ORDER BEARING NO.CBS/RCO/CSB/2017-18 DATED 23.02.2019 (VIDE ANNEXURE-A) INSOFAR AS THE PETITIONERS ARE CONCERNED PASSED BY THE RESPONDENT NO.3.

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THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING THIS DAY, COURT MADE THE FOLLOWING:

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ORDER

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The petitioners are before this Court under Article 226 of the Constitution of India praying for a writ of certiorari to quash the order bearing No.CBS/ RCO/CSB/2017-18 dated 23.02.2019 at Annexures-A and A1 insofar as the petitioners are concerned, by which the petitioners are blacklisted as Contractors.

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It is stated that both the petitioners are Grade-I Contractors registered with the Public Works Department of the State. The petitioners have undertaken many contract works entrusted to them by the Public Works Department. During the year 201516 respondent No.3-Chief Engineer, Communication and Building (South), Bengaluru had issued work orders to the petitioners for certain works in the limits of Koppal District, which the petitioners executed and completion certificate was also issued by the Department. There were certain allegations of mal-

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administration and misappropriation of Government funds against the officers of the Department. There was a direction to take disciplinary action against the concerned officers. Respondent No.4 had also sought for details of the Contractors, who had carried on certain works in Koppal District. As per the direction, list of Contractors was forwarded to the respondents. Thereafter, respondent No.6 issued show-cause notices to the petitioners dated 23.12.2016 under Annexures-L and L1 stating that certain works entrusted to the petitioners have not been carried on and without carrying on the entrusted contract work amount has been drawn, due to which the State has suffered financial loss. Hence, explanation was sought as to why they should not be blacklisted. The petitioners state that pursuant to the show-cause notices, they replied on 02.01.2017 and 30.12.2016 respectively as per Annexures-M and M1.

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Learned counsel for the petitioners submits

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that without considering the replies submitted by the petitioners, the respondents under Annexures-A and A1 dated 23.02.2019 blacklisted the petitioners. The learned counsel would submit that blacklisting of a Contractor would have a far reaching effect and it would have civil consequences. As such, the respondents are required to pass a speaking order after considering the objections filed by the petitioners. He also invites attention of this Court to Rule 13 of Public Works Department Code. In that circumstance, he prays for quashing Annexures-A and A1 dated 23.02.2019.

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Per contra, the learned HCGP submits that the petitioners were issued with show-cause notices as per Annexures-L and L1 and they replied as per Annexures-M and M1, which was considered while passing the impugned Official Memorandum at

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Annexures-A and A1 both dated 23.02.2019. As such, he submits that no case is made out by the petitioners to quash the same. It is also his submission that the Rule requires providing an opportunity which has been provided by the respondents. Thus, he prays for dismissal of the writ petitions.

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There is no dispute that the petitioners are registered Contractors under the Public Works Department of the State. They were entrusted with certain works under respondents No.6 and 7. It is the case of the petitioners that the entrusted work during the year 2015-16 was carried out by them. For having completed the work entrusted to the petitioners, the Department has issued work completion certificate. Thereafter, the respondent No.7 issued Annexure-L dated 23.12.2016 and Annexure-L1 dated 23.12.2016. One of the show-cause notice reads as follows:

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“ªÉÄÃ®ÌAqÀ «µÀAiÀÄPÉÌ ¸ÀA§A¢ü¹zÀAvÉ, G¯ÉèÃTvÀ ¥ÀvÀæ (1) gÀ£ÀéAiÀÄ F PÀbÉÃjAiÀÄ°è MqÀA§rPÉ ªÀiÁrPÉÆAqÀAvÉ ¤ÃªÀÅ CPÉÆÖÃ§gï-2015 jAzÀ d£ÉÃªÀj-2016 gÀ ªÀgÉV£À CªÀ¢üAiÀÄ°è F ¥ÀvÀæPÉÌ ®UÀwÛ¹zÀ vÀSÉÛAiÀÄ PÀæªÀÄ ¸ÀASÉå jAzÀ ªÀgÉV£À PÁªÀÄUÁjUÀ¼À£ÀÄß vÀÄAqÀÄ UÀÄwÛUÉ DzsÁgÀzÀ ªÉÄÃ¯É ¥ÀqÉzÀÄPÉÆArgÀÄ«j.

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¸ÀzÀj PÁªÀUÁjAiÀÄ£ÀÄß ¤ÃªÀÅ C£ÀÄµÁ×£À UÉÆ½¸ÀzÉÃ EgÀÄªÀ ¥ÀæAiÀÄÄPÀÛ F PÁªÀÄUÁjUÀ¼À SÉÆnÖ ©®ÄèUÀ¼À£ÀÄß vÀAiÀiÁj¹ ¸ÀgÀPÁgÀzÀ ¨ÉÆPÀÌ¸ÀPÉÌ DyðPÀ £ÀµÀÖªÀÅAlÄ ªÀiÁrgÀÄwÛÃj JAzÀÄ zÀÆj£ÀéAiÀÄ FUÁUÀ¯ÉÃ J¥sï.L.Dgï.¸ÀA.317/2016 ¢£ÁAPÀ: 1-9-2016 gÀAzÀÄ PÀÄµÀÖV ¥ÉÆÃ°Ã¸À oÁuÉAiÀÄ°è UÀÄ£Éß zÁR¯ÁVgÀÄvÀÛzÉ.

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PÁgÀt F ¥ÀæPÀgÀtzÀ°è PÁªÀÄUÁj ¤ªÀð»¸ÀzÉÃ ºÀt ¥ÀqÉzÀÄ DyðPÀ £ÀµÀÖªÀÅAlÄ ªÀiÁrgÀÄªÀÅzÀjAzÀ, KPÉ ¤ªÀÄä ºÉ¸ÀgÀ£ÀÄß PÀ¥ÀÄà ¥ÀnÖUÉ ¸ÉÃj¸À¨ÁgÀzÀÄ JA§ÄzÀgÀ §UÉÎ ¤ªÀÄä ¸ÀªÀÄeÁ¬Ä¶AiÀÄ£ÀÄß F ¥ÀvÀæ vÀ®Ä¦zÀ ªÀÄÆgÀÄ ¢£ÀzÉÆ¼ÀUÁV F PÀbÉÃjUÉ ¸À°è¸ÀvÀPÀÌzÀÄÝ.”

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A reading of the above show-cause notice would indicate that the petitioners were entrusted with piece work contract during the period from October-2015 to January-2016. But, the said work was not carried on and by placing false bills, amount has been drawn

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causing loss to the State. Hence, it sought explanation as to why the petitioners should not be blacklisted. To the said show-cause notices, as per Annexure-M dated 02.01.2017 and Annexure-M1 dated 30.12.2016 both the petitioners submitted their reply. Thereafter, the respondent No.3 passed the impugned Official Memorandum dated 23.02.2019 blacklisting the petitioners from the list of Contractors of Public Works Department. The impugned O.M. would indicate that Minor Irrigation and Ground Water Development Division, Kustagi (now Koppal Division), during the year 2015-16 submitted a proposal for black-listing certain contractors. The impugned O.M. would also indicate that the petitioners were issued with notice by respondent No.3 on 11.09.2018. To the said notice dated 11.09.2018 and 26.09.2018, the petitioners replied as per Annexure-N3 stating that they have already submitted reply to respondent No.7.

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A perusal of the impugned O.Ms. under

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which the petitioners are blacklisted is bereft of any reason. The blacklisting of contractors would have a far-reaching effect and it would have civil consequence. The contractor would be deprived of further entrustment of contract work by the State and other authorities under the State. Where such drastic civil consequences would arise, the authorities should afford a reasonable opportunity and pass a detailed speaking order. Rule 13 of the Department Code reads as follows:

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“Rule-13:Black-Listing: The registering authority may blacklist a contractor where-

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(i) There are sufficient and strong reasons to believe that the contractor or his employee has been guilty of malpractices such as bribery, corruption, fraud including substitution of, or interpolation in tenders, or unauthorized use of, or disposal of Government materials issued for specific works, etc., Or

(ii) x x x x x x x

(iii) x x x x x x

(iv) x x x x x x

(v) x x x x x x x;

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Provided further, that before action under sub-clause (i) and (v) is taken by the registering authority the contractor concerned may also be given reasonable opportunity to explain his stand before he is blacklisted for the reasons mention in clause.”

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7. A reading of the above Rule would also

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indicate that before taking any action, as envisaged under the Rules, the contractor concerned should be given a reasonable opportunity to explain his stand before he is blacklisted. Even though the impugned order indicates the issuance of show cause notices, the impugned order is a non-speaking order. The impugned order would only state the proposal submitted to government for blacklisting contractors, as the action for blacklisting is to be taken at

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government level. The government gave approval hence blacklisted subject to recovery of amount if any.

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The above extracted Rule would indicate that the registering authority may blacklist a contractor if there are sufficient and strong reasons to believe that the contractor has been guilty of malpractices or fraud or for any other reason. But no reasons are recorded nor forthcoming from the impugned O.M. Reasons are the basis or foundation of a valid order. Without assigning any reason or without any basis an order which has a civil consequence could be passed. Reasons in an administrative order ensures transparency and fairness in decision making.

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The conclusion arrived at in the impugned order to blacklist the petitioners is not supported by any reasons or cause. Moreover, as per Rule-13 extracted above, action for blacklisting could be initiated only by Registering Authority. The Registering Authority shall

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disclose the reasons for blacklisting the petitioners. As the impugned O.M. lacks reason, I am of the view that the impugned O.M. bearing No.CBS/RCO/CSB/2017-

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18 dated 23.02.2019, Annexure-A and Annexure-A1 requires to be quashed with liberty to the Registering Authority to take action in accordance with law after affording a reasonable opportunity to the petitioners and to pass a speaking order.

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With the above, the writ petitions are disposed

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of.

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Sd/JUDGE

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SH/kms

Sri.Ashok Ballolli S/O Nagappa Ballolli v. State of Karnataka

Case brief

What is this about?

What did the court decide?

Sri.Ashok Ballolli S/O Nagappa Ballolli v. State of Karnataka

Case brief

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