Allowed

M/S. Ramsons Garment Finishing Equipments Pvt. Ltd. v. Government of India

Karnataka HC8 Jul 2022WP/37569/2013

Case brief

AI extract

What is this about?

A railway supplier challenged a five-year blacklisting. The Court allowed the petition and quashed the communication for failing to address the supplier's explanations and provide adequate reasons, while permitting fresh action after another hearing.

What did the court decide?

Five-year blacklisting communication quashed; the authority was permitted to proceed afresh after affording another hearing.

M/S. Ramsons Garment Finishing Equipments… — Public Procurement and Tenders | Karnataka HC (2022)

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 08^TH DAY OF JULY, 2022

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BEFORE

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THE HON’BLE MR. JUSTICE C.M. POONACHA

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W.P.No.37569/2013(GM-RES)

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BETWEEN

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M/S. RAMSONS GARMENT FINISHING EQUIPMENTS PVT. LTD A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956 HAVING ITS REGISTERED OFFICE AT H.O 320, MYSORE ROAD BANGALORE-560026 REPRESENTED BY ITS COUNTRY MANAGER(LAUNDRY DIVISION) AND AUTHORISED SIGNATORY MR MUKESH KANTILAL

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...PETITIONER

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(BY DR.ADITYA SONDHI, SENIOR ADVOCATE ALONG WITH SMT.NIDHISHREE, ADVOCATE)

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AND

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1 . GOVERNMENT OF INDIA MINISTRY OF RAILWAYS (RAILWAY BOARD) RAIL BHAWAN, NEW DELHI-1 REPRESENTED BY ITS DIRECTOR RAILWAY STORES(M)

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2 . NORTHERN FRONTIER RAILWAYS MAILGAON, GUWAHATI-781 011

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ASSAM REPRESENTED BY ITS CONTROLLER OF STORES

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…RESPONDENTS

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(BY SRI ABHINAY Y.T, ADVOCATE)

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THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED COMMUNICATION DATED 03.07.2013 ISSUED BY R1 AT ANNEXURE-K AND ETC.

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THIS PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 24.06.2022, COMING ON FOR 'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT MADE THE FOLLOWING:-

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ORDER

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The present Writ Petition is filed challenging the Communication bearing No.2012/LS/54/3, dated

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03.07.2013, issued by the Respondent No.1.

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2. Brief facts of the case are as follows:

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The Petitioner is engaged in the manufacturing of modern laundry and dry cleaning equipment, having clients across India and overseas, both in the private and public sector. The Petitioner was the successful tenderer/bidder pursuant to the Tender Notification dated

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15.3.2010 issued by the Respondent No.2 and accordingly was issued the purchase order dated 10.05.2010. It is the contention of the Petitioner that the said order was implemented to the satisfaction of the Respondent No.2.

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The Respondent No.1 had issued a Memorandum dated 30.10.2012 notifying various malpractices/irregularities which the Petitioner was charged with and a detailed Statement of Charge/misconduct was enclosed along with the said Memorandum. It was also notified about the proposal to ban the business dealing of the Petitioner with the Indian Railways for a period of 5 years. Vide the said Memorandum, an opportunity of showing cause against the proposed action taken was also notified to the petitioner.

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In reply to the said Memorandum dated 30.10.2012, the Petitioner furnished replies dated 12.10.2012, 21.01.2013 and 13.02.2013. Vide Notice dated 10.4.2013, the Petitioner was notified of an opportunity of oral hearing that was to be afforded on

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10.5.2013 to the Petitioner. The Petitioner, in response to the Notice dated 10.4.2013, vide letter dated 07.05.2013, confirmed their participation on the date of oral hearing and further has furnished certain additional replies to the Statement of Charge. The representatives of the Petitioner attended the oral hearing, a copy of the Minutes of which was also furnished to the Petitioner. Thereafter, the Respondent No.1, vide order bearing No.2012/LS/54/3, dated 03.07.2013, banned the Petitioner for a period of 5 years, which has been impugned in the present Writ Petition.

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The Respondents have entered appearance

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and filed their statement of objections. In the statement of objections, the Respondents have defended their action of blacklisting the Petitioner and in detail furnished their response with regard to the allegations made against the Petitioner. It is also stated that the Petitioner has admitted certain charges made against it. It is further stated that the principles of natural justice were followed,

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inasmuch as an opportunity was given and the representations of the Petitioner were considered as also an opportunity of oral hearing was provided before issuing the impugned Communication. The process of banning being an administrative process, subjective satisfaction is sufficient and the banning order was sought to be justified. It is denied that the competitors of the Petitioner was responsible for initiation of action by the Respondents.

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The Petitioner has also filed rejoinder to the statement of objections filed by the Respondents.

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Dr.Aditya Sondhi, learned Senior Counsel appearing for the Petitioner put forth the following contentions;

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(a) a detailed explanation furnishing replies to all the allegations made was given by the Petitioner to the Respondents;

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(b) there was no deliberate attempt by the Petitioner to supply substandard machinery or to pass off machinery of a particular make as that of the other;

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the interest of providing good and efficient service as sought for by the Respondents within a specified time framework and the moment the Respondents conveyed their objections/dissatisfaction to certain aspects of the work done by the Petitioner, the same was immediately rectified in the form of supplying a new machinery or redoing the work at the sole cost of the Petitioner;

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(d) a business competitor of the Petitioner was instrumental for initiation of action by the Respondents;

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(e) large amounts of money were still due and payable from the Respondents to the Petitioner and the same was not insisted upon by the Petitioner to demonstrate its bona fides;

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(f) the Petitioner had successfully completed the work specified in the Tender and letters recording satisfaction of the same were also issued by the Respondents;

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(g) the Petitioner is a reputed company having dominance in the market and is a successful Tenderer in

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many Railway projects and has been doing work as per the Tender specifications to the satisfaction of the Railways;

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(h) the impugned Communication dated 03.07.2013 is a very casual and cryptic order without stating valid reasons and the same casts a stigma upon the Petitioner who is unable to participate in any other Tender floated by the Government and costs irreparable harm to its goodwill and economic interest;

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(i) the impugned Communication dated 03.07.2013 refers to internal findings which have not been furnished to the Petitioner; and

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(j) in the impugned Communication dated 03.07.2013, the Respondents have recorded that the Petitioner was involved in “fraudulent” acts, whereas in the Memo of Charge, fraud was never alleged vis-à-vis the Petitioner.

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In support of his arguments, the learned Senior Counsel for the Petitioner relied upon the following decisions;

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i) M/s Erusian Equipment & Chemicals Ltd., v. State of West Bengal and another¹ ;

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ii) UMC Technologies Private Limited v. Food Corporation of India and another² ; and

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iii ) Mekaster Trading Corporation v. Union of India (UOI) and ors³ .,

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iv) Johnson and Johnson Pvt. Ltd., v. All India Institute of Medical Sciences, New Delhi,⁴

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Putting forth the aforementioned contentions and relying on the rulings, the Petitioner sought for quashing the impugned Communication.

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Sri Abhinay Y.T, learned Counsel for the Respondents put forth the following contentions;

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(a) the impugned Communication dated 03.07.2013 is an administrative action and judicial review of the same is restricted and this Court ought not to entertain the Writ Petition;

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1 (1975) 1 SCC 70

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2 (2021) 2 SCC 551

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3 106(2003) DLT 573

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4 2021 SCC OnLine Del 4154

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(b) the process of affording an adequate

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opportunity was provided, inasmuch as the Petitioner was given an opportunity of responding to the allegations as well as an opportunity of oral hearing and no right of the Petitioner is violated by issuing the impugned Communication;

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(c) that a specific allegation of fraud has been alleged as against the Petitioner and the charges were made after a vigilance inspection;

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(d) it is denied that a business rival of the Petitioner is behind the action initiated by the Respondents; and

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(e) that the charges made against the Petitioner are in respect of deficiencies in the manner of not carrying out the work stipulated in the Tender with regard to cleaning of sheets and other laundry of the Indian Railway, which is required to be carried out diligently in public interest. The Petitioner having been found deficient for the same, action initiated by the Respondents is justified.

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In support of his contentions, the learned Counsel for the Respondents relied upon the following decisions;

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i) Jagdish Mandal v. State of Orissa and Others⁵ ; and ii) Patel Engineering Ltd., v. Union of India⁶ , .

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Putting forth the aforementioned contentions and relying on the rulings, the Respondent sought for dismissal of the Writ Petition.

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Having regard to the rival contentions put forth by the learned Counsel for the parties, the question that arises for consideration of this Court is, “Whether the impugned Communication bearing No.2012/LS/54/3, dated 03.07.2013, is liable to be interfered with by this Court?”

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The arguments of the learned counsel for the Petitioner and Respondents were heard and a detailed reference has been made by both the counsel to the

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5 (2007) 14 SCC 517

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6 (2012) 11 SCC 257

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various documentary material available on record vis-àvis, the charges/allegations that were made against the Petitioner and response that was furnished to it. It is not necessary to refer to all the material on record, except to the extent necessary to decide the question that arise for consideration in the present case.

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It was contended by the learned Senior Counsel for the Petitioner that the Tender did not mandate it to supply Electrolux machines. Hence, the Petitioner did not violate any norms of the Tender when it had initially supplied Ramsons machines and thereafter supplied Electrolux machines. It is not forthcoming from any of the material available on record that the Petitioner under the Tender was required to supply only Electrolux machines. With regard to the allegation that a sticker was affixed on the Electrolux machines supplied, while denying the said allegation, the Petitioner has specifically stated that they suspect the same to be the handwork of some mischief-

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mongers. It was contended by the learned Senior Counsel for the Petitioner that fraud was not a charge made by the Respondents at the time of issuing the Memorandum containing the charges. However, in the impugned Communication dated 03.07.2013 the Petitioner was found to have been involved in fraudulent activity. In response to the same, the Respondents have contended that the charges enclosed along with the Memorandum dated 30.10.2012 were of fraud that was alleged against the Petitioner.

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It was strenuously contended by the learned Counsel for the Respondents that with regard to various allegations/charges that were made against the Petitioner, no response was furnished and as a result of which the Petitioner is deemed to have admitted the charges. However, the learned Senior Counsel for the Petitioner disputes the fact that the Petitioner had admitted any of the allegations and has specifically contended that in the various replies issued by the Petitioner as also in the oral

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hearing it was specifically denied by the Petitioner of any wrong doing in carrying out the work as contemplated under the Tender.

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The learned Senior Counsel for the Petitioner also contends that the act of the Petitioner in replacing the machines that were pointed out by the Respondents was not an admission of wrong doing, but was merely in the interest of ensuring that the operations of the Respondents were not hindered and the Petitioner has incurred huge loss in the process of replacing the said machinery, which they have not claimed from the Respondents; and that the act of replacing the machinery should be seen as a bona fide act done in good faith by the Petitioner to maintain a business relationship with the Respondents.

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Be that as it may, in the Communication dated 03.07.2013 the Respondent No.1 has not dealt in detail with regard to various allegations/charges that were made against the Petitioner as also response given by the Petitioner to the charges/allegations. In the absence of the

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Respondent Authority appreciating the various aspects pertaining to the charges made against the Petitioner and the replies furnished by the Petitioner to the same and setting out its reasons for the decision arrived at, the question of this Court re-appreciating the various material available on record to adjudicate whether the decision of the Respondent is in accordance with law does not arise. The Communication dated 03.07.2013 under which blacklisting of the Petitioner for a period of five years was ordered is a grave one which will cast a stigma on the Petitioner and has far reaching consequences.

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17 . In the case of M/s Erusian Equipment & Chemicals Ltd¹ ., the Hon’ble Supreme Court has held as

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follows:

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“12. ……………… The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or

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expectation. When the State acts to the prejudice of a person it has to be supported by legality.”

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“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”.

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“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. 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.”

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“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.”

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18. In the case of UMC Technologies Private

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Limited² , the Hon’ble Supreme Court has held as follows:

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“14. …………….. 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. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.”

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In the case of Mekaster Trading

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Corporation³ , a learned Single Judge of the Delhi High court has held as follows:

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“28. ……………… Whether the contention raised by the petitioners in their replies are considered and addressed, is the main question? Perusal of the impugned order shows that after making recital of the events which transpired after the show cause notice, i.e. filing of replies by the petitioner, giving of hearings to both parties who explained their respective cases, the penultimate para records that case has been examined and heard and the sum and substance of the allegation made against the petitioner was that petitioner could not fulfilll its contractual obligation as Indian agent and replies submitted by the petitioner as well as oral representation made by them during hearing of the

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case have not been found convincing. All the arguments of the petitioners are brushed aside by the following utterances "the reply submitted by them vide their letters dated 18.8.2001 and 6.2.2002 and oral representation by them during hearing of the case on 4.3.2002 have not been found convincing. The available evidence does not reveal that the firm has fulfillled its contractual obligations."

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“29. Passing the order in such a slip shod manner which has the serious effect of blacklisting the petitioner for a long period of 5 years is certainly not act of good administration.”

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“30. It is abundantly clear that the aforesaid summation cannot be called as "reasons" in support of the order. It can, at best, be termed as conclusion. Apart from this conclusion there is nothing in the order to indicate any supportive reason. Thus, there is no indication in the order as to what are the elements which persuaded the competent authority to reject the contentions of the petitioner. The requirement that the reasons must meet the substance of the principle argument that the competent authority was required to consider is clearly lacking. No link between the material on which conclusions are based and the actual conclusion drawn is based, is found. If that has remained at the back of the mind of the authority passing the order, and has not surfaced on the records of the case, the ingredients of a reasoned order are not met. Reading of such an order would naturally not satisfy the aggrieved party's desire to know as to why decision was reached and what was the justification in rejecting his point of view. It would harbour the feeling that the authority proceeded with the matter with closed mind, whatever is stated in the show cause notice is final and giving of opportunity to show cause was empty formality as the defense was rejected summarily by

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labelling the same as 'not convincing'. It has to be emphasised that reasons for a decision are distinct from the conclusions recorded in the order. Apart from repeating that the petitioner had not fulfillled its contractual obligation as Indian Agent which was stated in the show cause notice (may be in detail), what was required was to at least indicate in a concise manner as to why the defense of the petitioner was unconvincing.”

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(emphasis supplied)

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In the case of Johnson and Johnson Pvt.

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Ltd.,⁴ a learned Single Judge of the Delhi High Court while placing reliance on the earlier judgment of the said High Court in the case of Mekaster Trading Corporation³ has held as follows:-

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“13. ………………. In this regard, reliance was placed on the decision of the Supreme Court in Kulja Industries Limited Vs. Chief Gen. Manager (2014) 14 SCC 731 to contend that the decision of the respondent to blacklist the petitioner had to withstand the test of fairness, natural justice, relevance, nondiscrimination, quality and proportionality. ……………”

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“31. This brings me to the next question, whether the impugned order had been passed after duly considering the defense put forth by the petitioner. Administrative orders, such as the impugned order, require the Authority

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passing it to clearly set out the reasons as to why it arrived upon a decision to penalize an entity. This makes such administrative orders, and the manner in which they are written, of special interest to the affected party and the Courts that deal with their grievances. “

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(emphasis supplied)

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In the case of Patel Engineering Ltd⁵ ., the Hon’ble Supreme Court while referring to its earlier decision in the case of M/s. Erusian Equipment & Chemicals Ltd¹ . , has held as follows:

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“14. ……….. This Court also took note of the fact that the right to make a contract includes the right not to make a contract. By definition, the said right is inherent in every person capable of entering into a contract. However, such a right either to enter or not to enter into a contract with any person is subject to a constitutional obligation to obey the command of Article 14. Though nobody has any right to compel the State to enter into a contract, everybody has a right to be treated equally when the State seeks to establish contractual relationships. …………….. The effect of excluding a person from entering into a contractual relationship with the State would be to deprive such person to be treated equally with those, who are also engaged in similar activity.”

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“ 15. ……… The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such

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power. The only legal limitation upon the exercise of such an authority is that the State is to act fairly and rationally without in any way being arbitrary— thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors.”

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22. In the case of Jagdish Mandal⁴ , the Hon’ble

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Supreme Court has held as follows:

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“22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such

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interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold. Therefore, a court before interfering in tender or contractual matters in exercise of power of judicial review, should pose to itself the following questions:

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(i) Whether the process adopted or decision made by the authority is mala fide or intended to favour someone;

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Whether the process adopted or decision made is so arbitrary and irrational that the court can say: “the decision is such that no responsible authority acting reasonably and in accordance with relevant law could have reached”;

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(ii) Whether public interest is affected.

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If the answers are in the negative, there should be no interference under Article 226. Cases involving blacklisting or imposition of penal consequences on a tenderer/contractor or distribution of State largesse (allotment of sites/shops, grant of licences, dealerships and franchises) stand on a different footing as they may require a higher degree of fairness in action.”

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23. The requirement/necessity of giving reasons

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even in administrative actions has been the subject matter of many judgments. The Hon’ble Supreme Court in the

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case of Union of India v. Jai Prakash Singh⁷ has held as follows:

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“11. Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, all the more when its order is amenable to further avenue of challenge. The absence of reasons has rendered the High Court's judgment not sustainable.

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12. Even in respect of administrative order Lord Denning, M.R. in Breen v. Amalgamated Engg. Union [(1971) 2 QB 175 : (1971) 2 WLR 742 : (1971) 1 All ER 1148] observed : (All ER p. 1154h) ‘The giving of reasons is one of the fundamentals of good administration.’ In Alexander Machinery (Dudley) Ltd. v. Crabtree [(1974) 1 ICR 120 : 1974 IRLR 56] it was observed:‘Failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at.’ Reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the ‘inscrutable face of the sphinx’, it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system, reasons at least sufficient to indicate an application of mind to the matter before court. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The ‘inscrutable face of a sphinx’ is ordinarily

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7 (2007) 10 SCC 712

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incongruous with a judicial or quasi-judicial performance.” [Ed. : Quoting from Cyril Lasrado v. Juliana Maria Lasrado, (2004) 7 SCC 432, p. 436, paras 11-12.]

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24. In the case of Kranti Associates (P) Ltd., v.

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Masood Ahmed Khan⁸ , the Hon’ble Supreme Court has set out certain principles on the requirement of disclosing reasons, which reads thus;

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“(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

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(b) A quasi-judicial authority must record reasons in support of its conclusions.

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(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.

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(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

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(e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations.

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(f) Reasons have virtually become as indispensable a component of a decision-making process as

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8 (2010) 9 SCC 496

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observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

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(g) Reasons facilitate the process of judicial review by superior courts.

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(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.

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(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.

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(j) Insistence on reason is a requirement for both judicial accountability and transparency.

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(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.

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(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.

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(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 Harv. L. Rev. 731-37.)

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(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 p. 562, para 29 and Anya v. University of Oxford [2001 EWCA Civ 405 : 2001 ICR 847 (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’.

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(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’.”

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It is clear from the enunciation of law as set

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out in the aforementioned judgments that having regard to the severity of the effects of blacklisting, the mandate of law requires strict adherence to the principles of natural justice. If an action of blacklisting is sought to be made, the person/entity concerned is required to be duly notified of the charges levelled against him/it and the consequences that may follow if the charges are proved, give adequate opportunity to the person/entity against whom/which the allegations are made to put forth his/its

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say and the order under which blacklisting is imposed should disclose adequate reasons for imposing such punishment after considering/dealing with the various responses/explanations given by the person/entity against whom the allegation is made.

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No doubt, the Respondents have suitably notified the Petitioner of the charges levelled against it as well as given an adequate opportunity to put forth its explanation in response to the allegations made as also having given an opportunity of oral hearing. However, the Communication dated 03.07.2013 whereunder the Petitioner is sought to be blacklisted for a period of five years has not dealt with the explanation offered by the Petitioner as also set out adequate reasons for blacklisting the Petitioner for five years. Under the circumstances, the Communication dated 03.07.2013 does not meet the requirement of law and hence, the same is required to be quashed.

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27. Accordingly, I pass the following:

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ORDER

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i) Writ Petition is allowed.

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ii) Impugned Communication bearing

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No.2012/LS/54/3, dated 03.07.2013, issued by

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the Respondent No.1, is hereby quashed.

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iii) It shall be open to the Respondent No.1 to proceed with the matter by affording an other opportunity of hearing to the Petitioner and pass such orders as contemplated under law.

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iv) No order as to costs.

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sd/JUDGE

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M/S. Ramsons Garment Finishing Equipments Pvt. Ltd. v. Government of India

Case brief

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M/S. Ramsons Garment Finishing Equipments Pvt. Ltd. v. Government of India

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