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 counter party 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.

JUDGMENT

1. Heard Sri P. Narasimha Rao, learned counsel for the petitioner and Sri N. Manikanta, learned counsel for the respondents.

2. The petitioner-M/s.Coromandel Roller Flour Mils (P) Ltd., Visakhapatnam, a private limited company, incorporated under the Companies Act, engaged in flour milling business, has filed this writ petition under Article 226 of the Constitution of India, challenging the impugned notice/intimation dtd. 7/6/2016, by the Vice Chairman and Managing Director of the 1st respondent-the Andhra Pradesh State Civil Supplies Corporation Limited (in short "APSCL" or "the Corporation"), imposing penalty of Rs.6.00 lakhs @Rs.2.00 lakh per sample, for three samples, and directing recovery of the said amount from the final payment, apart from blacklisting the petitioner for a period of one year.

3. The petitioner, pursuant to the tender notice PDS 1/70/AP/WMWA/Tenders/2015-16, dtd. 20/5/2015 of the Corporation for supply of wheat atta for Zone-I consisting of districts Srikakulam, Vizianagaram and Visakhapatnam, applied tender and was granted the said work for which an agreement dtd. 10/6/2015 was executed between the petitioner and the Corporation for supply of whole meal wheat atta of 2,728.769 MTS quantity on the eve of Sankranthi festival 2016 for the said three districts under "Chandranna Kanuka" (Special Scheme launched in the interests of the poor Sec. under below poverty line). The petitioner supplied the product of whole meal wheat atta to the Corporation in packaging under the agreement. It is the case of the petitioner that the petitioner company got certification after conducting analytical testing in the Directorate of Marketing and Inspection Regional Agmark Laboratory, Guntur, in all batches and the product was certified. After such certification the product, packed in 1 kg polythene bags and in secondary packing of 50 bags of 1 kg polythene bags, was delivered to the authorized agencies of the Corporation. The entire stock was supplied at the destination points in time, complying with the terms of the agreement in all respects.

4. The petitioner company received a letter No.PDS-I/Analysis Report/CSK-2016, dtd. 20/1/2016, from the Corporation calling for the explanation for the reason of non-confirmation of quality parameters of wheat atta supplied. It referred to the analysis report of the third party agency M/s.NCML, Hyderabad appointed under Clause 7.2 of the agreement, reporting non-confirmation of quality parameters, as exceeding the limits.

5. The petitioner submitted explanation dtd. 28/1/2016 inter alia that there must be some serious technical error in the report of the third party agency as there could be no possibility for some samples being in conformity and only three not in conformity as the petitioner had adopted the same process. It was also submitted that depending upon the quality of the wheat supplied by the Corporation to the petitioner converting into flour there might be the possibility of difference. The petitioner also submitted that the notice did not disclose the batch number, date of manufacturing and the parameters in which it has exceeded the limit and requested to provide such information in detail.

6. The Corporation-1 st respondent initially passed order dtd. 5/3/2016, against which the petitioner sent legal notice dtd. 4/4/2016 and thereafter the order/notice dtd. 7/6/2016 impugned in the present writ petition was passed, being the same as order dtd. 5/3/2016.

7. Learned counsel for the petitioner submitted that the petitioner got several quantities of the product testified for quality testing analysis through the Directorate of Marketing and Inspection Regional Agmark Laboratory, Guntur, which issued certificates regarding 100% confirmation of quality specifications, but the Corporation got it tested through its own appointed third party agency, which gave different reports on quality specifications but the third party assaying agency M/s.NCML, Hyderabad's analysis report