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2019 Supreme(Kar) 626
IN THE HIGH COURT OF KARNATAKA AT DHARWAD BENCH
S.G. Pandit, J.
C.S. Gulannavar - Appellant
Vs.
Director, Health And Family Welfare Department - Respondent
Writ Petition No. 102980 of 2018
Decided On : 25-06-2019
Harshwardhana M. Patil, Adv., M.H. Patil, Adv., Ravi V. Hosmani, Adv.
The main legal point established is that the imposition of permanent blacklisting without a formal inquiry and for allegations that do not warrant such severe punishment violates principles of natural justice.
Headnote:
Tender Cancellation - Violation of Principles of Natural Justice - Blacklisting - [TENDER CANCELLATION] - [GOVERNMENT CONTRACTS] - [Article 226 of the Constitution of India, Clause 6 of the terms and conditions of the tender]
Fact of the Case:
The petitioner, a contractor, was awarded a tender to supply manpower to a government department. However, the petitioner failed to supply the required workforce, leading to the cancellation of the tender and permanent blacklisting by the respondent.
Finding of the Court:
The court found that the cancellation of the tender and permanent blacklisting of the petitioner was unjustified. It held that the petitioner should have been given an opportunity to represent his case before being blacklisted, and the allegations against the petitioner did not warrant permanent blacklisting.
Issues: The main issue was whether the respondent was justified in canceling the tender and blacklisting the petitioner permanently.
Ratio Decidendi: The court emphasized the importance of principles of natural justice and the need for a formal inquiry before imposing permanent blacklisting. It also highlighted that the allegations against the petitioner did not warrant such severe punishment.
Final Decision: The court quashed the order of blacklisting and tender cancellation, stating that the respondent was not justified in passing the impugned order. The court held that the blacklisting should have been for a specific period and not permanent.
JUDGMENT :
S.G. Pandit, J.
The petitioner is before this Court under Article 226 of the Constitution of India praying to quash the order bearing No.RCB/HVR/KTPP/AP-01/2017-18 dated 27.12.2017 passed by respondent No.5 and order bearing No.G/AA/KUKAHA/C-3/766/ 2017-18 dated 04.08.2017 passed by respondent No.2.
2. The brief facts leading to the case are that the petitioner claims that he is a contractor who supplies manpower to various departments of the Government. Respondent No.4 by notification dated 09.02.2017 issued E-tender for supply of manpower, i.e., to supply of 13 Pharmacists and 17 Junior Lab Technicians. The petitioner applied to the tender. The petitioner being the lowest tenderer succeeded in the tender process. Respondent No.4 issued work order dated 13.04.2017 for supply of 13 Pharmacists and 17 Junior Lab Technicians for the period from 15.04.2017 to 31.03.2018. It is the case of the petitioner that, before issuing the work order, on 26.03.2017 respondent No.4 had issued a paper publication inviting application to outsource the work of Pharmacists and Lab Technicians on contract basis. The petitioner did not supply the manpower in pursuance to the work order dated 13.04.2017, which necessitated respondent No.4 to issue notice dated 26.07.2017 alleging that the petitioner has supplied only 5 Pharmacists as against 13 Pharmacists and they have information that the petitioner has not paid three months salary to Lab Technicians and Pharmacists. The petitioner conducted himself contrary to the terms and conditions of the tender harassing the employees. Hence, explanation was sought as to why he should not be blacklisted. In pursuance to the show-cause notice, the petitioner replied on 30.07.2017 refuting the allegations stating that he has not supplied the manpower at all. Being not satisfied with the explanation submitted by the petitioner, by order dated 04.08.2017, respondent No.2-Deputy Commissioner cancelled the tender awarded to the petitioner and for feited the EMD amount of Rs.90,000/- and ordered for blacklisting the petitioner. Aggrieved by the said order, the petitioner approached this Court in W.P.No.108383/2017. The writ petition was disposed of observing that the petitioner has an alternative and efficacious remedy of an appeal and liberty was reserved to the petitioner to approach the appropriate Appellate Authority for redressal of his grievance. Thereafter, the petitioner filed an appeal before the Regional Commissioner, Belagavi Division, Belagavi against the order of cancellation of tender and blacklisting. The Regional Commissioner by order dated 27.12.2017 rejected the appeal. Aggrieved by the same, the petitioner is before this Court in this writ petition.
3. Heard the learned counsel for the petitioner and the learned AGA for the respondents.
4. The learned counsel for the petitioner would submit that the cancellation of tender and blacklisting the petitioner is in total violation of principles of natural justice. Except the show cause notice, no proceeding has taken place before the Deputy Commissioner and no enquiry was conducted by the Deputy Commissioner to arrive at a conclusion that the petitioner has violated the terms and conditions of the tender and that the petitioner has not paid the salary to the Pharmacists and Lab Technicians. He submits that the quantum of punishment, i.e., imposition of permanent blacklisting, is not permissible and the punishment imposed is too harsh. The allegation contained in the show cause notice if proved also could not warrant blacklisting. If the successful tenderer fails to execute the work order, the terms of tender notification provides only for forfeiting of EMD and awarding tender to next lowest tenderer. The learned counsel for the petitioner submits that the petitioner has filed O.S.No.158/2017 on the file of the Principal Civil Judge and I Additional JMFC, Ranebennur to recover the EMD and security deposits. He submits that the suit has nothing to d
