IN THE HIGH COURT OF JUDICATURE AT PATNA
Sanjay Karol, S. Kumar, JJ.
M/s Satyendra Kumar and Co. Const. Pvt. Ltd. - Appellant
Vs.
Versus
The State of Bihar through Principal Secretary, Building Construction Department, Patna, Bihar - Respondent
Civil Writ Jurisdiction Case No.2625 of 2021
Decided On : 24-01-2022
Bihar Contractors Registration Rules, 2007 – Rule 11 – Black-listing of Contractor – An order of blacklisting is open to be weighed on scales of natural justice and doctrine of proportionality – An essential precondition for a duly issued order of blacklisting is a fair hearing on Show Cause notice issued – Issuance of Show Cause Notice, unless otherwise warranted, must precede blacklisting – Where action of authorities is ex-facie illegal, Courts are duty bound to interfere – Impugned action insofar as it relates to debarment is concerned, needs interference being in utter violation of fundamental principles of natural justice and Bihar Contractor Registration Rules, 2007 – Part of impugned communication whereby petitioner stands debarred, quashed and set aside. (Paras 12, 17 and 19)
Natural Justice – Principles of natural justice are attracted whenever a person suffers a civil consequence, or prejudice is caused to him because of some administrative action – Civil consequences mean infraction of personal property rights, violation of civil liberties, material deprivation or sufferance of non-pecuniary damages – Mere violation of Natural Justice Principles is not sufficient for Judicial intervention unless such breach also entails avoidable prejudice caused to the person. (Para 14)
JUDGMENT
Sanjay Karol, J.
(The proceedings of the Court are being conducted by Hon’ble the Chief Justice/ Hon’ble Judges through Video Conferencing from their residential offices/residences. Also, the Advocates and the Staffs joined the proceedings through Video Conferencing from their residences/offices.)
The sole issue which arises for consideration is as to whether, without even issuing notice to show cause or complying with the fundamental principles of natural justice, the petitioner can be, straightway black listed/debarred from participating in the other works, civil in nature, undertaken on behalf of the State of Bihar or not?
2. Vide impugned order dated 03.10.2020, the Building Construction Department, Government of Bihar, has inter alia debarred the petitioner with immediate effect. Impliedly, such order prohibits the petitioner from participating in all the works of civil nature undertaken by the said Department.
3. The other issue raised in the said communication is petitioner’s alleged violation of the terms of agreement executed on 04.04.2018 concerning work of civil nature.
4. During the course of the hearing, Sri Sanjay Singh, learned Senior Counsel appearing for the petitioner, while confining the instant petition, only qua the issue of debarment, seeks liberty to agitate the other grievances under law, by initiating appropriate proceedings in terms of the agreement and/or as per law, before the appropriate forum.
5. Petitioner has prayed for the following reliefs:-
(B) For issuance of an order/orders, direction/directions or writ/writs in the nature of Mandamus directing the Respondents to seeking a direction to the respondents to act forthwith on the application of the petitioner regarding closure of their contract after making all the requisite payments, i.e. carrying out the final measurement of the work carried out at the site and making the payment of the same along with approval of the time extension and release of the amount deducted under each bill under this head along with the release of Security Deposit and issuance of quantity wise completion certificate.
(C) For any other Order/Orders/Direction/Directions which this Court Hon’ble Court may deem fit and proper in the facts and circumstances of the present case.”
6. Liberty, as prayed for, is granted.
7. Coming to the sole surviving issue of blacklisting, we find the respondents not to have disputed the issue of the impugned communication, debarring the petitioner from participating in other works with immediate effect, without issuing a notice to show cause or conveying such intent prior to it.
8. Our specific attention is invited to the Bihar Contractors Registration Rules, 2007, whereby as per Rule 11, a contractor can be debarred only in terms of the conditions stipulated therein. But what is essential, as is also envisaged in the Rules, is the requirement of first issuing a notice to show cause before taking action in terms thereof.
9. It is apt to refer to sub-rule (kha) of Rule 11 of the Rules which reads as under:
10. On merits, whether petitioner’s case for debarment falls within any of the conditions stipulated therein is an issue which we may not examine, leaving it open to be considered by the authorities and what we need to examine is the effect of the order of blacklisting/debarment in the event of non-compliance of the Rules and fundamental principles of natural justice.
11. Sri Sanjay Singh, learned Se
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Blacklisting or debarment cannot be permanent and must be preceded by a specific show cause notice, complying with the principles of natural justice.
Blacklisting of a contractor must adhere to the principles of natural justice, requiring a specific show cause notice containing proposed penalties. Furthermore, permanent or indefinite blacklisting ....
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