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2024 Supreme(Cal) 1458
IN THE HIGH COURT AT CALCUTTA (CIRCUIT BENCH AT JALPAIGURI)
JOYMALYA BAGCHI, AJAY KUMAR GUPTA, JJ.
M/s. Roxy Enterprises – Appellant
Versus
The State of West Bengal and Others – Respondents
M.A.T. No. 33 of 2024, CAN No. 1 of 2024
Decided On : 21-05-2024
Advocate Appeared:
For the Appellants : Kunaljit Bhattacharjee, Sourav Ganguly, Alok Sah, Rishita Chakraborty
For the Respondents: Bikramaditya Ghosh, Supriya Singh, Hirak Barman, Momenur Rahman
IMPORTANT POINT
Blacklisting requires a show-cause notice; failure to provide one renders the decision void, independent of contract termination.
Headnote:
(A) Principles of Natural Justice - Blacklisting - The court held that blacklisting requires a show-cause notice, and failure to provide one renders the decision void. The termination of a contract does not automatically lead to blacklisting. (Paras 12, 13, 14)
(B) Contract Law - The appellant's contract was terminated due to failure to complete work within the stipulated time, but the debarment was found to violate natural justice principles. (Paras 10, 11)
Facts of the case:
The appellant submitted a bid for road repair but failed to complete the work due to pandemic conditions, leading to termination and debarment from government work.
Findings of Court:
The court found the debarment decision void due to lack of notice, while termination was valid based on contract terms.
Issues: The main issues were whether the termination was lawful and if the debarment violated natural justice.
Ratio Decidendi: The court ruled that blacklisting requires a show-cause notice and cannot occur solely due to contract termination.
Result: The decision to debar the appellant from government work was set aside.
JUDGMENT :
JOYMALYA BAGCHI, J.
1. Leave is granted to the learned Advocate-on-record for the appellant to correct the cause title in course of the day.
2. A brief factual sketch leading to the appeal is as follows:
In response to a notice inviting pre-qualification-cum-tender (two cover system) published by the Alipurduar Zilla Parishad, the appellant submitted its bid for repair of road from Salkumarhat near Dijarajghat to Bhandani temple via Bangdaki Forest under Salkumar-II GP of Alipurduar-I PS within Alipurduar Zilla Parishad. The work was to be completed within 120 days. The terms and conditions mentioned in the notice, inter alia, provided if the work was not completed by the contractor within the stipulated time frame, necessary penal measure in the tune of deduction of an amount as decided by the Artha Sanstha Unnayan-o-Parikalpana Sthayee Samity of Alipurduar Zilla Parishad will be imposed. Running payments shall be made as per norms and availability of funds.
3. By Memo dated 03.03.2020, Executive Engineer (P & RD), Alipurduar Zilla Parishad issued work order in favour of the appellant. He was requested to take up the work within seven days from the date of issuance of the letter and complete the same in all respect within the stipulated period. Due to pandemic conditions appellant was unable to commence work immediately. In spite of repeated requests by the Assistant Engineer, he did not resume work and the work was not completed within the stipulated time frame.
4. Under such circumstances, by the impugned Memo dated 05.05.2022 appellant was directed to respond why the contract shall not be terminated as per provisions of Artha Sanstha Unnayan-o-Parikalpana Sthayee Samity of Alipurduar Zilla Parishad.
5. By communication dated 03.01.2023 the Executive Engineer intimated the appellant as he had failed to complete the work as per agreement and in view of the public interest involved, his contract was terminated along with penalty of forfeiture of security deposit etc. and he was debarred from participating in any type of work in the government sector.
6. Challenging the aforesaid communication, appellant moved this court.
7. Learned Single Judge, inter alia, opined the legality of termination and forfeiture of security involved disputed questions of fact and relegated the appellant to seek remedy before a competent forum, if permissible in law. Being aggrieved by this order appellant is before us.
8. Learned Advocate for the appellant contends the learned Judge failed to consider the fact that the contract had not only been terminated but the appellant had also been debarred from participating in any other government work. This amounts to blacklisting. No notice was served upon the appellant with regard to blacklisting as required under law.
9. Learned Advocate for the respondent nos.3 to 6 contends appellant had violated the terms of contract. Accordingly, his contract was terminated. All issues including debarment may be agitated before the appropriate forum in accordance with law.
10. It is alleged appellant had failed to act diligently and complete work within the stipulated time frame. Appellant contends the delay was due to pandemic conditions prevailing in 2020-21 and non-release of running dues in time. On the other hand, respondent nos. 3 to 6 contends in spite of repeated notices, appellant did not resume work after the pandemic and in view of public interest involved, his contract was terminated and security forfeited.
11. The rival stances give rise to disputed questions of fact and the parties were rightly relegated to the competent forum. However, the issue of debarment of the appellant appears to be in violation of principles of natural justice. None of the show cause notices including the impugned notice dated 05.05.2022 calls upon the appellant to show cause why he shall not be debarred from government work. Without issuing a notice to show cause why the appellant should not be blacklisted, he could not have bee
