IN THE HIGH COURT OF CHHATTISGARH AT BILASPUR
GOUTAM BHADURI, DEEPAK KUMAR TIWARI, JJ.
M/s Balaji Traders, Through - Prop. Anchal Kumar, S/o Shri Jugal Kishore Kesharwani - Appellant
Versus
State Of Chhattisgarh, Through - The Collector and Ors. - Respondents
FA No. 80 Of 2022
Decided On : 13-10-2023
Blacklisting - Contract Termination - [Food Supply Contract, Termination, Blacklisting] - [Chhattisgarh Human Rights Commission Act, 2005 - Section 12(1), Indian Penal Code, 1860 - Sections 336, 279, Limitation Act, 1963 - Articles 14, 15] - The court examined the sustainability of the blacklisting order, the limitation period for filing the suit for pending bills, and the justification of the termination and forfeiture orders. The court set aside the blacklisting order, rejected the claims for pending bills and damages, and allowed the appeal partly.
Fact of the Case:
The plaintiff, a catering firm, supplied food to a hospital under a contract. The contract was terminated due to alleged inferior food quality, leading to blacklisting and forfeiture of security amount. The plaintiff filed a suit for pending bills and damages.
Finding of the Court:
The court set aside the blacklisting order, rejected the claims for pending bills and damages, and allowed the appeal partly.
Issues: Sustainability of blacklisting order, limitation period for filing suit, justification of termination and forfeiture orders.
Ratio Decidendi: The blacklisting order lacked a specific notice, rendering it unsustainable. The suit for pending bills was filed beyond the limitation period. The termination and forfeiture orders were justified based on the plaintiff's failure to maintain food quality.
Final Decision: The blacklisting order was set aside, and the claims for pending bills and damages were rejected. The appeal was allowed partly.
JUDGMENT :
(Deepak Kumar Tiwari, J.) :
1. The instant Appeal is directed against the judgment and decree dated 26.2.2022 passed by the 3rd Additional District Judge, Ambikapur, District Surguja in Civil Suit No.8-B/2015 whereby the suit filed by the plaintiff/appellant herein was partly decreed.
2. Henceforth the parties shall be referred as per their description before the Court below.
3. Facts of the case are that the plaintiff/appellant herein is the proprietor of the firm namely, M/s Balaji Traders, who was engaged in the business of supply of catering. Respondent No.2 had issued a tender (Ex.-P/2) for supply of the food to the indoor patients admitted in the District Hospital, Ambikapur, District Surguja. The plaintiff/appellant has participated in the tender process by submitting an application and his offer was duly accepted by the defendant/respondent No.2 on certain terms and conditions, and the work order (Ex.-P/3) was issued in his favour on 7.7.2011. Looking to the services of the appellant, he was also awarded additional work of food supply under the scheme namely, “Janani Shishu Suraksha Yojna” vide order dated 26.11.2011 (Ex.-P/4), and the period of contract was from 20.7.2011 to 19.7.2012. The food prepared by the appellant was tested and checked every day for which a taste and quality register was maintained by respondent No.2.
4. The appellant had submitted the bills for the work done during the period 20.7.2011 to March, 2012 to respondent No.2, the details of which are as under:-
Food bill supplied to the indoor patients-
| Sr. No. | Bill Number | Date | Amount |
| 1. | 140 | 02.12.2011 | Rs.4,51,236/- |
| 2. | 182 | 02.11.2011 | Rs.1,88,208.60/- |
| 3. | 183 | 02.12.2011 | Rs.1,76,251.20/- |
| 4. | 184 | 05.01.2012 | Rs.1,91,208.90/- |
| 5. | 185 | 08.02.2012 | Rs.1,67,272.20/- |
| 6. | 186 | 01.03.2012 | Rs.15,827.30/- |
| 7. | 191 | 05.03.2012 | Rs.21,746.70/- |
Food bill provided under the Janani Shishu Suraksha Yojna
| Sr. No. | Bill Number | Date | Amount |
| 1. | 187 | 02.01.2012 | Rs.27,600/- |
| 2. | 188 | 08.02.2012 | Rs.77,700/- |
| 3. | 189 | 01.03.2012 | Rs.65,000/- |
| 4. | 190 | 05.03.2012 | Rs.10,400/- |
|
|
| Grand Total | Rs.13,92,450.90/- |
5. The aforesaid bills were presented before the respondent authorities for payment and process for payment has also been initiated and defendant No.2 had given the information that partial allotment was received from defendant No.1. So, payment will be made early. During the pendency of the bills, the concerned authorities of Human Rights Commission had inspected the food prepared by the appellant on 2.3.2012 and some adverse comments were also made (Ex.-P/8). As a result, the contract and the work order dated 7.7.2011 & 26.11.2011 respectively were terminated vide order dated 3.3.2012 (Ex.-P/18) and security amount of Rs.75,000/- and caution money of Rs.52,000/- had been forfeited, and payment of pending bills was also not paid by order dated 30.5.2012 (Ex.-P/17). The appellant was also blacklisted (Ex.-P/19). During the aforesaid proceedings, no opportunity was afforded to the appellant and without any factual enquiry, the order has been passed and even the pending bills were not cleared by the respondents.
6. Thereafter the appellant had challenged the impugned action of the respondent before this Court by way of WPC No.568/2013, which was dismissed vide order dated 7.5.2014 (Ex.-P/32) with an observation that the writ petition arises out of contract and disputed questions of fact are involved, and the petitioner (appellant herein) may file a civil suit with regard to recovery of the pending bills. Accordingly, the appellant after sending the legal notice under Section 80 of the CPC (Ex.-P/30) had filed a civil suit before the concerned Court for payment of pending bills relating to the period prior to 2.3.2012, am
Gorkha Security Services v. State (NCT of Delhi) : (2014) 9 SCC 105
Vet India Pharmaceuticals Limited Vs. State of Uttar Pradesh and Another : (2021) 1 SCC 804
UMC Technologies (P) Ltd. v. Food Corpn. of India : (2021) 2 SCC 551
Kulja Industries Ltd vs Chief General Manager Western Telecom Project BSNL : (2014) 14 SCC 731
Shankar Finance and Investments Vs. State of Andhra Pradesh & Others : (2008) 8 SCC 536
Janki Vashdeo Bhojwani and Another Vs. IndusInd Bank Ltd & Others : (2005) 2 SCC 217
Nasir Ahmad v. Custodian General, Evacuee Property
Erusian Equipment & Chemicals Ltd. v. State of W.B.
State of Orissa v. Mamata Mohanty
Lachhmi Sewak Sahu v. Ram Rup Sahu
Kamlesh Babu v. Lajpat Rai Sharma
Babulal Vardharji Gurjar v. Veer Gurjar Aluminium Industries (P) Ltd.
Kanchan Udyog Limited Vs. United Spirits Limited : (2017) 8 SCC 237
Point of law : Before proposing to pass a black listing order or debarring orders the parties had to be given hearing followed by an appropriate reasoned order.
The main legal point established in the judgment is the requirement of a valid, particularized, and unambiguous show-cause notice before blacklisting, and the need for fair hearing and proportionate ....
Blacklisting is a distinct administrative action from contract termination, carrying severe stigmatic and exclusionary consequences. It requires a specific, unambiguous show-cause notice and an indep....
A blacklisting order requires a specific show-cause notice to uphold principles of natural justice; its absence renders the blacklisting illegal and arbitrary.
Point of Law : Tender - Blacklisting - Order of blacklisting has an effect of depriving a person of equality of opportunity in the matter of public contract.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.