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2013 Supreme(Del) 1710
DELHI HIGH COURT
G.S.Sistani, J.
Sudhir Bhardwaj - Appellant
Versus
East Delhi Municipal Corporation & Anr. - Resopndent
WP (C) 2670 of 2013
Decided On : 07-05-2013
For the Petitioner:Mr. Devendra Kumar, Advocate.
For the SDMC/Respondent No. 1:Ms. Biji Rajesh for Mr. Gaurang Karith, Advocates.
Blacklisting involves civil consequences and requires a show-cause notice before being imposed.
Headnote:
Blacklisting - Contractor - 1975 (1) SCC 70, S.L. Kapoor v. Jagmohan (1980) 4 SCC 379, Raghunath Thakur Vs. State of Bihar and Ors. (1989) 1SCC 229
Fact of the Case:
The petitioner, an approved contractor, seeks quashing of a letter blacklisting and removing him from the list of approved contractors by the MCD. The petitioner alleged that his bills were not cleared due to officials demanding a bribe, leading to a complaint and subsequent FIR. The petitioner filed recovery suits and approached the Court for recovery of his money. The respondent contended that the petitioner was blacklisted due to failure to execute awarded works.
Finding of the Court:
The court considered whether a contractor can be blacklisted without a specific show-cause notice. The court referred to previous cases and held that blacklisting involves civil consequences and a contractor has the right to claim equal treatment and a show-cause notice before being blacklisted. As no show-cause notice was issued, the court quashed the blacklisting order.
Issues: Whether a contractor can be blacklisted without a specific show-cause notice.
Ratio Decidendi: Blacklisting involves civil consequences and a contractor has the right to claim equal treatment and a show-cause notice before being blacklisted.
Final Decision: The writ petition was allowed, and the order blacklisting the petitioner was quashed. The respondents were given the option to issue a show-cause notice to the petitioner if advised.
1. With consent of parties the writ petition is taken up for final hearing and disposal. Petitioner was an approved contractor of the MCD registered vide registration No.1911/IV, (Civil) dated 24th April 2008. Petitioner seeks quashing of letter dated 7th September 2012 by which the petitioner has been black-listed and has been removed from the list of approved contractors. The necessary facts to be noticed for disposal of the writ petition are as follows.
2. That the petitioner has been executing contracts with the respondent No.1. In the years 2008-2009 various tenders were floated for execution of works in different areas of Shahdara, North Zone. The petitioner being an approved contractor also submitted his bids for awarding of works and consequent thereto work orders No.EE/SH/TC/08-09 141, 142, 143, 144 all dated 02.05.2008, EE/SH/TC/08-09 299 dated 02.09.2008, EE-MI/SH/N/TC/08-09 517 dated 31.03.2009 and EE-MI/SH/N/TC/08-09 27 dated 25.05.2009 were awarded in favour of the petitioner by the respondents. As per the petitioner, after the award of the said works petitioner started execution of the works awarded and arranged for men and material and also completed the same within the stipulated period as mentioned in the work orders. After completing the work the petitioner approached the concerned JE and AE and requested them for preparing and passing his bills. However, the concerned officials did not do so for extraneous reasons as they demanded a bribe. Consequent thereto the petitioner filed a complaint against Shri S.K.Mittal and Shri R.K.Mittal in the Vigilance/Anti Corruption department. Consequent to the complaint of 19th November 2008 an FIR No.38/08 was registered and the said officials were caught red handed accepting bribe money from the petitioner. Thereafter the petitioner personally visited the offices of the respondents and also sent various letters including letters dated 16th December 2008, 22nd January 2010, 2nd June 2010 and 24th December 2010 requesting the respondents for preparation and release of his bills but no action was taken on account of the complaint made by the petitioner. In the year 2011 again various tenders were floated. The petitioner submitted his bids and he was awarded work contracts in his favour but his bills were not cleared which forced the petitioner to approach the Court for recovery of his hard earned money. Out of the three recovery suits filed two suits were decreed in favour of the petitioner on 2nd February 2012 and the third suit is still pending. Petitioner claims to have filed another suit for recovery in the Delhi High Court which is also pending. It is contended that on account of the legal action initiated by the petitioner against the officials of the respondent by lodging a complaint in the Vigilance department and also on account of filing of recovery suits the petitioner has been black-listed. Counsel submits that no specific notice to show-cause was issued to the petitioner as to why he should not be black-listed.
3. Learned counsel for the respondent submits that the impugned notice dated 7th September, 2012 was issued to the petitioner on account of his failure to execute the works awarded to him and for this reason the petitioner was black-listed. She further submits that notices in this regard were issued. However, she does not dispute the fact that no notice was issued to the petitioner as to why he should not be black-listed.
4. Heard learned counsel for the parties and considered their rival submissions. The short question which arises for consideration before this Court is as to whether a contractor can be black-listed without issuance of a specific show-cause notice or not. This question was also a subject matter of consideration in the case reported as 1975 (1) SCC 70 Erusian Equipment & Chemicals Ltd. v. State of West Bengal & Anr. wherein it was observed as under:-
“14. The State can enter into contract with any person it chooses.
