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IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
SANJAY KUMAR MEDHI, J.
M/s Avijantrik Infratech Pvt Ltd – Appellant
Versus
The Union Of India And 6 Ors – Respondents
WP(C) 7057 of 2021
Decided on : 11-04-2023
ARTICLE 226 - CONSTITUTIONAL LAW - ACT SECTION LIST: Article 226 - The court discussed the extraordinary powers conferred by Article 226 of the Constitution of India, emphasizing the necessity of adhering to the principles of natural justice in actions that entail adverse civil consequences, such as blacklisting. The court interpreted that a proper opportunity must be provided to the affected party to defend against such actions, and that the requirement for a personal hearing depends on the specifics of each case. The court concluded that the petitioner was given a sufficient opportunity to respond to the allegations, thus validating the Railway Board's decision.
Fact of the Case:
The petitioner challenged a decision by the Railway Board to ban its business dealings for five years, alleging that the decision was made without following due process and violated principles of natural justice. The petitioner claimed that it was not given a proper opportunity to defend itself against serious allegations of using forged documents in a tender process.
Finding of the Court:
The court found that the petitioner had been given a show-cause notice and had responded to it, admitting to the use of fraudulent documents. The court held that the opportunity provided was adequate and that a further personal hearing would have been a mere formality, given the circumstances of the case.
Issues: Whether the Railway Board's decision to ban the petitioner's business dealings was made in violation of the principles of natural justice and whether the petitioner was afforded a proper opportunity to defend itself.
Ratio Decidendi: The court established that while actions like blacklisting require adherence to natural justice, the necessity for a personal hearing is contingent upon the specifics of the case. If the allegations are admitted or undisputed, further hearings may not be required.
Final Decision: The writ petition was dismissed, but the petitioner was granted the liberty to apply for reconsideration of the duration of the ban, given its long-standing relationship with the Railways.
JUDGMENT :
SANJAY KUMAR MEDHI, J.
The extraordinary powers conferred by Article 226 of the Constitution of India is sought to be invoked by means of this petition wherein the petitioner has put to challenge an order dated 29.10.2021 by which a decision of the Railway Board has been conveyed. The said decision pertains to banning the business dealings with a Joint Venture of which the petitioner is a constituent for a period of 5 years. The petitioner alleges that the aforesaid action is bad in law as the same has been issued without following the due process of law. The petitioner has specifically pleaded that there has been violation of the principles of natural justice.
2. Before going to the issue to be decided, it would be beneficial to record the facts of the case in brief.
3. As per the projected case of the petitioner, a Notice Inviting Tender (NIT) was issued on 27.06.2019 by the Chief Engineer/Con-V. In response to the same, the petitioner with another entity as Joint Venture (JV) had submitted the bid along with all requisite documents. After completion of the tender process, the work was however, allotted to a third party. Thereafter, two further tender notices were issued on 15.03.2021 and 01.07.2021 for different works. In the meantime, a show-cause notice dated 11.08.2021 was served upon the petitioner leveling certain charges with regard to the tender notice dated 27.06.2019.
4. It is the case of the petitioner that reply to the aforesaid notice was submitted on 10.09.2021. However, so far as the bids submitted by the petitioner in respect of the tender notices dated 15.03.2021 and 01.07.2021 are concerned, the same were rejected which according to the petitioner was done without assigning any reasons. The petitioner had challenged the aforesaid action of rejection of its bid by filing two numbers of writ petitions, being WP(C) No. 5289/2021 and 5648/2021 before this Court in which notices have been issued and the matters are said to be pending.
5. It is the case of the petitioner that vide the impugned order dated 29.10.2021, the Railway Board had communicated the decision to ban the business dealings with the petitioner which has been stated above. It is the projected case of the petitioner that the aforesaid action has been taken without providing any opportunity of hearing and accordingly, there has been gross violation of the principles of natural justice.
6. The projected case of the petitioner has, however, been refuted by the respondent Railways by submitting that due opportunity was granted to the affected party and its response was duly considered and only thereafter, the decision was taken to ban its business dealings for a period of 5 years. It is also stated that the charges/allegations were very serious involving forgery and recourse to fraudulent documents while submitting a bid.
7. I have heard Shri A. Dasgupta, learned Senior Counsel assisted by Shri R. Ali learned counsel for the petitioner whereas the Railways have been represented by Shri B. Sharma, learned Standing Counsel. The materials placed before this Court, have been duly considered.
8. Shri Dasgupta, learned Senior Counsel for the petitioner has submitted that the impugned order dated 29.10.2021 is unsustainable in law on the ground that the same has been passed without giving proper opportunity to the petitioner. He submits that though a notice was issued to the petitioner raising certain allegations which was duly replied to on 10.09.2021, no further opportunity was given to the petitioner as to why the reply given should not have been accepted and unilaterally, a decision has been taken to penalize the JV and ban its business dealings for a period of 5 years. The learned Senior Counsel submits that mere serving of a show-cause notice will not amount to adhering to the due process of law which includes strict compliance with the principles of natural justice. It is further submitted that the impugned order has adverse civil consequences and
The main legal point established in the judgment is the requirement for a clear mention of the proposed blacklisting action in the show cause notice, as well as the need to adhere to principles of na....
The impugned actions of issuing the show cause notice and blacklisting the petitioner were arbitrary, unconstitutional, and violated principles of natural justice. The court emphasized the requiremen....
The requirement of giving reasons, adherence to principles of natural justice, and fairness in administrative actions, especially in cases of blacklisting or imposing penalties, is essential for a va....
The requirement for a fair hearing and a specific show cause notice before imposing the severe civil consequence of blacklisting, and the need for the authority to determine the period of punishment ....
The Petitioner's suppression of a material fact and approach to the Court with unclean hands led to the dismissal of the Petition.
The judgment emphasizes the importance of fair play, natural justice, non-discrimination, equality, reasonableness, and proportionality in the process of blacklisting, and the need for a valid, parti....
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