The impugned order was no more than a direction by the Government to its subordinates not to give any contracts to the petitioner, and it is the use of vivid expressions like, 'blacklist', and, 'debar' in such orders, savouring as they do of punishment and of deprivation of legal rights, that give rise to contentions like the present, in our view unfounded, invoking the principles of natural justice and the fundamental rights in Art.14, 16 and 19 of the Constitution.

Headnote:
Natural Justice - Government Contract - Art.14, 16, 19 of the Constitution - C. K. Achuthan v. State of Kerala AIR. 1959 SC. 490 - Bhaskaran v. State of Kerala 1958 KLT. 334 - Vedachala Mudaliar v. Divisional Engineer, Highways AIR. 1955 Madras 355 - Kannappa v. Dist. Forest Officer AIR. 1958 Madras 572 - State of Assam v. Keshab Prasad Singh AIR. 1963 SC. 309 - K. N. Guruswamy v. State of Mysore and others AIR. 1954 SC. 592 - State of Assam v. Tulsi Singh (1964) 1 S. C. J. 42 - Perkins v. Lukens Steel Co. 310 U. S.113 - Ridge v. Baldwin (1963) 2 All. E.R. 66 - Eradi J. held that the impugned order was no more than a direction by the Government to its subordinates not to give any contracts to the petitioner, and it is the use of vivid expressions like, 'blacklist', and, 'debar' in such orders, savouring as they do of punishment and of deprivation of legal rights, that give rise to contentions like the present, in our view unfounded, invoking the principles of natural justice and the fundamental rights in Art.14, 16 and 19 of the Constitution. The position might be different if there were a law regulating the conduct of its business by the Government. Such a law might imply a right in others to insist on their transactions with the Government being dealt with in accordance with the law, and, consequently, a right to complain against a breach of the law. The petition under Art.32 of the Constitution is wholly misconceived. No fundamental right is involved. At best, it is a right to take the matter to the Civil Court, if so advised, and to claim damages for breach of contract, if any.
Fact of the Case:

The petitioner, a Government contractor, challenged an order by the State Government blacklisting and debarring him from taking any Government work for the next ten years, without being heard before the order was made. The petitioner argued that the order violated the principles of natural justice and Art.14, 16 (1) and 19 (1) of the Constitution.
Finding of the Court:

The impugned order was no more than a direction by the Government to its subordinates not to give any contracts to the petitioner, and it is the use of vivid expressions like, 'blacklist', and, 'debar' in such orders, savouring as they do of punishment and of deprivation of legal rights, that give rise to contentions like the present, in our view unfounded, invoking the principles of natural justice and the fundamental rights in Art.14, 16 and 19 of the Constitution. The petition under Art.32 of the Constitution is wholly misconceived. No fundamental right is involved. At best, it is a right to take the matter to the Civil Court, if so advised, and to claim damages for breach of contract, if any.
Issues: Violation of principles of natural justice and Art.14, 16 (1) and 19 (1) of the Constitution.
Ratio Decidendi: The impugned order was no more than a direction by the Government to its subordinates not to give any contracts to the petitioner, and it is the use of vivid expressions like, 'blacklist', and, 'debar' in such orders, savouring as they do of punishment and of deprivation of legal rights, that give rise to contentions like the present, in our view unfounded, invoking the principles of natural justice and the fundamental rights in Art.14, 16 and 19 of the Constitution. The petition under Art.32 of the Constitution is wholly misconceived. No fundamental right is involved. At best, it is a right to take the matter to the Civil Court, if so advised, and to claim damages for breach of contract, if any.
Final Decision: The petition was dismissed with no costs.

Judgment :-

Eradi J.)

1. The petitioner, V. Punnen Thomas, who describes himself as a Government contractor, takes exception to the following order made by the respondent State Government:

"Sub:-Forest Irregularities in Forest contract tenderers blacklisted.

It has been revealed that Sri. V. M. Mohammed Shafi, Karakad House, Erattupetta and Sri. Punnen Thomas, Valanjathil, Kottayam have committed irregularities in connection with the tender for working down timber from Udumbanchola Block 1, with the result that Government had to sustain loss to a considerable extent. Government therefore order that these two persons are blacklisted and debarred from taking any Government work for the next ten years.

The Chief Conservator of Forests is informed that Sri. Punnen Thomas will however be permitted to do the work as per orders contained in Government Memorandum No. 12319/ F1/65/Agri. dated 7-4 -1965.

Sd/-T. R. Sukumaran Nair, Joint Secretary.

The Chief Conservator of Forests'.

2. The petitioner's grievance is that he was not heard before the order was made and he wants this court to quash the order and restrain the respondent from giving effect to it. His case is that the order is violative of the principles of natural justice and of Art.14, 16 (1) and 19 (1) of the Constitution.

3. As we understand it, the impugned order is in no sense an order against the petitioner it was not communicated to him and how he came by it is not disclosed and involves no civil consequences so far as he is concerned. It poses no threat to any legal right of his, (using the word, "right" in its widest possible sense) fundamental or otherwise, whether the reason it gives, namely, that the petitioner had committed irregularities resulting in loss to the Government, be true or not. No doubt it means that he will not be given any Government work on contract for the next 10 years, but, as we shall presently show, he has no claim, as of right, to be given such work.

4. The impugned order, it seems to us, is no more than a direction by the Government to its subordinates not to give any contracts to the petitioner, and it is, we apprehend, the use of vivid expressions like, "blacklist", and, "debar" in such orders, savouring as they do of punishment and of deprivation of legal rights, and the reference to such orders as decisions suggestive of an element of adjudication which, in fact, there is not, that give rise to contentions like the present, in our view unfounded, invoking the principles of natural justice and the fundamental rights in Art.14, 16 and 19 of the Constitution. Subject to any limitations that might be imposed by statute and in this case no such limitation is pleaded the law does not deny to the Government the freedom of contract (carrying with it the freedom not to enter into a contract) it vouchsafes to every person. And, subject to any such limitations, Government like any private party is free to treat with whom it pleases. It is free, if it so pleases, not to treat with any particular person for any or for no reason whatsoever. This much we think is clear from the decision of the Supreme Court in C. K. Achuthan v. State of Kerala AIR. 1959 SC. 490. There, their Lordships held that a refusal by the Government to do business with a particular person, whether or not such refusal amounted to a breach of contract, involved no breach of any fundamental right of the person concerned articles 14,16 (1),19(1) (g) and 31 were the provisions of the Constitution pressed into service in that case and furnished no ground for judicial interference under Art.32 or Art.226 of the Constitution. And their Lordships observed as follows:

"The gist of the present matter is the breach, if any, of the contract said to have been given to the petitioner which has been cancelled either for good or for bad reasons. There is no discrimination, because it is perfectly open to the Government, even as it is to a private party, to choose a person to their liking, to fulfil contra

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1968 Supreme(Ker) 59

Cases Referred (1)