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2022 Supreme(Jhk) 316

IN THE HIGH COURT OF JHARKHAND AT RANCHI
Rajesh Shankar, J.
Ms. Creative Lab., Ambala (Haryana), through its Authorized Signatory, Sagar - Petitioner
Versus
The State of Jharkhand and ors. - Opposite Parties
Cont. Case (Civil) No. 548 of 2021, W.P.(C) No. 3382 of 2021
Decided On : 26-07-2022

Advocates:
Advocate Appeared:
For the Petitioner:Mr. A. K. Sinha, Sr. Advocate, Mr. Indrajit Sinha, Advocate
For the Opposite Party : Mr. Mohan Kumar Dubey, A.C to A.G

The main legal point established in the judgment is the requirement for a fair hearing, specific show cause notices, and proportionate punishment before imposing blacklisting in government contracts.

Headnote:

Blacklisting - Government Contracts - [W.P.(C) No. 3382 of 2021] - [27.01.2020, 24.12.2019, 07.01.2022, 26.04.2022] - The court quashed the orders of blacklisting the petitioner, emphasizing the need for a fair hearing and specific show cause notices before imposing such severe penalties. The court found that the respondent did not comply with the order of the court and did not provide a fair opportunity for the petitioner to defend against the allegations. The court also noted that the period of blacklisting was determined arbitrarily, indicating unfair and partial conduct by the respondent. The impugned orders were quashed and the contempt proceeding against the respondent was dropped.

Fact of the Case:

The petitioner was blacklisted by the respondent No.3, but the court had previously quashed the order and directed the respondent to issue a specific show cause notice and provide a fair opportunity of hearing to the petitioner. However, the respondent issued multiple show cause notices and eventually reinstated the blacklisting without following the court's directions.

Finding of the Court:

The court found that the impugned orders of blacklisting were passed in violation of the principles of natural justice and without complying with the court's previous order. The court noted serious laches on the part of the respondent and observed that the orders were passed with a preconceived notion, indicating unfair and partial conduct.

Issues: The issues revolved around the procedural irregularity in the impugned orders of blacklisting, the failure to provide a fair opportunity for the petitioner to defend against the allegations, and the arbitrary determination of the period of blacklisting by the respondent.

Ratio Decidendi: The court emphasized the need for a fair hearing and specific show cause notices before imposing severe penalties such as blacklisting. The court also highlighted the requirement for the period of punishment to be specified in the show cause notice and determined based on the alleged violation.

Final Decision: The impugned orders of blacklisting were quashed, and the contempt proceeding against the respondent was dropped.

JUDGMENT :

W.P.(C) No. 3382 of 2021 was initially filed for quashing the order as contained in memo No. 615 dated 12.08.2021 passed by the respondent No.3 whereby the petitioner was permanently blacklisted. However, during pendency of the present writ petition, the respondent No.3 vide order as contained in memo No. 24 dated 07.01.2022 amended the impugned order dated 12.08.2021 fixing the period of blacklisting as five years and thereafter vide office order as contained in memo No. 472 dated 26.04.2022, reduced it to three years mentioning inter alia that the earlier orders as contained in memo No. 615 dated 12.08.2021 as well as memo No. 24 dated 07.01.2022 were recalled vide memo No. 471 dated 26.04.2022. The petitioner has therefore also challenged the orders dated 07.01.2022 and 26.04.2022 passed by the respondent No.3.

2. Cont. Case (Civil) No. 548 of 2021 has also been filed against the opposite party No.2 for wilful disobedience and non-compliance of the order dated 27.01.2020 passed by this Court in W.P.(C) No. 01 of 2020.

3. Learned Sr. counsel for the petitioner submits that in spite of passing of the order dated 27.01.2020, the O.P. No.2 failed to make formal communication to all other educational institutions regarding stay of the operation of letter No. 13/19-1312 dated 24.12.2019, due to which all educational institutions were reluctant in granting fresh work to the petitioner as well as were not receiving/accepting the equipments as per earlier supply orders issued to the petitioner. Many tenders were floated by the B.I.T, Sindri in which the petitioner participated, however, in absence of a formal communication by the O.P. No.2 regarding stay of the operation of letter dated 24.12.2019, none of the bids submitted by it was considered.

4. In the said contempt case, the O.P.No.2 filed his show cause affidavit annexing an office order as contained in memo No. 615 dated 12.08.2021 again permanently debarring and blacklisting the petitioner. The O.P. No.2 also filed a supplementary show cause affidavit stating that the order dated 12.08.2021 was reviewed and vide order dated 07.01.2022, the period of blacklisting the petitioner was reduced to a period of five years. He again filed a supplementary show cause affidavit dated 28.04.2022 annexing an office order as contained in memo No. 472 dated 26.04.2022 wherein it was mentioned that the earlier orders dated 12.08.2021 & 07.01.2022 were recalled vide memo No. 471 dated 26.04.2022 and the period of blacklisting of the petitioner was further reduced to three years from the date of passing of the said order restraining it from doing any business with Government Polytechnics and Engineering Colleges of the State of Jharkhand during the said period.

5. The factual background of the case, as stated in the writ petition, is that a tender was floated for procurement of materials with respect to laboratory in Government Polytechnic, Ranchi and the petitioner was selected for the said supply work. It completed the supply as required vide e-tender notice floated by the Department of Higher, Technical Education and Skill Development, Government of Jharkhand, however, it was permanently blacklisted vide letter No. 13/19-1313 dated 24.12.2019 issued by the respondent No.3 alleging that the products supplied by it were not up to mark and it also violated the other terms and conditions of the tender. Prior to issuing the said show cause notice, the respondent No.3 also issued letter No. 13/19-1312 dated 24.12.2019 to the Director/In-Charge Principal, BIT, Sindri and other educational institutions directing them not to purchase any equipment or goods from the petitioner-company and to keep the due amount of the petitioner in abeyance. Thereafter, the petitioner filed a writ petition being W.P.(C) No. 01 of 2020 before this Court challenging the order of blacklisting as well as the communication sent to BIT, Sindri and other educational institutions. This Court vide order dated 27.01.2020

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