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2018 Supreme(All) 92

ALLAHABAD HIGH COURT
BEFORE : SUDHIR AGARWAL AND AJIT KUMAR, JJ.
M/s. VINDHYAWASINI T. TRANSPORT ....Petitioner
Versus
STATE OF U.P. AND OTHERS ....Respondents
(Civil Misc. Writ Petition No. 14505 of 2015, decided on 20th February, 2018)

Advocates Appeared:
Shri Kant Shukla for the Petitioner; C.S.C. for the Respondents.

Headnote:Contract – Cancellation and blacklisting – Contract for handling and transportation of food grains from Warehouse Depot and other centers to different distribution centers in Gorakhpur Division – Truck of drivers of transport vehicles diverted food grains meant for distribution to poor people – Resulted in breach of contract – Contract cancelled and security money forfeited – Blacklisting of petitioner’s firm permanently – Debarment could never be permanent and period should be invariably be mentioned in order of debar – Hence, impugned order would not be treated to be permanent debarment/blacklisting of petitioner – Respondent should pass a clarificatory supplementary order mentioning period of debarment of petitioner with regard to blacklisting. [Paras 18 to 24]

       Result; Petition Partly Allowed.

JUDGMENT

Hon’ble Sudhir Agarwal, J.—Heard Sri Shashi Nandan, learned Senior Advocate, assisted by Mr. Shri Kant Shukla, Advocate, for petitioner and learned Standing Counsel for respondents.

2. Though contract of petitioner has been cancelled and he has been blacklisted, but learned Senior Advocate is confining his relief in the present writ petition only to the extent petitioner has been permanently blacklisted and contention is that blacklisting cannot be permanent without providing a specific period therefor.

3. We find substance in the aforesaid submission. Before giving our reasons in detail, it would be appropriate to have a bird eye view of the relevant facts, necessary for adjudication of present writ petition.

4. M/s Vindhyawasini T. Transport is “Handling and Transport Contractor” registered in Food and Civil Supplies Department for handling and transportation of food grains. It is registered with Regional Food Controller, Gorakhpur Region, Gorakhpur (hereinafter referred to as “RFC, GKP”). Principal function of petitioner, whenever contract is awarded, is to transport and handle food grains available for Public Distribution System (hereinafter referred to as “P.D.S.”) in Gorakhpur Region, Gorakhpur. A work tender was floated in 2012 for handling and transportation of food grains for transporting the same from Warehouse Depot, Railway Go-downs and other centers to different distribution centers in Gorakhpur Division for Financial Year (hereinafter referred to as “F.Y.”) 2012-13, i.e., upto 31.3.2013. Petitioner was ultimately issued work order on 28.12.2012 by RFC, GKP. Two of the conditions of work order in Clauses-6 and 7 were that, any information, if given by Contractor, is found incorrect, his security amount shall be forfeited, contract shall be cancelled and Contractor shall be blacklisted. Further, Contractor if fails to lift and transport goods or deliberately allows allocation to lapse, it will be deemed to be in violation of terms and conditions of contract and would result in cancellation of registration of Contractor and also forfeiture of security amount and blacklisting of Contractor. In compliance of work order, agreement was executed between petitioner and RFC, GKP. The above contract was extended for F.Y. 2013-14 and subsequently vide order dated 29.3.2014, it was extended for F.Y. 2014-15.

5. Alleging that Truck drivers of transport vehicles arranged by petitioner, diverted food grains meant for distribution to poor people through P.D.S. and thereby committed a serious offence. This diversion also resulted in breach of terms of contract. A Show-cause Notice was issued to petitioner after suspending contract by order dated 9.12.2014. A criminal case was also registered being Case Crime No. 441 of 2014 under Sections 419, 420, 467, 468, 471 I.P.C. and 3/7 Essential Commodities Act. Petitioner submitted reply dated 9.2.2015 and thereafter impugned order has been passed on 11.3.2015, forfeiting security and blacklisting of petitioner’s Firm.

6. It is contended by Sri Shashi Nandan, learned Senior Advocate, that impugned order, blacklisting petitioner’s Firm does not mention any period, and, therefore, this is nothing but a “permanent blacklisting” which is not permissible in law. Learned Senior Counsel has pressed this writ petition against impugned order dated 11.3.2015 only to the extent it has blacklisted petitioner, permanently.

7. Hence question up for consideration is, “whether blacklisting of a Firm or Contractor can be made permanently or it should be for a limited period”.

8. It cannot be doubted that blacklisting of a person or Contractor or a Firm has an adverse civil consequence. No one can be blacklisted without opportunity and more so, it cannot be permanent. Here it would be appropriate to have a retrospect of law on the subject of blacklisting.

9. A Full Bench by majority view in V. Punnen Thomas v. State of Kerala, AIR 1969 Ker. 81, held that a mere refusal to afford a man the prospect




































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