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2023 Supreme(Online)(Pat) 10961

PATNA HIGH COURT
MR. P. B. BAJANTHRI, MR. ARUN KUMAR JHA, JJ
Rajiv Kumar – Appellant
Versus
The State of Bihar through the Additional Chief Secretary, Minor Irrigation Department, Government of Bihar, Patna – Respondent
Civil Writ Jurisdiction Case No.3860 of 2023



Advocates:
For the Petitioner/s:Mr. Prabhat Ranjan, Advocate, Mr. Chandan Kumar, Advocate
For the Respondent/s: Mr. Ajay Kumar, G.A.-9

The absence of a clear and specific show cause notice before administrative blacklisting violates principles of natural justice, leading to quashing of the decision.

Headnote:(A) Bihar Contractors Registration Rules, 2007 - Requirements of show cause notice and adherence to principles of natural justice prior to blacklisting a contractor for a period exceeding permissible duration - Invalid show cause notice deemed ineffective when lacks specification on allegations - Arbitrariness in administrative decisions must be avoided - Impugned blacklisting for ten years set aside on grounds of denial of fair hearing and non-compliance with procedural requirements. (Paras 6-22)

(B) Natural Justice - Requirements for issuing notices in administrative proceedings must detail the specific allegations to enable effective defense from the noticee. (Paras 17-19)

(C) Judicial Review - Courts must exhibit caution in interfering with administrative actions associated with commercial interests unless there is a clear case of arbitrariness or violation of fundamental rights. (Para 9)

(D) The principles of proportionality must be adhered to when imposing penalties, reflecting the severity of consequences in administrative action. (Para 20)

Facts of the case:
The petitioner, a contractor, challenged the blacklisting by the Minor Irrigation Department based on allegations of document interpolation during tender procurement. The blacklisting order lacked sufficient notice and reasons, failing to satisfy the requisites of procedural justice.

Findings of Court:
The court found the impugned order arbitrary considering the lack of fair process; it directed the authority to reassess the decision accordingly.

Issues: Whether the notice to show cause was valid and whether the blacklisting was carried out in accordance with the principles of natural justice and due process?

Ratio Decidendi: The court emphasized the necessity of providing adequate opportunity and clear notice to the party adversely affected by administrative measures, reaffirming that arbitrary actions infringe fundamental rights leading to a mandatory judicial review.

Result: The order of blacklisting was quashed, and the matter was remanded for reevaluation within three months.

Table of Content
1. petitioner's request to challenge blacklisting based on natural justice violations. (Para 3)
2. arguments against procedural fairness and lack of proper jurisdiction in blacklisting notice. (Para 4 , 6 , 7 , 8)
3. court emphasizes necessity of fair procedures and gives weight to proportionality standards. (Para 9 , 12 , 20)
4. court allowing petition, quashing blacklisting and ordering review on procedural compliance. (Para 22)

CAV JUDGMENT

(Per: HONOURABLE MR. JUSTICE ARUN KUMAR JHA)

Date : 20-04-2023

Heard learned counsel for the petitioner and learned counsel for the respondents.

2. The present writ petition has been filed by the petitioner claiming the following reliefs :-

“(i) Quashing of the Notice to Show Cause dated 11.10.2022 contained in Letter No. 2311 issued by Executive Engineer, Minor Irrigation Division, Gaya (Annexure 3) whereby the petitioner has been asked to Show Cause as to why for the alleged act of tampering in the "work done value" which is not as per the terms of the Tender, appropriate action under Bihar Contractors Registration Rules, 2007 and IPC/ CrPC be not taken;

(ii) Quashing of the consequential order dated 20.02.2023 as contained in Letter no. 107 (Annexure 5) by which, the Incharge Chief Engineer, Minor Irrigation Department, Patna has blacklisted the Registration of the petitioner for a period of 10 years in terms of Rule 11 (a) (vii) of the Bihar Contractors Registration Rules, 2007 on the basis of a Show Cause Notice issued by an incompetent authority and without even referring to the causes shown by the petitioner

(iii) Declaration to the effect that the aforesaid exparte order of blacklisting shall not be made applicable retrospectively in connection with those tenders in which the last date for submission of the Tender documents has already lapsed and the petitioner has submitted the Tender documents and which tenders are pending disposal; and

(iv) Restraining the Respondents from giving effect to taking any precipitative / coercive action arising out of the aforesaid order of blacklisting and the dispute during the pendency of the present writ application and/or without the leave of this Hon'ble Court.”

3. Briefly stated the facts of the case, according to the petitioner, are that the petitioner is a registered contractor under the Minor Irrigation Department, Government of Bihar, Patna. The Chief Engineer, Minor Irrigation Department, floated a Notice Inviting Tender No. 13/2021-22 dated 23.03.2022 relating to various renovation and restoration works in the District of Gaya, Arwal, Nawada, Kaimur, Mohania and Patna under different irrigation schemes. The petitioner responded to the aforementioned NIT and submitted his Bid document along with all other valid certificates. It has come to the knowledge of the petitioner that during processing of the Tender, a complaint of general nature with regard to genuineness of the certificates being submitted by the prospective Bidders was lodged at the instance of one of the contractors, viz. M/s. R K Associate, intimating the Department that certain contractors are submitting certificates relating to eligibility criteria with interpolations in it. The Technical Bid Evaluation Committee convened its meeting on 30.07.2022 and, after considering the complaint, decided to disqualify the petitioner and the Committee resolved to recommend/ report the matter to the Departmental Tender Committee headed by the Additional Chief Secretary. Thereafter, the Departmental Tender Committee comprising four members presided by the Additional Chief Secretary convened its meeting on 27.09.2022 and considered the recommendation of the Chief Engineer as contained in Letter no. 1637 dated 30.07.2022 and accepted the proposal of the Technical Bid Evaluation Committee rejecting the Technical Bid of certain Contractors and directed the Chief Engineer to initiate an appropriate action against such contractors. In compliance of the direction contained in the afore

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