Gau HC | Essentials of fair play demand that before blacklisting, person or entity concerned should be afforded an opportunity to represent his case

Gauhati High Court: Achintya Malla Bujor Barua, J. allowed the writ petition and granted the respondents the liberty to continue proceedings against the petition at their behest by affording him the opportunity to be heard first.

The facts in a nutshell bring out that the petitioner, who is a registered contractor under the PWRD, was allotted work as per the letter of acceptance. Although the original period for completion of the work was 3 months, due to certain intervening factors, the time was extended. The petitioner submitted that the work was completed prior to the end of the extended period. Later on, there was a complaint from the Commissioner & Secretary to the Governor of Assam that the approach road to the Raj Bhawan was damaged. There was an enquiry on the said complaint and it is stated that the PWD had submitted a report that some loose materials were present in the bituminous mixture which was due to inadvertence. The petitioner proposed before the department that necessary rectification would be done at the cost of the petitioner. The rectification work although allowed, could not be completed by the petitioner because of some difficulties due to the COVID-19 pandemic situation. Accordingly, the petitioner prayed for some more time for completion of the repair work.

Counsel for the petitioner, I. Choudhary submitted that due to incessant rains a landslide further damaged the approach road to the Raj Bhawan. In the aforesaid circumstance, PWRD, Assam had issued the order by which the petitioner was debarred for a period of 3 months with immediate effect from performing any work.

Thus, the petitioner filed the said petition challenging the order on the grounds that it was passed without following the due procedure of law.

Nath, counsel for respondents, upon instruction made a statement that neither any show-cause notice nor any opportunity was given to the petitioner before the impugned order was issued by the PWRD.

The law as regards the blacklisting of a contractor had been settled by the Supreme Court in Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 wherein it has been provided that blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purpose of gains and therefore the person concerned should be given an opportunity to represent his case before he is put on the blacklist.

An excerpt from the Erusian Equipment verdict is pertinent to refer here:

“The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are “instruments of coercion”

The Court while relying on the above-mentioned Supreme Court verdict allowed the writ petition and held that, since the order of debarring the petitioner was set aside on a technical reason, the Court granted liberty to the respondent authorities to still proceed against the petitioner by following due procedure of law i.e. by issuing a show-cause notice or giving him an opportunity to present his case first.[Oriental Engineers v. State of Assam, 2020 SCC OnLine Gau 3443, decided on 19-08-2020]

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