Jhar HC | Principles of natural justice required to be followed and cannot be waived out depending upon quantum of punishment; Reiterated mandate of natural justice in blacklisting cases

Jharkhand High Court

Jharkhand High Court: A Division Bench of Ravi Ranjan, CJ and Sujit Narayan Prasad, J. allowed the appeal and quashed the impugned order as it suffers from material irregularities.

The facts of the case are such that the a notice inviting tender was issued by the respondent-BCCL on inviting applications from reputed and experienced contractors for repairing of drain in upgradation colonies under CV Area of BCCL. The writ petitioner-appellant participated in the process of bid along with other bidders and the writ petitioner-appellant was declared successful. The Letter of Acceptance for awarding the work was issued in favour of the writ petitioner which contained a condition wherein the writ petitioner-appellant was required to furnish performance security within the period of 28 days from the date of issuance of Letter of Acceptance. The writ petitioner-appellant did not furnish the performance security since the site plan was not furnished. The respondent-BCCL issued several reminders but to no avail. Thus, the respondent-BCCL cancelled the Letter of Acceptance and debarred/blacklisted the writ petitioner-appellant for participating in the future tender for a period of 12 months. A writ petition was filed challenging the same but the Court refused to interfere with the same on the ground of latches. Thus, the instant intra-court appeal was preferred under Clause 10 of the Letters Patent.

Counsel for the writ petitioner-appellant submitted that it was incumbent upon the respondent-management to provide an opportunity of hearing by issuing notice before passing an order of blacklisting for a period of 12 months but having not done so, the impugned order is not sustainable in the eye of law for utter violation of principles of natural justice

Counsel for the respondent submitted that several reminders have been given to the writ petitioner-appellant to complete the work within the period stipulated in the agreement, but having not done so, the order of blacklisting for 12 months has been passed. It was further submitted that a specific stipulation was made for furnishing the performance security, stating that apart from cancelling the Letter of Acceptance and forfeiting the earnest money, the decision will also be taken for debarment from participating in future tenders for a minimum period of 12 months Thus, such a stipulation made therein that action for debarment from participating in future tenders for a minimum period of 12 months is nothing but be treated as show cause.

The Court relied on Gorkha Security Services vs. Govt. (NCT of Delhi), (2014) 9 SCC 105 and reiterated that the principles of natural justice be followed in cases of blacklisting. The Court remarked that the cardinal principle of natural justice is mandatory to be followed in a case where any adverse decision/action is being taken against one or the other. The issuance of notice means that the person against whom any adverse action proposed to be taken, is required to be provided with the opportunity of hearing.

The Court thus held “on the basis of the facts discussed above, that the order passed by the learned Single Jude in refusing to interfere with the decision of the administrative authority, so far as it relates to debarring the writ petitioner-appellant from participating in future tenders for a period of 12 months, is not sustainable in the eye of law.” [Sanjay Kumar Sharma v. Bharat Coking Coal Ltd, L.P.A. No.304 of 2021, decided on 10-02-2022]


Appearances

For the Appellant: Mr. Amritansh Vats

For the Respondents: Mr. Anoop Kumar Mehta


Arunima Bose, Editorial Assistant has reported this brief.

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