jharkhand high court

Jharkhand High Court: In a civil writ petition filed for quashing office order in memo dated 4-11-2020 issued by Inspector General of Prison of Jharkhand State blacklisting the petitioner for 5 years, and quashing letter dated 5-11-2020 issued by Superintendent of Jail debarring the petitioner from supplying any food material in the Divisional Jail from 1-10-2020 to 31-12-2020, allegedly violating the principles of natural justice, Rajesh Shankar, J. allowed the instant petition by quashing and setting aside the blacklisting and debarring of the petitioner by the Jail authorities.

The Court referred to various cases including Kulja Industries Ltd. v. Western Telecom Project BSNL, (2014) 14 SCC 731 wherein State was party to a contract, the Supreme Court held that “A fair hearing to the party being blacklisted becomes an essential precondition for proper exercise of the power.” The Court explained the consequences of order of blacklisting in Gorkha Security Services v. Govt. (NCT of Delhi), (2014) 9 SCC 105 with the words that “It is described as ‘civil death’ of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders, which means precluding him from the award of government contracts.”

The Court observed that the power to blacklist is inherent and unqualified, and there is no need to specifically confer the same by statute or contractual terms. It further added that if such a decision taken by the government or its instrumentalities, it is open to scrutiny of fairness, relevance, natural justice, etc. The Court said that a show cause notice specifying grounds for the action proposed is mandatory for enabling the other party to answer the case before passing blacklisting orders.

The Court noted that the two show cause notices in the instant case reflect that the proposed blacklisting was not communicated to the petitioner, but he was only called upon to explain regarding the food materials not being supplied. Thus, the said show cause notices in the Court’s opinion did not comply with the principles of natural justice for passing blacklisting order. The Court also pointed out that the allegations of petitioner quoting low price in the tender for 2nd quarter was not alleged in the show cause notices, thus, the Court held that the impugned order was passed in violation of principles of natural justice.

The Court quashed and set aside the office order in memo dated 4-11-2020 blacklisting the petitioner for 5 years and letter dated 5-11-2020 debarring the petitioner from supplying any food material in the Divisional Jail during 4th quarter from 1-10-2020 to 31-12-2020.

Considering the question of whether it is proper to remand the matter to respondent to pass a fresh order, the Court relied on Vetindia Pharmaceuticals Ltd. v. State of U.P., (2021) 1 SCC 804 wherein the Court found the blacklisting order unsustainable, but the matter was not remanded to the authorities concerned due to lapse of time between the said order and judgment delivered. The Court referred to the instant case wherein the petitioner has already suffered for more than 2 years after the impugned order was passed and found it inappropriate to remand the matter back to the authorities concerned for passing a fresh order.

[Sai Traders v. State of Jharkhand, 2023 SCC OnLine Jhar 376, decided on 20-3-2023]

Order by: Justice Rajesh Shankar

Advocates who appeared in this case :

For Petitioner: Advocate Amritansh Vats, Advocate Rashmi Kumari;

For Respondents: A.C. to Advocate General Mohan Kumar Dubey.

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