Allahabad Traders vs State of U.P. and Others

Amitava Lala, J.—Counter-affidavit filed today by learned A.G.A. be kept with the record. Rejoinder-affidavit filed by learned Counsel for the petitioner be also kept with the record.

The order impugned which has been passed blacklisting the petitioner appears to be on the basis of show cause and enquiry but appears to us that no opportunity was given to petitioner to give reply to show cause as to why the petitioner will be blacklisted. It is well known that blacklisting of a trader means he may loose his goodwill in the market, therefore, it will have a penal consequences.

Therefore, before passing such extreme order, a show cause required to be made to the petitioner to give his explanation and thereafter the Governmental authority can take a decision to this extent. We are very much relying on paragraph 20 of the judgment in Erusian Equipment and Chemicals Ltd. Vs. State of West Bengal and Another, It has also been followed in various cases such as Joseph Vilangandan Vs. The Executive Engineer, (Pwd), Ernakulam and Others, and 1989 (1) SCC 220. Paragraph 20 of the Judgment in Erusian Equipment and Chemicals Ltd. Vs. State of West Bengal and Another, is as follows:

Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.

Therefore, we quash the order dated 30.10.2009 impugned in the writ petition and direct the authority to take appropriate steps in accordance with law after affording fullest opportunity of hearing.

The writ petition is accordingly disposed of. No order is passed as to costs.

However, the State is at liberty to proceed in accordance with law and to pass appropriate order after affording fullest opportunity of hearing.

Ashok Srivastava, J.

I agree.