Arvind Kumar Singh vs Union of India and others

Amitava Lala And Ashok Srivastava, JJ.—Heard Mr. J.P. Gupta, learned Advocate, holding brief of Mr. N.P. Singh, learned Counsel appearing for the petitioner.

In this writ petition, the petitioner wanted an order to quash the impugned order dated 12.11.2007 passed by the respondent No. 5. The petitioner has contended before us that before blacklisting the firm, neither showcause notice or opportunity of hearing has been given nor it comes out from the plain reading of the counteraffidavit, as filed on behalf of the respondent.

Upon being repeated calls, no one appeared on behalf of the respondents. We have gone through the petition and the counteraffidavit. It appears to us that the decision has been taken on the basis of the enquiry and purported fraudulent act, if any, on the part of one Mr. Yaswant Singh, whose services has been terminated by the petitioner''s firm for which firm is vicariously liable, by which the firm has been blacklisted.

Against this background, we are of the view that blacklisting will have a penal consequences, therefore, unless an appropriate hearing on show cause is completed, no authority is allowed to pass such order of blacklisting.

We are very much relying on paragraph 20 of the judgment in Mr. Erusian Equipment and Chemicals Ltd. v. State of West Bengal and another.1 It has also been followed in various cases such as AIR 1978 SC 930 and AIR 1989 (1) SCC 220. Paragraph 20 of the judgment reported in AIR 1975 SC 266 is as follows:

"20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship which 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."

Since we do not find any such showcause notice and hearing, particularly in view of the interim order passed by Division Bench of this Court dated 17.12.2007, we are of the view that the impugned order can only be effective subject to the hearing and final order to be passed by the authority upon giving fullest opportunity of hearing. Therefore, we make a time bound programme for giving notice by the authority concerned to the petitioner, calling upon him to show cause and call upon him to give reply and complete such proceedings and by passing reasoned order thereon within a period of two months from the date of communication of this order.

However, the order impugned will be given effect to subject to the decision taken by the authority concerned.

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