Deepak Kumar Agrawal vs Nagar Palika Parishad

Tarun Agarwala and Rajan Roy, JJ.—List has been revised. No one appears to oppose this petition. Heard learned Counsel for the petitioner and perused the record.

By means of this writ petition, the petitioner has challenged the orders dated 9th January, 2006 and 3rd July, 2006, whereby he has been blacklisted, his security forfeited and the remaining dues declined.

According to the petitioner, he is a registered contractor and had submitted a tender for construction/painting of a road, namely ''Majnuwala Road'' from G.T. road to Railway Crossing, on 1st July, 2003, which was accepted and an agreement was entered into between the parties on 29.7.2003.

Assertion of the petitioner is that he completed the work by 31.3.2004, whereafter the due payment was also made. Thereafter, he received a notice with regard to the work being not satisfactory and ultimately an order of blacklisting was passed on 9.1.2006, against which, the petitioner filed Writ Petition No. 8670 of 2006, which was disposed of with a direction to the petitioner to submit a representation before the authority concerned, which was to be decided within a stipulated period and till then the order of blacklisting dated 9.1.2006, was kept in abeyance. The representation made accordingly, by the petitioner has been rejected by the ex parte order dated 3.7.2006.

Upon hearing learned Counsel for the petitioner and perusal of the record, it transpires that no notice was issued to the petitioner before passing the initial order of blacklisting nor after the order of this Court, any notice or opportunity of hearing was given to the petitioner and the order impugned herein has been passed ex parte. The Court finds merit in the contention of the learned Counsel for the petitioner that the authority has failed to consider the specific pleadings made by him in paragraphs 3 and 9 of his representation, which are quoted hereto below:

A perusal of the orders impugned indicates that the assertion made in paragraph 3 of the representation, according to the authority, do not require any examination and there is not even a whisper therein about the assertion made in paragraph 9 of the representation. In the opinion of the Court, the assertions made in paragraphs 3 and 9 of the representation were very relevant because according to the petitioner, he was assigned only the painting work whereas the laying and surfacing of the road by tarcol mix with stone ballast was to be done by the Nagar Palika Parishad, the respondent No. 1, which was not done and due to which, the irregularity occurred and for that, the petitioner could not be held responsible. Non-consideration of the aforesaid specific pleas raised by the petitioner in his representation renders the impugned order arbitrary.

Reference may be made in this regard to the pronouncement of the Supreme Court in the case of Erusian Equipment and Chemicals Ltd. Vs. State of West Bengal and Another, wherein their Lordships'' have held as under:

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.

The decisions of the Supreme Court in Radhakrishna Agarwal and Others Vs. State of Bihar and Others, ; E.P. Royappa Vs. State of Tamil Nadu and Another, ; Mrs. Maneka Gandhi Vs. Union of India (UOI) and Another, ; Ajay Hasia and Others Vs. Khalid Mujib Sehravardi and Others, ; Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, and Dwarkadas Marfatia and Sons Vs. Board of Trustees of the Port of Bombay, have also ruled against arbitrariness and discrimination in every matter that is subject to judicial review before a Writ Court exercising powers under Article 226 or Article 32 of the Constitution. A reference to the following passage from the decision of the Supreme Court in Mahabir Auto Stores and others Vs. Indian Oil Corporation and others, should, in our view, suffice:

It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this Court in Radhakrishna Agarwal and Others Vs. State of Bihar and Others, ......In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a Governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable.. It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case.

In the instant case, the Court finds gross violation of the principles of natural justice and non-consideration of the relevant aspects of the matter before blacklisting the petitioner, therefore, the impugned orders are wholly unjustified and arbitrary. In view of above, the impugned orders being unsustainable are quashed. The writ petition is allowed.