Ram Singh Yadav vs Union Of India

Heard Ms. Saumya Sharma, learned counsel for the petitioner. Also heard Mr. Ramakant Mishra, learned Deputy Solicitor General, appearing for the respondents.

On 15.11.2022, this Court had passed the following order:

"Heard Ms. Saumya Sharma, learned counsel for the petitioner. Also heard Mr. Ramakant Mishra, learned Deputy Solicitor General, appearing for the respondents.

At the very outset, Ms. Sharma submits that the challenge in this petitioner is to be confined only to black-listing of the petitioner from participating in future tenders of the respondents No. 2, 3 and 4.

It is her contention that before black-listing the petitioner, no show-cause was issued. She further submits that a fresh tender has been issued by the respondents and unless the order dated 20.10.2022 so far as it relates to black-listing of the petitioner is stayed, the petitioner will be debarred from participating in the said tender process. It is also her submission that tenders are to be opened today itself.

Mr. Mishra submits that he needs to have instructions as to whether any show-cause notice was issued to the petitioner before order of black-listing was passed.

List tomorrow i.e. on 16.11.2022 as a fresh case.

In order to protect the interest of the petitioner and to balance the competing equities by way of an interim order, we permit the petitioner to submit tender. We further direct that tenders submitted shall not be opened till 16.11.2022.

Mr. Mishra will communicate this order telephonically to the respondents."

According to Ms. Sharma, the date of submission of tender is deffered till 18.11.2022, and therefore, the petitioner did not submit any tender yesterday.

Mr. Mishra, on instructions, very fairly submits that before issuance of debarment order, no notice to show-cause was issued to the petitioner.

In M/s. Erusian Equipment & Chemicals Ltd. v. State of West Bengal & Another, reported in (1975) 1 SCC 70, the Hon'ble Supreme Court in paragraph 20 observed as follows:

"20. 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."

In Gorkha Security Services v. Government (NCT of Delhi) & Others, reported in (2014) 9 SCC 105, the Hon'ble Supreme Court observed that serving of show cause notice is a requirement before recourse can be taken for blacklisting. It was observed that the fundamental purpose behind serving of the show cause notice is to make the noticee understand the precise case set up against him which he has to meet and for this purpose, a statement of imputations detailing out the alleged breaches and defaults he has committed, is required so that he gets an opportunity to rebut the same and also indicating the nature of action which is proposed to be taken for such a breach.

In UMC Technologies Private Limited v. Food Corporation of India & Another, reported in (2021) 2 SCC 551, it was held by the Hon'ble Supreme Court that for a show cause notice to constitute the valid basis of a blacklisting order, such notice must spell out clearly, or its contents be such that it can be clearly inferred therefrom, that there is intention on the part of the issuer of the notice to blacklist the noticee. Such a clear notice is essential for ensuring that the person against whom the penalty of blacklisting is intended to be imposed, has an adequate, informed and meaningful opportunity to show cause against his possible blacklisting. As the notice in the said case was silent about the proposed action of blacklisting, the Hon'ble Supreme Court held that the show cause notice issued in the said case did not fulfill the requirement of valid show cause notice for blacklisting and accordingly, the order of blacklisting was set aside and having regard to the peculiar facts and circumstances of the case, the matter was remanded to the Corporation for a fresh consideration.

In view of the above enunciation by the Hon’ble Supreme Court, the order of debarment, which is, in other words, an order of black-listing, cannot be sustained in law.

Accordingly, order dated 20.10.2022 so far as it relates to debarment of the petitioner is concerned from participating in tenders for all future tenders is set aside. However, liberty is reserved to the respondents to initiate appropriate proceedings with regard to debarment/ black-listing in accordance with law.

Since the order of debarment has now been set aside, there is no embargo on the petitioner to participate in the subject tender.

The writ petition stands allowed and disposed of.