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Judgment
Ramesh Ranganathan, CJ
The application seeking condonation of delay in preferring this appeal is not opposed by Mr. Jitendra Chaudhary, learned counsel for the respondents-writ petitioners and the delay is, therefore, condoned. Delay condonation application stands disposed of.
This appeal is preferred by the State of Uttarakhand against the order passed by the learned Single Judge in Writ Petition (M/S) No.1338 of 2010 dated 13.12.2017, setting aside the impugned order dated 07.05.2010, and reserving liberty to the appellants-respondents to proceed with the matter in accordance with law.
By order dated 07.05.2010, the respondents-writ petitioners was black listed from participating in future tenders to be invited by Government of Uttarakhand or its agencies. A show-cause notice was issued to the respondents-writ petitioners on 23.07.2008, to which they submitted their reply on 18.03.2009, 07.07.2009, 21.09.2009, 25.09.2009 and 27.10.2009. It is the appellants case, however, that the respondents-writ petitioners had failed to furnish information, specifically sought by the appellants, resulting in the impugned order being passed.
In the order under appeal, the learned Single Judge observed that the reply submitted by the respondents-writ petitioners to the show-cause notice were required to be taken into consideration by the competent authority by adverting to the facts contained therein; there was violation of principles of natural justice; and the purpose of issuing a show-cause notice to the respondents-writ petitioners was to enable them to project their case before the competent authority. While quashing the impugned order, liberty was reserved to the appellants-respondents to proceed with the matter in accordance with law.
In M/s Erusian Equipment & Chemicals Ltd. vs. State of West Bengal & another: AIR 1975 SC 266, the Supreme Court observed thus:-
"......Under Article 298 of the Constitution the Executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of black-listing has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of black-listing. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality.
But for the order of blacklisting, the petitioner would have been entitled to participate in the purchase of cinchona. Similarly the respondent in the appeal would also have been entitled but for the order of blacklisting to tender competitive rates.
The State can enter into contract with any person it chooses. No person has a fundamental right to insist that the Government must enter into a contract with him. A citizen has a right to earn livelihood and to pursue any trade. A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling.
The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates; a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are "instruments of coercion".
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.
With regard to the case of the petitioners, it is made clear that the authorities will give an opportunity to the petitioners to represent their case and the authorities will hear the petitioners as to whether their name should be put on the blacklist or not. This is made clear that the decision on this question will not have any effect on the proceedings pending in Calcutta High Court where the petitioner has challenged the adjudication proceedings under the Foreign Exchange Regulations Act. Any decision of the authorities on the blacklisting will have no effect on the correctness of any of the facts involved in those proceedings." (emphasis supplied)
Again in Raghunath Thakur vs. State of Bihar & others: AIR 1989 SC 620, the Supreme Court observed thus:-
"Indisputably, no notice had been given to the appellant of the proposal of black-listing the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before black-listing any person. In so far as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realised that black-listing any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In that view of the matter, the last portion of the order in so far as it directs black-listing of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the black-list in respect of future contracts under the Collector is set aside. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for black-listing the appellant if the Government is so entitled to do so in accordance with law, i.e. giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefore. We, however, make it quite clear that we are not expressing any opinion on the correctness or otherwise of the allegations made against the appellant. The appeal is thus disposed of." (emphasis supplied)
In the present case, while a show-cause notice was no doubt issued to the respondents-writ petitioners, to which they submitted their reply, the order of black listing was passed on the ground that the information sought for by the authorities had not been furnished by the respondents-writ petitioners. Failure, if any, on the part of the respondents-writ petitioners to furnish the information sought for by the appellants may well justify an inference being drawn, but that does not absolve the appellants of the requirement of assigning reasons as to why the contentions put forth by the respondents-writ petitioners, in their reply to the show-cause notice, should not be accepted.
We find no infirmity, therefore, in the order under appeal, necessitating interference in an intra-court appeal. Suffice it to make it clear that it is open to the appellants to consider the objections raised by the respondents-writ petitioners in their reply to the show-cause notice, and to pass a reasoned order afresh and in accordance with law.
Subject to the aforesaid observations, the Special Appeal fails and is, accordingly, dismissed. No costs.