2014 (1) TMI 585 - HC - Customs

Prohibition on export of rice under tripartite agreements - Debarring of company - Duration of debarring - Held that - no duration of the debarring of the petitioner has been fixed in the said order, meaning thereby that it has the effect of permanent black listing/debarring of the petitioner - debarment is never permanent and the period of debarment invariably depends upon the nature of the offence committed by the erring contractor - orders debarring the petitioners from all future transactions with MMTC, STC and PEC will remain in force only for a period of four years commencing 10.11.2010, meaning thereby that the aforesaid order shall come to an end on 09.11.2014 - Following decision of M/s Kulja Industries Limited Versus Chief Gen. Manager WT. Proj. BSNL & Others 2013 (10) TMI 733 - SUPREME COURT - Decided partly in favour of petitioner.

Summary

Issues:
1. Challenge to memorandum debarring petitioners from transactions with certain PSUs.
2. Duration of the debarring order.
3. Applicability of the order on dealings with other entities.
4. Blacklisting period determination.

Analysis:
1. The judgment addresses multiple petitions challenging a memorandum debarring petitioners from transactions with specific Public Sector Undertakings (PSUs) issued by the Government of India, Ministry of Commerce. The petitioners had entered into agreements for exporting non-basmati rice, but were later restricted from conducting business with the mentioned PSUs.

2. The issue of the duration of the debarring order is crucial. The court noted that the absence of a fixed duration in the order effectively imposed a permanent blacklisting on the petitioners. Citing legal precedents, including Vinay Construction Co. & Ors. Vs. Municipal Corporation of Delhi, the court emphasized the need for a prescribed period for blacklisting due to its severe consequences.

3. The judgment clarifies that the debarring orders will be in force for a specific period of four years from the initial date, allowing the petitioners to resume transactions with the specified PSUs after 09.11.2014. Furthermore, the order does not restrict the petitioners from engaging with the Government of India, other PSUs apart from the named three, or private entities. The ruling ensures that the memorandum does not affect dealings with sister concerns of the petitioner companies.

4. The court's decision aligns with legal principles established in previous cases like Sabharwal Medicos Pvt. Ltd. Vs. Union of India and M/s Kulja Industries Limited vs. Chief Gen. Manager W.P. Project BSNL, emphasizing that debarment or blacklisting should have a defined period based on the nature of the offense committed. The judgment provides a balanced approach by setting a specific timeframe for the debarring orders while safeguarding the petitioners' business interests with other entities.