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2021 (3) TMI 1421 - HC - Indian LawsPrinciples of Natural Justice - No reasons are assigned as to why the conclusion was drawn that the reply is not satisfactory - debarring or blacklisting a contractor - HELD THAT - In the catena of judgments, the Hon'ble Supreme Court opined that debarring or blacklisting a contractor has drastic consequences on him. The said penal action cannot be passed without following the due process and without assigning adequate reasons. The reply to the show cause notice submitted by the petitioner clearly shows that the petitioner has assigned detailed reasons in support of his defense. He mentioned about various clauses of NIT and prayed that no coercive action be taken against him - the aforesaid finding that reply is not satisfactory is a conclusion drawn by the Managing Director for which no reasons are assigned. Reasons are held to be heart beat of conclusion. On the basis of Judgment in Kranti Associates 2010 (9) TMI 886 - SUPREME COURT , in contractual matter, the Division Bench of this Court in M/S. AICONS ENGINEERING PVT. LTD. VERSUS STATE OF M.P. OTHERS 2019 (11) TMI 1796 - MADHYA PRADESH HIGH COURT set aside the order which was not a speaking order and no reasons were assigned. The order dated 22.01.2021 cannot be upheld because it does not contain any reason whatsoever for the conclusion that reply is not satisfactory - petition allowed.
Issues:
Challenge to order of debarment based on unsatisfactory reply to show cause notice. Analysis: The petition filed under section 226 of the Constitution challenged an order of debarment for six months due to an unsatisfactory reply to a show cause notice. The petitioner contended that the reply was detailed and the respondent did not consider the defense adequately, violating principles of natural justice. The Hon'ble Supreme Court emphasized the importance of providing reasons for decisions affecting individuals adversely. The petitioner's reply cited clauses of NIT and requested no coercive action. However, the order of debarment lacked reasoning for deeming the reply unsatisfactory, contravening the need for reasons in administrative, quasi-judicial, and judicial orders. The judgment referred to the case of Kranti Associates Pvt. Ltd and highlighted the necessity of recording reasons to ensure justice and transparency in decision-making processes. The absence of adequate reasons in the impugned order led the High Court to set it aside, following the precedent set in a previous Division Bench decision. The Court emphasized that reasons for decisions must be cogent, clear, and succinct to uphold the principles of natural justice and due process. Transparency in decision-making is crucial to prevent abuse of judicial powers and maintain accountability. Based on the principles outlined in the Kranti Associates case and previous judicial decisions, the High Court concluded that the order of debarment lacked sufficient reasoning to support the decision. Consequently, the Court set aside the order dated 22.01.2021 and directed the Managing Director to make a fresh decision in accordance with the law based on the petitioner's reply to the show cause notice. The petition was allowed to the extent indicated, emphasizing the importance of providing reasoned decisions in contractual matters to uphold fairness and transparency in administrative actions.
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