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TMI Blog2019 (12) TMI 1520X X X X Extracts X X X X X X X X Extracts X X X X ..... can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing, and prior intimation of such a move. This principle is too well entrenched in the legal ethos of this country to be ignored, as the state did, in this case. The High Court, in the opinion of this court, fell into error in holding that in matters of award of public contracts, the scope of inquiry in judicial review is limited. Granted, such jurisdiction is extremely circumscribed; no doubt the court had refused to grant relief to Daffodils against its plea of wrongful rejection of its tender. The appeal is allowed. - MR. R. F. NARIMAN AND MR. S. RAVINDRA BHAT, JJ. For the Petitioner : Mr. Sibo Sankar Mishra, AOR For the Respondent : Mr. Ankit Goel, AOR, Mr. Harsh P. Shahi, Adv. JUDGMENT S. RAVINDRA BHAT, J. 1. Leave granted. With consent, all counsel who appeared were heard. 2. The appellant (hereafter Daffodills ), a pharmaceutical supplier, is aggrieved by a decision of the Allahabad High Court, rejecting its challenge to an order (dated 21.08.2015) issued by the Principal Secretary, Government of U.P. to its Medical and Health Department, direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was pending against it), Daffodills submitted that the criminal case was filed against one Mr. Surender Chaudhary, an erstwhile Director, who had ceased to have any connection with it (i.e. Daffodills) from 22.02.2012. Besides, it was argued that the decision not to procure, amounted to blacklisting and that it was issued without notice or predecisional hearing and was consequently liable to be set aside. 6. In the impugned order, the High Court recalled a previous direction in other proceedings, i.e. Writ Petition No. 3611 (MB)/ 2011 where it had enquired in regard to the execution and implementation of the National Rural Health Mission in regard to utilization of funds released by the Government of India. The impugned order states that in compliance of that order, CBI registered a case for preliminary inquiry and after concluding the investigation filed a charge-sheet in the competent court against Surender Chaudhary, the then Director of Daffodils and other co-accused. 7. After noticing Daffodil s contention that Surender Chaudhary ceased to be its Director and also that it was not given opportunity of hearing before the passing of the order, the High Court observed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Surender Chaudhary was acting in the capacity of Director of Daffodills, for which he was charged of various offences by the CBI. These involved fictitious accounts of supply to various individuals and persons in order to obtain procurement orders from the State. The concerned clause 14 clearly stated that a court case means criminal case against the firm, Board of Directors or individual Directors. Therefore, the involvement of Surender Chaudhary was close, who was none other than the blood relative of the existing director, the appellant s contention that the acts of omission and commission did not in any manner affect it, is not sound. Learned counsel submitted that having regard to these facts, the order made by the Principal Secretary (on 21.08.2015) was only a direction to not procure medicines locally from the appellant; it could not be characterized as a debarring or blacklisting order. It was pointed out that the appellant had filed a suit in 2014, seeking a direction not to finalize the tender for which it had bid; furthermore, the order dated 21.08.2015 was made pursuant to the directions of the court. Consequently, the appellant could have no grievance against it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CC 699; Grosons Pharmaceuticals (P) Ltd. v. State of U.P.,(2001) 8 SCC 604; B.S.N. Joshi Sons Ltd. v. Nair Coal Services Ltd. (2006) 11 SCC 548 have now clarified that before any executive decision maker proposes a drastic adverse action, such as a debarring or blacklisting order, it is necessary that opportunity of hearing and representation against the proposed action is given to the party likely to be affected. This has been stated in unequivocal terms in Raghunath Thakur (supra) 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 Southern Painters (supra) the grievance was with respect to unilateral deletion of the petitioners name from the list of approved contractors, maintained by the public sector agency. This court held that such an action was arb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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