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TMI Blog2015 (8) TMI 1548X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy to blacklist is in addition to the right to make a claim for the amount, which according to it is outstanding or any other right which it may have under the contract or law. Whether invocation of one right i.e. of initiating recovery proceedings, would bar the invocation of another right i.e. to blacklist? - HELD THAT:- The power to blacklist, in this case on the ground of non-payment of dues, is independent of the power to recover the said dues, whether by instituting arbitration proceedings or by instituting a suit for recovery of the said amount and the mere pendency of such proceedings would per se not be a bar to the exercise of the power to blacklist. If during the pendency of legal proceedings the power to blacklist has been invoked, what would be the proper fora for entertaining a challenge if any made to the exercise of such power-whether by way of an independent proceeding or by way of an application for interim relief in the pending legal proceedings? - HELD THAT:- If blacklisting is on the same grounds which are subject matter of pending legal proceedings, the proper mode for challenging the said action of blacklisting would be by way of an application for interim r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt SDMC has blacklisted the petitioner, are pending between the petitioner and the respondent SDMC, the respondent SDMC is not entitled to blacklist the petitioner without awaiting the outcome of the arbitration proceedings. 3. I have wondered whether the mere pendency of arbitration or a suit in respect of the disputes can become a bar to the exercise of power of blacklisting. I am of the opinion that there can be no proposition of law in absolute terms that pendency of a litigation between the contractor and an authority / body / municipality / government, the dispute wherein entitles the authority / body / municipality / government to exercise the power to blacklist the contractor, cannot be a ground to deprive such authority / body / municipality / government from exercising the power of blacklisting. If it were to be so held, it would become very easy for a contractor to defeat the right of the authority / body / municipality / government to blacklist, by, as soon as the dispute has arisen, initiate the litigation. 4. The Supreme Court, as far back as in Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal (1975) 1 SCC 70 held, (i) that under Article 298 of the Consti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lacklisting a delinquent bidder, if it is otherwise justified. The power to blacklist was held to be inherent in every person legally capable of entering into contracts. 6. It would thus follow that the exercise of the power to blacklist is independent of any provision therefor in any law or in the contract. 7. Mention may also be made of the recent dicta of the Supreme Court in Gorkha Security Services Vs. Govt. of NCT of Delhi (2014) 9 SCC 105 reiterating the law aforesaid. 8. I am therefore of the view that the right of the government / governmental agency to blacklist is in addition to the right to make a claim for the amount, which according to it is outstanding or any other right which it may have under the contract or law. 9. The question which next arises is, whether invocation of one right i.e. of initiating recovery proceedings, would bar the invocation of another right i.e. to blacklist. 10. In my opinion, no. Supreme Court, in Transcore Vs. Union of India (2008) 1 SCC 125 quoted Snell's Equity (31st Edition) propounding that a dual obligation could arise on the same transaction and that doctrine of election of remedies is applicable only when the two or more re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. In addition, finding that the grounds on which blacklisting was ordered were the same which were subject matter of a pending arbitration, it was observed that the determination by the Arbitrator would settle all the issues. It was observed that Indian Oil Corporation Limited (IOCL) ought not to have proceeded with blacklisting with undue haste, without giving an opportunity of hearing also to the contractor in that case. However in the end, it was observed that "It is for the respondents (IOCL) to choose which path they would like to follow". It thus appears that the learned Single Judge of this Court also did not hold that the pendency of the arbitration was an absolute bar to blacklisting. The Division Bench dismissed the appeal, without disturbing the option given to IOCL to, notwithstanding the pendency of arbitration proceedings, if so desired, proceed with the blacklisting but after giving opportunity of hearing to the contractor. As far as National Building Construction Corporation Limited supra is concerned, in that case also blacklisting was found to be without proper opportunity of hearing and thus not sustainable. Though, it was also observed that since the blacklist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the judgments cited by him having entertained the challenge to blacklisting in an independent proceedings, it has but to be necessarily held that an independent proceeding challenging the blacklisting is maintainable and this Bench would be bound by the said judgments. 20. I have considered the aforesaid contention. I find that in neither of the judgments aforesaid cited by the counsel for the petitioner, such a plea or argument was taken or considered. In National Building Construction Corporation Limited supra, though Erusian Equipment & Chemicals Ltd. supra was noticed, but on a different aspect than that on which reliance thereon has been placed hereinabove. It is settled principle of law that a judgment is a precedent on what falls for adjudication and not what can be logically deduced or inferred therefrom. A plethora of case law in this regard has been noticed in Google Inc. Vs. Competition Commission of India MANU/DE/1271/2015 (DB) and in Jamia Hamdard (Deemed University) Vs. Union of India MANU/DE/2314/2015. The judgments cited by the counsel for the petitioner cannot be said to have held that the challenge to the blacklisting is to be by way of an independent proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been arrived at after understanding from the counsels the stage at which the arbitration proceedings are pending and the time required to be taken by them for further proceedings and on their assurance that they will not seek any adjournment and fully co-operate with the Arbitral Tribunal in disposal of the arbitration proceedings by the said date. 27. Accordingly, this petition is disposed of with the request aforesaid to the Arbitral Tribunal. 28. Needless to state that in view of the above, blacklisting shall not be given effect to till the award. 29. However, in the event of the award being in favour of the respondent SDMC, the question of the period for which the petitioner is to be blacklisted would remain to be decided by the respondent SDMC. The respondent SDMC to, within 15 days of the arbitral award, if in its favour, issue a show cause notice to the petitioner specifying the period for which the petitioner is then proposed to be blacklisted and after hearing the petitioner, pass an order thereon within a period of 15 days thereafter. 30. Needless to state that if the petitioner remains aggrieved from that order, would have remedies in law. No costs. Copy be given da ..... X X X X Extracts X X X X X X X X Extracts X X X X
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