Jharkhand High CourtMahamaya Chemicals vs The State Of Jharkhand And Ors. on 6 December, 2006Equivalent citations: AIR2007JHAR61, 2007(2)BLJR876, [2007(1)JCR555(JHR)], AIR 2007 JHARKHAND 61, 2007 (1) AIR JHAR R 696 (2007) 1 JCR 555 (JHA), (2007) 1 JCR 555 (JHA)Author:Permod KohliBench:Permod KohliORDER
 

Permod Kohli, J.Page 08771. Petitioner is aggrieved of the order No. 123 dated 25th August, 2006, blacklisting the petitioner and the order dated 09.09.2006 cancelling the work already allotted. Petitioner is a proprietorship concern duly registered with the District Industrial Centre, Ranchi and is engaged in manufacturing and processing of unslacked lime etc. Petitioner participated in the bid and was declared as a successful bidder for supply of the unslacked lime. A formal agreement is said to have been executed, which was in operation till 30th September, 2006. Vide impugned order No. 123 dated 25th August, 2006, issued under order of the Under Secretary, Drinking Water and Sanitation Department, Government of Jharkhand, Ranchi petitioner has been blacklisted and has been deprived of all future contracts with a further direction not to allow execution of current work. This blacklisting order has been passed on the ground that the representative of the petitioner entered into the office of the Executive Engineer, Drinking Water & Sanitation Division, Hatia Project, Ranchi without permission and attempted to destroy the papers lying on the table of the officer and also misbehaved with the Executive Engineer, Drinking Water & Sanitation Division, Hatia Project, Ranchi and threatened to kill him. Consequently, another order has been passed dated, 09.09.2006, whereby petitioner's order of supply dated 26th June, 2006 for supply of 25 metric tonne of lime stone and 59 metric tonne of Alluminna Ferric has also been cancelled with a further direction not to make any payment to him. Though petitioner has made so many allegations against Respondent No. 7, who is the Executive Engineer, Drinking Water & Sanitation Division, Hatia Project, Ranchi and this Officer has been impleaded as a party by name but primarily impugned orders has been assailed being in contravention of the provisions of Bihar Public Works Department Code and violation of principles of natural justice. Reliance is placed upon Clause 18 of the Bihar Public Works Department Code, which reads as under:18. (i) De-registration-If any of the documents produced by the contractors at the time of registration is found to be faulty, his registration will be cancelled with immediate effect.(ii) Black listing - If obvious defect is found at a later date in the work done by the contractor or his conduct and behaviour is found unbecoming of a civilized person either during or after the construction period (but within the period of registration or he is found guilty of any criminal offence, or it is established that he has managed to receive excess payment from the Department, or engineers employed by him are found to be associated or employed simultaneously with other firms, or any information furnished by him is found to be wrong or misleading during any time his registration is valid, then for any; or all of the above reasons it will be open to the Department to black-list the contractor for an indefinite or a specified period and/or de-register him and withhold any further payment due to him and forfeit his earnest money, and security deposit  after giving him proper opportunity to re-present his case. During the period the contractor has been blacklisted, he will not be eligble to purchase tender or apply for any work or receive contract any where for any work in the Department.Page 08782. Mr. M.K. Laik, learned Sr. S.C. I while defending the impugned order has vehemently argued that in the present case, there is no necessity of observing the principles of natural justice as the representative of the petitioner who is her husband is guilty of  misbehaviour as is evident from the impugned order dated 25th August, 2006. He has further relied upon Rules 13 and 14 of Bihar Contractors Registration, Rules, 1996, which reads as under:Rule 13.- The name of the contractor in any of the category of P.W.D. (Public Works Department) due to any of the following category of corruption by a Contractor or any partner of a registered firm or by any director or any technical employee or any of the authorized representative of a private public committee company, personally, may be put under black list.(i) Indisciplined behaviour with any Officer or employee of the concerned department.(ii) Latches in the disposal of work in accordance with the agreement or prescribed specification.(iii) For creating law and order problem in the Government Office at the time of receiving tender papers or producing tender papers or any work connected with it.Rule 14. - The final decision shall be taken by the competent registering Officers of a particular class/rank only after issuing show cause notice for blacklisting any contractor of a particular class.3. It is, accordingly, stated that under Rule 14 only contractor of the special category is entitled to notice before blacklisting and petitioner being not a special category contractor, was not entitled to any such notice.4. It is not in dispute that before passing the impugned orders, petitioner was not provided any opportunity of being heard. Not that, she has been blacklisted, but even prevented from executing the existing contracts, which were valid up to 30th September, 2006. Under the existing supply contracts, petitioner has also supplied materials and vide impugned order dated 09.09.2006, she has been deprived of the due payments for this supply, besides prevented from future contracts. Such ' an action not only casts stigma upon the petitioner but also affects her civil rights. It is not the case of the Respondents that the petitioner herself is guilty of misbehaviour. The allegations are against the representative of the petitioner, who incidently happens to be her husband. Two questions arise for consideration (i) whether the petitioner is to be punished for the act of alleged misbehaviour of her representative when admittedly, there is no allegation of financial irregularities etc.affecting the State Exchequer (ii) Whether blacklisting and other penal actions are justified without observing the principles of natural justice, particularly in view of the specific provisions of Clause 18 of the Bihar P.W.D. Code. Clause 14 of 1996 Rules, which is relied upon by Mr. Laik is also of no help to him. Even this clause clearly prescribes observance of principles of natural justice. The apex Court in the case ofRaghunath Thakur v. State of Bihar and Ors.:4. ... 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 realized that blacklisting any person in respect of Page 0879 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 insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law....5.In view of the lawlaid down bythe apex Court and the circumstances of this case, there has been gross violation not only of the principles of natural justice but even the specific rules/norms, namely, Clause 18 of the Bihar Public Code, (sic) has also been contravened. Without going into the merits of the case and other questions raised, impugned orders are liable to be quashed for violation of the laid down norms/rules and for non-observance of the principles of natural justice. I order, accordingly. As a consequence, petitioner shall be entitled to make supplies in respect to the contracts, which existed for the remaining period for which he could not execute the contract on account of intervention of the impugned orders. Respondents are further directed not to prevent the petitioner from participating in tendering in future.