Supreme Court: Courts Have Sometimes Failed Arbitration, With Interference Curing No Disease  ||  Supreme Court: Co-Heir Cannot Sell Other Heirs' Shares as Karta After Intestate Succession  ||  SC: Casual Labourers With Temporary Status are Eligible For Pension Even Without Regularisation  ||  Supreme Court: High Courts Must Record the Nature of Crime and Allegations While Quashing FIRs  ||  Delhi HC Rejected Pernod Ricard’s Plea Against Denial of Wholesale Liquor License over Excise Case  ||  Gujarat HC: Lalita Kumari Ruling Does Not Permit Deceased’s Kin to Invoke Art 226 For FIR Failure  ||  Ker HC: Denying Disability Pension to Army Personnel Based on Unreasoned Medical Opinion is Invalid  ||  Kerala HC Directs Family Courts to Follow Calcutta HC Custody Guidelines Till State Rules Framed  ||  Allahabad HC Allows LIC Employees to Be Engaged as Census Enumerators and Supervisors For Duties  ||  Supreme Court Unveiled Victim Protection Plan For Trafficking Survivors and Urged Legal Reforms    

Gupta Freight Carrier Vs. The Executive Director, West Zone, Zonal Office (West) and Ors. - (High Court of Bombay) (05 Apr 2022)

Order of blacklisting can be scrutinized not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality

MANU/MH/1153/2022

Contract

The challenge raised in present writ petition is to the order passed by the Food Corporation of India (FCI) terminating the contract that was issued to the Petitioner. Besides such termination of the contract, the earnest money deposited by the Petitioner has been forfeited. The Petitioner has also been debarred from participating in any future tender of the FCI for a period of five years.

In the case in hand, the show cause notice dated 1st October, 2020 has been found to be a proper notice indicating the action of blacklisting being proposed therein. This notice was replied by the Petitioner on 28th December, 2020. It is thus clear that, due notice was given to the Petitioner and the order of blacklisting cannot be questioned on the count that, the Petitioner was not heard before blacklisting it.

An order of blacklisting can be scrutinized not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. Whether an order of blacklisting is reasonable, fair and proportionate to the gravity of the offence can be examined by a writ Court.

The order of blacklisting has the effect of depriving a party of the privilege and advantage of entering into a lawful relationship with the State for undertaking business. As held in Erusian Equipment and Chemicals Ltd. vs. State of West Bengal, an order of blacklisting has an effect of depriving a person of equality of opportunity in the matter of public contract. An order of blacklisting is equivalent to civil death of the person concerned and is stigmatic in nature. It is with these aspects in mind that the proportionality of the order of blacklisting for a period of five years would have to be viewed.

The Petitioner ought to have been granted an opportunity of hearing at least on the aspect of duration of the period of blacklisting which is five years. It is thus held that, in the present case absence of reasonable and meaningful opportunity of hearing on the proportionality of the period of blacklisting ought to have been granted to the Petitioner and the Petitioner is prejudiced to that extent.

The FCI ought to grant an opportunity of hearing to the Petitioner in the context of Clause 7(iv) of the MTF since the Petitioner has been debarred for a period of five years. Thus, while upholding the decision of the FCI to debar the petitioner for failure to comply with the terms and conditions of Clause 7(iv) of the Model Tender Format (MTF), the Petitioner is liable to be heard on the period for which it ought to be debarred.

The order terminating the contract of the Petitioner forfeiting the earnest money and blacklisting the Petitioner is upheld. The FCI is however directed to grant an opportunity of hearing to the petitioner as regards the period of debarment. Petition partly allowed.

Tags : CONTRACT   TERMINATION   VALIDITY  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved