Services v. Government

Counsel for the Ap,rellant: SRI A. VENKATESH, REPRESENTf NCi SRI SAI SANJAY SURANENI Counsel for the Rer pondent Nos..l and 2: SRI M. VIGNESHW\R REDDY GP FOR TRANSPOR.T The Court Delive rer the following: JUDGMENT .i* i THE HON'BLE THE ACTING CHIEF JUSTICE SUJOY PAUL AND THE HON'BLE SMT" JUSTICE RENUKA YARA WRIT APPEAL No.432 of 2O25 JUDGMENT: (Per tLrc Hon'bie the Acting Chief Justice Sujog Paul) Sri A.Venkatesh, learned Senior Counsel representing Sri Sai Sanj ay Suraneni, learned counsel for the appellant' Sri M.Vigneshwar Reddy, learned Government Pleader for Transport, for respondents No.1 and 2'

2. With the consent, finallY heard'

3. This intra Court appeal takes exception to the order of the iearned Single Judge passed in W'P No'26439 of 2024' dated I a

13.03.2025. BRIEF FACTS oF THE CASE:

4. Learned Senior Counsel for the appellant submits that the appellant received a contract for supply of Smart Cards' However' some complaint was preferred against the appellant before the official respondents pursuant to which' it appears that certain chips were sent to National Informatics Centre (NIC) for testing' 2 The NIC r;u I r mitted its report. Thereafter, th : appellant was served rvi -lr . shor,v cause notice d,ated 24.06.2).>-4 In turn, the appellant f lr r its detailed reply on 06 .OT .20,24 . iiu trsequently, by order datrrrl :\,O9.2024, the Transport Commissi,rr-i:r rejected the reply an 1 ,lecided to debar the supplie:-7 a1:pel1ant from participzrtir g in any tender relating to Tralsp,rrt Department. Feeling dissr isfied with the order dated r}.ct9.2o24, the writ petition rvas liled. The learned Single Judge l as ,]r5mis5sd ths writ petitir,r: r.,- the impugned order dated 13.03.202,j. CONTENIL,Q I{ OF THE APPEL LANT:

5. The 1r.r t of contention of the learned Senic,r c >unser for the appella.t is t - ilt the reply to the shou. cause no:i(re has not been considerr-.d a ld no reasons were assigned ftrr passrng the order dated 1B.C!t ,,.t24 debxring the appellant from participating in aly furthe - tr r rder. such debarring amounts to "blercklisting,,. It was not prr r, "red in the show cause notice that if th: reply is not acceptable. t may result into issuance of .n order of debarring/:1 a :<listing. This action, therefore, r-L nr. contrary to th-e bindin6 jr rlgment of the Supreme Court in Gorkha Security 3 Services v. Government (NCT of Delhif t. Apart from this, the other infirmities pointed out in the reply to the show cause notice were not dealt with.

6. Learned Senior Counsel for the appellant submits that the learned Single Judge, in the impugned order, has reproduced the rival contentions raised by the parties at the bar and reproduced the citations relied upon by both sides. However, the reasoning and conclusions are mentioned only from paragraph 12 onwards" 7 . Learned Senior Counsel for the appellant submits that the j learned Single Judge reiied on clause B.l(b) of the Request for Proposal (RFP) of February, 2023. However, the said RFP does not provide any power of blacklisting to the official respondents' The decision making process adopted by the official respondents was flawed and therefore, when the appellant has raised doubt about the chips in the reply to the show cause notice, the said point ought to have been dealt with. CONTENTION OF THE oFFICIAL RESPONDENTS: 8. Learned Government Pleader appearing for the ofhcial respondents supported the impugned order passed by the learued '(2014) 9 scc Io5 4 Single .Iuc g : ald urged that in view of the reltort of NIC, which was accel) e . by the learned Single Judge, ro latrl can be found in the impr t1 r red order. 9 . argum€:n Th e I : , n-red counsel for the parties ha v,r ;6nlined their t s 1 . the extent indicated above ancl n o cther point is pressed.

10. We lritr : heard the learned counsel for thr, :a-ties at length a;-r d perrrs: I te record. FINDINGS: 1 1 . This is; rite that in a matter of this natrl e, the scope of judicial rc'i. is basically rerated to the decisron rre king process. If the orcle.- ri r :ed 18.09.2024 is examined on thr, .rn .,i1 of the said principli: it',, i I be clear like cloudless sk7 that rn tlre said order, there is n(, j( tit of discussion about the repll- srr_ brr_ritted by the appellant t: t -r: show cause notice. The appell:Lr t,s, reply to the show. carrse rr , i6g, dated 06.07.2024, runs into a_nrol.;t four pages. The relevarLl , rrtion of the order dated 1g.09.2024, whereby the appellant u,as :iebarred/ blacklisted, reads thus: I I I I i I 5 "ln response the NIC, vide reference 4ff cited, has furnished report stating that some of the sample cards are found in compliance with SCOSTA certihcated issued by NIC, and some of the cards are found non-compliant. Basing on Lhe reporl furnished by NIC, the Department vide reference Stn ciled, has issued show cause notice to the Vendor M/s. Colorplast Systems Private Limited, to offer his explanation within Ten days from the date of receipt of copy. The Explanation submitted by the Vendor M/s. Colorplast Systems Pvt. Ltd., vide reference 6h cited, is not satisfactory. As per NIC report the Vendor, M/s Colorplast Systems Private Ltd, New Delhi has supplied, Non-Compliant Cards, that amount to violation of the Contractual conditions among other issues. Further, the Transport Department, has decided to initiate various legal actions as per the Rules and contractual terms and conditions. Further, the Transport Department, has decided to debar the said Supplier i.e., M/s. Colorplast Systems Private Ltd., New Delhi, from participating in any tender related to Transport Department. In view of the above, the MD TGTSL, is requested to take necessary action. Yours faithfullY, sd/ - Transport Commissioner"

12. A microscopic reading of the aforesaid paragraphs rnakes it clear that the argument of the learned Senior Counsel for the appellant has substaltial force. The Tralsport Commissioner reached to a conclusion that "the explanation submitted by the vendor M/s. Colorplast Systems Pvt. Ltd., vide reference 6tn cited, 6 is not satlsfil(rt )r')r"' ln our considered opinioll' t lr: said finding ()x1)lanation of amounts 1-rt '<:: - t:lusion" and not "reasons"' If th€ the appellarI ..ias not found to be satisfa<:tor"' the reasons therefor ought : have been assigned' The reasons ar: held to be heartbeat o I t ' r: conclusion' In the absence 'lf r:asons' the conclusion ()ilr 1'ot sustain judicial scrutiny' more so' u'hen it has civil conseq'r:l lres on the other side'

13. The: Al::: (Jourt emphasized' the need of zrssiErtir g reasons 1n administrati. e quasi-judicial and judicial pror:eecii-rg; in the case Masood Ahmerl Khan2' The of Kranti ,{sr ociates (Pf Ltd' v relevant por"-.( 1) reads as under: 'p r',:cessity of giving reason by a bocl1' or nu thorlty. rn for Jonsiderati'rrL b:Ibrc this ; ;;;;*l;;"u#" this Court rcc()gni:red a sorl adm"inistrative orclers :rtrd quasi- ;;;;"" ;;i;;' r''clers but with the passage of tinre th'r ( istinc-tlon ";;;;;;".-tnitiallv ihinn"d out : 1( virtuallv ' i;'i;;;;;i"rred'and foi"t i" the juclgmt:nt o ',r.wi;. i;i;"of tnd'ir-l(te6e)2 SCC 2t12 ";;f;; ^l-ris " t2,. ',ll t: supp(,r L Courrl tl of rlenta ju<liciar bc t *'e c ll rezr:i^ ecl in ,1.r( l 13,. . . 1a T1-i: l:<pression "speaking order" was ltrst <:oitrt:d by Lord CharL< r: I lr Earl Cairns in a ?ather strange cor ti)x1 The Lord ;;;;;; ,, i,.,-*'rril" explaining the ambit. ol 'h: u-rit of --ith on th: l ace of the certi,r -rr , referred to orders , ,a^p.-,"a out that an order with err'rrs ('n its face' ;;,;;; is a r;pe I -llng order' "ttots ' 12o lo1 o s;t'c 't '6 7

15. This Court always opined that the face of an order passed by a quasi-judicial authority or even an administrative authority affecting the rights of parties, must speak. It must not be like the "inscrutable face of a sphinx".

47. Summarising the above discussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is mcanL to serve the wider principle of justice tha[ justice must not only be done it must also appear to be done as wel1. (d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations. (fl Reasons have virtually become as indispensable a iomponent of a decision-making process as observing prin-iples of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial superior courts. revlew by (h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the lifeblood of judicial decision-making justifying the principle that reason is the soul of justice. 8 (r) Jr-Ld c ir I :r cven quasi-judicial opinions thesc c a5 s can be as cliff,:r',: r as the judges and authorities who r'1< 1ir er them' A11 thc,.e r,:cisions serve one common purl)ose 'r'hrch is to demorstr: e by reason that the relevant factols h tve been objcr:riv.:l considered. This is important for strstalning the litigan -s r :th in the justice delivery system. $ Ins -.rr: (rc on reason is a requirement lor brrtl iudicial acc,lun a: lity and transparency. (h) If a . rr,lge or a quasi-judicial authority is; nc t candid enoug -I , 1 rout his/ her decision-making proces;s t rt n it is impos r:b : to know whether the person deciding is frliLhful to the r:1oc1.r t : of precedent or to principles of increrlel ttalism (Q Rr:as : r ' in support of decisions must be .og( n t. ;[car and succLrct. , |lreteflce of reasons or "rubber-stamp reasons" is noL -o 1,e r rluated rvith a valid decision-making prrc'rss. (m) tt ca r:.ot be doubted that transparencv is t)re sine qua non ot '. ; raint on abuse of judicial powers. Transprrency in decrsion- r raking not only makes the judges tLr'd decision- maker s I r ;s prone to errors but also makes tht-'rl s'ubject to broad;.' ; :rutiny. (See David Shapiro in Dt'-fenct ot Judiciat Cando i l()87) 100 Harvard Law Review 73t-371 t (n) Sirr,'c the blc a reqlrirer an<] r :r Se<: R l ';z parir 2 !r 40s (-l r\ EuroJ,6 61 "adcq r::1 de<;lsirrLr he requirement to record reasons erniln rtes from I cloctrine of fairness in decision-mak irig, the said :rt- is now virtually a component ol llrman rights considered part of Strasbourg Jrlisprudence' "cijav. Spainl(19941 19 EHRR 5531 IrIlRR, at 562 tnd. Angav. uniuersitg of Oxford i20C 1 EWCA Civ | , urherein the Court referred to Ar it: [c 6 of the r Convention of Human Rights r"'h ic h requires, and intelligent reasons must be givt'r fc r judicial (o) ln rl common law jurisdictions judgments pl iy a vital role i-i s : tting up precedents for the futurc. lhet efore, for develolrr: , n t of law, requirement of giving reas or,s for the de<:isicrL t; of the essence and is virtually a lrarl o[ "due proce lS. I l l 9

14. If the impugned order is tested on the anvil of principles laid down in Kranti Associates (supra), it will be crysta1 clear that the order dated lB.Og.2024 is an example of non-application of mind'

15. In Gorkha Security Services (supra), the Apex Court opined that the blacklisting can be equated with "civil death" ald therefore, a proposal should be given whether such an action can be taken. In the show cause notice dated 24.06 "2024, no such communication was given that if the reply is not accepted, it may lead to debarring/blacklisting'

16. The learned Single Judge has not examined the decision t , makingprocessadoptedbytheofficialrespondents.Thereexists no discussion about the validity of the order dated 78"09 '2024 ' The said order, as ana-lysed above, suffers from non-application of mind and is devoid of any reasons. For this reason, the order dated 18.09.2024 d,eserves to be axed. The learned Single Judge has failed to examine the order dated 18'09'2024 on the basis of settled principles and the judgment cited by the appellant' 10 L/. Rt:st, 1iz r,t1y, the order passed by the lezrrne d S ngle J,rdge in W.P.No.264i]) of 2024 dated 13.03.2025 is set asi<le. The order debarrine L : appellalt dated 1g.0g.2024 is a1.;o set aside Liberty is rrrs: rr,eci to the officia,l respondents to e itlrer cancel the show ca.use I ,,tice and issue a fresh show causr, eotice or pass a fresh ordet -r' l:onsidering the reply of the appellart.

18. Acco.cli L:r,ly, the Writ Appeal is allowed t I the extent indicated at o ' '. it is made clear that this court Lras rot expressed any opiniorr o I t1-re merits of the case. No order as to costs. Misce I a rt:ous petitions pending, if any, shaf l st.rnd closed //TRUE COPYII ii'X;?,HTlEt?$MR / To 1 .) 2 i,|:{fii?i.i; I ;;Til,:Ei?or re,a nsa na, r," n,p J,.t ;,',:::,'*'" =- flJtffii{,,'#it}i3J}i'fr #l;"Til,x":x'n",ri,If; ir]a?%r,i1,.", ffi ;ru;:1,,="d"'lo[:'&:P,?,?:k::]1",;h.""#:ffi ,J!o!i,";"7,no"o *urt*l ; i f,:?,,? !os,i8'o,,,,, n :l a na a, r irotnn,.t8?. ":: 4

6. TJ LS l I I I I HIGH COUR'I DATED:17104t2025 JUDGMENT WA.No.432 o1' 2025 ,,, . 'i or 1t SI4 i 2t riAv 2Bzs ? o Qs.,,, rc trtr9 + ALLOWING II{E WRIT APPEAL WITHOUT C:If, 51' fl+ ;-1 ,.{ '1.