The High Court
Case Details
IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 2084 of 2021 Prafulla Kumar Swain Executive Officer, Malkangiri Municipality and another CORAM: ….. Vs. ….. Petitioner Ms. Babita Sahu, Adv. Opposite Parties Mr. B.P. Tripathy,, Adv. [O.P.No.1] Order No. 06. DR. JUSTICE B.R. SARANGI MR. JUSTICE G. SATAPATHY ORDER 29.02.2024 This matter is taken up by hybrid mode. 2. Heard Ms. Babita Sahu, learned counsel appearing for the
Legal Reasoning
petitioner and Mr. B.P. Tripathy, learned counsel appearing for opposite party no.1. 3. The petitioner has filed this writ petition seeking to quash the order dated 16.12.2020 under Annexure-9, by which the petitioner has been blacklisted for an indefinite period due to his unsatisfactory performance. 4. Ms. Babita Sahu, learned counsel appearing for the petitioner vehemently contended that blacklisting of the person goes to the root of the matter and, as such, it cannot be for an indefinite period. Therefore, the order impugned passed by the authority in blacklisting the petitioner for an indefinite period cannot be sustained in the eye of law. It is further contended that blacklisting of a person for an indefinite period has been deprecated by judicial pronouncements of this Court as well as the apex Court. Thereby, it is contended that the order dated 16.12.2020 passed by the authority under Annexure-9 may be quashed. 5. Mr. B.P. Tripathy, learned counsel appearing for opposite party no.1 vehemently contended that since the performance of the petitioner was not satisfactory and after evaluating his work, he has been blacklisted, thereby, the order so passed by the authority is well Page 1 of 5 justified, which does not require any interference of this Court. 6. Having heard learned counsel for the parties and after going through the records, this Court finds that pursuant to the tender call notice invited by opposite party no.1 on 05.12.2018 for executing cleaning work in all the wards, i.e., Ward No. 1 to 9 (Zone-1) and Ward No.10 to 19 (Zone-II), which includes door to door collection, bush cutting, street sweeping and cleaning of drain etc., the petitioner along with others had participated in the process of tender. The petitioner was selected to take up the sanitation work of Zone-II, i.e., Ward No.10 to 19 at the negotiated amount of Rs.5,02,552/-, subject to execution of necessary agreement. Accordingly, an agreement was executed on 01.01.2019 between the petitioner and opposite party no.1. Consequentially, work order issued in favour of the petitioner and he was allowed to take up the sanitation work for a period of 3 years commencing from 01.01.2019 to 31.12.2021, subject to satisfactory performance. Looking at his performance, opposite party no.1 had issued letter dated 06.01.2020 to the petitioner to continue the services of sanitation work for another one year from 01.01.2020 to 31.12.2020 with the same terms and conditions as laid down in the agreement. But the petitioner has not been paid his legitimate dues and, therefore, he approached the Collector, Malkangiri on 10.02.2020 for release of his dues. He also sent a copy of the said application to the Executive Officer, Malkangiri Municipality. On receipt of such application, without releasing his amount, on 31.03.2020, opposite party no.1 issued a notice of show cause to the petitioner stating inter alia that during the field verification he observed that the petitioner had not engaged required number of manpower as per the terms and conditions of the agreement. Furthermore, due to lapses on the part of the petitioner, the sanitation work in respect of Zone-II of Malkangiri Municipality badly hampered and, therefore, he was directed to file show cause within 3 days as to why action shall not be taken against Page 2 of 5 him as per the provisions of law and as to why his agency shall not be blacklisted. In response to the same, the petitioner also filed reply to the notice of show cause under Annexure-5 disputing such allegations and contended that he had engaged 42 labourers for the sanitation work of Zone-II of Malkangiri Municipality. The labourers were worked in a phased manner, i.e., some labourers were engaged in the morning 5.00 A.M. to 8.00 A.M. for sweeping work and other labourers were engaged from 8.00 A.M. to 1.00 P.M. for lifting garbage, drain cleaning, bush cutting etc. During field verification by Executive Officer on 27.03.2020, he found 23 labourers were engaged as because 19 labourers had already performed the sweeping work in the morning and again joined at 2.00 P.M. for cleaning of garbage. Therefore, the petitioner was blacklisted on the allegation of unsatisfactory performance, which is the subject matter of challenge in the present writ petition. 7. As it appears, this Court, vide order dated 19.12.2022, issued notice to opposite party no.1, Malkangiri Municipality by registered post with A.D. and in compliance of the same, Mr. B.P. Tripathy, learned counsel has already entered appearance and, as such, on 11.01.2024 and 02.02.2024, though he sought time to file counter affidavit, till date the same is not forthcoming. Therefore, an adverse inference can be drawn against the opposite party no.1. 8. On perusal of the order impugned, it appears that the order of blacklisting has been passed for an indefinite period. 9. In State of Odisha and others v. Panda Infraproject Limited, (2022) 4 SCC 393, the apex Court held that though blacklisting of respondent contractor was warranted, permanent blacklisting was too harsh a measure. 10. In M/s Chauhan Builders Raibareli v. The State of Uttar Pradesh and others, (S.L.P.(C) No. 32840 of 2018 disposed of on 16.08.2022), the apex Court held as under:- “One cannot be blacklisted for life. The order of Page 3 of 5 blacklisting the extent that it has not specified the period cannot be sustained. Since the order was passed way back in 2013 and the writ petition was dismissed on 05.09.2018, we deem it appropriate to exercise the powers under Article 142 of the Constitution to pass an order of blacklisting the appellant for a period of five years from the date of the order was passed.” 11. In Kulja Industries Limited v. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and others, (2014) 14 SCC 731, the apex Court held, if State or its instrumentality takes decision on blacklisting then such decision is subject to judicial review on grounds of principles of natural justice, doctrine of proportionality, arbitrariness and discrimination under Article 14 of the Constitution of India. 12. In Nova Steel (India) Ltd vs M.C.D. And Ors, AIR 1995 SC 1057, the apex Court held that the question of blacklisting of the contractor has been considered by the Courts time and again and it has categorically been held that such order cannot be passed without giving opportunity of hearing to the party. 13. In Urusian Equipment & Chemicals Ltd. v. State of West Bengal, AIR 1975 SC 266, the apex Court held that a fair hearing to the party being blacklisted thus becomes an essential pre-condition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The order itself being reasonable, fair and proportionate to the gravity of offence is similarly examinable by a writ Court. The apex Court also declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and the authority passing any such order is required to give a fair hearing before passing an order of blacklisting in certain entity. 14. In TELSA Transformers Limited v. Odisha Power Transmission Corporation Limited, 2016 (II) ILR CUT-37, this Court, taking into consideration the ratio decided in Gorkha Security Page 4 of 5 Services v. Government (NCT of Delhi), AIR 2014 SC 3371, held that merely because clause in notice inviting tender empowers the department to impose such penalty that does not mean that such penalty can be imposed without putting defaulting contractor to notice to this effect. 15. In UMC Technologies Private Limited v Food Corporation of
Decision
India (Civil Appeal No. 3687 of 2020 disposed of on 16.11.2020), the apex Court has also taken note of the decision of the apex Court in Erusian Equipment & Gorkha Security (supra) and has come to a conclusion that a prior show cause notice granting a reasonable opportunity of being heard is an essential element of all administrative decision-making and particularly so in decisions pertaining to blacklisting which entail grave consequences for the entity being blacklisted. Therefore, furnishing of a valid show cause notice is critical and a failure to do so would be fatal to any order of blacklisting pursuant thereto. 16. In such view of the matter, since the order dated 16.12.2020 has been passed in blacklisting the petitioner for an indefinite period, which has been deprecated by the apex Court in plethora of judgments, the same cannot be sustained in the eye of law. Accordingly, the order dated 16.12.2020 under Annexure-9 is quashed. 17. The writ petition is accordingly disposed of. Ashok (DR. B.R. SARANGI) JUDGE (G. SATAPATHY) JUDGE Signature Not Verified Digitally Signed Signed by: ASHOK KUMAR JAGADEB MOHAPATRA Designation: Secretary Reason: Authentication Location: HIGH COURT OF ORISSA Date: 01-Mar-2024 16:23:27 Page 5 of 5