Case Note & Summary
The dispute involved Grosons Pharmaceuticals (P) Ltd., a small scale industry engaged in drug manufacturing, which was blacklisted by the State of Uttar Pradesh following irregularities in drug purchases. The appellant was registered as an approved contractor for supplying drugs to government departments. After a vigilance inquiry, the State government issued a show cause notice regarding the blacklisting, to which the appellant responded. The State government subsequently blacklisted the appellant until the resolution of ongoing criminal proceedings. The appellant challenged this order through a writ petition, which was dismissed, leading to a special leave petition in the Supreme Court. The Supreme Court directed the State government to reconsider the matter, which reaffirmed the blacklisting. The appellant's subsequent writ petition to the High Court was also dismissed, prompting the appeal to the Supreme Court. The appellant argued that the blacklisting violated principles of natural justice due to the lack of supplied materials for the charges. The court found no merit in this argument, stating that the appellant had a contractual relationship with the State, not governed by statutory rules requiring such materials. The court emphasized that the principle of audi alteram partem was satisfied as the appellant was given an opportunity to respond to the show cause notice. Furthermore, the court noted that the High Court confirmed the existence of elaborate reasons for the blacklisting, thus dismissing the appeal without costs.
Headnote
A) Administrative Law - Blacklisting of Contractors - Compliance with Natural Justice - Constitution of India, Article 226 - The appellant contended that the blacklisting order was invalid due to lack of supplied materials for the charges. The court held that the appellant was given an opportunity to show cause, satisfying the principle of audi alteram partem, and thus the procedure was in conformity with natural justice (Paras 1-2). B) Administrative Law - Requirement of Reasons in Orders - Constitution of India, Article 226 - The appellant argued that the blacklisting order lacked reasons and was therefore invalid. The court found that the High Court confirmed that the State Government recorded elaborate reasons for the order, thus dismissing the appeal (Paras 2).
Issue of Consideration
Whether the blacklisting of the appellant violated principles of natural justice.
Final Decision
The Supreme Court dismissed the appeal, finding no merit in the arguments regarding violation of natural justice and lack of reasons in the blacklisting order.
Law Points
- Principles of natural justice
- Blacklisting of contractors
- Audi alteram partem
- Contractual relationship
- Civil consequences
