Case Note & Summary
The petitioner, M/s A P Securitas Pvt. Ltd., a security agency, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging a blacklisting order passed by Respondent No. 1, M/s Bank of Baroda, a public sector bank. The petitioner had been providing security services to the bank under a contract. The bank terminated the contract and blacklisted the petitioner from participating in future tenders, alleging breach of contract and poor performance. The petitioner contended that the blacklisting order was arbitrary, passed without affording an opportunity of hearing, and violated principles of natural justice. The petitioner sought quashing of the blacklisting order and restoration of its name in the bank's approved list of vendors. The bank, represented by Ms. Akshya Puturan, argued that the writ petition was not maintainable as the dispute arose out of a contract, and the petitioner had an alternative remedy by way of a civil suit or arbitration. The bank also submitted that the blacklisting was based on contractual breaches and was a commercial decision. The State of Maharashtra (Respondent No. 2) was represented by the AGP but did not actively contest. The court, comprising the Chief Justice and Justice Arif S. Doctor, heard the matter and reserved judgment on 15th April 2024, pronouncing it on 24th April 2024. The court held that while a public sector bank may be a 'State' under Article 12, the blacklisting of a contractor is essentially a contractual matter. The court noted that the petitioner had an efficacious alternative remedy, and the dispute involved disputed questions of fact regarding contractual performance. The court dismissed the writ petition as not maintainable, leaving it open to the petitioner to pursue other remedies available in law. The court did not express any opinion on the merits of the blacklisting order.
Headnote
A) Constitutional Law - Writ Jurisdiction - Maintainability - Article 226 of the Constitution of India - Blacklisting by Public Sector Bank - Held that a public sector bank, though a 'State' under Article 12, acts in a contractual capacity when blacklisting a contractor, and such disputes are ordinarily not amenable to writ jurisdiction, especially when alternative remedies exist. (Paras 1-10) B) Administrative Law - Blacklisting - Principles of Natural Justice - Article 226 of the Constitution of India - Blacklisting Order - Held that even if blacklisting has civil consequences, the court declined to interfere as the petitioner had an efficacious alternative remedy of civil suit or arbitration, and the blacklisting was based on contractual breaches. (Paras 11-20) C) Contract Law - Public Sector Bank - Tender Process - Breach of Contract - Security Services - Held that the dispute pertained to alleged breach of contract by the petitioner in providing security services, leading to termination and blacklisting, which is a contractual matter not suitable for writ jurisdiction. (Paras 21-30)
Issue of Consideration
Whether a writ petition under Article 226 of the Constitution of India is maintainable against a public sector bank for blacklisting a security agency from participating in future tenders, and whether the blacklisting order was arbitrary and violative of principles of natural justice.
Final Decision
The Bombay High Court dismissed the writ petition as not maintainable, holding that the dispute is contractual in nature and the petitioner has an efficacious alternative remedy. The court did not express any opinion on the merits of the blacklisting order.
Law Points
- Writ jurisdiction under Article 226
- Blacklisting by public sector banks
- Contractual matters
- Alternative remedy
- Maintainability of writ petition
