Case Note & Summary
The petitioners, M/s H.D. Enterprises (HDE) and M/s Gaurav Contracts Company (GCC), had entered into a joint venture/consortium agreement on 23.05.2018 to submit a bid for work advertised by Western Coalfields Limited (WCL). A work order was issued on 03.01.2019 and the joint venture completed the work. Subsequently, WCL issued an e-tender notice on 06.04.2023 for expansion of mines at Chandrapur area. HDE submitted its bid on 24.04.2023 along with an undertaking as per Annexure-P. However, WCL issued an order on 02.06.2023 blacklisting HDE and GCC for a period of three years on the ground that HDE had submitted a false undertaking regarding its relationship with another bidder. The petitioners challenged the blacklisting orders in two separate writ petitions. The court noted that the blacklisting orders were passed without any show-cause notice or opportunity of hearing to the petitioners. The court held that blacklisting has serious civil consequences and principles of natural justice require that the affected party be given a hearing before such an order is passed. Relying on the Supreme Court's decision in Erusian Equipment & Chemicals Ltd. v. State of West Bengal, the court quashed the blacklisting orders and directed WCL to consider the petitioners' bids in accordance with law. The court also clarified that WCL may proceed afresh after giving an opportunity of hearing to the petitioners.
Headnote
A) Administrative Law - Blacklisting - Principles of Natural Justice - Right to be Heard - The court considered whether an order of blacklisting passed without prior notice and hearing violates principles of natural justice. Held that blacklisting has serious civil consequences and must be preceded by a show-cause notice and opportunity of hearing. The impugned orders were quashed as they were passed in violation of natural justice. (Paras 5-8) B) Constitutional Law - Article 14 - Arbitrariness - Blacklisting without hearing is arbitrary and violative of Article 14. The court held that any action which is arbitrary cannot be sustained under Article 14. (Para 7)
Issue of Consideration
Whether the order of blacklisting passed by the respondent without affording an opportunity of hearing to the petitioners is sustainable in law.
Final Decision
The court allowed both writ petitions, quashed the blacklisting orders dated 02.06.2023, and directed the respondent to consider the petitioners' bids in accordance with law. The respondent may proceed afresh after giving an opportunity of hearing to the petitioners.
Law Points
- Principles of natural justice
- right to be heard before blacklisting
- Article 14 of the Constitution of India
- blacklisting without hearing is arbitrary
