Case Note & Summary
The petitioner, M/s. Bhagwati Construction, a proprietorship firm, challenged a notice dated 02.11.2021 issued by the Executive Engineer, Bhokar Division, Zilla Parishad, Nanded, blacklisting the petitioner from future contracts. The background is that the petitioner had entered into an agreement with the respondents for construction work, but allegedly failed to complete the work and did not repay an amount of Rs. 1,50,000/- as per the agreement terms. The respondents issued the impugned notice blacklisting the petitioner without issuing any prior show cause notice or affording an opportunity of hearing. The petitioner contended that the impugned notice was arbitrary and violative of principles of natural justice. The respondents argued that the petitioner had breached the contract and that the blacklisting was justified. The court analyzed that blacklisting has serious civil consequences and affects the fundamental right to carry on business under Article 19(1)(g) of the Constitution. Relying on the principle of audi alteram partem, the court held that no order blacklisting a person can be passed without giving a show cause notice and an opportunity of hearing. The court found that the impugned notice was issued in gross violation of natural justice. The court quashed and set aside the impugned notice dated 02.11.2021, but clarified that the respondents are at liberty to recover the dues from the petitioner in accordance with law. The writ petition was allowed.
Headnote
A) Administrative Law - Natural Justice - Blacklisting - Show Cause Notice - Constitution of India, Article 14, Article 19(1)(g) - The petitioner challenged a notice blacklisting it for non-payment of dues without prior show cause notice or hearing. The court held that blacklisting has serious civil consequences and cannot be done without following principles of natural justice. The impugned notice was quashed and set aside. (Paras 1-6) B) Contract Law - Breach of Contract - Recovery of Dues - Specific Contract - The respondents alleged that the petitioner failed to complete work and did not pay back the amount of Rs. 1,50,000/- as per agreement. The court noted that the dispute is contractual and the respondents may recover dues through appropriate proceedings, but cannot blacklist without hearing. (Paras 2-6) C) Constitutional Law - Right to Trade - Article 19(1)(g) - Blacklisting affects the fundamental right to carry on business. The court emphasized that any action affecting such right must be preceded by a fair hearing. (Paras 4-6)
Issue of Consideration
Whether the impugned notice dated 02.11.2021 blacklisting the petitioner without issuing a show cause notice and without affording an opportunity of hearing is violative of principles of natural justice and liable to be quashed.
Final Decision
The impugned notice dated 02.11.2021 is quashed and set aside. The respondents are at liberty to recover the dues from the petitioner in accordance with law. Rule made absolute accordingly.
Law Points
- Natural Justice
- Audi Alteram Partem
- Blacklisting
- Show Cause Notice
- Article 14
- Article 19(1)(g)
- Contractual Dispute
- Writ Jurisdiction
