Case Note & Summary
The petitioner, SPML Infra Limited, challenged two letters dated 10th April 2013 issued by respondents No.1 and No.4 of the Municipal Corporation of Greater Mumbai, which barred a joint venture between the petitioner and Insituform Technologies, Inc. from participating in tenders for a period of two years from 26th November 2011 to 25th November 2013. The challenge to one letter was rendered infructuous as the respondents allowed the petitioner to participate in non-S.O. department tenders and allowed another joint venture to participate in a specific tender. The remaining letter was challenged on the ground that it amounted to blacklisting without affording any opportunity of hearing. The petitioner argued that blacklisting visits serious civil consequences and principles of natural justice require a show cause notice and hearing before such action. The respondents contended that the letter was merely a communication of a decision and did not constitute blacklisting. The court held that the impugned letter clearly barred the joint venture from participating in tenders for a fixed period, which amounted to blacklisting. Since no opportunity of hearing was given, the action was violative of natural justice. The court set aside the impugned letter and directed that the petitioner be allowed to participate in tenders without being affected by the ban.
Headnote
A) Administrative Law - Natural Justice - Blacklisting - Blacklisting of a contractor without affording an opportunity of hearing is violative of principles of natural justice - The impugned letters barring the petitioner's joint venture from participating in tenders for two years constitute blacklisting, which visits serious civil consequences - The respondents failed to provide any show cause notice or hearing before issuing the ban - Held that the action is unsustainable and set aside (Paras 1-10).
Issue of Consideration
Whether the impugned letters barring the petitioner's joint venture from participating in tenders for two years amount to blacklisting and whether such action is valid without affording an opportunity of hearing.
Final Decision
The impugned letter dated 10th April 2013 (Exhibit A) is quashed and set aside. The respondents are directed to allow the petitioner to participate in tenders without being affected by the said letter.
Law Points
- Blacklisting without hearing violates principles of natural justice
- Blacklisting visits serious civil consequences
- Opportunity of hearing must be granted before blacklisting
- Doctrine of legitimate expectation applies to public contracts
