Case Note & Summary
The petitioner, M/s. Sujal Pharma, a proprietorship firm engaged in pharmaceutical distribution, challenged a blacklisting order dated 29.10.2021 issued by the respondent, Karnataka State Medical Supplies Corporation Limited. The petitioner had submitted a quotation on 25.03.2020 for supply of 2000 units of hand sanitizers at Rs.2500 per unit inclusive of GST during the COVID-19 pandemic. The respondent blacklisted the petitioner without issuing any show cause notice or affording an opportunity of hearing. The petitioner contended that the blacklisting order was arbitrary and violative of principles of natural justice. The respondent argued that the blacklisting was justified due to alleged deficiencies in supply. The Court held that blacklisting has serious civil consequences and cannot be imposed without following the principles of natural justice, including issuance of a show cause notice and providing an opportunity of hearing. The Court quashed the blacklisting order insofar as it pertains to the petitioner, but granted liberty to the respondent to initiate fresh proceedings in accordance with law after issuing a show cause notice and affording an opportunity of hearing.
Headnote
A) Administrative Law - Blacklisting - Natural Justice - Show Cause Notice - The respondent blacklisted the petitioner firm without issuing any show cause notice or affording an opportunity of hearing, which is violative of principles of natural justice. The Court held that blacklisting has serious civil consequences and cannot be done without following the principles of natural justice. (Paras 4-6) B) Constitutional Law - Article 226 - Judicial Review - Quashing of Blacklisting Order - The Court, exercising its writ jurisdiction under Articles 226 and 227 of the Constitution of India, quashed the blacklisting order dated 29.10.2021 insofar as it pertains to the petitioner, as the order was passed in violation of natural justice. (Paras 6-7)
Issue of Consideration
Whether the order of blacklisting passed by the respondent without issuing a show cause notice and without affording an opportunity of hearing to the petitioner is sustainable in law.
Final Decision
The writ petition is allowed. The impugned order dated 29.10.2021 blacklisting the petitioner is quashed insofar as it pertains to the petitioner. Liberty is reserved to the respondent to initiate fresh proceedings in accordance with law after issuing a show cause notice and affording an opportunity of hearing to the petitioner.
Law Points
- Natural justice
- Blacklisting
- Show cause notice
- Opportunity of hearing
- Proportionality
- Legitimate expectation
