Case Note & Summary
The petitioner, Nawab Ali Khan, a contractor providing services to the Special Economic Zone Authority (respondent no.2), was blacklisted for one year by an order dated 21st September 2017. The blacklisting was based on an incident where three of his employees, while removing wood as per the contract schedule, also collected other garbage without authorization. When confronted, the employees admitted the act and unloaded the unauthorized material. No loss was caused to the respondent. The petitioner challenged the blacklisting order on the ground that it was passed without any opportunity of hearing, violating principles of natural justice. The respondents argued that the employees' misconduct justified the action. The court, relying on the Supreme Court judgment in Raghunath Thakur v. State of Bihar, held that blacklisting has serious civil consequences and cannot be imposed without affording a hearing. The court noted that the period of blacklisting had already expired but the stigma continued, causing difficulty in future tenders. The court quashed the blacklisting order and directed that the petitioner be treated as not blacklisted for any purpose. The court also observed that the action against the three employees (prohibiting entry for three years) was excessive but did not interfere as it was not challenged.
Headnote
A) Administrative Law - Natural Justice - Blacklisting - Opportunity of Hearing - The petitioner was blacklisted for one year due to misconduct of his three employees without any prior notice or hearing - The court held that blacklisting has serious civil consequences and cannot be imposed without following principles of natural justice - Relied on Raghunath Thakur v. State of Bihar, AIR 1989 SC 620 - Held that the impugned order is unsustainable (Paras 1-6).
Issue of Consideration
Whether the blacklisting of the petitioner-contractor without giving him an opportunity of hearing is valid in law, especially when the alleged misconduct was by his employees.
Final Decision
The court allowed the writ petition, quashed the blacklisting order dated 21st September 2017, and directed that the petitioner be treated as not blacklisted for any purpose. Rule made absolute.
Law Points
- Natural justice
- audi alteram partem
- blacklisting without hearing is illegal
- vicarious liability for employee misconduct
- proportionality of punishment
