Sunday, December 10, 2023

Allahabad High Court sets aside order prohibiting construction company from participating in tender contract of Agra Development Authority

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The Allahabad High Court has allowed the petition filed challenging the illegality, propriety and correctness of the order dated 26.8.2023 passed by the Chief Engineer, Agra Development Authority, Agra, whereby the petitioner has been blacklisted and debarred from participating in any future tender-contract of the Agra Development Authority.

The Division Bench of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava passed this order while hearing a petition filed by M/S Baba Construction Pvt Ltd.

Anoop Trivedi, Senior Counsel for the petitioner submitted that the order impugned blacklisting the petitioner and debarring him from future tender contracts is bad in law inasmuch as no prior notice of blacklisting has ever been issued to the petitioner and straightaway blacklisting order has been passed.

It has been argued that a blacklisting order entails civil consequences and as such, a show cause was required to be issued calling for an explanation from the petitioner before blacklisting it.

It is submitted that blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the government for purposes of gains.

The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put in the blacklist. In the absence of a show cause notice and the order being indefinite, the order blacklisting the petitioner is bad in law and liable to be set aside.

Ashok Mehta, Senior Counsel appearing for the respondents submitted that the submission of the counsel for the petitioner that no notice/ show cause was ever issued to the petitioner before blacklisting, is incorrect.

He had invited the court attention to a communication dated 7.12.2021 filed to the petition addressed to the petitioner which according to him is the show cause notice. He thus submitted that there is no error in the order of blacklisting and no interference is warranted by the Court.

On the perusal of the said communication, the Court found that it merely requires the petitioner to rectify the deficiency in the construction work carried out by the petitioner, failing which the petitioner would be recommended to be included in the blacklist. We are afraid that the said communication can under any stretch of imagination be taken to be a show cause notice to the petitioner before proceeding to blacklist it.

The Court opined that, a notice for blacklisting is required to specify as to what would be the consequence if the notice does not satisfactorily meet the grounds on which the action is proposed. The notice is also required to state the grounds necessitating the action and the penalty proposed specifically and unambiguously. The show cause notice is also required to adhere to the principles of natural justice.

“We also found that the orders of blacklisting has been passed for an indefinite period which is not permissible under the law”, the Court observed while allowing the petition.

In view of the above, the Court set aside the order dated 26.8.2023 passed by the Chief Engineer, Agra Development Authority, Agra.

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