Allahabad High Court
M/S Anod Pharma Private Limited Thru. ... vs State Of U.P. Thru. Prin. Secy. Deptt. ... on 17 March, 2021
Bench: Alok Singh, Saurabh Lavania
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH Court No. - 3 Case :- MISC. BENCH No. - 5126 of 2017 Petitioner :- M/S Anod Pharma Private Limited Thru. Its Managing Director Respondent :- State Of U.P. Thru. Prin. Secy. Deptt. Medical & Health &Ors Counsel for Petitioner :- Sudeep Seth,Manish Chandra,Manoj Kumar,Sridhar Awasthi Counsel for Respondent :- C.S.C.,Shree Prakash Singh Hon'ble Alok Singh,J.
Hon'ble Saurabh Lavania,J.
Heard Sri Sudeep Seth, learned Senior Advocate assisted by Sri Manish Chandra for the petitioner, Sri H.P. Srivastava, learned A.C.S.C. for the State/respondent Nos. 1 & 2 and Sri Shree Prakash Singh for the respondent No. 3.
The instant writ petition has been preferred for the following main reliefs:-
"(i) An appropriate Writ, Order or Direction in the nature of certiorari quashing the office memorandum dated 21.10.2016 issued by the Opposite Party No.1 (as contained in Annexure No.1 to this writ petition) as well as order dated 21.08.2015 issued by the Opposite Party No.1 (as contained in Annexure No.2 to this writ petition)".
(ii) An appropriate Writ, Order or Direction in the nature of mandamus commanding the Opposite Parties to remove the order dated 21.08.2015 from its website and issue a clarification letter that the petitioner company was not facing any CBI inquiry neither it was banned or barred from participating in the tender process in the State of U.P. as well as the other State."
Facts, in brief, as stated by the learned counsel for the petitioner, are to the effect that in the year 2009 the U.P. Small Scale Industries Corporation Ltd. floated a tender for construction and installation of water purification system (R.O. Water Plant) including civil work for 133 Districts Male Hospitals, District Female Hospitals and District Combined Hospitals under the National Rural Health Mission (N.R.H.M.) a Scheme of Government of India launched in the year 2005. The petitioner-M/s. Anod Pharma Private Ltd., a Company incorporated vide certificate of Incorporation dated 09.02.1995 (in short "Petitioner-Company") applied in the tender process and after acceptance of its bid, the work order was issued for 42 hospitals. The Petitioner-Company completed the work under the work order i.e. construction and installation of water purification system and handed over the same during the period 2010 and 2011. However, till date an amount to the tune of Rs.1,08,64,802.84/- has not been paid by the opposite party No.3 to the Petitioner-Company. It is on account of CBI inquiry.
He further stated that a Public Interest Litigation No. 3611 (M/B) 2011 (P.I.L.) (Sachchidanand v. State of U.P. and others) was filed before this Court alleging therein the misappropriation of N.R.H.M. funds by the State functionaries. This Court vide order dated 15.11.2015 directed the Director, C.B.I. to conduct inquiry in the matter of execution and implementation of the N.R.H.M. Scheme and utilization of funds at various levels. In compliance of judgment and order dated 15.11.2015, the investigation was carried out and F.I.R. was lodged on 18.01.2012, under Sections 120B read with Section 420 and 409 I.P.C. and under Section 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. In the F.I.R., the Petitioner-Company was also made an accused. Thereafter, the C.B.I. filed the charge-sheet No. 9 of 2012 dated 07.12.2012, under Section 120B read with Section 420/468 and 471 I.P.C. against several persons including a company, namely, M/s Surgicoin Mediquip Pvt. Ltd. but did not file charge-sheet against the Petitioner-Company nor its Director, Shri Rakesh Tandon, who was made a prosecution witness and who also resigned from the post of Director of Company on 16.11.2015.
It is also stated that thereafter C.B.I. filed another charge-sheet No. 4 of 2015 dated 26.08.2015, wherein also the name of the Petitioner-Company does not find place. However, one Director of the Petitioner-Company namely Sri Pradeep Kumar Tandon has been charge-sheeted, who had also resigned on 16.11.2015.
Learned Senior Advocate, Sri Seth further stated that prior to filing of charge-sheet dated 26.08.2015, a tender process was initiated by respondent No. 2 vide Tender Notice dated 15.10.2014 for the rate contract of fluids/medicines to the various hospitals of the Department of Medical and Health, U.P. This contract was for the period of one year from the date of notification of rate contract. In this tender process, the Petitioner-Company participated and was declared L-I, however, a clarification was sought vide letter dated 15.03.2015 from the Central Bureau of Investigation and the work order was not issued, though, ought to have been issued in favour of the Petitioner-Company as the Petitioner-Company was not an accused in both the charge-sheets aforesaid filed by the C.B.I. It is stated that in response to the letter of respondent No. 1 dated 15.03.2015, C.B.I. sent a letter dated 24.03.2015 informing thereby that in "Case No. RC1(A)/2012/SC.III/ND(SCB) Lucknow, M/s Anod Pharma Pvt. Ltd.-Sri Pradeep Kumar Tandon is Director of M/s Anod Pharma Pvt. Ltd. and not Sri Rakesh Kumar Tandon, Director. This case is under investigation and regarding Case No. RC-2/2012-EOU-IV it is mentioned therein that Sri Rakesh Kumar Tandon, Director of M/s. Anod Pharma Pvt. Ltd. was an accused but due to insufficient evidence he was not charge-sheeted rather he was made a witness in the instant case."
He further stated that after the aforesaid, the State Government issued an order dated 21.08.2015 as a directive to all the officials of the Directorate of Medical and Health for not making purchase of medicines from the firms covered under the C.B.I. inquiry aforesaid. In the order dated 21.08.2015, the names of the firms have been mentioned, which are as under:-
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1.
M/s Daffodills Pharmaceuticals, Jawahar Nagar, Rohta Road, Opp. Godwill Public School, Meerut.
RC/DST/2012/A/0004
2. M/s Micron Pharmaceuticals, Plot No. 2117 A-2, Phase 3, GIDC, Vapi, Gujarat.
RC/DST/2012/A/0009
3. M/s Jackson laboratories Pvt. Ltd. Amritsar, Punjab
(i)RC/DST/2013/A/0014 (ii)RC/DST/2014/A/0004 (iii)RC/DST/2013/A/0002
4. M/s. Care Pharma r/o 6/194, IMRT near Business School, Vipul Khand, Gomati Nagar, Lucknow.
(i)RC/DST/2013/A/0017
(ii)RC.3(A)/2013-SOB/ LKO
5. M/s Anod Pharma PVT. LTD. KANPUR
(i)RC.1(A)/2012/SC-III/ND (SCB Lucknow)
(ii)RC.2/2012-EOU-IV He further stated that the order dated 21.08.2015 is nothing but an order of blacklisting/debarring for an indefinite period, which is not legally permissible. This order of ban/blacklisting/debarring was passed without giving opportunity of hearing and without issuing any show cause notice to the Petitioner-Company. This indefinite/blanket ban/blacklisting/debarring of Petitioner-Company is violative of principles of natural justice. In this regard, reliance has been placed on the various pronouncements of the Hon'ble Apex Court in the cases of Erusian Equipment and Chemicals Ltd. v. State of West Bengal; reported in 1975 (1) SCC 70; Smt. Rajni Chauhan v. State of U.P.; reported in 2010 (8) ADJ 56; Gorkha Security Services v. Government of NCT, reported in 2014 (9) SCC 105; and Vetindia Pharmaceutical Ltd. v. State of U.P. & Another, reported in (2021) 1 SCC 804.
In the case of Vetindia Pharmaceutical Ltd. (supra), the Hon'ble Apex Court has considered its earlier judgments mentioned hereinabove, as such we feel it appropriate to reproduce the relevant paras, which are as under:-
"9.Erusian Equipment & Chemicals Ltd. v. State of W.B. [Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70] , held that there could not be arbitrary blacklisting and that too in violation of the principles of natural justice. In Joseph Vilangandan v. Executive Engineer (PWD) [Joseph Vilangandan v. Executive Engineer (PWD), (1978) 3 SCC 36] , this Court was considering a show-cause notice as follows : (Joseph Vilangandan case [Joseph Vilangandan v. Executive Engineer (PWD), (1978) 3 SCC 36] , SCC pp. 41-42, para 17) "17. ... ''You are therefore requested to show cause ... why the work may not be arranged otherwise at your risk and loss, through other agencies after debarring you as a defaulter ...' The crucial words are those that have been underlined [Ed. : Herein italicised.] . They take their colour from the context. Construed along with the links of the sentence which precede and succeed them, the words "debarring you as a defaulter", could be understood as conveying no more than that an action with reference to the contract in question, only, was under contemplation. There are no words in the notice which could give a clear intimation to the addressee that it was proposed to debar him from taking any contract, whatever, in future under the Department."
10. The question whether a show-cause notice prior to blacklisting mandates express communication why blacklisting be not ordered or was in contemplation of the authorities, this Court in Gorkha Security Services [Gorkha Security Services v. State (NCT of Delhi), (2014) 9 SCC 105] held as follows : (SCC pp. 120-21 & 123, paras 27-28 & 33) "27. We are, therefore, of the opinion that it was incumbent on the part of the Department to state in the show-cause notice that the competent authority intended to impose such a penalty of blacklisting, so as to provide adequate and meaningful opportunity to the appellant to show cause against the same. However, we may also add that even if it is not mentioned specifically but from the reading of the show-cause notice, it can be clearly inferred that such an action was proposed, that would fulfil this requirement. In the present case, however, reading of the show-cause notice does not suggest that noticee could find out that such an action could also be taken. We say so for the reasons that are recorded hereinafter.
28. In the instant case, no doubt the show-cause notice dated 6-2-2013 was served upon the appellant. Relevant portion thereof has already been extracted above (see para 5). This show-cause notice is conspicuously silent about the blacklisting action. On the contrary, after stating in detail the nature of alleged defaults and breaches of the agreement committed by the appellant the notice specifically mentions that because of the said defaults the appellant was "as such liable to be levied the cost accordingly". It further says ''why the action as mentioned above may not be taken against the firm, besides other action as deemed fit by the competent authority'. It follows from the above that main action which the respondents wanted to take was to levy the cost. No doubt, the notice further mentions that the competent authority could take other actions as deemed fit. However, that may not fulfil the requirement of putting the defaulter to the notice that action of blacklisting was also in the mind of the competent authority. Mere existence of Clause 27 in the agreement entered into between the parties, would not suffice the aforesaid mandatory requirement by vaguely mentioning other "actions as deemed fit". As already pointed out above insofar as penalty of blacklisting and forfeiture of earnest money/security deposit is concerned it can be imposed only, "if so warranted". Therefore, without any specific stipulation in this behalf, the respondent could not have imposed the penalty of blacklisting.
33. When we apply the ratio of the aforesaid judgment to the facts of the present case, it becomes difficult to accept the argument of the learned Additional Solicitor General. In the first instance, we may point out that no such case was set up by the respondents that by omitting to state the proposed action of blacklisting the appellant in the show-cause notice, has not caused any prejudice to the appellant. Moreover, had the action of blacklisting being specifically proposed in the show-cause notice, the appellant could have mentioned as to why such extreme penalty is not justified. It could have come out with extenuating circumstances defending such an action even if the defaults were there and the Department was not satisfied with the explanation qua the defaults. It could have even pleaded with the Department not to blacklist the appellant or do it for a lesser period in case the Department still wanted to blacklist the appellant. Therefore, it is not at all acceptable that non-mentioning of proposed blacklisting in the show-cause notice has not caused any prejudice to the appellant. This apart, the extreme nature of such a harsh penalty like blacklisting with severe consequences, would itself amount to causing prejudice to the appellant."
11. If the respondents had expressed their mind in the show-cause notice to blacklist, the appellant could have filed an appropriate response to the same. The insistence of the respondents to support the impugned order [Vetindia Pharmaceuticals Ltd. v. State of U.P., 2019 SCC OnLine All 6734] by reference to the terms of the tender cannot cure the illegality in the absence of the appellant being a successful tenderer and supplier. We therefore hold that the order of blacklisting dated 8-9-2009 stands vitiated from the very inception on more than one ground and merits interference.
12. In view of the aforesaid conclusion, there may have been no need to go into the question of the duration of the blacklisting, but for the arguments addressed before us. An order of blacklisting operates to the prejudice of a commercial person not only in praesentibut also puts a taint which attaches far beyond and may well spell the death knell of the organisation/institution for all times to come described as a civil death. The repercussions on the appellant were clearly spelt out by it in the representations as also in the writ petition, including the consequences under the Rajasthan tender, where it stood debarred expressly because of the present impugned order. The possibility always remains that if a proper show-cause notice had been given and the reply furnished would have been considered in accordance with law, even if the respondents decided to blacklist the appellant, entirely different considerations may have prevailed in their minds especially with regard to the duration.
13. This Court in Kulja Industries Ltd. v. Western Telecom Project BSNL [Kulja Industries Ltd. v. Western Telecom Project BSNL, (2014) 14 SCC 731] , despite declining to interfere with an order of blacklisting, but noticing that an order of permanent debarment was unjustified, observed : (SCC p. 744, para 28) "28.2. Secondly, because while determining the period for which the blacklisting should be effective the respondent Corporation may for the sake of objectivity and transparency formulate broad guidelines to be followed in such cases. Different periods of debarment depending upon the gravity of the offences, violations and breaches may be prescribed by such guidelines. While it may not be possible to exhaustively enumerate all types of offences and acts of misdemeanour, or violations of contractual obligations by a contractor, the respondent Corporation may do so as far as possible to reduce if not totally eliminate arbitrariness in the exercise of the power vested in it and inspire confidence in the fairness of the order which the competent authority may pass against a defaulting contractor."
14. Since the order of blacklisting has been found to be unsustainable by us, and considering the long passage of time, we are not inclined to remand the matter to the authorities. In Daffodills Pharmaceuticals [Daffodills Pharmaceuticals Ltd. v. State of U.P., (2020) 18 SCC 550 : 2019 SCC OnLine SC 1607] , relied upon by the appellant, this Court has observed that an order of blacklisting beyond 3 years or maximum of 5 years was disproportionate."
He further stated that one of the firms name of which find place in the impugned order dated 21.08.2015 is M/s Daffodills Pharmaceuticals, Jawahar Nagar, Rohta Road, Opp. Godwill Public School, Meerut has approached this Court challenging the order dated 21.08.2015 by means of a writ petition, which was dismissed. Thereafter, M/s Daffodills Pharmaceuticals Ltd. filed a Special Leave Petition (C) No. 4074 of 2018, subsequently converted into Civil Appeal No. 9417 of 2019. The Civil Appeal of M/s Daffodills Pharmaceuticals Ltd. was allowed by the Hon'ble Apex Court vide judgment dated 13.12.2019 reported in (2019) SCC Online SC 1607. The Hon'ble Apex Court quashed the order impugned dated 21.08.2015, which is also impugned herein, as also set aside the judgment of the High Court. In similar facts and circumstances, the Hon'ble Apex Court interfered in the matter and granted relief to M/s Daffodills Pharmaceuticals Ltd., a firm the name of which finds place in the impugned order dated 21.08.2015. He referred the following paras of the judgment of the Hon'ble Apex Court passed in the case of Daffodills Pharmaceutical Ltd. (supra).
"15.The decisions inErusian Equipments and Chemicals Ltd. v. State of West Bengal, (1975) 1 SCC 70 and Raghunath Thakurv. State of Bihar, (1989) 1 SCC 229 as well as later decisions Southern Painters v. Fertilizers & Chemicals Travancore Ltd., 1994 Supp (2) SCC 699; Grosons Pharmaceuticals (P) Ltd. v. State of U.P.,(2001) 8 SCC 604; B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd., (2006) 11 SCC 548 have now clarified that before any executive decision maker proposes a drastic adverse action, such as a debarring or blacklisting order, it is necessary that opportunity of hearing and representation against the proposed action is given to the party likely to be affected. This has been stated in unequivocal terms in Raghunath Thakur (supra) as follows:
"20. 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 on the blacklist."
16. In Southern Painters (supra) the grievance was with respect to unilateral deletion of the petitioners' name from the list of approved contractors, maintained by the public sector agency. This court held that such an action was arbitrary:
"The deletion of the appellant's name from the list of approved contractors on the ground that there were some vigilance report against it, could only be done consistent with and after due compliance with the principles of natural justice. That not having been done, it requires to be held that withholding of the tender form from the appellant was not justified. In our opinion, the High Court was not justified in dismissing the writ petition."
17. In the present case, even if one assumes that Surender Chaudhary, the accused in the pending criminal case was involved and had sought to indulge in objectionable activities, that ipso facto could not have resulted in unilateral action of the kind which the State resorted to-against Daffodils, which was never granted any opportunity of hearing or a chance to represent against the impugned order. If there is one constant lodestar that lights the judicial horizon in this country, it is this: that no one can be inflicted with an adverse order, without being afforded a minimum opportunity of hearing, and prior intimation of such a move. This principle is too well entrenched in the legal ethos of this country to be ignored, as the state did, in this case.
18. The High Court, in the opinion of this court, fell into error in holding that in matters of award of public contracts, the scope of inquiry in judicial review is limited. Granted, such jurisdiction is extremely circumscribed; no doubt the court had refused to grant relief to Daffodils against its plea of wrongful rejection of its tender. However, what the impugned judgment clearly overlooks is that the action of the state, not to procureindefinitely, on an assumption of complicity by Daffodils, was in flagrant violation of principles of natural justice.
19. Normally, this court would have quashed the Government of U.P.'s decision, and left it to grant a hearing to Daffodils, before taking any action. However, given that the impugned order of debarring (i.e. directive not to procure locally from Daffodills) was made over 4 years and 3 months ago, this court is of the opinion that it would be in the overall interest of justice that appropriate relief is granted. Accordingly, the said order of the Principal Secretary, Government of U.P. directing all concerned departments to desist from resorting to local purchase from the appellant is hereby quashed. The impugned judgment of the High Court is hereby set aside. The appeal is allowed in the above terms. No costs."
It is further stated that challenging the order dated 21.08.2015, the petitioner also approached this Court by means of Writ Petition No. 1310 (M/B) of 2016 (M/s Anod Pharma Pvt. Ltd. v. State of U.P. and another) and this Court vide order dated 05.07.2016 permitted the petitioner to prefer a representation before the Authorities and in compliance thereof, a representation was preferred, which was rejected vide order dated 21.10.2016, under challenge. The order dated 05.07.2016 is quoted hereunder:-
"Heard learned counsel for the petitioner and Shri Pathak, learned Additional Chief Standing Counsel for respondents no. 1 and 2.
The petition has been filed questioning the correctness of the order dated 21st August, 2015 whereby the petitioner firm has been blacklisted by the state government in relation to supply of medical items and participating in tenders in respect thereof.
As a matter of fact, the impugned order goes further to state that in case any such contract is negotiated with the petitioner, appropriate penal action shall be taken in the matter. This in our opinion amounts to preventing the petitioner from participating in taking negotiations which could have been done only after hearing the petitioner.
Learned Standing Counsel, however, contends that the petitioner firm was named and was referred to in the investigation conducted by the Central Bureau of Investigation in the NRHM Scam. It is on account of such involvement that the impugned order came to be passed.
Be that as it may, this court in the case of M/s Care Pharma versus State of U.P. and another, the name whereof is at Serial No.4 in the same order, had disposed of writ petition No.9676 (MB) of 2015 vide order dated 14.10.2015, providing an opportunity of hearing and passing of an appropriate order in accordance with law. Another judgment relied by the learned counsel for the petitioner is in the case of M/s Micron Pharmaceuticals versus State of U.P. and others Writ Petition No. 8121 (MB) of 2015 order dated 9.12.2015 and the third judgment in the case of Jackson Laboratories Pvt. Ltd. versus State of U.P. and 3 others Writ -C No.34383 of 2015 dated 21.1.2016.
Having considered the aforesaid submissions, we dispose of the writ petition with a direction that the petitioner shall make a representation ventilating his grievances before the respondent no.1 within a period of two weeks from today and on such representation it shall be open to the authority concerned to pass an appropriate order in accordance with law by means of a reasoned and speaking order preferably within a period of eight weeks."
He stated that the order dated 21.10.2016 is unsustainable as the opposite party No.1 failed to consider and appreciate that the Petitioner-Company has not been mentioned in the charge sheet(s) dated 07.12.2012 and 26.08.2015 and the criminal cases are against the former directors. It has been erroneously observed by the opposite party No.1 in paragraph 4 and 5 of the impugned order dated 21.10.2016 that the firm had not specifically stated that it had been acquitted in both the criminal cases from the Central Bureau of Investigation Court and due to continuance of two C.B.I. cases against the firm M/s. Anod Pharma Private Limited, the permission could not be granted to make purchase from the Petitioner -Company. The opposite party No.1 also failed to consider and appreciate that in the representation dated 18.07.2016, wherein it has been categorically submitted that the Petitioner-Company was not facing any sort of inquiry either by C.B.I. or any other agency nor any criminal court case/vigilance case or proceeding is pending against the Petitioner-Company. The opposite party No.1 also failed to consider and appreciate that initially the name of the Petitioner-Company was mentioned in the FIR but after investigation, no charge sheet has been filed by C.B.I. against the Petitioner-Company.
Sri Seth, further submitted that in the Supplementary Counter Affidavit dated 02.12.2019, filed by the State, in para 9, it has been specifically stated that a case of similar nature of M/s. Daffodills Pharmaceuticals Ltd. & Another vs. State of U.P. & Another, is pending before Hon'ble Apex Court, and now the same has been allowed, as such, the similar benefit is liable to be extended to the present petitioner i.e. M/s Anod Pharmaceutical Private Ltd.
He also submitted that in any case the ban/ blacklisting even as per para 18.6(2) of U.P. Procurement Manual (Procurement of Goods), 2016 applicable in all Government Departments in the State of U.P. can not be made for more than three years and in the present case the ban/ blacklisting/debarring is perpetual in nature, which is not permissible under the law. The impugned order dated 21.10.2016, whereby the basic order in challenge dated 21.08.2015 has been confirmed, is also an order of ban/ blacklisting for indefinite period. Thus, in view of pronouncement in this regard by the Hon'ble Apex Court as also in the light of para 18.6(2) of U.P. Procurement Manual (Procurement of Goods), 2016, both the impugned orders are unsustainable.
Lastly, he submitted that both the charge sheet Nos.09 of 2012 dated 07.12.2012 and 04 of 2015 dated 26.08.2015, are not against the Petitioner-Company, which is a separate juristic legal entity and can be prosecuted for offence committed by it in relation to business of the Company, as such if one director has been charge sheeted the Petitioner-Company can not be blacklisted that too for indefinite period. While passing the impugned order dated 21.09.2016 as also 21.08.2015 the authority concerned has failed to appreciate as also taken note of relevant provision of U.P. Procurement Manual (Procurement of Goods), 2016 i.e. 18.6(2), which is applicable in all Government Departments of State of U.P. and the exposition of law on the issue of debarring/ banning / blacklisting a firm/ Company. The prayer is to interfere in the matter and allow the writ petition.
Learned counsel for the State Sri H.P. Srivastava, opposed the prayer of the petitioner and tried to distinguish the case of M/s. Daffodills Pharmaceuticals Ltd. decided by the Hon'ble Apex Court vide judgment and order dated 13.12.2019 on the ground that in the case of M/s. Daffodills Pharmaceuticals Ltd. the Hon'ble Apex Court has taken note of the fact that the inquiry was pending, whereas in the instant case, the charge sheet has been filed. He stated that in this case, in compliance of order of this Court dated 05.07.2016, the Petitioner-Company represented its case/ version before the opposite party No.1, which was rejected vide impugned order dated 21.10.2016 and as such the plea related to opportunity of hearing in this case is not available to the Petitioner-Company. However, he could not dispute the fact that the order dated 21.08.2015, which is also impugned in the present writ petition, has already been interfered by the Hon'ble Apex Court in the case of M/s. Daffodills Pharmaceuticals Ltd. as also the fact that no opportunity of hearing was provided to the Petitioner-Company prior to passing of order dated 21.08.2015, which in fact is an order of blacklisting for indefinite period.
Learned counsel for the State also could not dispute the fact that one of the directors of the Petitioner-Company Sri Rakesh Tandon, was made prosecution witness and no charge sheet has been filed against the Petitioner-Company by the C.B.I. as also the fact that the charge sheet has only been filed against one director Sri Pradeep Tandon and both the directors of the Company had resigned on 16.11.2015. He also could not dispute the contents of para 18.6(2) of U.P. Procurement Manual (Procurement of Goods), 2016 and its applicability, according to which the maximum period in the case of blacklisting is three years.
We have carefully considered the submissions made by the learned counsel for the parties and perused the record.
From the above referred judgments, the main principle, which culled out in regard to the cases of blacklisting of a firm, are that (i) the order of blacklisting should not be passed without providing a reasonable opportunity of hearing to the concerned firm/company. (ii) the order of blacklisting should be for a fixed period. The order of blacklisting for an indefinite period is not permissible under law.
Coming to the facts of the case, we find from the record as also on the basis of the submissions made by the learned counsel for the parties that (i) the order dated 21.08.2015, whereby a direction was issued to the officials of the Directorate of Medical and Health for not making purchase of medicines from the firms covered under C.B.I. inquiry, is an order of debarring/blacklisting of firms and nothing more than that. This order of debarring/blacklisting is for an indefinite period, (ii) prior to passing of the order dated 21.08.2015, no opportunity of hearing was given to the Petitioner-Company in any manner whatsoever it may be, (iii) the order dated 21.08.2015 has already been interfered with by the Hob'ble Apex Court in the case of similarly situated firm-M/s Daffodills Pharmaceuticals Ltd., (iv) CBI has not filed the charge-sheet against the Petitioner-Company, (v) both the Directors namely Sri Rakesh Kumar Tandon and Sri Pradeep Kumar Tandon are no more Directors of the Petitioner-Company, as they resigned on 16.11.2015, and (vi) para 18.6(2) of U.P. Procurement Manual (Procurement of Goods), 2016, provides maximum three years period for debarring/blacklisting.
Thus, taking into consideration the aforesaid as also the law settled on the issue of interfering in the order of debarring/blacklisting of firm/company including the judgment of the Hon'ble Apex Court passed in the case of similarly situated firm-M/s Daffodills Pharmaceuticals Ltd., we are of the view that the order impugned dated 21.08.2015 is unsustainable in the eyes of law.
So far as the order dated 21.10.2016 is concerned, it is an order, whereby the order dated 21.08.2015, under challenge, has been confirmed, is also in effect is an order of ban/debarring/blacklisting of Petitioner-Company for an indefinite period, which is not permissible under law. Moreover, we find from the impugned order dated 21.10.2016 that while passing it, the concerned Authority i.e. opposite party No. 1-Principal Secretary, Department of Medical and Health did not considered the fact that no charge-sheet has been filed against the Petitioner-Company. Thus, for these reasons, we are of the view that the impugned order dated 21.10.2016 is also unsustainable in the eyes of law.
For the reasons recorded hereinabove as also taking note of of the judgments of the Hon'ble Apex Court, referred above, and para 18.6(2) of U.P. Procurement Manual (Procurement of Goods), 2016, we hereby quash the impugned orders dated 21.08.2015 & 21.10.2016.
We are not remanding the matter to the State Government. It is for the reason(s) that in the present case, the order of blacklisting/debarring was passed wayback on 21.08.2015 and as per para 18.6(2) of the U.P. Procurement Manual (Procurement of Goods), 2016, the order of blacklisting can only be passed for a maximum period of three years.
The writ petition is allowed in above terms with no order as to costs. The consequences shall follow.
Order Date :- 17.3.2021 Arun/-