Gujarat High Court
Amit R Shukla - Properitor R R Shukla & Co vs Ahmedabad Municipal Corporation on 24 July, 2017
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/11383/2010 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 11383 of 2010
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AMIT R SHUKLA - PROPERITOR R R SHUKLA & CO....Petitioner(s)
Versus
AHMEDABAD MUNICIPAL CORPORATION....Respondent(s)
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Appearance:
MR GIRISH B THAKER, ADVOCATE for the Petitioner(s) No. 1
MR SP MAJMUDAR, ADVOCATE for the Petitioner(s) No. 1
M/S TRIVEDI & GUPTA, ADVOCATE for the Respondent(s) No. 1
RULE SERVED for the Respondent(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 24/07/2017
ORAL ORDER
Heard learned advocate Ms. Shivangi Rana on behalf of learned advocate Mr. S. P. Majmudar for the petitioner and learned advocate Mr. Uday Trivedi for M/s Trivedi & Gupta Advocates for Ahmedabad Municipal Corporation.
2. The petitioner, by filling the present petition under Article 226 of the Constitution, has prayed to set aside order dated 26.08.2009 passed by the respondent Corporation whereby the petitioner contractor came to be black-listed. A further consequential prayer is made seeking a direction to refund the earnest money totaling of Rs. 60,000/- as Page 1 of 5 HC-NIC Page 1 of 5 Created On Mon Aug 21 02:50:52 IST 2017 C/SCA/11383/2010 ORDER well as security deposit amount of Rs. 2,00,000/-.
3. The petitioner was awarded contract for disposal of solid waste. He was to carry out the contract in respect of six wards of of central zone in the city of Ahmedabad namely Kalupur, Dariapur, Shahpur, Dudheshwar, Madhupura and Girdharnagar. The contract was awarded under Standing Committee Resolution No. 909 for a period of one year from 10.10.2008 to 10.10.2009. The order dated 22.12.2009 came to be passed whereby the petitioner was intimated by the authorities of the Corporation that he was permanently black-listed and the amounts of earnest money as well as the security deposit, were forfeited.
4. It was sought to be submitted on behalf of the respondent Corporation that the petitioner's work as a contractor was not satisfactory. It was also submitted that he was required to bring trolleys and tractors as a contractor but he worked without bringing such equipments which resulted into deficiency in performance in the work, and the work was remained unsatisfactory. In the affidavit-in- reply filed by the Corporation, details of the work to be performed by the petitioner was highlighted and it was further pointed out that on more than one occasions, the attention of the petitioner was drawn by addressing letters that the performance was not satisfactory. Learned advocate for the respondent Corporation heavily relied on the said aspects to contend that when the petitioner was informed about Page 2 of 5 HC-NIC Page 2 of 5 Created On Mon Aug 21 02:50:52 IST 2017 C/SCA/11383/2010 ORDER his unsatisfactory work, but he still did not improve, the action was justified.
5. It is well settled that the action of black- listing against a person not only entails civil consequence, but black-listing a person amounts to a stigma. The action of black-listing has to be necessarily preceded by observance of principles of natural justice where the person against whom the action is proposed, would be given show cause notice and the opportunity of hearing to defend. Learned advocate for the petitioner in the facts of the present case, could successfully establish that no show cause notice was given before the impugned order dated 22.12.2009 came to be passed permanently black- listing the petitioner contractor.
5.1 In Raghunath Thakur vs. State of Bihar and Others (AIR 1989 SC 620), the supreme court reiterated the principle that order of black-listing entails civil consequences in the person concerned and further brings out the adverse consequence for future business. The person affected by such order has a right to be heard and making representation in his defence. Similar view is taken by the Division Bench of this court in Indian Transformers Company Ltd. & other vs. Gujarat Energy Transmission Corporation Ltd. (Gitco) being Letters Patent Appeal No. 1338 of 2009 decided on 22.09.2009 wherein similar contention was advanced by the Corporation that with sufficient material the appellants were informed and thereafter Page 3 of 5 HC-NIC Page 3 of 5 Created On Mon Aug 21 02:50:52 IST 2017 C/SCA/11383/2010 ORDER the action of black-listing was taken. The Division Bench observed that such contention could not be accepted since the black-listing is a serious stigma.
5.2 Undisputedly, thus in the present case, the order of black-listing is passed without issuing any show cause notice and without affording opportunity of hearing. Not only that, though defence is coming forth that the petitioner was informed during the currency of the contract, the respondent Corporation permitted the petitioner to complete the full period of the contract. The Corporation did not find it proper to take any action during the contract period. The impugned order came to be passed much after the expiry of the duration of the contract, which even otherwise sufferred from the aforesaid vice of non compliance of natural justice, which is sine qua non when the action is of one of black-listing of the petitioner. Merely because the petitioner was addressed letters about unsatisfactory work and was asked to improve upon would not cure the defect.
6. For the aforesaid reasons, on the sole ground of the petitioner having not been given show cause notice and the opportunity of hearing, the impugned order deserves to be set at naught. The petitioner would be entitled to the consequential relief of refund of the security deposit as well as earnest money paid by him while securing the contract.
7. The petition is allowed and the order dated Page 4 of 5 HC-NIC Page 4 of 5 Created On Mon Aug 21 02:50:52 IST 2017 C/SCA/11383/2010 ORDER 26.08.2009 is hereby quashed. The Corporation shall refund amount of Rs. 60,000/- paid by the petitioner towards earnest money and Rs. 2,00,000/- paid towards security deposit, within a period of six weeks hereinafter.
8. It is,however, clarified that it would be open for the Corporation to proceed against the petitioner in accordance with law, if advised and if the facts so justified.
9. Rule is made absolute in the aforesaid terms.
(N.V.ANJARIA, J.) cmjoshi Page 5 of 5 HC-NIC Page 5 of 5 Created On Mon Aug 21 02:50:52 IST 2017