LAWS(DLH)-2003-4-37

SARASWATI DYNAMICS PRIVATE LIMITED Vs. UNION OF INDIA

Decided On April 10, 2003
SARASWATI DYNAMICS PRIVATE LIMITED Appellant
V/S
UNION OF INDIA Respondents

JUDGEMENT

(1.) It stands as a settled principle of law that before blacklisting a contractor/establishment, the Government is required to comply with the principles of natural justice by issuing show cause notice to the concerned person and giving him opportunity of being heard. This principle is firmly rooted in M/s Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal and another reported in (1975) 1 SCC 70 and has been reaffirmed repeatedly by the Apex Court in subsequent judgments. It is now ingrained as impeccable principle of law coupled with another dicta that principles of natural justice are now part of Article 14 of the Constitution of India. The question that arises for consideration is that, pending such an action, whether the authorities can take interim action to suspend business dealings with such an establishment without following the principles of natural justice. It is this question which squarely arises for consideration in this case.

(2.) This is not the first knock, by the petitioner, at the Court of Law. In fact one chapter of the legal battle between the parties has already been written. Earlier, the petitioner firm was banned without issuing show cause notice. This action was challenged by filing CWP No.5475/2002 by the petitioner. Contention was that in view of M/s Erusian Equipment & Chemicals Ltd.(supra) and other judgments taking similar view, such an action could not have been taken without following the principles of natural justice. The respondents, on the other hand, had argued that having regard to the seriousness of the allegations levelled against the petitioner, no such formality was required in this case. By detailed judgment dated 7th January, 2003 a learned Single Judge of this court quashed the action of the respondents holding that the respondents were required to issue show cause notice and provide the petitioner opportunity of being heard before taking such an action. Thus in the earlier legal battle, which was concluded by the aforesaid judgment, the issue was decided in favour of the petitioner. The respondents have accepted that judgment which was not taken in appeal. It has, thus, attained finality. However, while complying with the directions contained the aforesaid judgment dated 7th January, 2003 and revoking the earlier banning order dated 6th August, 2001 as well as all consequential orders, the respondents have added the following para in the revocation order dated 3rd February, 2003 which is not palatable to the petitioner herein:

(3.) Contention of the petitioner is that even the order to the effect that business dealings would remain suspended till the inquiry into the allegations and issue of final order, is also not permissible and before passing such an order, the respondents are required to adhere to the principles of natural justice. This is how the second chapter in the legal battle between the parties starts.