UNION OF INDIA Vs. A.K. MATHIBORWALA

JUDGEMENT

(1.) This is a letters patent appeal from the judgment and Order of Mr. Justice Kania dated January 12, 1973 in a writ petition under Article 226 of the Constitution of India setting aside an order blacklisting the original petitioners (respondents), who are four partners of a firm of M/s. V.K.Mithiborwala and Co., without giving notice or opportunity to be heard and raises an important question whether the impugned order is unconstitutional and illegal as violating Article 14 and Article 19(1)(g) of the Constitution of India and the principles of natural justice.

(2.) THE blacklisting order is referred to in an office memorandum dated December 4, 1965 addressed, by the Assistant Director General (SG -), Department of Communications, Post and Telegraphs Board, Government of India, New Delhi, to all the Ministries and Departments of the Government of India etc. It is marked 'Confidential' and reads: The undersigned is directed to say that the Government of India have decided that the under mentioned firm may be blacklisted with immediate effect for reasons shown against their names. The name of the firm may be included in the revised list of blacklisted firms issued by the Ministry of Industry and Supply (Department of Supply and Technical Development): Name and address of Reasons for black - Provision of the stan - Period,the firm blacklisted. listing. dardised Code.M/s. Mithiborwala Collusion with de - 3(iii). Indefinite.& Co. partmental officials incommission of fraud. The fact of and the reasons for blacklisting should not be disclosed to the firm. Accordingly the Directorate General of Supplies and Disposals CS -4 -A Section (Registration Branch), (hereinafter referred to as D.G.S.& D.) New Delhi, issued the following confidential Circular dated December 18, 1965: The Government of India have decided that the above named firm with the following partners, who were hitherto registered with this Directorate General as stockists of 'Sawn Timbers such as Teak, Mango and Bijasal, log, board and Scantilings' should be blacklisted with immediate effect for indefinite period. They also desire that tbe name of this firm may also be included in the consolidated list of Blacklisted firms. And then the names of the four partners, respondents, are set out. It also states that the said information about blacklisting should not be communicated to the said firm.

(3.) A departmental inquiry was also instituted against one S.R. Shankaran and one S.D. Shinde who were the store -keeper and store -holder respectively in the Bombay Telephone Workshop and they were found guilty of defrauding Government of teak -wood of the value of Us. 49,74'7 allegedly in collusion with the present respondents and were dismissed from service with effect from June 1, 1967. The said two employees subsequently filed separately Miscellaneous Writ Petitions Nos. 807 and 808 of 1965 in this Court against the said orders and the said petitions were allowed on August 3, 1972. In the meanwhile in view of the said dismissals and the firm having been blacklisted, the Superintendent of Police by his letter dated December 14, 1967 asked the manager, Bombay Telephone Works, whether seized documents should be returned to the firm. A copy of the said letter was also sent to the firm. The respondents, therefore, though they had already suspected some foul play came to know definitely that they had been blacklisted for an indefinite period by the D.G.S. and D. The respondents through their advocate served notice dated June 10, 1968 and filed the present petition on February 13, 1969 for quashing the impugned order (blacklisting them as partners of the said firm), as contravening principles of natural justice and their fundamental rights under Articles 14 and 19(7)(g). One A.L. Sharda, Deputy Director (Registration), D.G.S. and D., Delhi filed an affidavit in reply, on behalf of the appellants (original respondents), inter alia, denying that there was any rule of law which required Government to hear the respondents before blacklisting their names.