MADAN LAL Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) BOTH the petitions pertain to forfeiture of security deposits and encashment of bank guarantee by the Jaipur Zila Dugdha Utpadak Sahakari Sangh Ltd. (herein after 'the Sangh') under order dated 12-9-2009 in respect of alleged breach of contract for supply of milk by the petitioners. A challenge has also been made to the validity of the petitioners' blacklisting entailing exclusion of the petitioners from consideration for grant of future contracts/ licenses by the Sangh. The two petitions aforesaid therefore are being decided by this common order.

(2.) THE counsel for the petitioners submits that the impugned order dated 12-9-2009 was passed in contravention of the principles of natural justice and even otherwise contrary terms and conditions of the contract between the petitioners and the Sangh. Reference has been made to clause 8 of the agreement between the petitioners and the Sangh, where under the respondent Sangh was obliged to issue a notice to the petitioners before terminating the contract. It is submitted that admittedly no notice as warranted in terms of clause 8 of the contract and in compliance of natural justice was issued to the petitioner and it submitted that on this ground alone the termination of the contract for supply of milk was bad. Counsel further submits that in any event the forfeiture of security deposit and encashment of bank guarantee could not have been made by the respondent Sangh, except in accordance with clause (x) of the condition 10 of the agreement dated 25-9-2009 entered into between the petitioners and the respondent Sangh.

(3.) AS far as the issue of black-listing is concerned, in the case of Erusion Equipment & Chemical Ltd. Vs. State of West Bengal [(1975) 1 SCC 70] the Hon'ble Supreme Court has held that no order of black-listing of a contractor could be passed without compliance with the principles of natural justice. A similar view has been taken by this court in the case of Shri Abdhesh Sharma Vs. State of Rajasthan [2010 Western Law Cases (Raj.) UC 124]