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The Union of India (Uoi) Vs. A.K. Mathiborwala - Court Judgment

LegalCrystal Citation
CourtMumbai High Court
Decided On
Case NumberO.C.J. Appeal No. 38 of 1973 and O.C.J. Miscellaneous Petition No. 206 of 1969
Reported in(1974)76BOMLR659
AppellantThe Union of India (Uoi)
RespondentA.K. Mathiborwala
DispositionAppeal dismissed
constitution of india, articles 14, 19(1)(g)--standard code of d.g.s. & d., clauses (3), (5), (6), (7)--manual of office procedure for supplies, inspection and disposals, 1960 edn., rule 285--manual, 1968 edn., rule 32--blacklisting order passed under clause (3) of standard code--such order whether contravenes principles of natural justice--such order whether contravenes article 14 being discriminatory and arbitrary.;a blacklisting order passed by the government under clause 3(iii) of the standard code entails serious civil consequences to the party blacklisted and when passed without giving an opportunity to the party to be heard violates principles of natural justice and is null and void.;such an order is also discriminatory and arbitrary as after the impugned order is passed the.....nathwani, j.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 & 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.....

Nathwani, J.

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 & 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. The respondents are citizens of India and carry on business in partnership at Bombay in the name and style of Messrs. V.K. Mithiborwala and Co. (hereinafter referred to as the firm.) The business of the said firm mainly consisted of supplying timber to the Central Government, State Governments, local authorities and public undertakings as Government contractors. The firm had been on the approved list of D.G-.S & D. since 1944, the last time being on June 5, 1963. By its A/T (Acceptance of Tender) dated January 6, 1962 the D.G.S. & D. had given a contract to the firm for supply of teak-wood planks to the Manager, Bombay Telephone Workshop, Bombay. On a complaint made by the Manager in or about August 1964 to the Special Police Establihsment, Bombay, as to shortage of timber in the godown of the said Workshop, Police officers made inquiries and interrogated the petitioners and their employees and took charge of account-books and documents pertaining to the case from the possession of the firm on August 27, 1964.

4. 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. & 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. & 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.

5. The petition came up for hearing before Mr. Justice Kania who called for the rules, if any, regarding blacklisting: framed by the D.G.S. & D. but the same were not made available. By his judgment and order dated January 12, 1973, the learned Judge set aside the impugned order. The appellants have challenged the said order in this appeal.

6. At our instance the learned Counsel for appellants produced a copy of Rule 285 regarding Blacklisting, Banning and Suspension of contracts from the Manual of Office Procedure for Supplies, Inspections and Disposals, 2nd edition, 1960 and a copy of the corresponding Rule 32 from the Manual (3rd edition, 1968). The learned Counsel for the appellants also produced at our instance rules of the Standard Code followed by D.G.S. & D. and stated that the Code was in force at the material time, i.e. December 1965. He further stated that a new Standard Code leas come into operation from September 14, 3971 and there were no separate rules regulating the procedure for blacklisting the names of suppliers so far as other departments of Government were concerned. By consent of parties Rule 285 and the copy of the Code are taken on record.

7. In this appeal the main point is whether the impugned blacklisting order contravenes the principles of natural justice and also Article 14 as being discriminatory and arbitrary. The learned Counsel for the appellants urged that the Government like a private person is free to choose any person with whom to deal with or transact business and no citizen has a fundamental right to carry on business in properties, privileges or rights of Government, that an order blacklisting a party is an administrative order and its effect was merely to refuse to such a party the prospects of doing business with Government which did not affect any right or interest of such a party and even if such a refusal carried any stigma, it does not amount to a punishment and that as there is no adjudication of any rights of such a party, no question of principles of natural justice arises. He, therefore, contended that in the present case it was not necessary to give opportunity to be heard before passing the impugned order and that Article 14 was not at all attracted. In support of Government's right to enter into contract with any party the appellants relied on the following rulings of the Supreme Court, viz. (i) C.K. Achutan v. State of Kerala : AIR1959SC490 (ii) State of Assam v. Tulsi Singh [1964] I S.C.J. 42 State of Orissa v. Hari narayan : [1972]3SCR784 and (iv) Produce Exchange Corpn. v. Commr., Excise, Assam : [1973]1SCR201 .

8. In Achutan's case the Supreme Court observed that when one person is chosen by Government than another the aggrieved person cannot claim protection of Article 14. But the said observation was made in the context of alleged breach of contract made by the Government (See paras. 8 and 11 at page 492). In both the Assam cases the question arose whether the impugned order accepting the bid of a rival contractor violated the provisions of a specific rule framed by the State Government under the relevant Act which regulated the procedure for granting the exclusive privilege of conducting a ferry in one case and of supplying country liquor in the other. Thus the decision in these two cases turned upon the interpretation and application of relevant statutory rules. However, it is important to notice that in Tulsi Singh's case the officer who held auction sale of ferry rejected the offer of the petitioner, though he was the highest bidder, on the only ground that his name appeared in a 'special list'. The list was of a confidential nature and bore the names of persona suspected or confirmed to be connected with smuggling activities and it was the policy of the State Government not to grant ferries, fisheries etc. to such persons. But it did not appear on what information the list was prepared or from what source the information was received; nor was anything disclosed as to the procedure adopted by the Government Officers in preparing the list. Mr. Justice Venkatarama Aiyar, therefore, came to the conclusion that it was unsafe to rely on the list for deciding the civil rights of persons and he ruled it out as 'not material on which, an opinion could be formed', and there was nothing else on which the officer could have rejected the offer of the highest bidder and, therefore, he held that the rejection of the offer was not in accordance with the statutory requirement. It would be seen that though in that case there is no discussion as to the procedure that ought to have been adopted by the Government in preparing the special list the reasons given by the learned Judge for not relying upon it suggest that the procedure for preparing such a list should be fair and just.

9. In Hari Narayan's case (supra) the Government had refused to accept the highest bid made at the auction sale of country liquor shops. The Supreme Court held that the Bihar and Orissa Excise Act (Act No. II of 1915) expressly conferred such power on the Government and even apart from that it was open to the Government as the owner of the privileges to decline to accept the highest bid if it thought that the price offered was inadequate and that reliance on Article 14 or Article 19(1)(g) of the Constitution was irrelevant and a citizen could not have any fundamental right to trade or carry on business in the properties or rights belonging to the Government.

10. Thus none of the said four cases deal with a blacklisting order which, as will be presently seen, is wholly different from an order of the Government declining to accept any particular bid or offer made by a supplier or contractor.

11. In order to emphasise Government's aforesaid right to deal with any party whom it likes the appellants also cited observations from a recent Supreme Court decision in Railway Board, New Delhi v. N. Singh : (1969)IILLJ743SC to the effect that the freedoms guaranteed to citizens under Clauses (a), (I) and (c) of Article 19 do not include the right to exercise them in the properties belonging to others and that the exercise of these freedoms come to an end as soon as the right of some one to hold his property intervenes. The appellants' contention seems to be that an exercise of one's right to carry on his business under Article 19(1)(g) does not extend to a point where it would intervene with some else's--in the present case, Government's--right to choose a party with whom to enter into contract for its requirements. Apart from the fact that the impugned order is a blacklisting order, appellants' said contention, in our opinion, cuts both ways and an exercise of its right or freedom by Government to choose any party cannot obviously extend to a point where it would intervene with a citizen's rights, fundamental or otherwise.

12. Reliance was also placed for the appellants on the following eases of the Supreme Court: Union of India v. J.N. Sinha : (1970)IILLJ284SC . State of Assam v. Basanta Kumar Das : (1973)ILLJ119SC and State of A.P. v. Parasurama Gurukul : [1974]1SCR191 . These cases were relied on to show that administrative orders contended to be of the same nature as the impugned one passed by Government in exercise of its discretion do not involve adjudication of rights and is not justiciable in Court. It is, therefore, argued that the impugned order is an administrative order which involves no adjudication of rights and does not confer any legal right upon the respondents which could be enforced in a Court. In this connection, however, it is necessary to notice the shift in the position of the Court in England and here. It is now well-settled by a series of rulings of the Supreme Court that the principles of natural justice should be observed even before passing administrative or executive orders when the same affect the civil rights of a party; see: State of Orissa v. Binapani Dei : (1967)IILLJ266SC A.K. Kraipah v. Union of India : [1970]1SCR457 and Union of India v. K.P. Joseph : [1973]2SCR752

13. In Kraipak's Case Mr. Justice Hegde observed (p. 154):

The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For determining whether a power is an administrative power or a quasi-judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised. In a welfare State like ours it is inevitable that the organ of the State under our Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate. The concept of rule of law would lose its validity if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner. The requirement of acting judicially it essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely those which facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi-judicial power.

The learned Judge then proceeded to quote certain observations from the English cases in Reg. v. Criminal Injuries Compensation Board, ex parte Lain [1967] 2 Q.B. 864 and H.K. (An infant), In re [1967] 2 Q.B. 617

14. The moot question, therefore, in the present ease resolves itself as to the true nature of the impugned order and its effect on respondents' rights, if any. As recorded in the office memorandum dated December 4, 1964, the said firm was blacklisted as per Clause 3(iii) of the Standard Code. It will be, therefore, convenient to refer to the relevant clauses of the Code. Clause (1) requires every department of Government to maintain an up to date list of approved suppliers after taking into consideration the financial standing of the firm, capacity, past performance etc., and states that there should be coordination between the D.G.S. & D. and other departments of Government of India with a view to the preparation of common list of suppliers. Clauses (2) and (3) provide respectively for the removal and blacklisting of suppliers from the list of approved suppliers. Clause (3), insofar as is material, is as follows:

BLACK LISTING: An order of blacklisting implies that all departments of Government of India are forbidden from dealing with the firm. The grounds on which blacklisting may be ordered are:--...

(iii) If there is strong justification for believing that the proprietor or employee, or representative of the firm has been guilty of malpractices such as bribery, corruption, fraud, substitution of tender, interpolation etc....

The issue of such orders shall normally involve immediate cessation of all future business with the firm by all departments under the Government of India. While intimating the issue of such orders to other Ministries, the Authority issuing the blacklisting orders shall specify the names of all the partners of the firm, and its allied concerns to whom also such orders would apply....

Once issued, blacklisting orders should ordinarily not be revoked unless...on a review the administrative ministry is of the opinion that the punishment already meted out is adequate in the circumstances of the case.

(Italics ours.)

Clause (5) (part) reads:

An order banning business may be cases where the offence or the unsatisfactory execution of the contract is not considered serious enough to merit a blacklisting order and at the same time an order removing the name... is not considered adequate punishment.

(Italics ours.)

Clause (6) says:

The Ministry of Works, Housing & Supply (Department of supply) shall be responsible for keeping an upto date list of blacklisted firms and circulate every quartet a list of additions and revocations during the previous quarter to all other Ministries.

15. From the above provisions of the Code it is obvious that the idea underlying blacklisting a party's name is to stop with immediate effect all future business with the said party and its allied concerns. Further as the organisation of D.G.S. & D. may be required to purchase stores right from 'broom to heavier equipments' on behalf of all the Ministries of Government of India and State Governments, local bodies, quasi-public bodies like municipalities, district boards, statutory corporations and government undertakings converted into joint stock companies (See Rule 2 of Chapter I of the Manual, 1960 Edition), the business of the blacklisted party and its concerns with such other quasi-public bodies also would cease. It may be mentioned that the respondents have stated in the petition--and it is not denied by the appellants--that after the impugned order no Government or quasi-Government agencies dealt with the said firm or with any concern in which any of the present respondents had interest. Thus a blacklisting order is not a case of Government simply not accepting any particular offer or bid made by a supplier, but it denies an opportunity to the blacklisted party of its offer being even entertained and considered on merits by Government and other quasi-Government bodies and that too for the period--whether indefinite or specific--to be mentioned in such order.

16. Moreover, it is obvious that such a blacklisting order is passed as a punishment. In this connection it was contended for the appellants that as the impugned order was passed by the Department of Communication and not by the D.G.S. & D. Rule 285 which mentions a blacklisting order as punishment would apply only to blacklisting orders passed by the Ministry of Supply and not by other Ministries. This contention is devoid of any substance. Clauses (3) and (5) of the Code refer to a blacklisting order as punishment. This apart, the Ministry of Works, Housing and Supply (Department of Supply) is responsible for keeping an upto date list of blacklisted firms and also acts as the coordinating Ministry for purpose of reviewing doubtful or marginal cases of blacklisting orders (See Clause (7) of the Code). Further, it is common ground that apart from the Code, the Ministry of Communication had no other Rules for blacklisting, removing or banning the name of any supplier. Thus the effect of a blacklisting order being penal under Rule 285 cannot be got rid of as naively argued by the appellants.

17. Further, it is to be observed that the respondents were blacklisted on the ground of collusion with two departmental officials in committing fraud on Bombay Telephone Workshop and as circular letters were sent to all Government departments and quasi-Government agencies it involved worthiness of respondents' as businessmen and was bound to cast a serious slur on them and their said firm and its allied concerns.

18. From the foregoing discussion it is clear that the impugned order was Penal and was bound to have serious effect on the respondents by way of substantial economic loss and, therefore, it cannot be brushed aside merely as one passed in exercise of Government's right or privilege like that of any other private party to enter into a contract with whomsoever it wants to transact business. The impugned order was admittedly passed without giving to respondents notice or opportunity to be heard in regard to the said allegations of collusion against their firm.

19. It was contended for the appellants that the Government would be seriously prejudiced if in a case before blacklisting a notice and an opportunity to be heard had to be given to the party concerned. Now, even though the Rule 285 was not produced before him Mr. Justice Kania took the view that in such a situation it would be open to the Government officer to recommend the issuing of a temporary blacklisting order without affording any opportunity to the contractor concerned to show cause against the same. We are, with respect, in agreement with this view which is also supported by Rule 285(3). Rule 285(3) expressly provides that when a prima facie case of corruption etc., is made out against a firm the business may be suspended by an ad-interim order pending full inquiry.

20. That takes us to a consideration whether the impugned order is unconstitutional and illegal as contravening respondents' fundamental rights or principles of natural justice. The appellants urged that no right, fundamental or otherwise, of the respondents is involved; on the other hand the respondents contend that the impugned order passed without giving notice and opportunity to be heard violates principles of natural justice and was also discriminatory and arbitrary and contravened their fundamental rights under Articles 14 and 19(1)(g) of the Constitution. There is conflict of opinion on this point among the High Courts in India. The Kerala High Court (by a majority) in a Full Bench decision in Punnen Thomas v. State : AIR1969Ker81 F.B. and the High Court of Andhra Pradesh in Earn Singh v. State : AIR1970AP314 took the view that a blacklisting order without giving show-cause notice or an opportunity of being heard did not violate any fundamental right of the Government contractor. The Delhi High Court, however, in a series of cases namely, K.G. Khosla & Co. Pvt. Ltd. v. Union of India (1968) Civil Writ Petition No. 447 of 1968, decided on October 7, 1968 (Delhi). Mahabir Hat . v. Union of India (1970) Civil Writ Petition No. 1166 of 1969 decided on February 3, 1970 (Delhi). Messrs. S.K. Iron Foundry and Engineering Co. v. Union of India (1971) Civil Writ Petition No. 322 of 1971, decided on August 17, 1971 (Delhi) and in M.K. Mathulla v. N.N. Wanchoo : AIR1970Delhi195 has held to the contrary.

21. In Punnen Thomas's case the name of Government contractor was put in blacklist for ten years without giving him an opportunity to be heard as according to the Government he was found to be dishonest and undependable because of irregularities committed by him in connection with the tender of the contract. The majority of the Court (Raman Nayar Ag. C.J. and Eradi J.) held that the Government has the right to refuse to deal with any person without giving reasons or for any reason that it thinks fit. The majority further held that a citizen has no right fundamental or otherwise, to insist upon the Government to enter into any business with him, and a mere refusal to afford a man the prospect of doing profitable business with the Government, entails no civil consequence and, therefore, there is no question of an invasion of his civil rights and the rules of natural justice or Article 14 being violated. Mr. Justice Mathew, however, took a contrary view. He held that an order putting a person in blacklist was totally different from saying that Government like any other private citizen can enter into contract with any person it pleases; that an ex parte adverse adjudication and putting his name in blacklist by way of punishment appeared to be against the notions of fairness in a democratic country, that the impugned order involved material damage in the loss of prospect of entering into advantageous relationship with Government and that the verdict from the Government of his being guilty of irregularities had civil consequences as it touched his reputation and standing in the business world. The learned Judge after citing a passage from Harvard Law Review, Vol. 70, p. 193 at p. 225 proceeded to observe that the Government is still Government even when it is dispensing bounties, gratuities or privileges, and therefore, one who lacks a 'right' to a Government gratuity may nevertheless have a right to fair treatment in the distribution of even bounty, gratuity and gifts. He further' observed that reputation can be viewed both as an interest of personality and as an interest of substance, viz. as an asset and that the plea of an absolute or qualified privilege by Government in respect of a communication by, it to one of its subordinates for protecting its own interest had no relevance when the question is whether Government can pass an order casting a stigma upon the petitioner without a notice and an opportunity of being heard. Further as regards civil consequences the learned Judge referred to Binapani's case (supra) and concurred (see p. 89) with the view expressed in an earlier Kerala case that the ultimate question in the language of Australian Law Journal Vol. 41, p, 129, is

Whether an exercise of the power would have a 'serious' effect on the applicant, and whether an exercise of the power was conditional on some factual determination or evaluation rather than being a completely open discretion based on policy.

And then proceeded to add (p. 89) :

That the exercise of the power here, has serious effect on the petitioner and is attended with civil consequences cannot be denied by anyone making a realistic approach to the situation, and I think the exercise of the power was also conditional on the determination of a question of fact, namely whether the petitioner committed any irregularity in connection with the tender, a question which cannot be decided by discretion based on policy.

The learned Judge also derived support for his conclusion from the reasoning in the Supreme Court ease of Tulsi Singh (supra) and the Madras ruling in Kannappa v. Dist. Forest Officer A.I.R. [1958] Mad. 572.

22. We are, with respect, unable to agree with the majority opinion and prefer the view of Mr. Justice Mathew, namely a blacklisting order passed without giving notice and opportunity to be heard to the party concerned entails civil consequences and is also discriminatory and arbitrary. As already seen the impugned order in the present case involved serious civil consequences to the respondents, and as the same was passed without giving opportunity to be heard it violated the principles of natural justice and is, therefore, illegal, null and void. Further, in our opinion, it was discriminatory and arbitrary inasmuch as after the impugned order the respondents' tenders for supply of goods would not be even considered on merits by the Government and quasi-Government agencies, and, therefore, it violates the principles of equality of opportunity enshrined in the preamble to the Constitution and embodied in Article 14 of the Constitution.

23. As regards the Andhra Pradesh case of Bam Singh, Mr. Justice Chinnappa Reddy dealing with the impugned blacklisting order held that the protection against discrimination afforded by Article 14 extends to executive action but observed as follows (p. 318):.I do not think that principles of natural justice can be extended to situations like this where investigation and inquiry has necessarily to be confidential and where no vested rights of the petitioner are affected.

We are, with respect, unable to agree with this view. Except for the said observation in that case there is no discussion whether the impugned order was bound to affect petitioner's reputation and business and whether it involved discrimination against him by way of excluding his offers in future being at all considered. Further, in our view the consideration of alleged confidential nature of inquiry cannot extend to the extent of overriding the protection guaranteed by Article 14 against discriminatory and arbitrary Government action. It is, perhaps, 3aecessary to add that as in the present case no opportunity whatsoever was granted to the respondents we need not consider the exact nature of the opportunity to be given to the party and it Would suffice to say that the scope of opportunity to be given would depend upon the facts and circumstances of each individual case.

24. Turning to the Delhi cases, both the Khosla cases were decided by Division Benches and in both of them the petitioners were the same, i.e. a Company which was incorporated under the Indian Companies Act, 1913. In the first Khosla case a blacklisting order was passed and in the second there was no such direct order but the High Court construed the order as equivalent to a blacklisting order. In both these cases the Court set aside the impugned orders holding that they violated petitioner Company's fundamental rights under Articles 14 and 21. In the second Khosla case the Division Bench referred to the Kerala Full Bench decision in Pwmen Thomas's case and preferred the view of Mr. Justice Mathew. In the next two cases the petitioners were citizens of India and blacklisting orders were set aside as violating Articles 14 and 19(1)(g) as no opportunity was given and principles of natural justice were not observed. In the case of Mathtdla, the petitioner who was a Chartered-accountant had filed a writ petition to set aside a confidential Government circular issued to all departments of the Central and State Governments containing derogatory remarks about him and conveying Government's decision not to nominate him to any board of a concern in which the Government had any interest. No notice or opportunity was given to him before the Government decided to so debar him. It was held that the said circular contravened petitioner's fundamental rights under Articles 14 and 19(1)(g) of the Constitution. We are, with respect, in agreement with the view taken by the Delhi High Court in the above cases that the impugned orders violated Article 14 and were in breach of principles of natural justice. In the above view we do not think it necessary to determine whether the impugned order also contravenes respondents' fundamental rights under Article 19(7)(g).

25. We may point out that in Bam Krishna v. Union of India : AIR1969Cal18 an order was passed by the Government of India putting the petitioner on the 'banning list' for a period of three years. However, in that case Government had served a notice on the petitioner to show cause before taking action against Mm. Therefore, the decision is not of assistance in determining the point which arises in the present case.

26. For the reasons indicated above, we dismiss the appeal.

27. In view of the further facts that have been brought to our notice in the affidavit of Balwantsingh dated August 16, 1973, the Deputy Director (Registration) in the D.G.S. & D., we make the following order:

28. The appellants are directed to circulate the decision of this Court quashing the said blacklisting order to all the Ministries, quasi-Government organisations and other corporations etc. to whom originally the decision to blacklist the respondents and their firm was communicated, under intimation to the respondents, within four months from the date of this judgment. They are further directed to delete the name of the respondents and their said firm from the consolidated list and other lists of blacklisted persons maintained by any of the Ministries of the Central Government.

29. Costs of this appeal quantified at Rs. 1,000, to be paid by the appellants to the respondents.

30. Liberty to the respondents to withdraw a sum of Rs. 500 deposited in Court by the appellants towards the cost of the respondents of this appeal.

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