Skip to content


Mahaveer Hat Manufacturing Company and ors. Vs. the Union of India and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtDelhi High Court
Decided On
Case NumberCivil Writ Appeal No. 267 of 1969
Judge
Reported in5(1969)DLT566
ActsConstitution of India - Article 226
AppellantMahaveer Hat Manufacturing Company and ors.
RespondentThe Union of India and ors.
Advocates: B.R. Iyengar,; Bishambar Lal,; H.K. Puri,;
Cases ReferredK.G. Khosla & Co. v. The Union of India
Excerpt:
the case focused on the validity of order that had black listed a firm - it was observed that firm in question was nto given any proper opportunity of hearing, prior to the order of black listing the same - in view of the fact that such an order would have cast a serious stigma on the trader, it was ruled that the order was liable to be set aside under article 14 read with article 19(1)(g) of the constitution of india - - the petitioner firm, however, failed to keep up the delivery dates. it is asserted for the respondents that the petitioners has no right, fundamental or otherwise, to insist upon the government to enter into any business relationship with the petitioner and that the government like any private individual has the right to enter or nto to enter into any contract with the..........no. 1 of which at the relevant time petitioners no. 2 to 4 alone were the partners and in which firm petitioners no. 5 to 10 had also become partners when this writ petition was filed .though the order which is said to be secret black listing the petitioner-firm has nto been filed it is common ground that the order blacklisting the petitioner-firm was passed. it is contended that the same was passed on the recommendation of the special police establishment who investigated the matter.(2) it is stated in the return, in the affidavit of shri dua ditta, under secretary of the government of india, ministry of railway (railway board) on behalf of the third respondent namely, the secretary, government of india, ministry of railways, that tenders were invited for the supply of cloth surge.....
Judgment:

S. Rangarajan , J.

(1) The petitioners seek to quash the order passed by the Director General of Supplies & Disposals (Second respondent) on 19th Augast. 1987 black listing the firm which has been described as petitioner No. 1 of which at the relevant time petitioners No. 2 to 4 alone were the partners and in which firm petitioners No. 5 to 10 had also become partners when this writ petition was filed .Though the order which is said to be secret black listing the petitioner-firm has nto been filed it is common ground that the order blacklisting the petitioner-firm was passed. It is contended that the same was passed on the recommendation of the Special Police Establishment who investigated the matter.

(2) It is stated in the return, in the affidavit of Shri Dua Ditta, Under Secretary of the Government of India, Ministry of Railway (Railway Board) on behalf of the third respondent namely, the Secretary, Government of India, Ministry of Railways, that tenders were invited for the supply of cloth surge blue worsted superior 54/56 on the terms and conditions stated in the I.T. and that the petitioner submitted a tender of supply of 1000) yards of such cloth, the sane having been accepted by third respondent. The goods were to be supplied F.O.R. Amritsar. The tender was accompanied by a sample of cloth. The petitioner firm, however, failed to keep up the delivery dates. Subsequently as a result of Special Police Eastablishment's investigation certain small practices by the petitioner-firm are stated to have been disclosed and the petitioner firm was blacklisted. The said order having been communicated to the various departments of the Government but nto to the petitioner firm. Subsequent to the said blacklisting order no order was to be placed with the firm and no correspondence was to be entered by the Government with the firm.

(3) The petitioner alleges that the said order of blacklisting was known to the petitioner-firm only by the end of March, 1969. In addition to the assertions made that they had nto engaged in any malpractices the impugned order is said to be vitiated on account of the violation of the principles of natural justice, the petitioner nto hiving been given any opportunity to show cause against the proposed action, namely of blacklisting them.

(4) It is contended for the respondents, on the other hand, that the government has right to deal with any person without giving any reasons or for any reason it thinks fit and that such refusal could nto be set aside under Article 226 on grounds of violation of rules of natural justice. It is asserted for the respondents that the petitioners has no right, fundamental or otherwise, to insist upon the Government to enter into any business relationship with the petitioner and that the Government like any private individual has the right to enter or nto to enter into any contract with the particular person. These contentions are based upon the majority decision in V, Punnen Thomas v. State of Kerala on the other hand, my attention has been invited to a Division Bench decision of this court (unreported) in K.G. Khosla & Co. v. The Union of India' Civil Writ Petition No. 447 of 1969 (decided on 7th October, 1968). My learned brother S. K. Kapur J., speaking for T.V.R. Tatachari J, held that order of blacklisting which involves serious consequences, could nto be passed without opportunity being given to the person affected by the said order. It was held that a serious stigma is cast on a trader (a limited liability company in that case) without even giving an opportunity of being heard. Having regard to the fact that the petitioner in that case was a limited liability company there was obviously no question o{ the company, in that ease being able to invoke any fundamental right under Article 19 of the cosntitution. The position in the present case is even more favorable to the petitioner because the petitioner is only a partnership firm consisting of several partners and they do nto suffer from the same disability in the matter of enforcing fundamental rights as a company incorporated under the provisions of the Indian Companies Act.

(5) It is thus seen that there is a conflict of judicial opinion on this question, namely, whether an order of blacklisting could be made only after giving the effected person an opportunity of being heard. I have been referred to the above said Full bench decision of the Kerala High Court where the majority of whose constituting Full Bench held a view which is opposed to the above Division Bench decision of this Court. I am bound by the aforesaid decision of this Court. Shri D. K. Kapur for the respondent made a feeble afford to distinguish the aforesaid ruling on the ground that in that case there was an averment that the petitioner-company was merely ruined by reason of the said blacklisting and that there is no such averment in this case. I am afraid the Division Bench decision cannto be distinguished on any such ground. The essence of the matter is whether serious consequences are attracted by reason of the impugned order which is admittedly one made without giving an opportunity to these affected by that order. In consequence with the above said Division Bench decision of this High Court by which I am bound, I hereby quash the impugned order, namely, of the second respondent blacklisting the petitioner.

(6) In the result the writ petition is accepted as above. The petitioners are entitled to the costs from the respondents. Lawyer's fee Rs. 150.00 .


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //