# M/s Trident Engineers v. Dakshinanchal Vidyut Vitran Nigam Ltd. & Anr

- **Citation:** (2020) 1 ILRA 1244
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2019-12-13
- **Case number:** Writ C No. 41082 of 2019
- **Bench:** Ramesh Sinha, Samit Gopal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-trident-engineers-v-dakshinanchal-vidyut-vitran-nigam-ltd-anr-45150
- **Pages:** 5

## Headnote

A. Administrative law - Violation of the
principles of natural justice - Blacklisting
- before any executive decision maker
proposed any action like blacklisting,
adverse
action
or
debarring
it
is
necessary that opportunity of hearing &
representation against the said proposed
action be given to the affected party -
respondent authorities failed to give
specific notice to the petitioner showing
their intention to blacklist him on the
strength of the alleged irregularities -
impugned order not sustainable in the
eyes of law and deserves to be set aside.
(Para 8 & 9)

The claim of the petitioner of the security
amount of Rs. 34 lakhs which has been
withheld by the respondents even after the
expiry of 18 months from the date of
completion of the project and just in order to
defeat the legitimate claim of the petitioner the
impugned order of blacklisting the petitioner's
firm has been passed so as to defeat the
legitimate refund of the security deposit. (Para
4)

Held: - Before blacklisting or putting a person
on a holiday list a person has to be given full
opportunity of hearing as the order of
blacklisting or keeping on holiday list has an
adverse civil consequence and is a harshest
possible action. (Para 9)

Writ Petition allowed. (E-7)

List of cases cited: -

1.Gorkha Security Services vs. Government
(NCT of Delhi and others), 2014 (9) SCC 105

2.Raghunath Thakur vs. State of Bihar &
Ors,1989 (1) SCC 229

## Text

1 All. M/s Amrit Bazar Patrika Pvt. Ltd., Allahabad Vs. State of U.P. & Ors.
1245
last almost more than a year, we direct
petitioners to vacate disputed land within
one month from the date of delivery of
judgment.

171. In view of above discussion, we
do not find any merit in both the petitions.
Subject to above direction about vacation
of land in dispute, the writ petitions are
dismissed.

172. No costs.
----------
(2020)1ILR 1244

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 13.12.2019

BEFORE
THE HON'BLE RAMESH SINHA, J.
THE HON'BLE SAMIT GOPAL, J.

Writ C No. 41082 of 2019

M/s Trident Engineers ...Petitioner
Versus
Dakshinanchal Vidyut Vitran Nigam Ltd. &
Anr. ...Respondents

Counsel for the Petitioner:
Sri Tarun Agrawal, Sri Mohit Kumar Shukla

Counsel for the Respondents:
Sri Baleshwar Chaturvedi

A. Administrative law - Violation of the
principles of natural justice - Blacklisting
- before any executive decision maker
proposed any action like blacklisting,
adverse
action
or
debarring
it
is
necessary that opportunity of hearing &
representation against the said proposed
action be given to the affected party -
respondent authorities failed to give
specific notice to the petitioner showing
their intention to blacklist him on the
strength of the alleged irregularities -
impugned order not sustainable in the
eyes of law and deserves to be set aside.
(Para 8 & 9)

The claim of the petitioner of the security
amount of Rs. 34 lakhs which has been
withheld by the respondents even after the
expiry of 18 months from the date of
completion of the project and just in order to
defeat the legitimate claim of the petitioner the
impugned order of blacklisting the petitioner's
firm has been passed so as to defeat the
legitimate refund of the security deposit. (Para
4)

Held: - Before blacklisting or putting a person
on a holiday list a person has to be given full
opportunity of hearing as the order of
blacklisting or keeping on holiday list has an
adverse civil consequence and is a harshest
possible action. (Para 9)

Writ Petition allowed. (E-7)

List of cases cited: -

1.Gorkha Security Services vs. Government
(NCT of Delhi and others), 2014 (9) SCC 105

2.Raghunath Thakur vs. State of Bihar &
Ors,1989 (1) SCC 229

(Delivered by Hon'ble Samit Gopal, J.)

1. Heard Sri Tarun Agrawal, learned
counsel
for
the
petitioner
and
Sri
Baleshwar Chaturvedi, learned counsel for
the Respondent-Corporation.

2. The matter was taken up on
12.12.2019 and instructions were supplied
by learned counsel for the respondent
(Corporation) which were taken on record.
Today with the consent of both the
counsels the matter is being finally heard
and decided.

3. The petitioner has filed the present
writ petition for issuance of writ, order or
direction in the nature of Certiorari
1246 INDIAN LAW REPORTS ALLAHABAD SERIES
quashing the order dated 12.09.2019
passed by the respondent No. 2 by which
the petitioner has been put on holiday list
for three years. The said order is Annexure
10 to the writ petition. The facts of the
present case relate to tender No. 45EWCA
/
2016-17
floated
by
the
respondent No. 2 for the supply and
erection of material for construction of
33KV single circuit solar power plant line
from 220KV s/s, Gokul, Mathura to
proposed Solar Power plant of 5MW in
District Mathura on semi turnkey basis.
The petitioner emerged as the lowest
bidder for the said work and was thus
issued a letter of intent dated 22.03.2017
by the respondent No. 2. A copy of the
same has been annexed as Annexure No. 1
to the writ petition. Subsequently, a formal
contract
was
executed
between
the
respondent No. 1 and the petitioner on
03.04.2017. As per the contract the work
was to be completed by 22.07.2017 but the
contract also envisaged extension of time
in the event of unforeseen circumstances.
The total value of the contract was
provided in Clause 5 of the same. As per
Clause 5.1 of the contract 60% of the
material cost was to be paid after
successful inspection and delivery of
material at site, further Clause 5.2
provided 30% payment of the material cost
upon erection of the material, Clause 5.3
provided that the balance payment of 10%
against supplies will be done after
satisfactory commission and handing over
of the project. The petitioner was further
required to deposit permanent security
deposit equivalent to 10% of the contract
value as per Clause 7 of contract. The said
amount worked out to Rs. 34 lakhs.

4. Learned counsel for the petitioner
argued that the present writ petition is
confined to the fact that the claim of the
petitioner of the security amount of Rs. 34
lakhs which has been withheld by the
respondents even after the expiry of 18
months from the date of completion of the
project and just in order to defeat the
legitimate claim of the petitioner the
impugned
order
of
blacklisting
the
petitioner's firm has been passed so as to
defeat the legitimate refund of the security
deposit. It has further been argued that the
work of the project was completed on
29.12.2017 and thereafter letter dated
29.12.2017 was sent to the Executive
Engineer in the office of the respondent
No. 1 informing him about the completion
of the project and requesting him to take
over the said line and it has further been
argued that an inspection was conducted
by the Deputy Director, Electrical Safety,
Government of U.P., Aligarh Region,
Aliagarh and after the said inspection he
gave permission of the line by energizing
it. It has further been pointed out that a
letter dated 17.01.2018 was issued by the
said Deputy Director in which he has
categorically recorded that the solar link
line erected by the petitioner be completed
with all the relevant rules and regulations.
The said argument is based on Annexures
5 and 6 of the writ petition. It has further
been
argued
that
the
testing
and
commissioning of the line was thereafter
completed and the petitioner requested the
respondent No. 2 to take over the plant
vide various letters dated 20.02.2018,
12.03.2018, 31.07.2018, 12.09.2018 and
12.11.2018 but for the reasons best known
to them the said plant was not formally
taken over by the respondents. It has
further been pointed out that in spite of the
same the respondents were satisfied by the
performance of the plant and thereby they
released the entire payment to the
petitioner and only the security amount of
Rs. 34 lakhs was withheld. On the strength
1 All. M/s Trident Engineers Vs. Dakshinanchal Vidyut Vitran Nigam Ltd. & Anr.
1247
of the averment in paragraph 22 of the writ
petition it has been argued that by
releasing the balance amount of 10%
which would thereby make the payment to
the petitioner complete for the satisfactory
commissioning and handing over of the
project the respondents had satisfied
themselves
about
the
successful
commissioning of the plant. The balance
amount was thus drawn on 09.07.2019. It
has further been argued that till 29.06.2019
the plant was working as desired and there
was no reported defect by the respondents.
Upon the lapse of the period of 18 months
the petitioner requested the releasing of the
security amount of Rs. 34 lakhs but instead
of releasing the said amount a notice dated
03.09.2019 was issued by the respondents
which is Annexure 8 to the writ petition.

5. Our attention has been drawn to
the said notice whereby it has been
observed that on preliminary enquiry some
shortcomings have been found in the plant
which have been mentioned in the said
notice and subsequently the petitioner has
been called upon to submit his reply on
06.09.2019 by 03 p.m. The petitioner
submitted his detailed reply on 06.09.2019
itself which was duly received in the office
of the respondent No. 2 on 06.09.2019.
The said reply is Annexure 10 to the writ
petition which bears the signature and date
of the concerned receiving person. It has
further been argued that the impugned
order dated 12.09.2019 Annexure 11 to the
writ petition has been passed in an
arbitrary manner and in utter violation of
principles of natural justice without even
considering the detailed reply of the
petitioner and even the fact that there was
no reference in the said notice of
blacklisting of the petitioner due to the
insufficiencies in the work as mentioned in
the same. The question of blacklisting as
referred to in the notice dated 03.09.2019
was only in the event the petitioner could
not furnish his reply within the stipulated
period as mentioned in the said notice.
Further the learned counsel for the
petitioner argued that the principles of
natural justice have not been followed in
the present case at all as the respondents
have not considered the reply dated
06.09.2019 of the petitioner and even the
petitioner was not heard.

6.

Learned
counsel
for
the
respondent (Corporation) to the contrary
has argued that the impugned order dated
12.09.2019
has
been
passed
after
considering the matter in detail and also
considering the reply of the petitioner
dated 06.09.2019. The said argument of
the learned counsel for the respondents is
based on the basis of his instructions dated
11.09.2019 which have been supplied by
him to the Court on 12.12.2019 which is
on record. He further argued that there is
no illegality and arbitrariness in the
impugned order dated 12.09.2019 but he
could not dispute the fact that the reply of
the petitioner submitted to respondent No.
2 on 06.09.2019 to the show cause notice
dated 03.09.2019 does not find mention in
the impugned order.

7. From the facts as emerge from the
records and arguments of the learned
counsel for the petitioner and the learned
counsel for the respondent (corporation)
the impugned order dated 12.09.2019 does
not anywhere reflect that the reply of the
petitioner
dated
06.09.2019
was
considered by the authorities. From
perusal of the impugned order dated
12.09.2019 it is clear that there is no
reference by the authority concerned that
the
reply
of
the
petitioner
dated
06.09.2019 was considered and any
1248 INDIAN LAW REPORTS ALLAHABAD SERIES
hearing was afforded to the petitioner
before passing of the said order. The
impugned order is confined only to the
fact that the same is being passed as some
deficiencies have been found in the newly
constructed 33KV line and hence the
petitioner is being blacklisted for a period
of three years from the date of the said
order. In the notice dated 03.09.2019 it
was not mentioned that if the authorities
are not satisfied with the reply of the
petitioner then they shall proceed to
initiate steps for blacklisting of the
petitioner. The said notice is related to the
question of blacklisting the petitioner was
only confined to the fact that if the reply to
the said notice was not given within the
said stipulated period then proceedings for
blacklisting shall be taken up. Further
there is no adjudication in the impugned
order about the point-wise reply given by
the petitioner to the said notice. In the
judgment of Gorkha Security Services vs.
Government (NCT of Delhi and others)
reported in 2014 (9) SCC 105 it has been
held that the authorities must issue a
specific
show
cause
notice
to
the
contractor indicating a clear intention to
blacklist him before passing any order of
blacklisting. The Hon'ble Supreme Court
has in para 21 of the same held as
follows:-

"The central issue, however,
pertains to the requirement of stating the
action which is proposed to be taken. The
fundamental purpose behind the serving of
show-cause notice is to make the noticee
understand the precise case set up against
him which he has to meet. This would
require the statement of imputations
detailing out the alleged breaches and
defaults he has committed, so that he gets
an opportunity to rebut the same. Another
requirement, according to us, is the nature
of action which is proposed to be taken for
such a breach. That should also be stated
so that the noticee is able to point out that
proposed action is not warranted in the
given case, even if the defaults/breaches
complained of are not satisfactorily
explained. When it comes to blacklisting,
this requirement becomes all the more
imperative, having regard to the fact that
it is harshest possible action."

8. That as per the settled principles of
law it has been held that before any
executive decision maker proposed any
action like blacklisting, adverse action or
debarring it is necessary that opportunity
of hearing & representation against the
said proposed action be given to the
affected party. The Hon'ble Supreme
Court in the matter of Raghunath Thakur
vs. State of Bihar & Ors reported in 1989
(1) SCC 229 has held:-

"20. Blacklisting has the effect of
preventing a person from the privilege and
advantage
of
entering
into
lawful
relationship with the Government for
purposes of gains. The fact that a
disability is created by the order of
blacklisting indicates that the relevant
authority
is
to
have
an
objection
satisfaction. Fundamental of fair play
require that the person concerned should
be given an opportunity to represent his
case before he is put on the blacklist."

9. In the present case the respondent
authorities have failed to give specific
notice to the petitioner showing their
intention to blacklist him on the strength
of the alleged irregularities. Further the
impugned notice does not anywhere reflect
that the authorities have considered the
detailed reply of the petitioner dated
06.09.2019 (Annexure 9 to the writ
1 All. M/s Trident Engineers Vs. Dakshinanchal Vidyut Vitran Nigam Ltd. & Anr.
1249
petition). In view of the settled proposition
of law by the Apex Court in catena of
decisions some of which as has been
referred above, it is absolutely clear that
before blacklisting or putting a person on a
holiday list a person has to be given full
opportunity of hearing as the order of
blacklisting or keeping on holiday list has
an adverse civil consequences and is a
harshest possible action. Thus we are of
the considered opinion that there has been
a complete violation of the principles of
natural justice in the instant case. The
impugned order is not sustainable in the
eyes of law and deserves to be set aside.

10. Hence, a writ in the nature of certiorari
is issued quashing the impugned order dated
12.09.2019 passed by the respondent No. 2 vide
letter No. 1037 /बव0का0/म/आ/0 (Annexure 10
to the writ petition).

11. It is hereby further provided that
the petitioner shall submit fresh reply to
the notice dated 03.09.2019 to the
respondent No. 2 within a period of three
weeks from today along with a certified
copy of this order and the respondent No.
2 is further directed to decide the same
afresh within a further period of three
weeks from the date of receipt of the said
reply with a reasoned and speaking order
in accordance with law.

12. The writ petition thus succeeds
and is allowed.

13. No order as to cost.
----------
(2020)1ILR 1248

ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 12.04.2019

BEFORE
THE HON'BLE SUDHIR AGARWAL, J.
THE HON'BLE RAJENDRA KUMAR-IV, J.

Writ C No. 43455 of 2018

M/s Veekay General Industries ...Petitioner
Versus
Union of India & Ors. ...Respondents

Counsel for the Petitioner:
Sri Abhijeet Mukherji, Sri Sudeepta Kumar
Pal

Counsel for the Respondents:
Sri Ranjan Kumar Rai, Sri Vivek Kumar Rai

Contract law- Contract between the
Petitioner and North Central RailwayArbitration clause- Principles of Natural
justice -not applicable in contract in
private law-Writ Jurisdiction cannot be
exercised -for enforcement of pure and
simple commercial contract.

Held, that in the matter of pure and simple
commercial
contract,
extraordinary
constitutional remedy under Article 226 is not a
substitute for getting the contract executed or
for allowing damages to a party for alleged
breach of contract since remedy lies in
common law by filing suit for enforcement of
contract wherever it is permissible or for
damages/ compensation for alleged wrongful
breach of contract. Reason being that such
matters involves recording of evidence, oral
and documentary, and remedy under Article
226 of the Constitution cannot be made a
substitute of common law civil proceedings and
parties must avail such remedy. (Para 16)

Writ Petition dismissed. (E-9)

List of cases cited: -

1. Bareilly Development Authority vs. Ajai Pal
Singh, AIR 1989 SC 1076

2.Kerala State Electricity Board and another Vs.
Kurian E. Kalathil and others, 2000(6) SCC 293 C

3.The Rajasthan State Industrial Development
and Investment Corporation and Anr. vs.