JUDGMENT
S.K. Chattopadhyaya, J.
1. The petitioner, a proprietorship concerned, has moved this Court being aggrieved by the letter dated 12.5.97 issued by the respondent-Heavy Engineering Corporation at Ranchi.
2. The petitioner being an authorised stockist/distributor of some companies, supplied goods to the major industries including M/s. Heavy Engineering Corporation (in short ‘the Corporation’). Some time on 27.6.94 the Corporation made an enquiry from M/s. Rallies India Limited, Engineering Division, Calcutta regarding purchase of certain machineries and the petitioner being its agent. M/s. Rallies India Ltd. forwarded the same to it and in turn the petitioner addressed a letter to the Assistant Manager (Purchase) of the Corporation on 18.7.94 quoting the rates in respect of the concerned goods. This letter in Annexure 2. In its quotation the petitioner specified its terms and conditions to the payment which was 95% to be paid against proforma invoice and balance 5% on CRB. The respondents placed an order on 1.10.94 asking the petitioner to complete the delivery by 15.11.94. On receipt of this supply order, the petitioner sent a proforma invoice to the Corporation (Annexure 3). In view of the terms the Corporation sent a photo-copy of the cheque and petitioner after supply was to collect the cheque. However, there was no letter intimating the petitioner regarding the advance cheque. It is alleged that after a lapse of about 15 months the Corporation informed the petitioner by letter dated 29.2.96 that the cheque No. 239071 dated 27.1.96 for Rs. 86,305.94 is ready and requested the petitioner to collect the cheque against the delivery/despatch document. Photo copy of the cheque dated 29.2.96 is Annexure 4. On 30.5.96 the Corporation asked the petitioner to supply materials because till that date required supply was not made. However, the petitioner met the concerned respondents and informed them that since there was considerable delay in preparing the cheque, it would not be possible for it to supply goods on quoted price due to escalation of price of the materials from 1st December, 95. Chart of new rates of price of the required goods was also placed before the concerned respondents and the petitioner expressed its readyness to supply the goods if the additional cheque of the difference amount is given to the petitioner. In-stead of sending the cheque of additional price, the Corporation, by its Fax message dated 17.6.96 directed the petitioner to supply the goods threatening that if the goods were not supplied the Corporation would cancel the order and will have no further dealings with the petitioner in future (Annexure 7). On behalf of M/s. Rallies India Ltd. the General Manager (Purchase) of the Corporation was also informed that supply order could not be executed as the payment advice was received very late and during this period price has increased considerably and as such, requested the Corporation to process the order in accordance with the current price list. In the meantime the Corporation also placed certain orders with M/s. Larsen & Toubro Ltd. and this firm also asked the Corporation to get in touch with the petitioner who is also the local agent of this firm. However, the Duputy Manager on 22.11.96 informed M/s. Larsen &.Toubro that the Corporation is not dealing with the petitioner any more and as such, names of some other firms should be suggested, with whom the Corporation can make a contact (Annexure 9). The petitioner apprehended that he would be black-listed and as such, met the concerned respondents and was assured that there was no question of black-listing or short-listing of the petitioner. It is stated that even thereafter, the Corporation dealt with the petitioner and the petitioner had supplied some items to the respondent-Corporation and on receipt of the same they have also issued cheque on 7-4-97. Photo copy of Challan and cheque are annexed as Annexure 10. Thereafter, again when the Corporation made an enquiry from M/s. Larsen & Toubro the Corporation was requested to contact the petitioner for supplying goods or regarding any quotation but again the Deputy Manager (Purchase), by his letter dated 12-5-97, informed M/s. Larsen & Toubro that the petitioner firm has been banned from dealing with HEC and under the circumstances, it was not possible for the Corporation to place any order with the petitioner.
On these premises the petitioner has made a grievance before this Court that this action of the Deputy Manager (Purchase) of the Corporation amounts to black-listing the petitioner and depriving the petitioner from carrying out its business. The petitioner has also alleged that without giving a hearing before such black-listing the Deputy Manager (Purchase) has completely ignored the principle of natural justice.
3. Being noticed, the Corporation has filed its counter affidavit taking a stand that as the petitioner defaulted in delivering the materials within the stipulated period, even after repeated requests made by the Corporation, the Corporation had no option but to stop the dealing relationship with the petitioner. According to it, the materials which were required to be supplied by the petitioner against the supply order, were urgently required but due to nondelivery of the same in time, affected the business relations. In spite of repeated requests to the petitioner for supply of the materials, when it failed to supply the same, action had to be taken against the petitioner under Clause 7.3.2 (a) of the approved Purchase Manual of the Corporation after taking approval from the competent authority. Photo copy of the relevant Chapter has been annexed as Annexure-D. The cancellation of the purchase order No. 3753 dated 1.10.94 has been Annexed as Annexure-B to show that the aforesaid purchase order was cancelled by serving a letter to the petitioner on 26.6.96. As because the letter dated 26.6.96 was circulated to all concerned for suspending business dealing with the petitioner, naturally by letter dated 12.8.97 M/s. Larsen & Toubro was informed that the Corporation is no longer dealing with the petitioner-firm. The specific case of the Corporation is that the petitioner-firm has not been black-listed but only suspended from the business dealing in future because of deliberate negligence in delivering the goods on unreasonable and unsustainable grounds.
4. Mr. Mittal, learned Counsel appearing on behalf of the petitioner, contended that though the respondent-Corporation has categorically seated in paragraph 7 of the counter affidavit that the petitioner-firm has not been blacklisted rather it has been suspended from business dealings but the very letter addressed to the M/s. Larsen & Toubro informing that the Corporation has stopped all dealings with the petitioner in future which amounts to black-listing of the petitioner and has been done without giving any opportunity. He contends that if the specific purchase order No. 3753 dated 1.10.94 has been cancelled for the reason of non-supply of materials within the stipulated time, the petitioner may not have any grievance but the very action of the respondent No. 2 in informing other firms like M/s. Larsen & Touhro amounts to depriving the petitioner from carrying out its business and that cannot be done without giving proper opportunity to the petitioner.
5. On the other hand, Mr. A.K. Sinha, learned Senior Counsel appearing on behalf of the respondent-Corporation, has submitted that in view of Clause 7.3.2 (a) of the Approved Purchase Manual the Corporation was well within its jurisdiction to suspend the petitioner from future dealings.
6. It is well settled that no person has a fundamental right to insist that the Government must enter into a contact with him but he has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling. There is no denial of the fact that a person, who has been dealing with the Government in the matter of sale and purchase of materials, has a legitimate interest or expectation and when the State acts to the prejudice of a person, it has to be supported by legality. Though the Corporation has categorically stated that the petitioner has not been blacklisted rather it has been suspended from business dealings in future but the very fact that the Corporation has informed M/s. Larsen & Toubro that it has stopped its dealing with the petitioner-firm, in my view, is nothing but a blacklisting. The words ‘suspended from the business dealings in future’, in my view, is nothing but a jugglery of words which means black-listing. It is true that Clause 7.3.2 (a) of the Approved Purchase Manual of the Company (Annexure-D) indicates that if the firm fails to execute a contract or fails to execute it satisfactorily, the suppliers may be removed from the list of approved suppliers.
7. In the instant case, there is no denial of fact that on 27.6.94 the Corporation made an enquiry from M/s. Rallies India regarding purchase of certain machineries. The petitioner, being the agent of M/s. Rallies India, Corporation was directed to contact the petitioner in this regard. On 18th July, 94 the petitioner wrote a letter to the Assistant Manager (Purchase) of the Corporation with reference to enquiry dated 27.6.94. At the very first instance the petitioner informed with regret that the said enquiry was received by its principal namely, M/s. Rallies India Ltd. late, the required information could not be submitted to the Corporation in time. It was further mentioned that since the Principal, M/s. Rallies India does not quote its rate directly to any customer, hence in future any enquiry should be made. This letter of the petitioner is dated 18.7.94. (Annexure 2). There is no denial of fact that cheque was issued after 15 months though, according to the terms and conditions, 95% of the payment ought to have been made against Proforma Invoice and balance 5% on CRB. The petitioner has categorically stated in paragraph 9 about the terms and conditions of payment but same has not been denied specifically and merely it has been stated that they are matter of records and it would rely on the true scope meaning, effect and interpretation of the same at the time of hearing. If this be the position that according to the terms and conditions, 95% of the amount was to be paid against the proforma invoice but the respondent-Corporation undisputedly sent the cheque after 15 months and as such the petitioner could not deliver the required materials as by that time there was an escalation of the price of the said materials. Under these circumstances, in my view, though the Corporation could have cancelled the specific order but definitely could not have debarred the petitioner for future dealing. This debarring from future dealing amounts to black-listing and that has been admittedly done without giving any reasonable opportunity of hearing to the petitioner and, therefore, the same cannot be sustained.
8. In the case of Raghunath Thakur v. State of Bihar , an argument was advanced on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Their Lordships, while accepting the argument that there was no requirement specifically to any notice, has observed as follows:
But it is an implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In that view of the matter, the last portion of the order in so far as it directs black-listing of the appellant in respect of future contracts, cannot be sustained in law.
9.In the premises, in may considered opinion, the letter dated 12.5.97 issued by the Corporation to M/s. Larsen & Toubro intimating that the petitioner has been banned from dealing with the Corporation and also Fax message dated 12.5.97 informing the petitioner that respondents will have no further dealing with the petitioner in future, cannot be sustained in law.
10. However, so far letter No. 3652 dated 26.6.96, as well as purchase order No. 3753 dated 1st October, 94 is concerned, I am not inclined to interfere with the same on the ground that for non-supply of materials in time for whatever reason, the Corporation might have got the said materials from other concerned.
11. In the result, this writ application is allowed by quashing the letter dated 12.5.97, by reason of which the petitioner has been blacklisted for future.