Debarring Contractor From Participating In Any Contract Affects Right To Life, Prior Notice With Reasons For Blacklisting Is Must: Karnataka HC

The Karnataka High Court has said that blacklisting or debarring of a Contractor from participating in any contract has civil consequences and thus, prior notice indicating the reasons for blacklisting and debarment has to be communicated and on receiving reply, a final order may be passed.A single judge bench of Justice SG Pandit made the observation while setting aside the communication dated April 5, 2019, issued by the Senior Divisional Commercial Manager South Western Railway to M/S. Crest Facility Management, debarring them from participating in any Catering contracts of the Indian Railways. "Blacklisting or debarring of a Contractor from participating in any contract would result in civil consequence. In that, a person against whom debarment or blacklisting is passed, he would not be in a position to participate in any of the contracts and his right to life would be affected. When an action of the authorities would result in civil consequences, a prior notice indicating the reason for blacklisting or debarment shall be communicated and on receiving the reply, such blacklisting or debarment order shall be passed," the Bench observed.The respondent-Railways had invited tenders for Housekeeping, Catering and Loading Unloading support services and the petitioner was one of the successful tenderers so far as catering services is concerned. Even though the petitioner's tender was accepted, on the ground that tenderer/petitioner failed to execute the work, the petitioner was debarred under the impugned letter dated 05.04.2019. Advocate Abhinay YT appearing for the Railways conceded that no notice was issued to the petitioner prior to communication dated 05.04.2019. Following which the court opined, "In the instant case, since there was no notice before debarring or blacklisting the petitioner from participating in catering service of the respondent-Railways, I deem it appropriate to quash Annexure-G dated 05.04.2019, with liberty to the respondent to take appropriate action, after affording an opportunity to the petitioner." Accordingly it allowed the petition and quashed the communication and clarified that the Railway authorities are at liberty to take action against the petitioner, after affording an opportunity to the petitioner, in accordance with law. Case Title: M/S. CREST FACILITY MANAGEMENT v UNION OF INDIA Case No: WRIT PETITION NO.39350/2019 Citation: 2022 LiveLaw (Kar) 194. Date of Order: 30TH DAY OF MAY, 2022 Appearance: Advocate ANJANA C.H for petitioners Advocate ABHINAY Y.T for respondent Click Here To Read/Download Order

Debarring Contractor From Participating In Any Contract Affects Right To Life, Prior Notice With Reasons For Blacklisting Is Must: Karnataka HC

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