IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WEDNESDAY, THE TENTH DAY OF JUNE, TWO THOUSAND NINE ONLY WRIT PETITION No.18855 of 2007 & 4604 of 2008 WRIT PETITION No.18855 of 2007 Between: M/s.Power Control Systems, a registered Proprietary firm, reptd., by its Proprietor- G.Krishna, S/o.Surya Rao, 43 years, S.B.H.Complex, Bhadrachalam Road, Paloncha, Khammam District and three others. … Petitioners And Andhra Pradesh Power Generation Corporation Ltd., Reptd., by its Managing Director, Vidyut Soudha, Khairtabad, Hyderabad four others. … Respondents Counsel for the petitioners: Sri J.Prabhakar. Counsel for the respondents: Sri S.D.Goud for Sri K.Chidambaram. WRIT PETITION No. of 2007 Between: M/s.Meredian Enterprises, a Proprietary Concern, reptd., by its Proprietrix-Smt.G.Indira, W/o. G.Krishna, 20-4/10 (Old) 20-5-38, Contractors Colony, Paloncha, Khammam District. … Petitioner And Andhra Pradesh Power Generation Corporation Ltd., Reptd., by its Managing Director, Vidyut Soudha, Khairtabad, Hyderabad four others. … Respondents Counsel for the petitioners: Sri J.Prabhakar for Sri N.S.Bhaskar rao. Counsel for the respondents: Sri S.D.Goud for Sri K.Chidambaram. This Court made the following: COMMON ORDER:- Order dated 31-7-2007 passed by respondent No.2 is the subject matter of these two Writ Petitions. While Writ Petition No.18855 of 2007 is filed against blacklisting of four petitioners, Writ Petition No.4604 of 2008 is filed questioning extension of order dated 11-9- 2002 whereunder the sole petitioner was blacklisted for a further period of five years. In the manner in which these Writ Petitions are proposed to be disposed of, it is not necessary to record all the facts in detail. It will suffice to note that petitioner No.4 is running petitioners 1 to 3- Firms, while his wife-Smt.G.Indira is connected with running of M/s.Meridian Enterprises, petitioner in Writ Petition No.4604 of 2008. The record shows that M/s.Meridian Enterprises was blacklisted by the respondents for a period of five years by order dated 11-9-2002. A show cause notice was issued by respondent No.2 to petitioner No.4 in Writ Petition No.18855 of 2007 calling upon him to show cause why petitioners 1 to 3-Firms should not be blacklisted. The sole basis on which the said notice was given was that M/s.Hind Engineering Corporation, Howrah, was stated to have informed the respondents that the petitioner approached the said company to obtain supporting quotations/offers for manipulating tenders. An incidental allegation was also made that petitioner No.4 was threatening the officials of APGENCO frequently over telephone and bringing pressure to make undue favour to him. Petitioner No.4 submitted his explanation wherein he, inter alia, denied the allegations contained in the show cause notice. With reference to the alleged information furnished by M/s.Hind Engineering Corporation, Howrah, he stated that he never asked for any supporting quotations from the said Corporation and he requested respondent No.2 to give full details of the said allegation in order to file a suit against him and M/s.Hind Engineering Corporation. By the impugned order, respondent No.2 purporting to consider the said explanation of petitioner No.4, merely rejected the same by making a cryptic observation “your explanation is not at all satisfactory and also it contains a number of irrelevant aspects, which deviate the actual subject matter. Hence, your explanation is not convincing and is also not corroborative with the facts realized already”. With regard to the extension of order of blacklisting against the petitioner in Writ Petition No.4604 of 2008, in paragraph 8 of the impugned order it is mentioned that blacklisting of the petitioner firm is further extended upto a period of five years with effect from the date of the said order. As rightly pointed by Sri J.Prabhakar, learned counsel for the petitioners, at the hearing, respondent No.2 has not supplied any material about the information passed on by M/s.Hind Engineering Corporation, which constituted the sole basis for blacklisting the petitioners in Writ petition No.18855 of 2007. Even though the petitioner in his explanation asked for furnishing of full details of the alleged information said to be have been given by M/s.Hind Engineering Corporation, no such details have been furnished. Respondent No.2 failed to discuss the stand taken by the petitioners in their explanation and summarily rejected the case by a cryptic observation that the petitioners’ explanation was not satisfactory. With regard to the petitioner in Writ Petition No.4604 of 2008, admittedly no prior notice has been given to the proprietrix of the petitioner-firm. The order of blacklisting results in serious adverse consequence to a business venture. It amounts to civil death, albeit temporarily, of the business entity. As held by the Supreme Court in Erusian Equipment & Chemicals Ltd., Vs. State of West Bengal – (1975) 1 SCC 70 - the order of blacklisting leads to serious consequences and the authority passing such order should observe principles of natural justice and make a through application of mind before passing such an order. As respondent No.2 failed to provide necessary material to the petitioners in Writ Petition No.18855 of 2007 and deal with the explanation submitted by them, the impugned order of blacklisting of three firms, which are petitioners 1 to 3 in the said Writ Petition, cannot be sustained. Similarly, no notice was given to the petitioner in Writ Petition No.4604 of 2008 proposing extension of the period of blacklisting beyond five years. Therefore, the impugned order relating to the petitioner in the said Writ Petition also cannot be sustained in law. For the above-mentioned reasons, the impugned order dated 31-7-2007 is set aside in respect of the petitioners in both the Writ Petitions. Respondent No.2 is given liberty to issue fresh notices to the petitioners in both the Writ Petitions calling for their explanation and provide them all the relevant material along with the fresh notices. After considering the explanations, if any, filed by the petitioners, respondent No.2 shall be free to pass appropriate orders. Subject to the above observations, both the Writ Petitions are allowed. ------------------------------------ C.V.NAGARJUNA REDDY,J Date:10-6-2009 MNR