IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWENTY THIRD DAY OF JULY TWO THOUSAND AND NINE PRESENT THE HON'BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No. 7385 of 2004 Between: Municipal Contract Labour Society, Bhimavaram rep.by its President, Penta Srinivas S/o Krishna, R/o Bhimavaram, West Godavari District. ..... PETITIONER AND 1 Commissioner, Bhimavaram Municipaltiy, Bhimavaram, West Godavari District. 2 Municipal Council, Bhimavaram, rep.by its Chairperson, Bhimavaram, West Godavari District. .....RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ of Mandamus, or any other appropriate Writ, Order or direction, declaring the action of the respondents in passing the resolution dated 8-4-2004 vide resolution No.30, terminating the contract of the petitioner society and also keeping the petitioner society under black list without any notice, as illegal, arbitrary and principles of natural justice and for a consequential order further directing the respondents to set aside the impugned resolution dated 8- 4-2004 enabling the petitioner society to carry to the contract work as per the agreement dated 8-12-2003. Counsel for the Petitioner: MR.CH.DHANAMJAYA Counsel for the Respondents: MR.S.NAGESWARA REDDY The Court made the following : Order: The petitioner, a Labour Contract Society, has filed this writ petition challenging the validity of the resolution dated 08-04-2004 passed by the second respondent-Municipal Council, terminating the contract given to it and also blacklisting it for future contracts. 2 . During the year 2004, the Commissioner, Bhimavaram Municipality, West Godavari District, issued tender notice inviting bids from Labour Contract Societies to undertake sanitation work in unit-3 of the municipal area. After acceptance of the bid offered by the petitioner- society, an agreement was entered into by the first respondent with the petitioner-society awarding the contract to it for sweeping of main roads, streets, lanes, by-lanes, sub-lanes and other open areas and to collect the garbage, dust etc., for a period of one year from the commencement of the work. During the currency of the said work, the first respondnet issued notice dated 13-01-2004 to the petitioner-society alleging that the petitioner-society is allowing other than the members of the society to undertake the contract work and if it fails to undertake take steps to rectify the defects, the contract awarded to it would be cancelled. On receipt of the said notice, the petitioner-society submitted explanation on 21-01-2004 justifying its action for allowying three new members, who did not figure in the list submitted along with the tender schedule, to attend to the work. Thereafter, it appears, when the matter was placed before the Municipal Council, impugned resolution dated 08-04-2004 was passed approving the proposal for termination of the contract and also to blacklist the petitioner-society. 3. In this writ petition, it is submitted by the learned counsel for the petitioner that no valid reasons have been assigned by the respondents to terminate the contract. It is submitted that as much as there is no bar for admitting new members, the same is not in violation, so as to terminate the contract and to blacklist the petitioner-society. 4. On the other hand, it is submitted by the learned standing counsel for the respondents that in view of clause 15 of the agreement, it is not open for the petitioner-society to allow any other person, whose particulars are not furnished, to execute the work. It is submitted that as there is violation of the terms of the agreement, the contract is terminated and the petitioner-society is blacklisted. 5. So far as the termination of the contract is concerned, I do not find any merit in the writ petition to invalidate the resolution at this stage. The contract was only for a period of one year and the same was granted in the year 2003. In view of the fact that the contract period itself is over, the petitioner-society is not entitled for any relief, to invalidate the termination of the contract. So far as blacklisting is concerned, I have perused a copy of the notice dated 13-01-2004. The said notice is not a show cause notice calling upon the petitioner-society to explain as to why it should not be blacklisted. Further, no clause in the agreement is referred to, which prohibits engaging of newly admitted members into the society to undertake the work. The notice issued to the petitioner itself is vague and no valid reasons have been assigned for not accepting the explnation offered by the petitioner-society. When the petitioner-society has stated that three more members are admitted into the socidty, respondents have not considered the same before taking a decision for blacklisting the petitioner-society. As much as the order of blacklisting will have serious consequences and affects the members of the society, unless valid reasons are recorded, no order can be passed for blacklisting. In absence of any clear show cause notice before passing the order for blacklisting and further as the respondents have not considered the explanation offered by the petitioner-society, I deem it appropriate, it is a fit case to quash the impugned resolution passed by the Municipal Council to the extent of blacklisting the petitioner-society for award of future works. 6. For the aforesaid reasons, resolution No.30 dated 08-04-2004, to the extent of blacklisting the petitioner-society for award of future works, is hereby quashed. It is made clear that the order passed by the respondnets to the extent of termination of the contract is not interfered with. 7. The writ petition is partly allowed to the extent indicated above. No order as to costs. ___________________ R. SUBHASH REDDY, J. July 23, 2009 CBS/MRR THE HON’BLE SRI JUSTICE R.SUBHASH REDDY WRIT PETITION No.7385 of 2004 23rd July, 2009 MRR/CBS