IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE THIRTT FIRST DAY OF MARCH, TWO THOUSAND EIGHT ONLY PRESENT: THE HON’BLE MR. JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.2673 of 2008 Between: M/s. S.V.R. Electricals Private Limited, Rep., by its Managing Director, Sri Madala Venkateswara Rao, Guntur District. … Petitioner AND Eastern Power Distribution Company of A.P., Ltd., Visakhapatnam, rep., by its Chief General Manager Visakhapatnam. … Respondent Counsel for the petitioner : Sri Ghanta Rama Rao Counsel for the respondent : Sri S.V. Ramana for Sri O. Manohar Redy (SC for APSEB) This Court made the following: THE HON’BLE SRI JUSTICE C.V.NAGARJUNA REDDY WRIT PETITION No.2673 of 2008 ORDER:- This writ petition is filed for a writ of Certiorari to quash letter No.CGM/P&MM/EPDCL/VSP/P-1301/P3/D.No.5347/ 07 dated 13.12.2007 issued by the respondent. The petitioner, a private limited company, was entrusted with manufacture and supply of electrical transformers under order placed on 27.05.2004. The validity of the period is 90 days from the date of the order. The allegation against the petitioner is that it failed to supply the required number of transformers as per the following schedule. “Before 31.12.2004 250 Nos. Before 31.01.2005 250 Nos. Before 28.02.2005 250 Nos. Before 31.03.2005 250 Nos.” Correspondence was exchanged between the petitioner and the Chief General Manager (Purchase & Material Management) – respondent. The correspondence includes letters dated 11.10.2004, 14.03.2005, 11.07.2005, 14.10.2005, 20.12.2005, 02.02.2006, 31.05.2007, 15.06.2007 and 13.12.2007, the last of which is impugned in this writ petition. The substance of all these letters is that the petitioner failed to adhere to the schedule in supply of electrical transformers. In all these letters, the petitioner was cautioned that if he does not improve the performance, the respondent will take action according to the purchase order apart from removing the his name from the list of the suppliers. In the impugned order, it is mentioned as under: “In response you have given inspection offer for the balance quantity of 270 Nos. vide reference (7) cited above. The inspection was completed and dispatch instructions were issued vide reference (8) cited above. The balance material was received as follows: 16.07.2007 20 Nos. 07.07.2007 44 Nos. 14.06.2007 36 Nos. 24.07.2007 38 Nos. 23.06.2007 88 Nos. 10.07.2007 44 Nos -------------------- Total 270 Nos. -------------------- In view of your poor response in supply of ordered material the Purchase Order placed on you under reference (1) cited is hereby short closed and limited to 988 Nos., and your firm is removed from the vendors list.” At the hearing, Sri Ghanta Rama Rao, learned counsel for the petitioner submitted that before issuing the impugned order, the petitioner was not given an opportunity of hearing. He therefore submitted that the order by which the petitioner is removed from the vendors list is in violation of principles of natural justice. Per contra, Sri S.V. Ramana representing Sri O.Manohar Reddy, learned Standing Counsel for the respondent submitted that the various letters, a reference to which is made hereinabove, show that the petitioner failed to adhere to the schedule for supply of transformers and time and again he was cautioned that action in accordance with the terms of the purchase order will be taken and therefore, the petitioner cannot complain of violation of principles of natural justice. I have carefully considered the respective submissions of the learned counsel and perused the record including the counter-affidavit filed by the respondent. In the abovementioned letters, except the impugned letter, the main complaint against the petitioner is that it failed to supply 270 numbers of transformers and in that connection the respondent was asserting that if the petitioner failed to supply the said transformers, action as per the terms and conditions of the purchase order will be taken. In fact, in letter dated 20.12.2005, the respondent threatened the petitioner that if the petitioner fails to supply the balance quantity of 270 numbers of transformers, he will be black listed without any notice. In the above-reproduced portion of the impugned order, it is mentioned that the 270 numbers of transformers in respect of which notices were earlier given were supplied in the months of June and July, 2007. since the petitioner supplied 998 out of 1000 transformers, which the petitioner is required to supply under the order placed by the respondent, the contract was limited to 998 numbers and the petitioner is removed from the vendors list. On the abovementioned facts, I do not myself in agreement with the learned counsel for the respondent that the petitioner was given reasonable opportunities under the various letters addressed by the respondent to the petitioner before passing the impugned order. As stated supra, all the earlier correspondence was in relation to non-supply of 270 numbers of transformers, which were admittedly supplied by the petitioner in June and July, 2007. I do not find any letters written subsequent to completion of supply of the said number of transformers, before the impugned order was passed. It is therefore clear that even though the petitioner supplied the 270 numbers of transformers with reference to which repeated notices were given earlier, he is penalized by the impugned letter without any prior notice. If the respondent felt that the subsequent supply of 270 numbers of transformers with delay, still exposes the petitioner to the penalty of black listing or removal from the vendors list, it is incumbent upon the respondent to issue a notice giving the petitioner an opportunity of explaining against the proposed action. Admittedly, the respondent did not give any such notice after completion of the supply of the abovementioned transformers. In Erusian Equipment and Chemicals Limited v. State of West Bengal the Supreme Court held that the action of black listing results in serious adverse civil consequences and it should therefore be preceded by a prior notice and an opportunity of hearing to the person, who is likely to be affected by such an order. Since the respondent failed to give any such notice and opportunity to the petitioner, the impugned order is set aside. Liberty is, however, given to the respondent to initiate action afresh in the light of the observations made hereinabove. The writ petition is accordingly allowed. As a sequel to disposal of the writ petition in the manner indicated above, WPMP.No.3177 of 2008 filed by the petitioner for interim relief is disposed of as infructuous. ____________________________ C.V.NAGARJUNA REDDY, J Date: 31.03.2008 ES