IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE ANTONY DOMINIC WEDNESDAY, THE 27TH JULY 2011 / 5TH SRAVANA 1933 WP(C).No. 20191 of 2011(Y) ------------------------- PETITIONER(S): ----------------------- 1. AIA ENGINEERING LTD., (A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956, THROUGH ITS AUTHORIZED SIGNATORY), HAVING ITS REGISTERED OFFICE AT 115, GVMM ESTATE, ODHAV ROAD, AHMEDABAD (GUJARAT). 2. MR.ACHYUT CHANDRAKANT PARIKH, WORKING AS DGM CORPORATE AFFAIRS, AIA ENGINEERING LTD., 115, GVMM ESTATE, ODHAV ROAD, AHMEDABAD (GUJARAT). BY ADVS. SRI.P.VIJAYA BHANU, SENIOR ADVOCATE SMT.M.M.DEEPA SRI.V.A.JOHNSON (VARIKKAPPALLIL) SRI.UNNI SEBASTIAN KAPPEN RESPONDENT(S): ------------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE ADDITIONAL CHIEF SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM, KERALA - 695 001. 2. MALABAR CEMENT LIMITED, WALAYAR - 678624, PALAKKAD DISTRICT, KERALA - 678 624. R1 BY GOVT. PLEADER SRI. P.N. SANTHOSH R2 BY ADV. SRI. K. ANAND THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 27/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Mn ...2/- WP(C).No. 20191 of 2011(Y) APPENDIX PETITIONER'S EXHIBITS: EXT.P1 : COPY OF THE COMMUNICATION DATED 13.05.2011 ISSUED BY THE RESPONDENT NO.1 TO RESPONDENT NO.2. EXT.P2 : COPY OF THE SHOW CAUSE NOTICE NO. MT/02/AIA/234/2011/5399 DATED 25.06.2011 ADDRESSED BY THE 2ND RESPONDENT TO PETITIONER NO. 1. EXT.P3 : COPY OF THE COMMUNICATION DATED 08.07.2011 ADDRESSED BY RESPONDENT NO. 2 TO THE 1ST PETITIONER. EXT.P4 : COPY OF THE REPLY OF THE 1ST PETITIONER DATED 05.07.2011. EXT.P5 : COPY OF THE CIRCULAR RESOLUTION DATED 07.03.2008 PASSED BY THE BOARD OF DIRECTORS OF THE 1ST PETITIONER COMPANY AUTHORIZING THE 2ND PETITIONER AS ONE OF THE AUTHORIZED SIGNATORIES. RESPONDENT'S EXHIBITS - NIL //TRUE COPY// P.A. TO JUDGE Mn ANTONY DOMINIC, J. ------------------------------------------------- W.P.(C)No. 20191 OF 2011 ------------------------------------------------- DATED THIS THE 27th DAY OF JULY, 2011 J U D G M E N T Petitioner is undertaking manufacturing business in machineries for grinding and crushing applications. 2. It appears that in 2004, 2nd respondent purchased complete set of machineries from the 1st petitioner company. Long thereafter, they were issued Ext.P2 dated 25-06-2011 whereby the Executive Director of the Company called upon the petitioner to show cause why the petitioner shall not be blacklisted. Exhibit P2 reads as follows: “We have received Government letter stating that we have to blacklist you due to the allegation of irregularities in the purchase of “complete set of Cement Mill Internals” for Cement Grinding Unit, Pallipuram, Cherthala without inviting tenders, as a result of which the Company has suffered a pecuniary loss. Kindly present before Managing Director on 7th July, 2011 at 11.00 A.M. for personal hearing and show cause why you should not be blacklisted.” . 3. Petitioners submit that Ext.P2 does not contain any reason si for blacklisting as proposed and that it was issued on the basis of Ext.P1 directions issued by the 1st respondent. W.P.(C)No.20191/2011 -2- Therefore, it is contended that the show cause as per Ext.P2 is an empty formality. It is also the case of the petitioner that the 1st respondent has no jurisdiction to issue directions in the nature of Ext.P1. It is with these allegations the writ petition is filed. 4. In so far as Ext.P1 issued by the 1st respondent is concerned, I agree with the learned counsel for the petitioner that a company like the 2nd respondent, even if it is a Government company, have to take decisions independently. Therefore, for blacklisting a supplier consequent to irregularities in the supply of machineries, action should be completed by the company concerned with due application of mind, and untrammeled by any such direction. Therefore I can take Ext.P1 as a suggestion and not as a binding direction. In that view of the matter Ext.P1 can only be treated as a suggestion from the 1st respondent and it is entirely for the 2nd respondent to apply is mind to the facts of the case and take an independent decision. 4. In so far as Ext.P2 is concerned, if the purchase in question is irregular, it is always open to the purchaser to take action against a supplier, like the petitioner, provided there is justification for such proceedings. In so far as Ext.P2 is W.P.(C)No.20191/2011 -3- concerned I agree with the learned counsel for the petitioner that it is laconic and cannot form the basis of a proceeding for blacklisting. In that view of the matter, Ext.P2 cannot be proceeded. Therefore, I dispose of the writ petition with the following directions: (i) That Ext.P1 will not be treated as any binding direction and will be treated only as a suggestion from the 1st respondent. (ii) It will be open to the 2nd respondent to issue fresh show cause to the petitioner incorporating all the allegations on the basis of which the 1st petitioner is proposed to be blacklisted. (iii) On receipt of such notice, petitioners shall file its reply and therefore the 2nd respondent shall take a decision untrammeled by Ext.P1 Writ petition is disposed of. Sd/- ANTONY DOMINIC JUDGE AMG True copy P.A to Judge