Case: Joseph Vilangandan Vs. The Executive Engineer, Buildings &amp; Roads (P.W.D.) Division

or debar the appellant from faking contracts with B &R Department in Ernakulam Division, the impugned order was illegal and void for the reason that no opportunity was given to the Appellant to represent his case before he was put on the black list. For this contention, reliance has been placed on the recent decision of this Court in Erusian Equipment &Chemicals Ltd. v. State of West Bengal.([1975] 2 S.C.R.674.)As against the above, the learned Attorney General has drawn our attention to the fact that a notice, dated April 17, 1968 (Ex. P-6) was given by the Executive Engineer to the appellant requesting the latter to show cause why the work may not be got done through other agencies, at the appellants risk and loss; after debarring him as a defaulter. It is submitted that this notice did indicate to the appellant that action to debar him from doing further contract work under the department was contemplated, and as such, this case is not hit by the ratio of Erusian Equipments case (ibid). It is further maintained that in Thomas v. State of Kerala, (I L R (1968) 2 Kerala 1 (F.B.)) it was rightly observed that the law does not deny to the Government the freedom of contract (carrying with it the freedom not to enter into a contract, it vouchsafes to every person. Reference was also made to the observations of this Court in C.K. Achuthan v. State of Kerala (A.I.R. 1959 S.C. 490.) in support of the contention that the impugned order does not per se offend Articles 14 and 19 (a) (g) of the Constitution. Those observations are to the effect:"There is no discrimination, because it is perfectly open to the Government, even as it is to a private party, to choose a person to their liking, to fulfill contracts which they wish to be performed. When one person is chosen rather than another, the aggrieved party cannot claim the protection of Article 14, because the choice of the- person to fulfill a particular contract must be left to the Government. (Because of the breach or, cancellation of his contract, the private person) cannot complain that there has been a deprivation. of the right to practice any profession or to carry on any occupation, trade or business, such as is contemplated by Article 19(1)(g)." (Parenthesis, within brackets, added).The majority judgment of the Kerala High Court, inasmuch as it holds that a person is not entitled to a hearing, before: he is blacklisted, must be deemed to have been overruled by the decision of this Court in Erusian Equipment (ibid) wherein it was held that:"fundamentals of fairplay require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist."10. Controversy in the instant case, therefore, narrows down into the issue, whether such an opportunity was given to the appellant. Answer to this question will turn on an interpretation of the notice, dated April 17, 1968 (Ex. P- 8) given by the Executive Engineer to the appellant. This notice has been extracted in a foregoing part of this judgment. The material sentence therein is:"You are, therefore, requested to show cause .... why the work may not be arranged otherwise at your risk and loss, through other 1 agencies after debarring you as a defaulter.............. The crucial words are t hose that have been underlined. They take their color from the context. Construed along with the links of the sentence which precede and succeed them, the word s "debarring you as a defaulter", could be understood as conveying no more than that an action with reference to the contract in question, only was under contemplation. There are no words in the notice which could give a clear intimation to the addressee that it was proposed to debar him from taking any contract, whatever, in future under the. department. A perusal of the appellants reply (Ex. P-7), dated May 20, 1968, sent to the Executive Engineer, also appears to show that by the word "debarring" mentioned in the Executive Engineers letter dated April 17, 1968 (Ex. P-6), he understood as debarring him from executing the contract in question after declaring him a defaulter, and then getting the same work d one by other agencies, at his risk and loss. All that has been said in Ex. P-7 by the appellant is directed to justify that the non-execution of the contract was not due to his fault, but due to the delay on the part of the department in handing over the building to him for starting the work within the time specified in the agreement, and consequently, if any loss would be incurred by the department in getting the work done through any other agency, he would not be liable to make good the same. In short, the letter (Ex. P-6) dated April 17, 1968 from the Executive Engineer, did not give any clear notice to the appellant that action to debar him from taking in future any contract, whatever, under the department or its Ernakulam Division was in contemplation. The appellant was thus not afforded adequate opportunity to represent against the impugned action.This being the position, the rule in Erusian Equipments case (ibid) will be attracted with full force. While conceding that the State can enter into contract with any person it chooses and no person has a fundamental Tight to insist that the Government must enter a contract with him, this Court observed (in the said case)"Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the black list."11. The above enunciation squarely covers the case before us.12.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]Answer to this question will turn on an interpretation of the notice, dated April 17, 1968 (Ex. P- 8) given by the Executive Engineer to the appellant. This notice has been extracted in a foregoing part of this judgment. The material sentence therein is:"You are, therefore, requested to show cause .... why the work may not be arranged otherwise at your risk and loss, through other 1 agencies after debarring you as a defaulter.............. The crucial words are t hose that have been underlined. They take their color from the context. Construed along with the links of the sentence which precede and succeed them, the word s "debarring you as a defaulter", could be understood as conveying no more than that an action with reference to the contract in question, only was under contemplation. There are no words in the notice which could give a clear intimation to the addressee that it was proposed to debar him from taking any contract, whatever, in future under the. department. A perusal of the appellants reply (Ex. P-7), dated May 20, 1968, sent to the Executive Engineer, also appears to show that by the word "debarring" mentioned in the Executive Engineers letter dated April 17, 1968 (Ex. P-6), he understood as debarring him from executing the contract in question after declaring him a defaulter, and then getting the same work d one by other agencies, at his risk and loss. All that has been said in Ex. P-7 by the appellant is directed to justify that the non-execution of the contract was not due to his fault, but due to the delay on the part of the department in handing over the building to him for starting the work within the time specified in the agreement, and consequently, if any loss would be incurred by the department in getting the work done through any other agency, he would not be liable to make good the same. In short, the letter (Ex. P-6) dated April 17, 1968 from the Executive Engineer, did not give any clear notice to the appellant that action to debar him from taking in future any contract, whatever, under the department or its Ernakulam Division was in contemplation. The appellant was thus not afforded adequate opportunity to represent against the impugned action.This being the position, the rule in Erusian Equipments case (ibid) will be attracted with full force. While conceding that the State can enter into contract with any person it chooses and no person has a fundamental Tight to insist that the Government must enter a contract with him, this Court observed (in the said case)"Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blackabove enunciation squarely covers the case before us.