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

The appellant is a Government Contractor of 16 years standing. He has been executing major building contracts. The, Executive Engineer, P.W.D. Ernakulam (Respondent No. 1) invited tenders for , executing certain repairs to the English and Mathematics Blocks of the Maharaja College at Ernakulam. The appellant submitted a tender, dated March 8, 1967, for doing this work. In response to a letter from Respondent 1, the appellant sent his consent letter, dated March 27, 1967 (Ex. p-1), agreeing to reduced rates of certain items of the work, on the condition that "as soon as the Selection Notice is issued the building should be got vacated to facilitate the starting of the work". The tender was then accepted by the Executive Engineer and a Selection Notice was issued to the appellant on March 31, 1967 in which it was, inter alia, stated that the "facilities for carrying out the work will be given as soon as you start theformal agreement was executed on April 26, 1967, by the appellant and the Executive Engineer. Condition No. 4 of the agreement stipulated that "time shall be considered as the essence of the agreement and the contractor hereby agrees to commence the work as soon as the agreement is accepted by the competent authority (Executive Engineer) and the site (or premises) is handed over to him (contractor) as provided for in the conditions and to complete the work within 6 months from the date of such handing over of the site (or premises)".The appellant alleged that inspite of his request, the Executive Engineer and his assistants (Respondents 2 to 4) took no steps to hand over the building in order to enable him to start the work rhe repair work could commence only after the removal of the electric wirings, and such removal wag not done upto July 10,the meantime, the Engineers strike supervened, in which Respondents 1 to 4 participated. The period of six months for carrying out the work expired before the Engineers strike came to an end.On October 27, 1967, the appellant wrote a letter to the Executive Engineer (Respondent 1), requesting for release from the contract. Heto some unavoidable circumstances the building has not been got vacated so far. The completion period a per the tender for the work, i.e., 6 months is over. Now the cost of materials and labour have increased considerably. In the above circumstances I request that I may kindly be released from the above agreement of work and the security may beApril 17, 1.968, the Executive Engineer sent a Notice (Ex. P-6) to the appellant, which reads asfulfillment of the undertaking given by the department to give facilities to carry out the work as soon as you start the work was not even necessitated as you have failed even to commence the work as per the terms of the contract....You are, therefore, requested to show cause within seven days from the date of this notice why the work may not be arranged otherwise at your risk and loss, through other agencies after- debarring you as a defaulter and making good the loss that may accrue to the department, from your subsisting contracts in this Division." (Emphasisappellant, on May 20, 1968, sent a reply asserting that he committed no default; that he had collected the required wooden materials necessary for starting the work, immediately after the execution of the agreement, and that the delay in starting the work was only due to the delay in handing over the building to him.However, the Executive Engineer finally communicated his order, . dated June 20, 1968 (Ex. P-8), canceling the contract and informing the appellant that "the work is being arranged at your risk and loss through other agencies after declaring you as a defaulter and debarring you from taking further contract under the Division." (Emphasis supplied)To challenge this order o f the Executive Engineer, debarring the appellant from taking further contract under the Division, a Writ Petition (O.P. No. 2869 of 1968) under Article 226 of the Constitution was filed by the appellant in the Kerala High Court. It was con tended in the petition that the said Order (Ex. P-8) of the Executive Engineer, was ultra vires, illegal and unconstitutional as it violated the appellants fundamental rights guaranteed under Article 19(1)(f) and (g) of the Constitution. He further maintained that Respondent I was not right in holding the appellant a defaulter; nor had he any power or jurisdiction to black- list or rebar the appellant from taking further contracts in Ernakulamthe counter-affidavit filed on behalf of Respondent 1, it was.The Principal of the College when the work had to be carried out reported that the work may be done after the monsoon was over.(b) During the period of the Engineers  strike from 11-8-67 to 5-10-67 also there was nothing on record to show that the petitioner (Appellant) had approached either the Administrative Officer or work Superintendent or instructions to start the work and as soon as "No Work Programme" was over, the Assistant Engineer issued a notice by registered post to the appellant on 9-10- 6 7, directing him to start the work on or before 13-10-67. The contractor did not take any steps to commence the work, but sent a reply, dated 27-10-67, requesting that he be released from theOn November 22, 1967, the Principal of the College, wrote that all arrangements to vacate the building had been made. Respondent 1 thereupon sent one more notice by register ed post to the petitioner (appellant) on December 8, 1967, but the latter willfully refused to accept the same.(d) It was wrong that the appellant had collected any materials at the site to start the work.(e) On April 20, 1968, a letter was received from the appellant, claiming higher rates to execute the work. In the alternative, he requested that his security might be released at an early date. The appellant however admitted in this letter that the building in question was made available to him for executing the work in October 1967. Respondent I found the explanation of the appellanthearing the arguments, a learned single Judge of the High Court (K.K. Mathew, J.-), dismissed the petition in these words "In the light of the majority decision in I.L.R. 1968(2) Kerala Page 1, I dismiss the Writ Petition. Nothis judgment, the appellant preferred a Writ Appeal (No. 182 of 1968) before a Division Bench of the High Court. The Bench dismissed t he appeal inthis appeal, by special leave.

Court's reasoning:
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.