The Allahabad High Court recently delivered a significant judgment in the case of M/S Hi Tech Pipe Limited v. State of Uttar Pradesh and Others (Writ – C No. 11037 of 2024), addressing the debarment of a private firm from participating in projects under the Jal Jeevan Mission. The case was heard by a Division Bench comprising Justice Shekhar B. Saraf and Justice Manjive Shukla.
The petitioner, M/S Hi Tech Pipe Limited, challenged an order dated January 23, 2024, issued by the Executive Director, State Water and Sanitation Mission, U.P., Lucknow, which indefinitely debarred the company from supplying materials to any project under the Jal Jeevan Mission. The petition was argued by Senior Advocate Anoop Trivedi, assisted by Advocate Ronak Chaturvedi and Swati Agrawal Srivastava, while the respondents were represented by the State’s Standing Counsel and Advocate Sanjay Kumar Om.
Key Legal Issues:
The central legal issues in this case revolved around the following points:
1. Whether the debarment of the petitioner firm for an indefinite period was legally sustainable.
2. Whether the principles of natural justice, particularly the right to a fair hearing and proper consideration of the petitioner’s reply to the show-cause notice, were followed by the respondents.
3. The legality and fairness of the impugned order under the scrutiny of judicial review, specifically in light of the Supreme Court’s precedents on blacklisting and debarment.
Court’s Observations and Decision:
The High Court found that the impugned order debarred the petitioner firm indefinitely, as it was contingent on the term of the State Water and Sanitation Mission, which could be extended periodically. The Court expressed concern that such an indefinite debarment order could not stand without a comprehensive consideration of the reply submitted by the petitioner.
Quoting from its judgment in A.K. Construction Company v. Union of India and Others and the Supreme Court’s ruling in M/s Kulja Industries Limited v. Chief Gen. Manager W.T. Proj. BSNL & Ors., the Court underscored the critical importance of fairness, reasonableness, and proportionality in blacklisting decisions. It emphasized that blacklisting, being punitive with significant civil consequences, must not be imposed in a casual or cavalier manner.
The Court observed:
“The entire concept of blacklisting is required to be seen in a holistic manner… an order of blacklisting/debarment of a particular firm is in the nature of punishment which carries with it civil consequences for a firm… It was imperative upon the respondent authorities to consider the reply given by the petitioner in totality, and the mere rejection by using the term ‘reply is not satisfactory’ is uncalled for and cannot be accepted.”
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In light of these observations, the High Court quashed the order dated January 23, 2024, and directed the respondents to reconsider the petitioner’s reply comprehensively and pass a fresh order if necessary. The Court’s decision reaffirms the necessity for public authorities to exercise their powers of blacklisting or debarment with due regard to principles of natural justice and judicial fairness.
