Reply Not Considered In Totality: Allahabad High Court Sets Aside Blacklisting Order

The Allahabad High Court has set aside an order of blacklisting for indefinite period as the reply of the petitioner company was not considered in its totality but was rejected as being not satisfactory.

Observing that blacklisting has civil consequences for a company, the bench comprising Justice Shekhar B. Saraf and Justice Manjive Shukla held that “an order of blacklisting is accordingly required to be passed taking into consideration all aspects and should not be passed in a casual and cavalier manner as the same has an impact on the person for which such blacklisting is done.”

Executive Director, State Water and Sanitation Mission, U.P., Lucknow passed an order debarring the petitioner from making any supply to any project of Jal Jeevan Mission. This order was challenged on grounds that the reply submitted by the petitioner was not considered while returning a finding that the reply is not satisfactory. It was argued that blacklisting cannot be done for indefinite period.

Per contra, counsel for respondent argued that the order was not for an indefinite period as the State Water and Sanitation Mission was going to end on 31.12.2024. it was argued that the order was passed as the reply, upon consideration, was not satisfactory.

The Court observed that the respondent had rejected the reply of the petitioner as “not satisfactory” without considering its contents. It was held that the authority ought to have considered the reply in its entirety before passing any order.

The Court relied on its earlier decision in A.K. Construction Company v. Union of India and Others, where it held that if the decision of blacklisting is against the principles of natural justice or doctrine of proportionality, it can be subjected to judicial review.

The Court held that only using the term "reply is not satisfactory" is not sufficient reason to blacklist a company. Accordingly, the blacklisting order was quashed with a direction to the respondent to consider the reply of the petitioner and pass fresh orders.

Case Title: M/S Hi Tech Pipe Limited v. State Of Up And 4 Others 2024 LiveLaw (AB) 510 [WRIT - C No. - 11037 of 2024]

Case citation: 2024 LiveLaw (AB) 510

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