LexGORKHA SECURITY SERVICES versus GOVT. OF NCT OF DELHI & ORS.
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[2014] 13 S.C.R. 617 GORKHA SECURITY SERVICES V. GOVT. OF NCT OF DELHI & ORS. (Civil Appeal Nos. 7167-7168 of 2014) AUGUST 04, 2014 [J. CHELAMESWAR AND A. K. SIKRI, JJ.] A B Administrative Law - Imposition of penalty - Blacklisting - Form and content of show cause notice C required to be served, before deciding as to whether the noticee is to be blacklisted or not - Held: It is incumbent to state in the show cause notice that the competent authority intends to impose a penalty of blacklisting, so as to provide adequate and meaningful opportunity to the noticee to show 0 cause against the same - However, even if it is not mentioned specifically but from the reading of the show cause notice, it can be clearly inferred that such an action was proposed, that would fulfill this requirement. Administrative Law- Violation of contract- Imposition E of penalty - Blacklisting of appellant-contractor - Validity- Held: Blacklisting of appellant without giving it notice thereto, was contrary to principles of natural justice as it was not specifically proposed and, therefore, there was no s,how cause notice given to this effect before taking action of F blacklisting against the appellant - Impugned action of blacklisting the appellant accordingly set aside. Partly allowing the appeals, the Court HELD:1. Blacklisting has to be preceded by a show G cause notice. The necessity of compliance wUh the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. H 617 618 SUPREME COURT REPORTS [2014] 13 S.C.R. A Unless a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice, in exercise of power pre-judicially affecting another must be in conformity with the rules of B c D natural justice. [Paras 17, 29][627-G-H; 637-A-B] Patel Engineering Ltd. v. Union of India (2012) 11 SCC 257; Mis. Erusian Equipment & Chemicals Ltd. v. State of West Bengal &Anr. (1975) 1 SCC 70: 1975 (2) SCR 674; Raghunath Thakurv. State of Bihar and Ors. (1989) 1 SCC 229 : 1988 (3) Suppl. SCR 867 - relied on. Chairman, Board of Mining Examination andAnr. v. Ramjee 1977 (2) SCR904: 1977 (2) SCC 256 - referred to. 2. In the case at hand, it was incumbent on the part of the Department to state in the show cause notice that the competent authority intended to impose a penalty of blacklisting, so as to provide adequate and meaningful E opportunity to the appellant-contractor to show cause against the same. However, even if it is not mentioned specifically but from the reading of the show cause notice, it can be clearly inferred that such an action was proposed, that would fulfill this requirement. In the F pres~nt case, however, reading of the show cause notice does not suggest that noticee could find out that such an action could also be taken. Insofar as penalty of black listing and forfeiture of earnest money/ security deposit is concerned it can be imposed only, "if so warranted". G Therefore, without any specific stipulation in this behalf, respondent could not have imposed the penalty of black listing. [Paras 26, 28][635-G-H; 636-A-B, G] 3. It is not at all acceptable that non-mentioning of H proposed blacklisting in the show cause notice has not GORKHA SECURITY SERVICES v. GOVT. OF NCT OF 619 DELHI caused any prejudice to the appellant. This apart, the A extreme nature of such a harsh penalty like blacklisting with severe consequences, would itself amount to causing prejudice to the appellant. [Para 33][640-F-G] Haryana Financial Corporation andAnr. v. Kai/ash Chandra Ahuja 2008 (10) SCR 222 : (2008) 9 sec 31 - referred to. B 4. The impugned order passed by the respondents blacklisting the appellant without giving the appellant notice thereto, is contrary to the principles of natural C justice as it was not specifically proposed and, therefore, there was no show cause notice given to this effect before taking action of blacklisting against the appellant. Therefore, the impugned action of blacklisting the appellant is set aside. However, it would be open to the D respondents to take any action in this behalf after complying with the necessary procedural formalities. [Para 34][640-H; 641 ·A-C] Case Law Reference: (2012) 11 sec 257 relied on Paras 13, 17 1975 (2) SCR 674 relied on Para 17
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