RAGHUNATH THAKUR versus STATE OF BIHAR & ORS.

Citation: [1988] SUPP. 3 S.C.R. 867 · Decided: 08-11-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Disposed off
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Judgment (excerpt)

•' 
.... J 
RAGHUNATH THAKUR 
A 
v. 
STATE OF BIHAR & ORS. 
NOVEMBER 8, 1988 
[SABYASACHI MUKHARJI ANDS. RANGANATHAN, JJ.] 
B 
Administrative Law: Black listing-Right to be heard-Making 
representation against the order-Necessity for. 
The appellant has bid in an auction of Benl Country Liquor Shop 
in the District of Samastipur and was given the shop being the highest 
C 
bidder but he failed to deposit the bid money in time. 
The Collector, Samastipur by an order cancelled the bid and 
black listed the appellant. He then moved the High Court against the' .. 
order of the Collector. The High Court upheld the order of the 
Collector. 
The appellant appealed to this Court by special leave. 
Disposing of the appeal, the Court, 
D 
HELD: 1. It is an Implied principle of the rule of law that any 
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order having civil consequences should be passed only after following 
the principles of natural justice. Black-listing any person in respect of 
business ventures has civil consequences for the future business, of the 
person concerned in any event. [868H; 869A] 
r. Even if the rules do .not express so, it is an elementary principle 
F 
of natural justice that parties affected by any order should have right ofi 
being heard and making representations against the order. [869B] 
In the Instant case, that portion of the order· directing that th .e 
appellant be placed lo the black-list in respect of future contracts undt.r 
the Collector is set aside. So far as the cancellation of the bid of tl ... e G 
appellant is concerned, that is not affected. [869B-CJ 
CIVIL APPELLA'IE JURISDICTION: Civil Appeal No. 4031 
of 1988. 
From the Judgment and Order dated 14.4.1988 of the Patna High 
867 
H 
868 
SUPREME COURT REPORTS 
[1988) Supp. 3 S.C.R. 
A CourtinC.W.J.C.No.1923of1988. 
R.K. Jain, R.P. Singh and Y .D. Chandrachud for the Appellant. 
U.S. Prasad for the Respondents. 
B 
The Judgment of the Court was delivered by 
D 
E 
F 
SABYASACHI MU.KHARJI, J. Special leave granted. 
. The order dated 25th March, 1988 of the Collector is under 
challenge in thi~ appeal. The same reads as follows: 
"Shri Raghu Nath Thakur S/o Late Gorakh Thakur, 
Village Repura, P .S. Puksha, District Samastipur had bid 
for Rs.11,900 (Rupees eleven thousands only) per month 
Dak in an auction .of Beni Country liquor shop held on 
27 .3.88 and he as given the shop of Beni..Coui:ttry liquor but 
after .signing in BandoliastfRegister he did not deposit dak 
amount. 
The name of Shri Raghu Nath Thakur S/o Late 
Gorakh Nath Village Repura, P.S. Pusa, Distt. Samastipur 
is therefore placed in the black list for future under the 
orders passed by the Collector, Samastipur." 
This order was passed pursuant to the order of the Collector. 
The letter dated 25th March, 1988, states as follows: 
"The Collector of the district after perusal of the said office 
note passed order on 25.3.88 which is produced in verbatim 
below: 
· 
Ist bidder chunki defaulter hai atah security prapt kar lea 
tatha bhavishya ke liae Black list karen." 
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Indisputably, no notice had been given to the appellant of the 
proposal of black-listing the appellant. It was contended on behalf of 
the Sta\e Government .that there was no requirement in the rule of 
giving any prior notice before black-listing any person. In so far as the 
contention th.at there is no requirement specifically of giving any 
notice is concerned, the respondent is right. But it is an implied princi-
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pie. of the rule of law that any order having civil consequence should be 
.. 
RAGHUNATH v. STAIB OF BIHAR [MUKHARJI, J.J 
869 
passed 'only after following the principles of.natural justice. It has to be A 
realised that black-listing any person in respect of business ventures 
has civil consequence for the future business of the person concerned 
in any event. Even if tlie rules do not express so, it is an elementary 
pr1ndple of natural justice that parties affected by any order should 
have right of being heard and making representations against the B 
orcler. In that view of the matter, the last portion of the order in so far 
as it directs black-listing of the appellant in respect of future contracts, 
cannot be sustained in law. In the premises, that portion of the order 
directing that the appellant be placed in the black-list in respect of 
future contracts under the Collector is set aside. So far as the cancella-
tion of the bid of the appellant is concerned, that is. not affected. This 
order will, however, n
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