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Case Title: M/S. SUJAL PHARMA versus KARNATAKA STATE MEDICAL SUPPLIES CORPORATION LIMITED

Case No: 20520 OF 2021

Decided on: 23rd April, 2024

Quorum: THE HON’BLE MR JUSTICE M.NAGAPRASANNA

Facts of the case

In this case, a company was placed on a blacklist without being given a notice to explain why, which is against natural justice principles. The necessity of giving someone a fair chance to explain themselves before acting was stressed by the High Court. Because the petitioner was not notified, the High Court invalidated the blacklisting decision, emphasizing the importance of adhering to natural justice principles. The respondent’s order was overturned by the Court, which granted the writ petition and emphasized the significance of upholding natural justice principles . The Court underlined the right to be heard prior to taking any such action and emphasized that blacklisting without adhering to natural justice principles is unlawful .

Appellant’s Contentions

The appellant contended that the order blacklisting them lacked a prior notice, violating principles of natural justice. While there may not be a specific rule mandating notice before blacklisting, it is an implied principle of the rule of law to follow natural justice when an order has civil consequences. The appellant argued that blacklisting affects future business and should only occur after giving the affected party a chance to be heard and make representations against the order .

Respondent’s Contentions

The respondent emphasized the court’s discretion in helping those who are late, arguing that the delinquent employee should not be permitted to bring up old claims. Article 226 of the Constitution grants the court the competence to exercise its discretion in granting delays, even when they may result in the dismissal of petitions.

Court analysis and Judgement

The papers go over how important it is to adhere to natural justice principles, including the requirement that a show-cause notice be served prior to taking any action, such as blacklisting. The notice must clearly state the grounds for action and the proposed punishment or action, and it must offer the affected party a reasonable opportunity to defend themselves. The party awarding the contract has the authority to blacklist a contractor; but, actions such as blacklisting are susceptible to court scrutiny based on natural justice and proportionality considerations, necessitating a fair hearing for the party on the blacklist. If the court takes too long to act, it may decline to exercise its discretionary writ power; nonetheless, the court’s authority under Article 226 of the Constitution should be used wisely, taking into account all relevant factors, such as the nature of the disagreement and the reason for the hold-up.

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Judgement Analysis Written by – K.Immey Grace