Vital Healthcare Private Limited Vs Karnataka State Medical Supplies Corporation Limited (Karnataka High Court)
Karnataka High Court held that passing of a blacklisting order without prior notice and without any opportunity of being heard cannot be sustained in law.
Facts- The petitioner is a proprietorship concern engaged in the business of pharmaceutical distribution. Notably, a purchase order was issued by the Corporation to the petitioner for supply of 10,000 quantity of Hand Sanitizers with unit packing of 5000 ml at a price of Rs.2500/- . The total value was thus Rs.2.5 crores. Post supply, the petitioner receives a replacement notice of certain quantities of Hand Sanitizers on the ground that they were declared as not of standard quality. Further, a second replacement notice was received on similar terms. The petitioner then submits a representation seeking reports upon which the product was said to be of bad quality. The reports are not furnished. What comes about is an order blacklisting several firms including the petitioner. It is this blacklisting that has driven the petitioner to this Court in the subject petition.
Conclusion- Held that no order of blacklisting can be passed without at the outset complying with the principles of natural justice which would be issuing a show cause notice to anyone who is sought to be blacklisted, be it a person or a firm or a Company clearly delineating the reasons for such blacklisting and seeking a reply from the hands of those who are sought to be blacklisted and passing an order either accepting or rejecting the reply of those who are sought to be blacklisted. It is equally settled principles of law that the order of blacklisting cannot be passed on the grounds that were not mentioned in the show cause notice.
