New Delhi, Feb 24 (PTI) The Supreme Court Thursday said the duration of blacklisting cannot be “solely per offence” and seriousness of lapse or gravity of commission and omission on the part of the contractor which led to an incident, should be the relevant considerations.
The apex court said it does not approve the guidelines issued by the Odisha Government in November 2021 which provide that blacklisting period per offence shall be limited to three years subject to an overall maximum cumulative period of 10 years for multiple offences.
A bench of Justices M R Shah and B V Nagarathna delivered the verdict on the pleas filed by the state against the orders passed by the Orissa High Court last year.
The high court in one of the orders had set aside the state’s order banning a contractor from participating or bidding for any work to be undertaken by the Odisha government and transacting any business with them.
Subsequently, the high court had passed another order on a separate petition and directed the state to remove the name of the contractor from the list of blacklisted contractors.
The contractor, the respondent before the apex court, had constructed a flyover over railway level crossing in Bhubaneswar and in 2017 a 10 metre slab of the flyover collapsed during concreting of the railway over bridge and one person died while 11 others were injured in the incident.
In its verdict, the top court noted the high court had erred in holding that the blacklisting order was “pre-determined” as in the case a committee had submitted a detailed report which was the basis for issuance of the show cause notice to the contractor.
“The action initiated against the respondent (contractor) was not in a vacuum but after considering the committee’s report and after following the due procedure as required,” the bench said.
The apex court noted that after the order of blacklisting was passed in the case, the state government had formulated guidelines by November 26, 2021 office memorandum (OM).
“However, we may observe that we do not approve of the guidelines issued by the state government by OM dated November 26, 2021. Duration of blacklisting cannot be solely per offence,” it said.
“Seriousness of the lapse and the incident and/or gravity of commission and omission on the part of the contractor which led to the incident should be the relevant considerations,” it said.
The bench noted that in a given case, it may happen that the commission and omission is very grave and because of the serious lapse or negligence, a major incident would have taken place.
It said that in such a case, it may be the contractor’s first offence and the period of blacklisting or banning can be more than three years.
“However, as the said guidelines are not under challenge, we rest the matter there and leave it to the state government to suitably amend and/or modify the said office memorandum. However, what we have observed above can be a guide while determining the period of debarment/blacklisting,” it said. The bench observed that action of blacklisting in this case was taken after a comprehensive report of a high-level inquiry was submitted before the authority concerned.
It noted that the state had studied the report submitted by the high-level committee and a show cause notice was issued and the contractor was called upon to show cause as to why he be not blacklisted.
The bench said the contractor had replied to the same and after considering the allegations in the show cause notice and the reply, the government had passed an order of blacklisting.
“Merely because the show cause notice was issued after the inquiry committee report was considered and thereafter the state government took the decision to initiate proceedings for blacklisting, that by itself, it cannot be said that the order of blacklisting was pre-determined as observed by the high court,” the bench said.
It observed that the high court ought to have considered the seriousness of the incident in which due to the omission and commission on the part of the contractor in constructing the flyover, one person had died and eleven others were injured.
“However, to debar him (contractor) permanently can be said to be too harsh a punishment. But considering the subsequent OM dated November 26, 2021 reproduced hereinabove (to which as such we do not agree as observed hereinabove), we are of the opinion that if the blacklisting is restricted to five years, it may be in the fitness of things,” it said.
“The impugned judgment and order passed by the high court quashing and setting aside the order dated December 12, 2017 blacklisting the respondent herein – contractor is hereby quashed and set aside. However, the period of blacklisting is ordered to be restricted to five years from the date of passing of the order of blacklisting,” the bench said. PTI ABA SA
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