Rajasthan High Court – Jodhpur
M/S Soltown Infra Private Limited vs Central Transmission Utility Of India … on 1 July, 2025
Author: Rekha Borana
Bench: Rekha Borana
[2024:RJ-JD:38136]
HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
JODHPUR
S.B. Civil Writ Petition No. 9702/2024
1. M/s Soltown Infra Private Limited, Through Its Authorized
Signatory Gouri Shankar Having Its Registered Office At
R-1, Off No. -1, Shree S Mohar Plaza, Yudhisir Marg, C-
Scheme, Jaipur, Rajasthan- 302001.
2. Mr Rahul Gupta S/o Rajendra Prasad Gupta, Aged About
35 Years, Director, Soltown Infra Private Limited Having
His Office At R-1, Off No. -1, Shree S Mohar Plaza,
Yudhistir Marg, C-Scheme, Jaipur, Rajasthan - 302001.
3. Mr Arunabh Mohanty S/o Jagdish Chandra Mohanty, Aged
About 36 Years, Director, Soltown Infra Private Limited,
Having His Office At R-1, Off No. -1, Shree S Mohar Plaza,
Yudhistir Marg, C-Scheme, Jaipur, Rajasthan - 302001.
----Petitioners
Versus
Central Transmission Utility Of India Ltd., Through Its Chairman
Plot No. 2, Near Iffco Chowk Metro Station, Sector 29,
Gurugram- 122 001 Haryana.
----Respondent
For Petitioner(s) : Mr. Vikas Balia Sr. Adv. Asst by
Mr. Aditya Kumar Singh
Mr. Devendra Khatri
Ms. Anukriti Jain
Mr. Ashok Choudhary
For Respondent(s) : Mr. Alok Shankar
Mr. Falgun Buch with
Mr. Gopal Kishan Chhangani
HON'BLE MS. JUSTICE REKHA BORANA
Order
01/07/2025
1. The present writ petition has been filed aggrieved of
letter/communication date 23.02.2023 (Annexure-1) whereby the
petitioner-firm had been black-listed from applying for and
obtaining any connectivity or open access with Central
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Transmission Utility of India Limited (hereinafter referred to as,
the ‘CTU/Nodal Agency’) for a period of three years.
2. The facts as pleaded in the writ petition and the reply to the
writ petition, in brief, are as under:
(i) The petitioner firm being authorized by the Government of
Rajasthan to develop Solar Park in the State of Rajasthan, applied
for Stage I connectivity for 600 MWs and 1200 MWs on
12.10.2021 and 30.11.2021 respectively. The Stage I connectivity
as applied for was granted to the petitioner-firm vide intimation
dated 21.12.2021 and 22.01.2022.
(ii) Clause 9.2.2 of Connectivity Procedure provides for
conditions to be complied with for the grant of Stage II
connectivity. The petitioner-firm finding itself eligible to apply for
Stage II connectivity, submitted three applications for 500 MWs,
600 MWs and 700 MWs for the purpose. The said Stage II
connectivity as applied for was granted to the petitioner- firm on
07.03.2022 vide three different intimation letters to the said
effect. All the said applications were granted qua the ISTS sub-
station at Bikaner II PS.
(iii) The transmission agreements to the effect were also
executed between the parties on 12.04.2022 (Annexure-10).
(iv) Anonymous complaints dated 14.07.2022 and 25.07.2022
were received by the respondent CTU/Nodal Agency pertaining to
the land documents as submitted by the petitioner-firm. A detailed
enquiry was made by the respondent CTU on the said complaints
and it was prima facie found that deliberate misrepresentations
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were made and misleading documents were submitted by the
petitioner-firm to CTU to approve the satisfaction of the conditions
for grant of Stage II connectivity in terms of Clause 9.2.2, which
amounted to fraud.
(v) Show cause notice dated 04.08.2022 was hence issued to
the petitioner-firm calling upon to explain the deliberate
misrepresentation. Petitioner-firm prayed for extension of time to
file reply to the said notice and also for a personal hearing. Both
the said requests were acceded to and the petitioner-firm was
granted a personal hearing on 29.08.2022.
(vi) However, the firm failed to satisfactorily explain the
infirmities in the applications as submitted by it for grant of Stage
II connectivity and admitted the mistakes on its part. Ultimately,
vide letter dated 30.08.2022, the firm withdrew the Stage II
connectivity as awarded to it, unconditionally.
(vii) Acting upon the request of the petitioner-firm for
unconditional withdrawal, vide letter dated 31.08.2022, CTU/Nodal
Agency revoked the connectivity granted to the petitioner-firm
cumulatively for 1800 MWs and further terminated the
transmission agreements dated 12.04.2022 with immediate effect.
Further, the bank guarantee as submitted by the firm was also
encashed by CTU and was credited to the Transmission Charges
Pool (POC pool) on 11.09.2022.
(viii) The above revocation and termination was made by
CTU/Nodal Agency reserving its right with regard to the infirmities
pointed out in its earlier communication.
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(ix) In pursuance to the right reserved, CTU/Nodal Agency
proceeded on to act further and after finding the reply/defence as
furnished/raised by the petitioner-firm to show cause notice dated
04.08.2022, to be unsatisfactory held that the petitioner-firm
committed a fraud. Consequently, vide order impugned dated
23.03.2023, it proceeded on to black-list the petitioner-firm for a
period of three years.
3. It is the above order dated 23.03.2023 which is under
challenge in the present petition.
4. Learned counsel for the petitioner raised the following grounds:
(i) The CTU being only a nodal agency has no authority to blacklist
the firm. It could only have acted in terms of the conditions of the
agreement and that having already done i.e. the bank guarantee
having been encashed and the agreement been terminated, no
further action so as to blacklist the firm could have been taken by
the said Nodal Agency. Once the agreement itself was terminated,
the Nodal Agency was not empowered to act further. Moreover, no
clause of the agreement governing the parties empowered the
respondent agency to blacklist the firm.
(ii) The action of blacklisting is in clear violation of statutory
right provided to the petitioner firm in terms of the Electricity
Act,2003. The Electricity Act provides for the right of open access
and connectivity and the CTU has no option but to allow
connectivity and open access if the firm complies with all the
technical requirements stipulated in the applicable regulations.
CTU being a mere Nodal Agency has no discretion to
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refuse/restrain open access and connectivity if the firm complies
with the regulations.
(iii) The right to connectivity, open access and generate
electricity is a statutory grant in terms of Electricity Act and not a
contractual grant. Further, open access is not a privilege but a
right as held by Hon’ble the Apex Court in Patel Engineering
Ltd. Vs. Union of India; (2012) 11 SCC 257 and Kulija
Industries Ltd. Vs. Western Telecom Project BSNL; (2014)
14 SCC 731. The said statutory right has been sought to be
curtailed by respondent CTU totally in contravention to the settled
position of law.
(iv) Even after show cause notice dated 04.08.2022 been
replied to, when no conclusion was arrived at, the petitioner firm,
of its own accord, withdrew the Stage II connectivity granted to it.
In pursuance to the said withdrawal, the agreements were
terminated and even the bank guarantee of the firm was
encashed. Once the said action was taken, cause if any, came to
an end/ceased. The further action in pursuance to same show
cause notice dated 04.08.2022 clearly amounted to ‘double
jeopardy’. Second penalty for the same cause of action amounting
to double jeopardy definitely needs interference by this Court. In
support of this submission, counsel relied upon the judgment of
Hon’ble Apex Court in Lt. Governor, Delhi & Ors. Vs. HC
Narinder Singh; (2004) 13 SCC 342.
(v) The whole action of CTU has been on the ground that the
firm had duplicated and submitted the same land rights related
documents in more than one application and further that the same
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computer generated endorsements had been submitted with
different land right related documents purporting them to be
registered. But no such action was proved to have been
committed by the firm. The specific contention of the petitioner
firm was that the firm did not gain any advantage by
incorporating/undertaking any wrong land documents as there
was no minimum land requirement either on the date of
application filed by the petitioner or on the date of issuance of the
blacklisting notice. When there was no minimum land
requirement, the alleged false representation even if any, could
not have granted any advantage to the petitioner-firm and hence,
no fraud can be concluded.
(vi) A fraud can be concluded only if a false representation is
made to gain some undue advantage. No undue advantage having
been proved in the matter, the action of the respondent – CTU was
clearly arbitrary.
(vii) The specific contentions of the petitioner-firm denying the
allegations of fraud were not even dealt with by the respondent-
CTU while passing the order/communication impugned. Had the
same been considered, it would very well have been clarified that
the discrepancies as pointed out by the respondent-CTU were just
the inadvertent errors which even stood rectified by the firm when
pointed out. The said inadvertent errors neither resulted into any
undue advantage to the petitioner-firm nor to any injury/loss to
respondent-CTU. In that situation, the petitioner-firm having
already penalized by encashment of bank guarantee, could not
have been further penalised by a major penalty of blacklisting.
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5. Responding to the grounds as raised by counsel for the
petitioner, counsel for the respondent submitted that the minimum
land requirement for Stage II connectivity was definitely provided
in the regulations. Counsel while relying upon Clause 9.2.2
submitted that one of the requisite milestone to apply for Stage II
connectivity was the ownership or lease rights or land use rights
for 50% of the land required for the capacity of Stage II
connectivity. Therefore, the submission made by counsel for the
petitioner that there was no minimum land requirement is totally
fallacious.
6. Responding to the ground that no fraud was proved on
record, Counsel submitted that the fact of petitioner-firm having
duplicated and submitted the same land documents in more than
one application and further, the same computer generated
endorsements having been submitted with different land
documents, was rather admitted by the petitioner-firm may be on
the pretext of an ‘inadvertent error’. It is only because of the said
admitted facts of misrepresentation and manipulation that the firm
on its own accord, moved an application for withdrawal of the
Stage II connectivity as granted to it. The said withdrawal of the
firm clearly amounted to admission and once the duplication of
documents and misrepresentation was admitted, no further
action/evidence to prove the fraud was even required. The facts
speak for themselves and same having been admitted, required no
further proof.
7. Responding to the ground of double jeopardy raised by
counsel for the petitioner, counsel for the respondent submitted
that the impugned action was in furtherance to show cause notice
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dated 04.08.2022 only. The termination of the agreements was
with a specific stipulation that the same was without prejudice to
CTUs rights in regard to infirmity pointed out in show cause notice
dated 04.08.2022 as well as the material shared during personal
hearing held on 29.08.2022.
8. Counsel further submitted that the plea of legitimate
expectation is barred in cases of express fraud and once the
fraudulent conduct of the petitioner-firm was crystal clear, it could
not have been ignored by the State agency and it deserved a
logical conclusion.
9. While arguing that the responent-CTU was very well
competent and empowered to blacklist the firm, counsel while
relying upon the judgment of Patel engineering (supra)
submitted that the authority of the State to blacklist a person is a
necessary concomitant to the executive part of the State to carry
on the trade or business and making all contracts for any purpose
and there need not be any statutory grant of such power. The only
legal limitation upon the exercise of such an authority is that the
State is to act fairly and rationally without in any way being
arbitrary.
10. With the above submissions counsel submitted that the
impugned order/communication was totally within the jurisdiction
of the respondent-CTU and hence, deserves to be affirmed.
11. Heard the counsels and perused the record.
12. The format of Application for Stage II connectivity
specifically provided for certain undertakings to be given by the
applicant. One of the said undertaking provided as under:-
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“I hereby undertake that the undertaking and other
documents (if any) submitted in order to meet the
eligibility conditions (e.g., LOA, ownership of land,
financial closure, auditor’s certificate regarding release
of funds etc. submitted for eligibility for Stage-II
connectivity) have not been and shall not be used as
eligibility documents for any other Stage-II application.
In case of any default in this regard, the application shall
be liable for rejection along with all associated legal and
regulatory liabilities.”
Admittedly, the above undertaking was given by the petitioner-
firm while applying for Stage II connectivity.
13. Show Cause Notice dated 04.08.2022 as served on the firm,
incorporated the following averments:-
“3. Whereas, SOLTOWN had submitted Title Report(s) by a
registered Advocate, Auditor’s certificate(s) by a Chartered
Accountant and Self Certificate Declaration-cum-
Undertaking(s) towards satisfaction of the prescribed
eligibility criteria under Clause 9.2.2 of the Revised
Procedure with its applications along with Affidavit in terms
of CTU advisory. In this regard, in the Declaration-cum-
Undertaking submitted along with the applications
SOLTOWN had undertaken and submitted the “We
undertake that the subject land has not been/will
not be used for any other purpose/project”. Further,
in the Affidavit submitted with these applications by
SOLTOWN, it had been submitted that:
“3. I am aware that if at any stage any
falsity/inaccuracy/incorrectness is detected in
the document/statements, the application itself
or the grant of Connectivity shall be liable for(Downloaded on 02/07/2025 at 09:43:10 PM)
[2024:RJ-JD:38136] (10 of 20) [CW-9702/2024]rejection or revocation (as the case may be) along
with all consequences in this regard.”
4. Whereas, upon receipt of information about certain
infirmities/anomalies in the Stage-II Connectivity
applications made by SOLTOWN, a post grant detailed
scrutiny by CTU was carried in respect of all the three
connectivity applications aggregating 1800 MW. This
examination inter alia revealed that SOLTOWN has
duplicated and submitted the same land right related
documents in more than one application and also, the
same computer-generated endorsements have been
submitted with different land right related documents
purporting it to be registered.
5. Whereas, prima facie it appears that SOLTOWN has,
deliberately misrepresented and misled CTU to approve the
satisfaction of the conditions for grant of Stage-II
connectivity under Clause 9.2.2 which constitutes a fraud.
Consequently, the grant of Stage-II connectivity in favour
of SOLTOWN is vitiated by reason of such wilful and
deliberate act on the part of SOLTOWN.
6. And, therefore, SOLTOWN is hereby called upon to
explain within 7(seven) days from the date of this notice
(addressed by both email/Registered AD), why 1800 MW
(aggregate) Connectivity granted to Soltown Infra Private
Limited vide CTU letter Ref No. C/CTU/N/05/1200003573,
C/CTU/N/05/1200003579, C/CTU/N/05/1200003603 dated
07.03.2022 cannot be revoked along with all associated
consequences for deliberately misrepresenting and
misleading CTU and for acting contrary to Clause 9.2.2 of
the Revised Procedure for grant of Stage-II connectivity. In
case no reply/representation is received within the
stipulated time, it will be presumed that you have no cause
and appropriate action will be initiated accordingly.”
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14. In reply dated 18.08.2022 to one of the notice dated
04.08.2022 as submitted by the petitioner-firm, it was responded
as under:-
“6. Because your Notice does not specify which land right
related documents are duplicated and which computer-
generated endorsements have been submitted with
different land right related documents purporting it to be
registered. During the discussions with your team,
following observations were pointed out:
a. In application No.120003573 (500 MW) two land
documents mentioned titled Harvindra Puri (15.61 Acre) in
page no. 129-136 and Devendra Puri (14.06 Acre) In page
no. 214-219 of the submitted land documents are not
included/claimed for qualification in the annexure (which
details the land parcels being used in the application no.
1200003573 (500 MW) to satisfy the requirements of
Clause 9.2.2 of the Revised Procedure). This means that
we had not used or claimed this additional land to satisfy
the land requirement in clause 9.2.2 of the Revised
Procedure. Due to a clerical mistake these two
additional and unclaimed documents got uploaded
with other land documents. Our application No.
1200003573 (500 MW) satisfies the land requirement
without counting the additional and unclaimed land in these
two land documents, and as such is complete without the
two land documents. The copy of the previously uploaded
documents with application No. 1200003573 after removal
of the two mistakenly added documents is enclosed
herewith as Enclosure (1). Kindly note that we gained no
benefit whatsoever by having made the mistake of placing
these two additional and unclaimed documents with the
application. The fact that these two documents were
mistakenly placed on record and not deliberately is evident(Downloaded on 02/07/2025 at 09:43:10 PM)
[2024:RJ-JD:38136] (12 of 20) [CW-9702/2024]from the fact that we did not use the land in these two
documents towards satisfying the land requirement as
stated in the ANNEXURE to the application. i.e. There is no
mention of these two parcels of additional and unclaimed
land in the application besides simply being annexed with
the application. It is clarified that there is a mention of
every other parcel of land (other than these two) in the
ANNEXURE to the application No. 1200003573 (500 MW)
as having satisfied the land requirement in Clause 9.2.2.
Kindly appreciate that all the land documents mentioned in
the ANNEXURE and uploaded with the application No.
120003573 (500 MW) are complete and sufficient without
considering the two afore-stated land parcels. As of today,
the project has much more than land required under clause
9.2.2.
b. Kindly appreciate that all the land documents mentioned
in the ANNEXURE and uploaded with the application No.
1200003573 (500 MW) are complete and sufficient without
considering the two afore-stated land parcels. As of today,
the project has much more land.”
15. In reply dated 18.08.2022 to the second notice dated
04.08.2022, it was responded by the petitioner-firm as under:-
“Because your Notice does not specify which land right
related documents are duplicated and which computer-
generated endorsements have been submitted with different
land right related documents purporting it to be registered.
During the discussions with your team, following
observations were pointed out:
a. In Application No. 1200003603 (700 MW), four land
parcels out of 27 were mistakenly uploaded. The fact
is that, there were other land parcels with the registry
of the same date which were to be uploaded with the
Application No. 1200003603 (700 MW), but among(Downloaded on 02/07/2025 at 09:43:10 PM)
[2024:RJ-JD:38136] (13 of 20) [CW-9702/2024]land documents of 80 land parcels uploaded, a clerical
error occurred, and these 4 wrong documents were
uploaded. A list of the details of these wrongly uploaded
documents is annexed herewith as Enclosure {3a}. The fact
that we had other three land documents, the registration
date of which land documents pre-date our application and is
infact of same day as of the 4 wrongly submitted land
parcels i.e. all dated 30.11.2021 demonstrates that this was
not done deliberately. We are submitting the correct land
documents with this reply as Enclosure {3b} (collectively).
Kindly appreciate that as on the date this mistake was
made, we had the requisite amount of land vis-à-vis the four
parcels of land which we mistakenly put in the application,
but we mistakenly did not place the correct land documents
on record. Copies of correct land documents relating to the
correct 3 land parcels is attached herewith as Enclosure
{3}.
b. The land documents attached with Application no.
1200003603 (700 MW) contains nine land documents
with which different registration endorsements were
uploaded due to a clerical mistake. These
endorsements are for different lands and not belong
to these 9 land agreements. These endorsements may
be ignored. It is stated that there is no duplication in these
nine land parcels. Kindly appreciate that we have registered
more then 80 lands for the application and over 2000 acres
in quantum,. While managing these almost 1000 papers, a
bonafide error happened during the uploading of the
documents.”
16. A bare perusal of the above averments as made by the
petitioner-firm in its replies to the show cause notice reflects that
the fact of 04 land documents being wrongly uploaded qua
application for grant of connectivity of 700 MWs out of 27 land
documents was admitted. Further, uploading of 09 land documents
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with different registration endorsement was also admitted, may be
on the pretext of ‘inadvertent error’ or a ‘clerical mistake’.
17. The fact of personal hearing being given to the petitioner-
firm has also not been denied. After the personal hearing being
given, admittedly the matter remained unresolved and hence, the
firm applied for withdrawal of Stage II connectivity vide its letter
dated 30.08.2022 (Annex.17) with the following averments:
“Based on the notice received on 4 th August 2022, we
responded by our letter dated 18.08.2022 & 21.08.2022.
We further interacted with the CTU team on 11.08.2022
and 29.08.2022. As the matter under discussion still
remain unresolved, Therefore we wish to
unconditionally withdraw our three Stage II
connectivity’s awarded as per the above mentioned
letters.
Request you to kindly acknowledge this letter. Thank you.”
18. Respondent-CTU acted upon communication dated
30.08.2022 of the petitioner-firm and vide communication/order
dated 31.08.2022 (Annex.18) revoked the Stage II connectivity
while observing as under:-
“Accordingly, in the light of the above representation by the
SOLTOWN in the communication dated 30.08.2022, the
Stage-II Connectivity granted to SOLTOWN vide intimation
nos. C/CTU/N/05/1200003573, C/CTU/N/05/1200003579,
and C/CTU/N/05/1200003603 all dated 07.03.2022 stand
revoked (along with bays allocated vide letter dated
12.07.2022) and Transmission Agreements dated
12.04.2022 stand terminated with immediate effect along
with the following consequences:
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(a) SOLTOWN shall not have any right to claim under
the subject Stage-II Connectivity grants and the same
shall stand terminated for all intent and purposes at the
instance of SOLTOWN;
(b) CTU shall be entitled to encash Connectivity Bank
Guarantee in the sum of Rs.Fifty (50) Lakh issued by
ICICI Bank in favor of CTU and appropriate the amount
irrevocably without any right of SOLTOWN to claim any
amount from CTU.
The above actions by CTU shall be without prejudice to
its rights in regard to the infirmities pointed out by
CTU in the communications resting with the CTU show
cause notice dated 04.08.2022 as well as the material
shared by CTU during the personal hearing held on
29.08.2022. Save as mentioned hereinabove, all claims
made by SOLTOWN in the representations made are denied.
Thanking you,”
19. A bare perusal of all the above facts clearly reveal that the
fact of duplication of documents and endorsement of wrong land
documents was rather admitted on part of the petitioner-firm and
it is only because of the said action that it proceeded on to apply
for withdrawal of the Stage II connectivity as granted to it,
unconditionally.
20. So far as the revocation of the grant and termination of the
transmission agreements is concerned, communication dated
31.08.2022 clearly reflects that the same was done by the CTU
without prejudice to its rights in regard to infirmity as pointed out
vide show cause notice dated 04.08.2022 as well as the material
shared on 29.08.2022 i.e. the date of personal hearing. In view of
the same, this Court is of the clear opinion that the revocation of
the grant and termination of the agreements cannot be concluded
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[2024:RJ-JD:38136] (16 of 20) [CW-9702/2024]to be a final disposal of the matter for all purposes. CTU definitely,
vide communication dated 31.08.2022, reserved its rights to act
further regarding the infirmities. Therefore, it cannot be held that
after termination of the agreements, CTU could not have acted
further in the matter. The misrepresentations having been
admitted by the petitioner-firm, the action thereupon was a
necessary corollary, that too, in view of the fact that a specific
undertaking (as reproduced in the preceding para) was given by
the petitioner-firm to the effect that the land documents used qua
one application shall not be used as eligibility documents for any
other Stage II connectivity. Thereby, the firm specifically
undertook that in case of any default, it shall be liable for rejection
along with all associated legal and regulatory liabilities.
21. Black-listing a firm found to be evolved in fraudulent
practice is not a concept foreign to contractual law. The law
specifically provides for restraining any firm to enter into any
further business relations with a party if it is found to have
committed any fraud with the other party. As observed by Hon’ble
the Apex Court in Patel Engineering (supra), the decision of
State or its instrumentality not to deal with certain persons or
class of persons on account of undesirability of entering into
contractual relationship with such persons is called ‘blacklisting’
and the State can decline to enter into a contractual relationship
with a person or a class of persons for a legitimate purpose.
Therein, Hon’ble the Apex Court held as under:
“The authority of State to blacklist a person is a necessary
concomitant to the executive power of the State to carry on
the trade or the business and making of contracts for any(Downloaded on 02/07/2025 at 09:43:10 PM)
[2024:RJ-JD:38136] (17 of 20) [CW-9702/2024]purpose, etc. There need not be any statutory grant of
such power. The only legal limitation upon the exercise of
such an authority is that State is to act fairly and rationally
without in any way being arbitrary – thereby such a decision
can be taken for some legitimate purpose. What is the
legitimate purpose that is sought to be achieved by the
State in a given case can vary depending upon various
factors.”
22. Hon’ble the Apex Court in Kulija Industries ltd. (supra)
also laid down the same proposition of law. Therein, the Hon’ble
Court held as under:
“That apart, the power to blacklist a contractor
whether the contract be for supply of material or
equipment or for the execution of any other work
whatsoever is in our opinion inherent in the party
allotting the contract. There is no need for any such
power being specifically conferred by statute or
reserved by contractor. That is because “blacklisting”
simply signifies a business decision by which the party
affected by the breach decides not to enter into any
contractual relationship with the party committing the
breach. Between two private parties the right to take any
such decision is absolute and untrammelled by any
constraints whatsoever. The freedom to contract or not to
contract is unqualified in the case of private parties. But
any such decision is subject to judicial review when the
same is taken by the State or any of its instrumentalities.
This implies that any such decision will be open to scrutiny
not only on the touchstone of the principles of natural
justice but also on the doctrine of proportionality. A fair
hearing to the party being blacklisted thus becomes an
essential precondition for a proper exercise of the power
and a valid order of blacklisting made pursuant thereto.
The order itself being reasonable, fair and proportionate to
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[2024:RJ-JD:38136] (18 of 20) [CW-9702/2024]
the gravity of the offence is similarly examinable by a writ
court. The legal position on the subject is settled by a long
line of decisions rendered by this Court starting with
Erusian Equipment & Chemicals Ltd. v. State of West
Bengal and Anr. (1975) 1 SCC 70 where this Court
declared that blacklisting has the effect of preventing a
person from entering into lawful relationship with the
Government for purposes of gains and that the Authority
passing any such order was required to give a fair hearing
before passing an order blacklisting a certain entity. This
Court observed:
“20. Blacklisting has the effect of preventing a person
from the privilege and advantage of entering into
lawful relationship with the Government for purposes
of gains. The fact that a disability is created by the
order of blacklisting indicates that the relevant
authority is to have an objective satisfaction.
Fundamentals of fair play require that the person
concerned should be given an opportunity to
represent his case before he is put on the blacklist.”
23. What can be concluded from the above ratio is that power
to blacklist a contractor is inherent in the party allotting the
contract. There is no need for any such power conferred by any
Statute or reserved by the contractor. The right to take such
decision if exercised between private parties, the same is absolute
and untrammelled by any constraints. If such right is exercised by
the State or any of its instrumentality, the same is subject to
judicial review. But then, the said scrutiny can also be only on the
touchstone of the principles of natural justice and the doctrine of
proportionality. Meaning thereby, a judicial review of an order of
blacklisting is permissible only if a fair opportunity of hearing has
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[2024:RJ-JD:38136] (19 of 20) [CW-9702/2024]
not been granted to the incumbent or the order of blacklisting is
highly disproportionate to the gravity of offence.
24. Applying the above ratio to the present matter herein, it is
not denied that the petitioner-firm after being served with notice
dated 04.08.2022, applied twice for extension of time to file reply
and the same was granted both the times. Further, the petitioner-
firm prayed for personal hearing and that too was granted.
Therefore, it is crystal clear that a fair opportunity of hearing was
very well granted to the petitioner-firm by the respondent-CTU.
25. So far as the proportionality of order of blacklisting is
concerned, this Court is of the opinion that in the present
circumstances wherein the fact of duplicating the land documents
and further endorsing the wrong documents with the registration
numbers of some other land documents is evident and rather
admitted on record. It is clear that the petitioner-firm annexed the
same land documents with two different applications which was in
total contravention to the conditions of the regulations and in
contravention to the undertaking given by it.
26. Further, it is also clear on record that the registration
number of some other land documents were furnished along with
the application form which did not even pertain to the land
documents as submitted. The same clearly was with an intent to
avail undue advantage in order to fulfill the criteria as provided in
Clause 9.2.2. The above fraud being proved on record, the same
definitely could not have been ignored by the respondent-CTU.
Fraud committed whenever and wherever, has to be taken care of
and the same cannot be permitted to be given a go-bye. Once it
was proved on record that the petitioner firm had committed a
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[2024:RJ-JD:38136] (20 of 20) [CW-9702/2024]
fraud, the respondent-CTU definitely was empowered to take a
decision not to enter into any contractual relationship with the
petitioner firm, in future. The action of the respondent-CTU
therefore cannot be said to be arbitrary or against any provision of
law. The same being totally in consonance with the settled
position of law, the order impugned does not deserve any
interference and the writ petition is hence, dismissed.
27. Stay petition and pending applications, if any, stand
disposed of.
(REKHA BORANA),J
186-Praveen/Devanshi/-
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