ZULFIQAR ALI vs DIVISIONAL SUPERINTENDENT (WORKSHOPS), PAKISTAN

The petitioner claims to be a licensed contractor for the supply and erection of goods and material engaged in the said business for the last many years. He claims to have performed and executed number of contracts awarded to him by the respondents in the past. A contract was awarded to him for the improvement of lighting in C & W Shops, Moghalpura, Loco Shops, Moghalpura and electric portion of staff quarters on Workshop Division on 8-5-1983 which he could not perform within the stipulated time because of non-availability of Philip chokes and bulbs which were to be installed under the contract. This aspect is stated to have been brought to the notice of the respondent vide his letter dated 5-6-1983 and for extension in time for the completion of the work. It is his case that it was astonishing for the petitioner when he received an intimation dated 20-3-1984 that he had been black-listed due to failure to complete the work awarded vide agreement dated 8-5-1983. This decision of the respondents black-listing the petitioner has been challenged through this writ petition.

2. It is contended by the learned counsel for the petitioner that delay in completion of the work was on account of the factors pointed out in letter dated 5-6-1983 whereafter no intimation/notice was sent to the petitioner except the letter of black-listing him. It is contended that the said decision taken by the respondent is clearly violative of the principles of natural justice inasmuch as the petitioner has been condemned unheard and an adverse decision was taken against him without hearing. To support his contention, reference has been made by him to Messrs Farid Sons Ltd., Karachi etc. v. Government of Pakistan through its Secretary, Ministry of Commerce, Karachi and another PLD 1961 SC 537; Muhammad Iqbal v. Fatima Jinnah Medical College and another 1989 M LD 4237; Tristar Shipping Lines Limited v. Government of Pakistan through Secretary, Ministry of Food, Agriculture and Livestock and 2 others 1997 CLC 1475; Aftab Shahban Mirani v. President of Pakistan and others 1998 SCM R 1863; New Jubilee Insurance Company Ltd., Karachi v. National Bank of Pakistan, Karachi PLD 1999 SC 1126 and a decision from the foreign jurisdiction, Preetam Pipes Syndicate v. Tamil Nadu Slum Clearance Board, Madras AIR 1986 Madras 310.

3. Contrarily, learned counsel for the respondents contends that the time was of the essence of the agreement which was not adhered to by the petitioner and he was thus, liable to be proceeded against. According to him, the petitioner was aware of the consequences of such a default on his part. He accordingly supports the order of his black-listing.

4. It is not the claim of the petitioner that he had completed the contract within the stipulated period but his stance was that on account of the difficulties mentioned in letter dated 5-6-1983, he could not complete the work in time and had requested for extension which was not responded to by the respondents and was informed of the decision of black-listing him without any notice or opportunity of explaining his position. In para.10(c) of the petition a specific grievance was made that he had been condemned unheard and the black-listing took place without any show-cause notice to the petitioner. In the comments submitted by the respondent what has been stated is that "ample opportunity was given to the firm to explain his position but having no response from the firm the action for black-listing was taken". There is however, no mention of any show-cause notice nor the copy of any such intimation/notice has been brought on the record. Even the perusal of the impugned decision does not evince that any notice was given to the petitioner or that he had been heard before taking such a decision. Mere assertion that he had ample opportunity without the support of documents cannot have a firm credence. Even a representation filed by the petitioner after the decision of black-listing was not responded to by the respondents.

Thus, the question that arises is whether the black-listing of the petitioner without issuing any show-cause notice or hearing him is sustainable in law. In Muhammad Iqbal (supra), the black- listing of the petitioner without prior show-cause notice or granting him opportunity of hearing was held to be illegal. In Tristar Shipping Lines Ltd. (supra) the black-listing order of the petitioner was declared as without lawful authority which was found to be non-speaking order and result of arbitrary exercise of power. In New Jubilee Insurance Company (supra), an Insurance Company had been delisted from the list of approved Insurance Companies without getting the dispute adjudicated upon by the competent forum. After referring to number of precedents, the effect of black-listing was noted by their Lordships that it prevented a party from the privilege and advantage of entering into lawful relationship with the respondent for the purpose of gains which is violative of Article 18 of the Constitution and that "the blacklisting of a company/firm/person also tarnishes the reputation of it/his as to its/his credibility to honour its/his commitments which may dissuade other parties from entering into contracts with the former. Thus, the consequences of blacklisting a company/firm/person are of great magnitude, which warrant that before taking such an action, there should be material on record pirma facie to indicate that the delinquent Insurance Company's refusal to pay claim was not warranted in the circumstances of the case".

After noting Muhammad Iqbal's case and Preetam Pipes Syndicates (supra), it was further observed by their Lordships that "there cannot be any cavil with the proposition that when an act or order inflicts civil consequences on a person in respect of his reputation or property which is harmful to his interest, he is entitled to be heard before such an action or order is taken or passed." In this view of the matter, there cannot be any other view except that before taking such a decision the person likely to be affected adversely is entitled to a notice and hearing in the matter. It has already been found by me above that no show-cause notice as to the proposed action of blacklisting was given to the petitioner nor he was heard. The order therefore, is not sustainable in law and is to be declared as illegal and of no legal effect.