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Jagadamba Agro Tech v/s State of Telangana

    Writ Petition No. 1111 of 2021
    Decided On, 13 December 2021
    At, High Court of for the State of Telangana
    For the Petitioner: K. Rathanga Pani Reddy, Advocate. For the Respondent: GP for Civil Supplies TG.

Judgment Text
In this Writ Petition, the petitioner is assailing the correctness of the order passed by the 2nd respondent in proceedings in Case No.CS6/27/2019 dt.31-12-2020 blacklisting the petitioner Rice Mill for supply of CMR paddy for a period of 5 years.

2. Heard learned counsel for petitioner, learned Government for Civil Supplies appearing for respondent Nos.1 and 2 and Sri T.P.Achari, learned Standing Counsel appearing for 3 and 4.

3. Counter affidavit on behalf of 2nd respondent is filed.

4. The short question involved in the present Writ Petition is as to the correctness of the impugned order passed by 2nd respondent in blacklisting the petitioner for a period of 5 years inasmuch as no notice was issued by respondents before imposing the said penal action on the petitioner.

5. Petitioner contends that though various proceedings under Section 6-A of the Essential Commodities Act, 1955 (for short ‘the Act’) were pending before the Authority, since the order of blacklisting is associated with civil consequences depriving petitioner of its relationship with the Government for the purpose of conducting business, the respondents ought to have put the petitioner on notice before imposing the penal action of blacklisting for a period of 5 years is initiated.

6. Learned Government Pleader for Civil Supplies seeks to support the order and submits on 17-07-2020, about 15,000 CMR paddy bags and 40 quintals of CMR rice were seized from the Mill premises of the petitioner and similarly on the same day, 270 quintals of rice were found on the platform of 3rd respondent Corporation belonging to the petitioner. In respect of the said seizure effected, the respondents have initiated necessary action under Section 6-A and 6-B of the Act and the proceedings are pending.

7. It is further contended that against above seizure, the petitioner obtained release by approaching this Court in W.P.Nos.11674 of 2020 and 12731 of 2020.

8. Learned Government Pleader for Revenue would further submit that having regard to the fact that petitioner is indulging in illegal practices and violating the terms of agreement entered into for supplying CMR rice from and out of the CMR paddy supplied to it, respondents have initiated action of blacklisting.

9. Learned Government Pleader for Revenue would further submit that in terms of Clause 11 of G.O.Ms.No.17 Consumer Affairs, Food and Civil Supplies (C.S.I.C.C.S.) Department dt.27-09-2019, the 2nd respondent is empowered to blacklist the rice miller who has diverted paddy stocks delivered for custom milling and indulged in purchase of PDS rice and attempt to deliver the same under CMR in exercise of powers conferred thereunder. Thus it is contended that the impugned order passed does not call for any interference.

10. I have taken note of the respective contentions.

11. It is settled position of law that blacklisting the trader or a person has a civil consequence and is of punitive nature, and therefore before such action is initiated, the concerned person/dealer is required to put on notice. Admittedly, in the facts of the present case, no notice has been issued by respondents in particular 2nd respondent before resorting to blacklisting of the petitioner even though there are other proceedings which are said to be pending under Section 6-A of the Act. Since petitioner has not been put on notice enabling it to offer its explanation as to why the penalty of blacklisting and that too being for a period of 5 years should not be imposed on it, this Court is of the view that the impugned order passed by respondents is in violation of principles of natural justice.

12. Further, the Honourable Supreme Court in Erusian Equipment & Chemicals Ltd vs State Of West Bengal & Another (AIR 1975 SC 266)observed :

“Black listing 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.”

13. The said view of the Supreme Court has been followed by this Court in P.Ravichandra Reddy Vs. Executive Engineer, Irrigation and CAD Development, Nalgonda District South Division, Gudur(2008 (1) ALD 93).

14. In view of the settled position of law as elucidated above, the impugned action of the respondents in blacklisting the petitioner for a period of 5 years without even putting on notice of the charge or allowing the petitioner to offer his explanation and consideration thereof has caused serious prejudice to the petitioner.

15. In view of the same, the impugned order to the extent of blacklisting the petitioner for a period of 5 years is liable to be interfered with. Consequently, the impugned o

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rder dt.31-12-2020 to the extent as indicated above is set aside and the matter is remanded back to the respondents to initiate proceedings afresh, if the said Authority so desires, by issuing notice to the petitioner to enable the petitioner to offer its explanation and consider the same in accordance with law and thereafter pass orders thereon and communicate it to the petitioner. 16. Accordingly, the Writ Petition is partly allowed as indicated above. No costs. 17. Consequently, miscellaneous petitions, pending if any, shall stand closed.