Prabhatam Advertisement Pvt. Ltd v. Municipal Corporation of Delhi (South Zone) New Delhi

RAJIV SAHAI ENDLAW, J. AUGUST 28, 2015 "pp/bs" (corrected and released on 15th September, 2015).

* IN THE HIGH COURT OF DELHI AT NEW DELHI % Date of decision: 28th August, 2015. + W.P.(C) No. 8234/2015 PRABHATAM ADVERTISEMENT PVT. LTD. ..... Petitioner Through: Mr. Gaurav Mitra & Mr. Rishabh Maheshwari, Advs. Versus MUNICIPAL CORPORATION OF DELHI (SOUTH ZONE) NEW DELHI ..... Respondent Through: Mr. Gaurang Kanth with Ms. Biji Rajesh, Advs. CORAM: HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW CM No.17273/2015 (for exemption) 1. Allowed, subject to just exceptions. 2. The CM stands disposed of. W.P.(C) No. 8234/2015 1. The petition impugns the order dated 6th August, 2015 of the respondent South Delhi Municipal Corporation (SDMC) blacklisting the petitioner from the panel of the respondent SDMC on the ground of non- payment by the petitioner of the outstanding dues of Rs.2,19,90,723/-. 2. The counsel for the petitioner relying on, (i) SPS Engineering Ltd. Vs. Indian Oil Corporation Ltd. 113 (2004) DLT 70, (ii) Indian Oil Corporation Ltd. Vs. SPS Engineering Ltd. 128 (2006) DLT 417 and (iii) National Building Construction Corporation Limited Vs. New Delhi Municipal Council 138 (2007) DLT 414 has contended that since the arbitration proceedings with respect to the same claim, on the ground whereof the respondent SDMC has blacklisted the petitioner, are pending between the petitioner and the respondent SDMC, the respondent SDMC is not entitled to blacklist the petitioner without awaiting the outcome of the arbitration proceedings. 3. I have wondered whether the mere pendency of arbitration or a suit in respect of the disputes can become a bar to the exercise of power of blacklisting. I am of the opinion that there can be no proposition of law in absolute terms that pendency of a litigation between the contractor and an authority / body / municipality / government, the dispute wherein entitles the authority / body / municipality / government to exercise the power to blacklist the contractor, cannot be a ground to deprive such authority / body / municipality / government from exercising the power of blacklisting. If it were to be so held, it would become very easy for a contractor to defeat the right of the authority / body / municipality / government to blacklist, by, as soon as the dispute has arisen, initiate the litigation. 4. The Supreme Court, as far back as in Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal (1975) 1 SCC 70 held, (i) that under Article 298 of the Constitution, the executive power of the Union and the State shall extend to carry on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose; (ii) that the State can carry on executive function by making a law or without making a law; (iii) that the exercise of such powers and functions in trade by the State is subject to Part III of the Constitution; (iv) that Article 14 speaks of equality before the law and equal protection of the laws; (v) that equality of opportunity should apply to matters of public contracts and thus the State while carrying on trade has a duty to observe equality; (vi) that an ordinary individual can choose not to deal with any person; (vii) that the Government cannot choose to exclude persons by discrimination; (viii) that no person has a fundamental right to insist that the Government must enter into a contract with him; (ix) that in passing an order of blacklisting, the Government department acts under what is described as a standardised Code; (x) that the grounds on which blacklisting may be ordered are, if the contractor is convicted by Court of law or security considerations so warrant or if there is strong justification for believing that the contractor has been guilty of malpractices such as bribery, corruption, fraud or if the contractor continuously refuses to return the Government dues or if the contractor employs the Government servant, dismissed or removed on account of corruption in a position where he could corrupt Government servants. 5. The Supreme Court again