Natural Justice – Opportunity of hearing – Appellant-pharmaceutical supplier had bid for contract to supply various
categories of medicines to the Health Department of the State – The
State issued order dated 21.08.2015 directing its Medical and Health
Department to stop local purchase from the appellant – It was alleged
that there was a FIR against the appellant and CBI was inquiring
into the same – The pending criminal case amounted to violation of
the terms of the tender conditions – Appellant challenged the order
dated 21.08.2015 before the High Court – Appellant contended
that the criminal case in question was filed against an erstwhile
Director, who had ceased to have any connection with the appellant
– It was also contended that the decision of the State amounted to
blacklisting and that it was issued without notice or pre-decisional
hearing – High Court rejected the challenge – On appeal, held: In
the instant case, even if one assumes that accused in the pending
criminal case was involved and had sought to indulge in
objectionable activities, that ipso facto could not have resulted in
unilateral action of the kind which the State resorted to against the
appellant, which was never granted any opportunity of hearing or
a chance to represent against the order dated 21.08.2015 – It is
settled that no one can be inflicted with an adverse order, without
being afforded a minimum opportunity of hearing and prior
intimation of such a move – High Court fell into error in holding
that in matters of award of public contracts, the scope of inquiry in
Judicial review is limited – Also, the order dated 21.08.2015 debarred
the purchase of medicines for an indefinite duration – This action
of the State, not to procure indefinitely, on assumption of complicity
by appellant was in violation of principles of natural justice –
Accordingly, order dated 21.08.2015 quashed – The impugned
judgment of the High Court set aside – Contract – Public contract.