In M/S. Ram Kumar Agrawal Engineers Pvt. Ltd. v. State of Odisha and Ors., the High Court of Orissa held that the State must examine the doctrine of proportionality in cases of blacklisting where the period of such blacklisting is not specified.
Engineer-in-Chief, Rural Works, Odisha, Bhubaneswar invited a public tender for bridges and roads as item rate tender. The petitioner participated in the tender process and got selected. The petitioner was selected for the construction of the H.L. Bridge over the Suktel river on Tamla-Mudassir road in the Bolangir district.
Subsequently, the Executive Engineer directed the petitioner to go ahead with the dismantling and related construction work. However, there was no formal order by the appropriate government for it. When the petitioner commenced the dismantling work, a distressed slab collapsed leading to the death of 2 persons on spot. No precautions were taken by the petitioner to ensure the safety of the labourers. Consequently, the petitioner was blacklisted by the government for an indefinite period.
Whether the High Court can interfere or not?
The High Court, in ordinary circumstances, would adopt a restrictive approach in its judicial review of the penalty or punishment imposed. However, if such penalty or punishment is shockingly disproportionate, the High Court can interfere even in a contractual dispute.
Doctrine of Proportionality
The doctrine of proportionality stresses that the decisions apart from being backed by reasonableness should ensure a balance between the advantage and disadvantage in the outcome by the concerned administrative action. The judicial review must stand backed by the doctrine of proportionality.
The Court relied on the decision in Gohil Vishvaraj Hanubhai and Ors. v. State of Gujarat and Ors. (2017) 13 SCC 621 wherein the proportionality of the impugned action was examined on the ground of violation of Article 14 of the Constitution of India. The Court further observed that an administrative decision should be subjected to judicial review in terms of its fairness, relevance, natural justice, equality, non-discrimination, and proportionality. A fair hearing of the party blacklisted is important for the validity of blacklisting to be maintained.
In the instant case, the administrative action of blacklisting the petitioner was considered disproportionate because no opportunity for a fair hearing was provided to the petitioner and no period was specified for the validity of such blacklisting order.
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