Summary
The Court quashed an indefinite direction prohibiting local medicine purchases from a supplier because it operated as debarment without notice or hearing. Pending criminal proceedings concerning a former director did not justify unilateral exclusion of the company. Limited review of public contracts did not shield a flagrant denial of natural justice; the earlier rejection of the supplier’s tender was a distinct matter.
Issues
- Whether an indefinite procurement prohibition amounted to debarment requiring prior notice and hearing.
- What relief was appropriate after the prohibition had operated for over four years.
Held
- In substance the direction prevented local procurement from the supplier indefinitely. Its effect, rather than its administrative description, made it a debarment measure with serious adverse consequences. (¶¶ 12, 13)
- Before blacklisting or debarring a supplier, the authority must give prior intimation and an opportunity to represent. Even assuming objectionable conduct by the former director, that did not dispense with hearing the company. (¶¶ 14, 15)
- The restricted scope of judicial review in public-contract matters did not justify ignoring this breach of natural justice. The earlier unsuccessful challenge to rejection of a tender did not validate the later indefinite procurement ban. (¶ 16)
- Given that the prohibition had operated for four years and three months, the Court quashed it rather than following the ordinary course of leaving the authority to provide a hearing before deciding afresh. (¶ 17)
Result
Appeal allowed without costs. The High Court judgment was set aside and the Principal Secretary’s direction prohibiting local procurement from the appellant was quashed.