PSUs on blacklisting spree

The Delhi High Court last week quashed the order of the National Highway Authority of India (NHAI) blacklisting L N Malviya Infra Projects Ltd for three years for allegedly misrepresenting its experience in road building. The NHAI contended that there should be no court interference with its orders as it had carefully considered all relevant facts and circumstances before issuing a detailed order. It cited an earlier project in which there were disputes between the parties. The firm contended that it was not given a hearing before taking the drastic step. The High Court agreed with it and observed that “blacklisting entails serious consequences in terms of its implications, which is why it should be kept in mind that apart from objectivity in terms of decision-making there must also be a clear understanding that cases of this nature would also require the satisfaction beyond just minimum requirements… it would be required that the authority observes a higher standard of objective fairness and must attempt to ensure that justice is rendered in their maximum capacity.” Analysing the facts of the case, the court held that the firm could not be accused of indulging in fraudulent or corrupt practices in any manner. In another case, the Bombay High Court last week quashed the blacklisting of Acer India Ltd by Central Bank of India and Punjab National Bank. There was a delay in the supply of computer goods from Thailand which was hit by floods. Central Bank took steps to blacklist Acer on that ground. Meanwhile, PNB also blacklisted the firm believing that the other public sector bank had done so. The High Court set aside the penal action based on the facts of the case.