M/s Selvel Media Services P. Ltd. v.

South Delhi Municipal Corporation

List of Dates

Date Event Pages

01.06.2009 The then MCD brought an auction for display of commercial advertising through
unipoles in the entire central zone of the MCD as it was then for an initial period
of three years and was further extendable for two years as per the terms and
condition. The petitioner participated and was declared successful and was
awarded 15 unipoles in the entire Central Zones of the MCD

09.06.2009 The petitioner complied with the terms and conditions and entered into 72 r/w
agreement with the respondent 109

22.06.2009 The respondent issued an allotment letter to petitioner 110

02.06.2017 The respondent issued demand-cum-final show cause notice and demanded Rs. 184
SCN 4,66,22,101/- from the petitioner

20.06.2017 The petitioner refuted the demand so made by the respondent on account of non- 188
reconciliation of accounts and submitted a detail reply

17.01.2018 The respondent issued a notice of demand against 15 sites and raised a demand 192
of Rs. 4,82,53,534/

17.02.2018 The petitioner replied to the demand notice in detail 224

16.10.2018 The respondent without considering any of the representation so made by the 56
Impugned petitioner, forfeited the security and raised a demand of Rs. 5,45,89,456 and
blacklisted the petitioner

1. Violation of Principles of Natural Justice

 That the impugned order has been passed without following even the basic principles
of natural justice, therefore, the same is liable to be set aside.

 The respondent has neither issued a proper show cause notice to the petitioner and
neither it has passed a reasoned order dealing with the issues and disputes raised by
the petitioner.

 That the respondent very casually and without specifying any reason wrote on
02.06.17 in one line that there was a show cause notice for blacklisting however, no
ground or reasons were provided in the said letter whereupon the case for blacklisting
was being made out against the petitioner.

 Thus, in absence of clear reason and ground a notice cannot be said to be a show
cause notice. It must be appreciated that mere claim of an amount by the state would
not give it a ground to blacklist the entity. Therefore, there was no notice before
blacklisting

 That further the petitioner in reply to letter dated 02.06.2017 submitted a detail reply
to the respondent on 20/06/2017 giving reason for non-payment of the claim amount
and requested for appointment of an arbitrator.

 However, the respondent neither appointed the arbitrator nor provided any reason for
not appointing the arbitrator to adjudicate the dispute. It further failed to deal with
this issue in its impugned blacklisting order that has been passed after more than a
year of that notice and a detail reply.
  No blacklisting order can be passed without giving the personal hearing to be affected
by such order. It is pertinent to mention that no such hearing was afforded to the
petitioner so the impugned order is liable to be quashed on this ground (See
Judgments: Justice Endlaw)

 Thus, the malice of the respondent is visible and the impugned order is liable to be set
aside

2. Blacklisting amounts to Civil Death

 That blacklisting a company by the state amounts to civil death of the company
curtailing its fundamental rights guaranteed under Article 19(1)(g)

 That when the consequences of action of the state is severe it requires higher degree
of fairness and equal treatment of the subject

 That even if the respondent take a ground that it had issued notice, it has failed to pass
a reasoned considering the reply of the petitioner to the said letter. If the reply of the
petitioner has not been considered while passing the impugned order