Simplified Explanation of the Judgment

In a judgment delivered on October 5, 2024, the Patna High Court set aside an appellate order that upheld the blacklisting of a private hospital without giving reasons. The Court directed the concerned authority to re-hear the appeal and issue a reasoned, or “speaking,” order.

The case involved a contract awarded to a private hospital for supplying manpower to government health institutions. The contract was awarded on December 1, 2022, and was valid for one year. However, the department later issued show-cause notices for cancellation and blacklisting.

Initially, the petitioner challenged the cancellation through a writ petition (CWJC No. 8122 of 2023). The High Court, in that earlier case, had directed the government to issue a fresh show-cause notice clearly stating the proposed action and to hold a hearing with the petitioner present. The government complied and passed a detailed order cancelling the contract and blacklisting the petitioner for two years.

An appeal was then filed by the petitioner against this order. However, the appellate authority summarily dismissed the appeal, merely stating that no new evidence had been presented and that the earlier departmental order had been reviewed.

The petitioner approached the High Court again, this time challenging the appellate authority’s order (Annexure-P/12) for lacking any reasoning or discussion on the evidence.

The High Court held that even though the original order (Annexure-P/10) was detailed, the appellate authority is still required to independently consider the evidence and provide reasons for its decision. The mere absence of “new” evidence does not justify avoiding a full and reasoned analysis of the appeal.

The Court noted that the appellate order was clearly “non-speaking,” meaning it lacked explanations or findings. As such, it violated principles of natural justice.

Accordingly, the High Court set aside the appellate order and directed the authority to reinstate the appeal, issue fresh notice, and decide the matter with proper reasoning after hearing the petitioner.

Significance or Implication of the Judgment

This judgment underscores the importance of reasoned decisions by appellate authorities, especially in cases involving blacklisting—a serious administrative action with long-term consequences. It reaffirms that procedural fairness must be followed at every stage, including appeals.

For contractors, hospitals, and other service providers dealing with the government, this ruling is significant. It ensures that even if departmental action is taken against them, their appeal must be fairly considered and a reasoned decision must be issued.

For public authorities, the judgment serves as a reminder that appellate processes cannot be treated as mere formalities. Appellate authorities must actively engage with the records, weigh the evidence, and provide detailed explanations for their conclusions.

Legal Issue(s) Decided and the Court’s Decision

• Is an appellate authority required to issue a reasoned (“speaking”) order?
  • Yes. The High Court held that appellate orders must provide independent reasoning based on the records, not merely confirm departmental findings.
• Can an appellate order be upheld if it lacks analysis or consideration of evidence?
  • No. The Court ruled that absence of reasoning renders the order invalid.
• Does the absence of “new” evidence relieve the appellate authority from issuing a reasoned order?
  • No. The authority must still consider existing records and make findings.
• What relief was granted?
  • The High Court set aside the impugned order and directed a fresh hearing with proper reasoning.

Case Title
M/s Vaishnavi Hospital v. State of Bihar & Ors.

Case Number
Civil Writ Jurisdiction Case No. 12018 of 2024

Coram and Names of Judges
Hon’ble Mr. Justice K. Vinod Chandran (Chief Justice)
Hon’ble Mr. Justice Partha Sarthy

Names of Advocates and Who They Appeared For
For the petitioner: Mr. Ajay Kumar Thakur, Advocate; Mr. Shivam, Advocate; Ms. Vaishnavi Singh, Advocate
For the respondents: Mr. P.K. Verma, AAG-3; Mr. Sanjay Kumar Ghosarvey, AC to AAG-3

Link to Judgment
https://www.patnahighcourt.gov.in/ShowPdf/web/viewer.html?file=../../TEMP/1051cd92-ed40-412c-8fb8-5127a244c9ab.pdf&search=Blacklisting

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