Decisions with economic consequences must have application of mind: HC

An unreasoned order is an unreasonable order, High Court Justice M Nagaprasanna observed while quashing a South Western Railway order blacklisting a Bengaluru-based firm.

Krishi Infratech, the petitioner firm, has undertaken various construction projects for the railways. The petition challenged an order issued on October 17, 2022, that blacklisted the firm for five years and also cancelled its bid for a civil works project involving the construction of a road over a railway bridge made of composite and PSC girders in the Yeshwantpur-Yelahanka section.

The railways alleged that the petitioner engaged in unethical behaviour, produced subpar work in collusion with railway officials, and violated the general conditions of the contract.

“The impugned order is an order blacklisting the petitioner or banning it for business for a period of five years commencing from October 17, 2022. Therefore, the order has economic and civil consequences upon the petitioner,” the court observed.

“Any order having civil or economic consequences should bear application of mind. Application of mind is discernible only when the order contains reasons, as reasons are live links between the decision maker and the decision taken. “A perusal at the impugned order would not indicate even a semblance of application of mind on the part of the competent authority who takes away the right of the petitioner to enter into a trade for a period of five years. Such an order, which has a sweeping ramification, could not have been casually passed by the respondent/railways,” the court further said.

The bench also noted that the order has no mention even to the extent of a word concerning the reply submitted by the petitioner firm except saying that the railways have considered the reply in detail and have concluded for banning.

The court has now remanded the matter back to the South Western Railway to pass appropriate orders after considering the series of replies/responses submitted by the petitioner and also affording an opportunity of hearing.