Necessity of serving a show cause notice as a requisite of the Principles of Natural Justice before imposing an order of blacklisting, as established by the Hon’ble Supreme Court.

ORDER :

1. The instant writ petition has been filed assailing the order dated 6.5.2020 Annexure P-1. Vide the said impugned order the respondents have blacklisted the petitioners establishment from being awarded any further work with the respondents.

2. On the previous date of hearing, this Court had directed the counsel for the respondents Chhattisgarh Textbook Corporation to seek instructions particularly as to whether any show cause notice was issued to the petitioner before issuance of impugned order Annexure P-1.

3. Primary contention of the petitioners itself was that the impugned order has been passed in blatant violation of principles of natural justice as also the settled legal position where minimum that was expected from the respondents was to give an opportunity of hearing to the petitioner before imposing of an order like blacklisting which otherwise amounts to a capital punishment.

4. Mr. Arjit Tiwari appearing for learned counsel for respondent Chhattisgarh Textbook Corporation today enters appearance and submits that in fact taking into consideration the developments that had taken place at that point of time particularly the rampant irregularities and illegalities committed by the petitioner establishment the Authorities were compelled to issue the impugned order. It is the further contention of the Respondents that the matter is already being investigated by the Anti Corruption Bureau in respect of the irregularities and illegalities committed by the petitioner in the course of execution of the Contract awarded to the petitioner and which also was one of the strong grounds on which respondents had issued the impugned order.

5. However, on a specific query being put to the learned counsel for the respondent Corporation, he fairly concedes that from perusal of records and pleadings and instructions that he has received, there was no specific proceedings initiated by the respondents in respect of blacklisting of the petitioner establishment. That is to say, before issuance of the impugned order Annexure P-1 dated 6.5.2020 there was no show-cause notice issued to the petitioner nor was there any specific opportunity of hearing given to the petitioner before imposition of the said order of blacklisting.

6. Plain perusal of the impugned order Annexure P-1 would reveal that it was an order imposing the blacklisting for all times to come. It was not for any specific period or for particular tenure after which the status of the petitioner would have got restored.

7. The law so far as blacklisting of an establishment is concerned by now well settled by the Hon’ble Supreme Court more particularly in two of the recent decisions, the first being that of Gorkha Security Services vs. Government (NCT of Delhi) and Others, (2014) 9 SCC 105.

8. Hon’ble Supreme Court in the said judgment in paragraph 16 referring to an earlier decision of the Hon’ble Supreme Court has held as under:

Necessity of serving show cause notice as a requisite of the Principles of Natural Justice:

16. It is a common case of the parties that the blacklisting has to be preceded by a show cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting many civil and/ or evil consequences follow. It is described as “civil death” of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in Government Tenders which means precluding him from the award of Government contracts.

9. The law laid down in the said judgment has been recently reiterated by the Hon’ble Supreme Court again in the case of UMC Technologies Private Limited vs. Food Corporation of India and Another, (2021) 2 SCC 551, wherein again Hon’ble Supreme Court in paragraph