The main legal point established in the judgment is the requirement of issuing a show cause notice before blacklisting a party and the factors to be considered while blacklisting a party.

Vibhu Bakhru, J.

1. The petitioner has filed the present petition, inter alia, impugning an order dated 23.09.2016 (hereafter 'the impugned order') whereby the petitioner has been debarred from participating in the tender process or entering into any contract/sub contract for a period of three years by the Ministry of Finance (respondent).

2. The petitioner had submitted its bid pursuant to a notice inviting tender dated 09.09.2010 issued by the respondent for providing data entry operators and peons. The petitioner's bid was accepted and it was awarded the contract for providing 50 data entry operators and 14 peons by the respondent on 22.11.2010. The said contract was extended from time to time and finally concluded on 29.02.2012.

3. In terms of the contract, the petitioner was responsible for complying with all statutory requirements and payment of all statutory dues including the payment of dues of EPF, ESI and service tax.

4. It is stated that the petitioner deposited the service tax dues, however, was not regular in depositing the EPF dues of the employees. Counsel for the petitioner states that this was so because the respondent had withheld its payments.

5. Nonetheless, the petitioner had deposited all the EPF dues and provided the details thereof to the respondent on 05.11.2013. It is also stated that information to this effect was furnished by the Employees’ Provident Fund Organization to the respondent on 08.11.2013.

6. Prior to the aforesaid date, the respondent issued letter dated 30.04.2013, calling upon the petitioner to submit employee wise details of contributions deposited by it for EPF and ESI purposes and the payment of service tax immediately without any delay. The respondent also warned that any lapse on the part of the petitioner would be viewed as gross violation of Labour Laws/Service Tax Rules.

7. Since it is an admitted case that the petitioner had not deposited the complete dues of EPF till that date (and had deposited it on 05.11.2013), the respondent proceeded to pass the impugned order.

8. Learned counsel appearing for the petitioner has assailed the impugned order principally on two fronts. Firstly, he submitted that the impugned order has been passed without issuing any show cause notice and thus it is liable to be set aside. Secondly, he submitted that although there has been some delay in depositing the EPF dues, however, there has been no default in the same and prior to the passing of the impugned order, the EPF Organization had confirmed to the respondent that all dues had been discharged.

9. Learned counsel for the respondent has countered the aforesaid submissions. At the outset, he has stated that the petitioner had committed default and such default would invite orders as passed by the respondent. He also submitted that this was an open and shut case where an incorrect undertaking had been submitted by the petitioner. He also disputed the contention that no show cause notice had been issued to the petitioner. He referred to the letter dated 30.04.2013 and submitted that the allegations on the basis of which the impugned order was passed were stated in the said letter.

10. Insofar as the merits of the case are concerned, the first and foremost question to be examined is whether the respondent had issued a show cause notice as required. A bare perusal of the letter dated 30.04.2013 indicates that there is no mention of blacklisting in the said letter. Thus, clearly the petitioner was not informed of any action such as blacklisting being contemplated against it. It is now trite law that an order of blacklisting has serious consequences on the party being blacklisted. In the case of Gorkha Security Services v. Govt. (NCT of Delhi) and Others, (2014) 9 SCC 105, the Supreme Court has termed this as "civil death". A Co-ordinate Bench of this Court in the case of R.K. Associates v. The Managing Director, IRCTC & Anr., ILR (2009) Supp.(7) Delhi 1 has also referred to blacklisting in similar terms.