Prior show cause notice is mandatory before delisting a vendor; failure to comply invalidates the decision and is contrary to principles of natural justice.

JUDGMENT

Sanjeev Sachdeva, J. (Oral)--It is pointed out by learned counsel for the Respondent that in order dated 07.12.2021 the designation of the officer who had produced the sealed cover has been recorded as Director, Research Design and Standard Organisation, Lucknow whereas it was Mr. Mehmood Alam, Director, Vigilance Research Design and Standard Organisation, Lucknow.

2. The order is corrected. Accordingly, in order dated 07.12.2021, reference to Director, Research Design and Standard Organisation, Lucknow shall be read as Director, Vigilance Research Design and Standard Organisation, Lucknow.

3. Arguments were partly heard on 02.12.2021 and on 07.12.2021, however a formal notice was not issued. Accordingly issue notice. Notice is accepted by learned counsel appearing for the respondents.

4. With the consent of parties Petition is taken up for final disposal.

5. Petitioner impugns order dated 08.11.2021 whereby petitioner has been delisted for the items (i) Multi Section Digital Axle counter & (ii) Single section digital axle counter.

6. Learned senior counsel appearing for the petitioner contends that no show cause notice as mandated by the guidelines issued by the respondent: Research Design and Standard Organisation i.e. QO-D-8.1-11 ver. 2.0 (hereinafter referred to as the QO-D guidelines) was issued prior to passing of the delisting order.

7. Learned senior counsel submits that a Temporary Delisting order was issued on 17.08.2021 which was challenged before the Calcutta High Court, however the said petition was opposed by the respondent on the ground of lack of territorial jurisdiction and petitioner was non suited on the ground of lack of territorial jurisdiction. He submits that the petitioner has filed an appeal before the Division Bench of the Calcutta High Court and arguments have been heard in the appeal and judgment has been reserved.

8. He submits that the subject proceedings are independent of the Temporary Delisting order as there is a separate provision in the guidelines dealing with Delisting.

9. Learned senior counsel submits that the impugned order refers to para 4.2.5 of the QO-D guidelines which do not deal with Delisting but deals with Banning of Business.

10. Learned senior counsel further contends that respondent No. 4 who has issued the impugned order, does not have the power to ban a vendor. He further submits that the procedure as prescribed by the Railway Vigilance Manual particularly para 1026 has not been followed prior to issuan