Suspension of business dealings by a government entity requires compliance with natural justice, including providing a show cause notice and sufficient grounds for such action.

JUDGMENT :

NAVIN CHAWLA, J.

1. This petition has been filed by the petitioners praying for the following reliefs:

“(I) Pass a Writ of Certiorari or any other writ/order/direction of like nature setting aside the MoD ID No. 31013/1/2016-D dated 21.11.2016 being the “Guidelines of the Ministry of Defence for Penalties in Business Dealings with Entities” along with Paragraphs 8 and 9 of the “Procedure for Penal Action under the Guidelines of the Ministry of Defence for Penalties in Business Dealings with Entities” promulgated by the Respondent under Rule 142 of the General Financial Rules 2017 as being ultra-vires Article 14, 19(1)(g), 19(6), 21, 77 and 300A of the Constitution of India and the “Defence Procurement Manual, 2009;

(II) Pass a Writ of Certiorari or any other writ/order/direction of like nature setting aside the Suspension Orders dated 05.07.2024, 01.01.2025 and Suspension Order dated 24.06.2025 and further prohibit the Respondent from passing any such similar Suspension Orders; and thereby direct the Respondent to remove the Petitioner’s name from the communication titled “Details of firms debarred/put on hold/suspended etc. from doing business with MoD-reg.” dated 24.06.2025 issued by the Respondent and/or any other similar list published on the internet or otherwise, within a period of 24 hours of such direction;”

Brief Facts:

2. It is the case of the petitioners that the petitioner No.1 is a Company engaged in the business of designing, manufacturing, and integration of complicated air borne and land systems used by on- board military platforms. It is also engaged in the production of various defence supplies like external fuel tanks, missile launchers, and bomb racks for certain aircrafts, being delivered to the Government of India. The petitioner No.2 is a director of the petitioner No.1 Company.

3. It is averred that since 2007, the petitioner No.1 Company has been a regular supplier of the Government of India for its requirements in the Armed Forces, conducting its entire business with the respondent, or with buyers approved by the respondent.

4. It is the case of the petitioners that the Central Bureau of Investigation (in short, 'CBI') launched an investigation in the Agusta Westland case in 2013 and, thereafter, three charge-sheets dated 06.09.2017, 17.09.2020 and 15.03.2022, have been filed by the CBI in the said case. However, neither in the FIR nor in the three charge-sheets filed by the CBI, there is any mention of the petitioner No.1 company or any of its employees or affiliates.

5. It is averred that despite there being no pending investigation/case against the petitioner No.1, the respondent has sought to suspend the petitioner under the Guidelines of the Ministry of Defence for Penalties in Business Dealings with Entities having MoD ID No. 31013/1/2016-D (hereinafter referred to as the 'Impugned Guidelines'), merely on the basis of an intimation by CBI that there is an “Ongoing Investigation” against the petitioners in the Agusta Westland Case.

6. It is the case of the petitioners that the respondent, without giving any Show Cause Notice to the petitioners, issued a Suspension Order dated 09.12.2022 (hereinafter referred to as the 'First Suspension Order'), whereby the petitioner No.1 had been suspended for one year from all business dealings with the responde