Point of Law: Blacklisting of a person or an entity by the State or a State Corporation, a valid, particularized and unambiguous show-cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatization that accrues to the person/entity being blacklisted.

ORDER :

1. In this writ petition filed under Article 226 of the Constitution of India, the petitioner has assailed the impugned letter dated 14.02.2017 issued under the hand of the respondent no. 2, whereby, the petitioner company has been blacklisted and has sought for setting aside of the said decision of its blacklisting contained in the impugned letter dated 14.02.2017.

2. The petitioner is a private limited company incorporated under the provisions of the Companies Act, 1956 and it has projected that its main task is to recruit and train security personnel for the purpose of the providing security services to various institutions/ organizations. The respondent no. 2 is the Principal of the Institute of Hotel Management, Catering Technology and Applied Nutrition (‘the Institute’ for short), located in Guwahati, Assam. The Institute is a sponsored institute of the Government of India.

3. By a Notice Inviting Quotation for Security Guards (‘the NIQ’ for short) dated 01.06.2016, the Institute invited quotations for supply of security guards/personnel for watch and ward duty of the Institute for a period of 1 (one) year. In response to the NIQ, the petitioner submitted its quotation quoting its rates. The Institute accepted the quotation submitted by the petitioner and a work order dated 14.07.2016 was issued to that effect asking the petitioner to depute requisite number of security guards/personnel w.e.f. 01.08.2016 as per the terms and conditions mentioned in the said work order. On receipt of the work order, the petitioner submitted a posting letter dated 01.08.2016 by placing 8 (eight) nos. of security personnel for the watch and ward duty of the Institute wherein the names and addresses of those 8 (eight) security personnel were mentioned.

4. On 21.09.2016, the respondent no. 2 by its communication of even date had informed the petitioner that it had failed to depute security guards as per the agreement which resulted in compromising with the quality of performance. The petitioner was thereby asked to show cause as to why appropriate proceeding should not be drawn against it and was also informed to the effect that if the response was found unsatisfactory to the Management of the Institute, the Management would exercise the power to discontinue the agreement. In response, the petitioner submitted its reply to the show cause notice on 27.09.2016 inter-alia stating the reasons for the lapses during the specific period and committing to serve the Institute sincerely as per the terms of the agreement thenceforth. It was on 25.01.2017, the respondent no. 2 served another letter to the petitioner, whereby, it was informed that the Institute had decided to blacklist the petitioner and treat it as per rules thenceforth. The petitioner was also directed to contact the Principal of the Institute on 27.01.2017. Pursuant to the said letter dated 25.01.2017, the petitioner submitted a representation before the respondent no. 2 on 28.01.2017 with the request to re-consider the decision of blacklisting. Thereafter, by the impugned letter dated 14.02.2017, the respondent no. 2 observing his dissatisfaction regarding the services provided by the petitioner and terming the quality of services as very poor because of not providing the requisite number of security personnel as per the agreement, had blacklisted the petitioner with the further intimation that there was no scope for further discussion.

5. Heard Mr. S. Sahu, learned counsel for the petitioner. Also heard Mr. S.K. Medhi, learned Central Government Counsel (CGC) for the respondent no. 1 and Mr. A. Thakur, learned counsel for the respondent no. 2.

6. Mr. Sahu, learned counsel for the petitioner has submitted that the decision on the part of the Institute to blacklist the petitioner is arbitrary, unjust and disproportionate. The impugned letter whereby the petitioner has been blacklisted was not preceded by a proper show-cause notice indicating precisely the alleged breaches and default