Blacklisting of contractors must adhere to principles of natural justice, including providing adequate notice and opportunity to respond to allegations.

ORDER :

PULLA KARTHIK, J.

This Writ Petition is filed seeking the following relief:

“… declaring the action of the respondents, particularly respondent No.2 in issuing the proceedings bearing No.4879/SNP-3/2024, dated 28.03.2025, by blacklisting the poultry firm of the petitioner i.e., M/s.Prashant Poultry Private Limited with immediate effect as being illegal, arbitrary, contrary to law, violative of principles of natural justice, without notice and set aside the same and consequently direct respondents to receive and process the same as per the tender uploaded on the website of the respondent department dated 30.03.2025, inviting online tenders for State Level Zonal Tender for procurement and supply of Eggs (hen) as per the AGMARK specifications and other processing/grading conditions as mentioned in the tender for a period of one year (April 2025-March, 2026) to the beneficiaries under the flagship of Arogya Lakshmi and Supplementary Nutrition Program for Zone-1, 2, 3, 4, 5, 6 & 7, approve the tender subject to terms of tender conditions as per law ….”

2) Heard Mr. E. Madan Mohan Rao, learned senior counsel, representing Sri M.Srinivas, learned counsel for the petitioner, and learned Advocate General appearing for the respondents.

3) Learned senior counsel appearing for the petitioner has submitted that the petitioner has participated in State Level Zonal Tender for Procurement and Supply of Eggs (Hen) along with other tenderers in the month of November, 2022 and tender has been approved in favour of the petitioner Company for a period of 2 years for Zone-6 (Charminar Zone). Accordingly, respondents 2 and 3 entered into an agreement on 07.02.2023 with petitioner Company for supply of eggs, as per the terms of the agreement, for a period of two years commencing from 01.03.2023 in the Districts of Medchal-Malkajgiri, Ranga Reddy, Sangareddy and Vikarabad in Zone-VI Charminar. In pursuance thereof, the petitioner Company has been supplying the eggs as per the terms and conditions of the agreement without any delay. Learned senior counsel further submitted that inspite of the petitioner Company maintaining quality and quantity, the respondents have started issuing show cause notices to the petitioner Company from the beginning itself, with malafide intention and for extraneous reasons, complaining that the eggs supplied are delayed and delivered at late hours and not in working hours and that the eggs are rotten and the eggs are being supplied in the month end leading to THR distribution and the supply of quantity was 89% instead of 100%, though the petitioner supplied as per the terms and conditions of the agreement.

3.1) Learned senior counsel has further contended that on one hand the respondents continued to issue notices and on the other they received the supplies, till the end of expiry of contract by the end of February, 2025. Further, in spite receiving the supply, bills are not being paid and nearly five months payment is due from the Government. While so, during first week of April, 2025, the petitioner was issued with the impugned proceedings dated 29.03.2025 referring to show cause notices earlier issued to the petitioner and stating that the petitioner failed to submit explanation to the said notices. Learned senior counsel has vehemently contended that vide impugned proceedings, the respondents have blacklisted the petitioner Company with immediate effect and barred from participating in the future contracts, tenders, procurement process and immediately on 30.03.2025 a fresh notification calling for tenders for the year 2025-2026 has been issued, in order to give contract to other tenderers malafidely and further without any notice proposing to blacklist, the impugned proceedings dated 28.03.2025 are issued by respondent No.2, arbitrarily and in colourable exercise of power and contrary to the agreement. Further, during the period of agreement dated 07.02.2023, despite issuance of show cause notices, no action was taken