For a blacklisting or debarment order to be valid, a show-cause notice must explicitly inform the contractor of the potential for such penal action. Failure to provide specific notice of the intention to blacklist violates the principles of natural justice and renders the order arbitrary and illegal.

AMIT BANSAL, J. (Oral)

1. The present writ petition has been filed seeking quashing and setting aside the debarment order bearing no. AO(Engg.)-II/G-IV/Cont./2025/D-156 dated 16th April, 2025 (hereinafter ‘impugned order’) issued by the respondents as being arbitrary, illegal, and violative of the ‘ Rules for Enlistment of Contractor in MCD-2024 ’ (hereinafter ‘Enlistment Rules’) as well as against the principles of natural justice. By way of the impugned order, the petitioner has been blacklisted from participating in the bids/ e-tendering processes of MCD for a period of one year.

2. Briefly stated, the relevant facts for deciding the present writ petition are as follows:

2.1. The petitioner is a contractor and was first enlisted with MCD as a Class-V Contractor in the year 1972. Since then, the petitioner’s enlistment has been continuously renewed from time to time.

2.2. The last renewal of the petitioner’s enlistment was effected on 19th March, 2021 for a period of five years. Presently, the petitioner is enlisted with MCD as a Class-II Contractor with a tendering limit of Rs. 5 crores and has been undertaking various developmental works for MCD from time to time.

2.3. The respondent no.3 invited bids in respect of Notice Inviting Tender (NIT) for the work of ‘Improvement of Maternity Home Centre in C-Block, Defence Colony’ falling under Ward no.145 of the Central Zone of MCD.

2.4. The petitioner participated in the said bidding process and was declared the lowest bidder (L-1). Consequently, the bid submitted by the petitioner was accepted by the respondents.

2.5. The respondent no.3 thereafter issued a Work Order dated 30th January, 2024 in favour of the petitioner for a contractual value of Rs.26,85,735/- with a stipulated completion period of three months.

2.6. A show cause notice dated 21st June, 2024 was issued by MCD to the petitioner under clause 3 of the condition of contract. Subsequently, another show cause notice dated 24th June, 2024 was issued by the respondent to the petitioner under clause 2 of the condition of contract.

2.7. The aforesaid show cause notices were duly replied to by the petitioner.

2.8. Subsequently, an opportunity of personal hearing was given to the petitioner, which was followed by the impugned order being passed by MCD on 16th April, 2025.

3. It is the case of the petitioner that a formal agreement had to be entered into between the petitioner and the respondents in respect of which the petitioner issued letters dated 5th February, 2024 and 20th February, 2024 seeking execution of the said agreement.

4. It is contended that the petitioner also called upon the officials of MCD to hand over the vacant possession of the site. However, the same was not done. The petitioner also requested for closure of the contract in case of any difficulty in execution of a formal agreement and handing over the site to the petitioner.

5. It is also contended that the aforesaid show cause notices issued by MCD to the petitioner were in relation to the Work Order between the parties and did not contemplate blacklisting of the petitioner from participating in the bids/ e-tendering processes of MCD. The relevant extracts of the Enlistment Rules are set out below:

“13.0 Disciplinary action

13.1 The contractor shall abide by all the rules of enlistment, and also by the terms and conditions of notice inviting tenders and contract. He shall execute the works with due diligence and strictly as per the contract conditions and specifications. Where the contractor has made himself liable for disciplinary action, the Enlistment Authority shall have the right