Back
2026 Supreme(Online)(Raj) 10741
HIGH COURT OF RAJASTHAN (JAIPUR BENCH)
Inderjeet Singh, Ashok Kumar Jain, JJ
Pious Placement And Trading Services – Appellant
Versus
Rajasthan Cooperative Dairy Federation Limited – Respondent
D.B. Special Appeal Writ No. 1242/2025
For the Appellants/Petitioners: Banwari Lal Sharma, Namo Narayan Sharma
For the Respondents: Siddharth Lamror
Blacklisting orders carry grave civil consequences and must strictly adhere to the principles of natural justice, requiring the issuance of a show-cause notice and a fair opportunity for the affected party to be heard.
Headnote:The matter concerns the legality of a blacklisting order issued against a firm without adhering to the principles of natural justice. The appellant challenged the order on the grounds that no show-cause notice was issued and no opportunity of hearing was provided, which is a violation of the due process of law. The court examined whether blacklisting an entity without a prior hearing is sustainable. Relying on the ratio that blacklisting involves civil consequences and creates a barrier between the entity and the Government, the court held that fundamentals of fair play require the concerned party to represent their case before being placed on a blacklist. The present appeal is allowed. The order dated 11.09.2025 passed by the learned Single Judge as well as the impugned order dated 05.07.2025 passed by the respondent No.2 are hereby set aside.
| Table of Content |
|---|
| 1. violation of natural justice in the issuance of a blacklisting order without notice. (Para 1 , 2) |
| 2. requirement of fair play and objective satisfaction for imposing civil consequences through blacklisting. (Para 3) |
| 3. setting aside of arbitrary orders while granting liberty for fresh proceedings following due process. (Para 4 , 5) |
Order
06/04/2026
1. Heard learned counsel for the parties and perused the material available on record.
2. Admittedly, the respondents have blacklisted the appellant-firm without issuing any show-cause notice and without affording any opportunity of hearing as well as without following the due process of law, which is in violation of the principles of natural justice.
3. The Hon’ble Supreme Court in the matter of M/S A.K.G. Construction and Developers Pvt. Ltd Vs. State of Jharkhand & Ors., reported in 2026 INSC 312, wherein, paras No.19 & 23, it held as under:-
“19. The requirement under Clause 10.5 is a clear case of legislative (in this case subordinate legislation) incorporation of principles of natural justice. This Court has time and again emphasised the need to adhere to principles of natural justice while passing blacklisting orders, given the grave consequences that follow. In Erusian Equipment & Chemicals Ltd. v. State of West Bengal, it was observed that –
“15. The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are “instruments of coercion”. 20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.”
23. The contractual relationship between the parties is governed by two legal regimes. While GCC governs termination, the 2012 Rules govern blacklisting. Proceedings for termination should not be conflated with proceedings for blacklisting. In the latter action, what is at stake is the future of the contractor. A blacklisting order assumes that the contractor is an incorrigible entity, at least for some time to come, in this case such an assumption was intended to operate for five years. For giving effect to such a premise, there has to be sufficient evidence, clear application of mind and stronger adherence to principles of natural justice, (5. The blacklisting order dated 23.08.2004 falls short of this requirement and is liable to be set aside.). The blacklisting order dated 23.08.2004 falls short of this requirement and is liable to be set aside.”
4. In view of the aforesaid and considering the law laid down by the Hon’ble Supreme Court in the matter of M/S A.K.G. Construction and Developers Pvt. Ltd (supra), the present appeal is allowed. The order dated 11.09.2025 passed by the learned Single Judge as well as the impugned order dated 05.07.2025 passed by the respondent No.2 are hereby set aside.
5. However, the respondents shall be at liberty to pass a fresh order against the appellant in accordance with law, after following due process.
