Notice For Blacklisting Must Specify Consequence On Failure To Meet Grounds By Noticee: Allahabad High Court

The Allahabad High Court has held that show cause notice for blacklisting must include the grounds on which blacklisting is being proposed in a clear manner. The Court has held that any action proposed to be taken against the party on failure to meet the grounds, must be mentioned in the notice clearly and unambiguously.

A bench comprising of Chief Justice Pritinker Diwaker and Justice Ashutosh Srivastava held,

“In our opinion, a notice for blacklisting is required to specify as to what would be the consequence if the noticee does not satisfactorily meet the grounds on which the action is proposed. The notice is also required to state the grounds necessitating the action and the penalty proposed specifically and unambiguously. The show cause notice is also required to adhere to the principles of natural justice. We also find that the orders of blacklisting has been passed for an indefinite period which is not permissible under the law.”

Petitioner challenged an order of blacklisting passed by the Chief Engineer, Agra Development Authority, Agra, debarring the petitioner from participating in any future tender-contract of Agra Development Authority.

Counsel for the petitioner argued that the order of blacklisting from all future tenders was bad in law as no prior show cause notice had been issued to petitioner. Debarring from entering into contracts with government bodies creates a disability for the petitioner. A show cause notice must be issued as the order of blacklisting entails civil consequences, argued the Counsel.

Further, it was contended that before blacklisting, the petitioner must be given an opportunity of a hearing, which has not been done in the present case. Thus, the order blacklisting the petitioner for an indefinite period is liable to be set aside, he argued.

The Allahabad High Court observed that the notice merely recorded that the petitioner had to rectify its work, failing which it would be recommended to be included in the blacklist. Accordingly, the Court observed that the said notice could not “under any stretch of imagination be taken to be a show cause notice to the petitioner before proceeding to blacklist it.”

The Court held that a show cause notice must be clear and unambiguous regarding the penalty that is sought to be imposed. A notice for blacklisting must specify the consequence on failure of meeting the grounds by the notice. Further, the blacklisting order cannot be passed for an infinite period, the Court held.

While allowing the writ petition, the Court granted liberty to the respondent to issue fresh notice in accordance with law.

Case Title: M/S Baba Construction Pvt.Ltd vs. State Of U.P. And 3 Others 

Citaiton: 2023 LiveLaw (AB) 350

Counsel for Petitioner: Anoop Trivedi, Senior Advocate assisted by Vibhu Rai, Abhinav Gaur

Counsel for Respondent: Ashok Mehta, Senior Advocate assisted by Suresh C. Dwivedi

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