[Tender] Valid Show Cause Notice Must Disclose Charges Imposed, Afford A Reasonable Opportunity To Respond: Calcutta High Court

The Calcutta High Court has recently observed that the elements required to constitute a valid show cause notice include that the notice discloses the charges imposed upon the person or entity to whom such a notice is being addressed to and it affords a reasonable opportunity to the person to reply to the charges so made.

Justice Moushumi Bhattacharya opined that the necessity of a show cause notice and the consequent opportunity to hearing assumes importance in the context of the punishment to be suffered by the person for whom the show cause notice is intended.

“The fundamental criterion of a show cause notice is an opportunity to the intended person to show cause as to why the threatened punitive action should not be followed”, the Court observed.

The Court was adjudicating upon a petition challenging a communication dated June 21, 2022 issued by the respondents (Damodar Valley Corporation i.e. DVC) by which the petitioner was informed that its name will not be recommended for issue of future tender enquiries of DVC for a period of 2 years. The impugned communication referred to a notice of termination dated 26th February, 2022 issued by DVC under a contractual clause binding upon the parties.

Justice Bhattacharya ruled that the impugned letter does not satisfy the requirements of a show cause notice. Reliance was placed upon Gorkha Security Services v. Government (NCT of Delhi) (2014), where the Apex Court had highlighted the necessity of compliance with the principles of natural justice with reference to the person against whom an action of blacklisting is sought to be taken. 

The Court also referred to UMC Technologies Private Limited vs. Food Corporation of India (2021) wherein the Apex Court had underscored that the first principle of civilised jurisprudence is that a person against whom any action is sought to be taken or whose rights and interests are to be affected should be given a reasonable opportunity to defend himself.

“The petitioners admittedly were not given an opportunity to rebut the imputations made in the said letter. The petitioners were served with the impugned letter of debarment soon thereafter on 21st June, 2022 without being heard in the matter”, the Court added.

Accordingly, the impugned letter of debarment was set aside.

Case Title: Cognition Projects Pvt. Ltd. & Anr v. Damodar Valley Corporation & Ors

Case Citation: 2023 LiveLaw (Cal) 24

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