Dharitree Enterprises, Kesinga, Kalahandi vs. Odisha State Warehousing Corporation (Oswc), Bbsr

Sri Gautam Mukherji, learned Senior Advocate alleging ante-dating of the Office Order purported to have been signed on 12.12.2025 after receipt of Representation dated 07.12.2025 along with documents showing medical exigency which prevented the petitioner from complying with the terms of Clause 8 within the period stipulated. Expanding his argument further, it is submitted that incorrect fact has been stated in the counter affidavit that the opposite parties have not received any ―medical document‖, though it is admitted by them and the Representation dated 07.12.2025 reveals the following: “I received your acceptance letter dated 20.11.2025, at that time I was in Kalinga Hospital, Bhubaneswar to treat of my son for liver disease. After return since 22.11.2025 I fell in sever viral fever and undergoing treatment with routine medication for 2 weeks as advised by doctor. Therefore, your goodself is earnestly requested to grant me two weeks‟ time enabling me to submit the Security Deposit and Bank Guarantee. Such unavoidable situation due to ill health may kindly be accommodated.” 6. 1. In furtherance to such submission, Sri Gautam Mukherji, learned Senior Advocate would point out that the OSWC has acknowledged receipt of the Representation dated 16.12.2025 of the petitioner along with a copy of ―ICICI Bank Advice Receipt‖ depicting transaction to the tune of Rs.32,25,000/- being made through RTGS on 16.12.2025 (evidence of such receipt is available at the bottom portion of Annexure-5 of the writ petition and Annexure-D/1 of counter affidavit). Refuting the contention of Sri Bijaya Kumar Dash, learned Senior Advocate for OSWC, the learned Senior Counsel for the petitioner would argue that had the Office Order been signed on 12.12.2025 by the Managing Director and stated to have been issued vide No.4595/Com/H&T/Ten/13/2025/OSWC, dated 15.12.2025, his office should/could have refused to acknowledge the receipt of the Representation dated 16.12.2025. The opposite parties of the OSWC having shown such sanguine approach to terminate the contract with the petitioner and clamping debarment from participating in future tender ―from the date of issuance of this order under the HTC MTF Clause 8(iv) and IX(f)‖ there is no explanation as to why the communication thereof was made on 17.12.2025 at 7:44PM. [See, Annexure-6 series enclosed with the writ petition]. The factual details so far as medical exigency is concerned, the authorities of the OSWC having not discussed nor decided on its merit appreciating the difficulty faced by the petitioner, it is insisted by Sri Gautam Mukherji, learned Senior Advocate to show indulgence in the Office Order dated 15.12.2026 by exercising power under Articles 226 and 227 of the Constitution of India.

Laying emphasis on the averment made at paragraph 10 of the writ petition that in view of Clause 10.5.4 of the Guidelines issued by the Central Vigilance Commission it is obligated on the opposite parties to consider the exceptional case, like the present one, and extend the time to furnish Security Deposit as required under Clause 8 of the NIT/MTF. Having not done such exercise by the opposite party No.1, his Office Order dated 15.12.2025 is arbitrary, whimsical and fanciful.

Sri Gautam Mukherji, learned Senior Advocate, elaborating the statement made at paragraph 14 of the writ petition, would vehemently contend that the punitive action like debarring the petitioner from participating in future tenders for three years without affording a opportunity of hearing violates the principles of natural justice and it is infraction of fair-play in action. It is urged that such unilateral decision of the Managing Director of OSWC coupled with termination of contract vide Office Order dated 15.12.2026 would fall within the meaning of ―unreasonableness‖ as envisioned in Article 14 and the action impinges upon the petitioner’s fundamental right to carry on business as postulated under Article 19(1)(g) of the Constitution of India.

Repelling the contention of Sri Gautam Mukherji, learned Senior Advocate for the petitioner, Sri Bijaya Kumar Dash, learned Senior Advocate for the OSWC submitted that the theory of ante-dating or back-dating the Office Order is not supported by any material particulars. There is no denial of the fact by the petitioner that it received the Letter of Acceptance dated 20.11.2025 via e-mail on 21.11.2025 and fifteen working days period stipulated for submission of Security Deposit in shape of Demand Draft or Pay Order lapsed on 09.12.2025 (vide paragraph 2 of the rejoinder affidavit of the petitioner). Hence, he urged that failure to comply with the terms of NIT/MTF triggered exercise of power under Clause 8(iv) inasmuch as the petitioner deposited Rs.32,25,000/- through RTGS, which is 50% of the sum equivalent to 5% of the value of the contract as per the requirement under item (a) of sub-clause (i) of Clause 8 thereof. Since the circumstances enumerated by the petitioner very well comprehended in item (a) of sub-clause (i) of Clause 8, and the nature of deposit made is not within the ken of either item (b) or item (c) of sub-clause (i) of Clause 8, there was no impediment for the Managing Director to take a decision not only to terminate the contract but also to debar the petitioner from participating in future tender for three years.

With vehemence it is submitted by Sri Bijaya Kumar Dash, learned Senior Advocate that the Managing Director being apprised of the factual details as available on record, approved and signed the Office Order on 12.12.2025, which could be issued from the Office of the Odisha State Warehousing Corporation, Bhubaneswar only on 15.12.2025, as two days’ holidays intervened in between.

It is discernible from Letter dated 07.12.2025 that no document was enclosed showing medical attendance. Therefore, the statement of the petitioner is fallacious that medical documents formed part thereof. It is the Representation dated 16.12.2025 which was received in the Office of OSWC. Therefore, there was no scope for the Managing Director of OSWC to consider the medical emergency or otherwise at the relevant point of time when the Office Order was prepared and signed.

Having heard the counsel for the respective parties and perused the record, the relevant facts emerge as follows: i. Clause 8 of subject E-Tender for appointment of Handling and Transport Contractor under item (a) of sub-clause (i) requires “a sum equivalent to 5% of the value of contract in the form of Demand Draft or Pay Order issued by a Scheduled Bank in favour of the OSWC” to be deposited towards Security Deposit; nonetheless, the successful tenderer within fifteen days of acceptance of the tender at his option deposit 50% of such amount while the balance 50% can be left for being deducted at the rate of 10% from the admitted bills. Items (b) and (c) of sub-clause (i) of Clause 8 speaks about ―another sum‖ and ―additional sum‖ to be secured in the form of Bank Guarantee. ii. The petitioner in his Letter (Representation) dated 16.12.2025 clarified that “we have deposited the requisite security deposit for SWC, Kesinga (Internal and RH Kesinga) amounting to Rs.32,25,000/- through RTGS to corporate account number vide ICICR52025121600742299, dated 16.12.2025 (copy enclosed) and rest fifty percent of Security Deposit may kindly be deducted from out running bills”. Therefore, there is no confusion in mind that the petitioner has impressed upon the OSWC to treat such Security Deposit to fall within the purview of item (a) of sub-clause (i) of Clause 8. iii. The petitioner having transmitted such amount through RTGS in terms of item (a) of sub-clause (i) of Clause 8) on 16.12.2025, admittedly said payment towards Security Deposit was made beyond 09.12.2025, i.e., fifteen working days from date of issue of Letter of Acceptance dated 20.11.2025. iv. There is no denial of the fact by the OSWC that Letter/Representation dated 16.12.2025 of the petitioner was received by it on 16.12.2025. However, the opposite parties disputed the fact that “no such Representation (dated 07.12.2025) or medical documents were ever received by the OSWC prior to the due date for submission of the Security Deposit”. v. However, the Representations dated 07.12.2026 and 16.12.2026 clarify that due to medical emergency of the Managing Partner and his son, the petitioner-firm could not satisfy the conditions stipulated in Clause 8 of the NIT/MTF.

With the above background of factual scenario, minute study of the documents available on record reveals that no plausible reason to persuade this Court has been ascribed to indicate as to why the Office Order being signed on 12.12.2025 by the Managing Director of OSWC and issued vide No.4595/Com/H&T/Ten/13/ 2025, dated 15.12.2025 (though 13.12.2025 and 14.12.2025 were holidays on account of Second Saturday and Sunday respectively) could be forwarded to the petitioner on 17.12.2025 at 7:44PM even as Letter/Representation dated 16.12.2025 enclosed with the ICICI Bank Advice Receipt showing time at 4:15PM was received by the OSWC on 16.12.2025. 9. 1. The matter can be looked into from another angle. Whereas the opposite parties have admitted by stating that the due date for furnishing Security Deposit was 09.12.2025 (See paragraph 4 of the counter affidavit), there is nothing placed on record with explanation to suggest as to why immediate step on 10th or 11th of December, 2025 could not be taken to terminate the contract and pass orders thereon. All these events being not sufficiently explained, the apprehension of the petitioner that the Office Order purported to have been signed on 12.12.2025 and stated have been issued on 15.12.2025 cannot be overlooked, the contention of the petitioner cannot be discarded at the threshold. The impugned Office Order (Annexure-1) terminating the contract has impact of civil/evil consequences and inflicting punishment like debarring the petitioner from participating in future tenders for three years would affect the livelihood of the personnel engaged for carrying out the business.

In the case of Canara Bank Vrs. Debasis Das, (2003) 4 SCC 557 = (2003) 2 SCR 968 the principles of natural justice has illuminatingly been discussed in the following manner: (SCC) “12. Residual and crucial question that remains to be adjudicated is whether principles of natural justice have been violated; and if so, to what extent any prejudice has been caused. It may be noted at this juncture that in some cases it has been observed that where grant of opportunity in terms of principles of natural justice does not improve the situation, “useless formality theory” can be pressed into service.

Natural justice is another name for common-sense justice. Rules of natural justice are not codified canons. But they are principles ingrained into the conscience of man. Natural justice is the administration of justice in a common-sense liberal way. Justice is based substantially on natural ideals and human values. The administration of justice is to be freed from the narrow and restricted considerations which are usually associated with a formulated law involving linguistic technicalities and grammatical niceties. It is the substance of justice which has to determine its form.

The expressions “natural justice” and “legal justice” do not present a watertight classification. It is the substance of justice which is to be secured by both, and whenever legal justice fails to achieve this solemn purpose, natural justice is called in aid of legal justice. Natural justice relieves legal justice from unnecessary technicality, grammatical pedantry or logical prevarication. It supplies the omissions of a formulated law. As Lord Buckmaster said, no form or procedure should ever be permitted to exclude the presentation of a litigant's defence.

The adherence to principles of natural justice as recognized by all civilized States is of supreme importance when a quasi-judicial body embarks on determining disputes between the parties, or any administrative action involving civil consequences is in issue. These principles are well settled. The first and foremost principle is what is commonly known as audi alteram partem rule. It says that no one should be condemned unheard. Notice is the first limb of this principle. It must be precise and unambiguous. It should apprise the party determinatively of the case he has to meet. Time given for the purpose should be adequate so as to enable him to make his representation. In the absence of a notice of the kind and such reasonable opportunity, the order passed becomes wholly vitiated. Thus, it is but essential that a party should be put on notice of the case before any adverse order is passed against him. This is one of the most important principles of natural justice. It is after all an approved rule of fair play. The concept has gained significance and shades with time. When the historic document was made at Runnymede in 1215, the first statutory recognition of this principle found its way into the “Magna Carta”. The classic exposition of Sir Edward Coke of natural justice requires to “vocate, interrogate and adjudicate”. Inthe celebrated case of Cooper Vrs. Wandsworth Board of Works, (1863) 143 ER 414 = 14 CBNS 180 = (1861-73) All ER Rep Ext 1554 the principle was thus stated : (ER p. 420)

Principles of natural justice are those rules which have been laid down by the courts as being the minimum protection of the rights of the individual against the arbitrary procedure that may be adopted by a judicial, quasi- judicial and administrative authority while making an order affecting those rights. These rules are intended to prevent such authority from doing injustice.

What is meant by the term “principles of natural justice” is not easy to determine. Lord Summer (then Hamilton, L.J.) in R. Vrs. Local Govt. Board, (1914) 1 KB 160 = 83 LJKB 86 (KB at p. 199) described the phrase as sadly lacking in precision. In General Council of Medical Education & Registration of U.K. Vrs. Spackman, 1943 AC 627 = (1943) 2 All ER 337 = 112 LJKB 529 (HL) Lord Wright observed that it was not desirable to attempt “to force it into any Procrustean bed” and mentioned that one essential requirement was that the Tribunal should be impartial and have no personal interest in the controversy, and further that it should give “a full and fair opportunity” to every party of being heard.

Lord Wright referred to the leading cases on the subject. The most important of them is Board of Education Vrs. Rice, 1911 AC 179 = 80 LJKB 796 = (1911-13) All ER Rep 36 (HL) where Lord Loreburn, L.C. observed as follows: (All ER p. 38 C-F)

Concept of natural justice has undergone a great deal of change in recent years. Rules of natural justice are not rules embodied always expressly in a statute or in rules framed thereunder. They may be implied from the nature of the duty to be performed under a statute. What particular rule of natural justice should be implied and what its context should be in a given case must depend to a great extent on the facts and circumstances of that case, the framework of the statute under which the enquiry is held. The old distinction between a judicial act and an administrative act has withered away. Even an administrative order which involves civil consequences must be consistent with the rules of natural justice. The expression “civil consequences” encompasses infraction of not merely property or personal rights but of civil liberties,

Natural justice has been variously defined by different Judges. A few instances will suffice. In Drew Vrs. Drew and Lebura, (1855) 2 Macq 1 = 25 LTOS 282 (HL) (Macq at p. 8), Lord Cranworth defined it as “universal justice”. In James Dunber Smith Vrs. Her Majesty the Queen, (1877-78) 3 AC 614 (PC) (AC at p. 623) Sir Robort P. Collier, speaking for the Judicial Committee of the Privy Council, used the phrase “the requirements of substantial justice”, while in Arthur John Spackman Vrs. Plumstead District Board of Works, (1885) 10 AC 229 = 54 LJMC 81 = 53 LT 151 (AC at p. 240), the Earl of Selbourne, S.C. preferred the phrase “the substantial requirement of justice”. In Vionet Vrs. Barrett, (1885) 55 LJRD 39 (LJRD at p. 41), Lord Esher, M.R. defined natural justice as “the natural sense of what is right and wrong”. While, however, deciding Hookings Vrs. Smethwick Local Board of Health, (1890) 24 QBD 712 Lord Esher, M.R. instead of using the definition given earlier by him in Vionet case, (1885) 55 LJRD 39 chose to define natural justice as “fundamental justice”. In Ridge Vrs. Baldwin, (1963) 1 QB 539 = (1962) 1 All ER 834 = (1962) 2 WLR 716 (CA) (QB at p. 578), Harman, L.J., in the Court of Appeal countered natural justice with “fair play in action”, a phrase favoured by Bhagwati, J. in Maneka Gandhi Vrs. Union of India, (1978) 1 SCC 248 = (1978) 2 SCR 621. In H.K. (An Infant), Re (1967) 2 QB 617 = (1967) 1 All ER 226 = (1967) 2 WLR 962 (QB at p. 630), Lord Parker, C.J. preferred to describe natural justice as “a duty to actfairly”. In Fairmount Investments Ltd. Vrs. Secy. of State for Environment, (1976) 1 WLR 1255 = (1976) 2 All ER 865 (HL) Lord Russell of Killowen somewhat picturesquely described natural justice as “a fair crack of the whip” while Geoffrey Lane, L.J. in R. Vrs. Secy. of State for Home Affairs, ex p Hosenball, (1977) 1 WLR 766 = (1977) 3 All ER 452 (CA) preferred the homely phrase “common fairness”.

How then have the principles of natural justice been interpreted in the courts and within what limits are they to be confined? Over the years by a process of judicial interpretation two rules have been evolved as representing the principles of natural justice in judicial process, including therein quasi-judicial and administrative process. They constitute the basic elements of a fair hearing, having their roots in the innate sense of man for fair play and justice which is not the preserve of any particular race or country but is shared in common by all men. The first rule is “nemo judex in causa sua” or “nemo debet esse judex in propria causa sua” as stated in Earl of Derby’s case, (1605) 12 Co Rep 114 = 77 ER 1390 that is, “no man shall be a judge in his own cause”.Coke used the form “aliquis non debet esse judex in propria causa, quia non potest esse judex et pars” (Co. Litt. 1418), that is, “no man ought to be a judge in his own case, because he cannot act as judge and at the same time be a party”. The form “nemo potest esse simul actor et judex”, that is, “no one can be at once suitor and judge” is also at times used. The second rule is “audi alteram partem”, that is, “hear the other side”. At times and particularly in continental countries, the form “audietur et altera pars” is used, meaning very much the same thing. A corollary has been deduced from the above two rules and particularly the audi alteram partem rule, namely “qui aliquid statuerit, parte inaudita altera acquum licet dixerit, haud acquum fecerit” that is, “he who shall decide anything without the other side having been heard, although he may have said what is right, will not have been what is right” [see Boswel‟s case, (1605) 6 Co Rep 48b = 77 ER 326 (Co Rep at p. 52-a) or in other words, as it is now expressed, “justice should not only be done but should manifestly be seen to be done”. Whenever an order is struck down as invalid being in violation of principles of natural justice, there is no final decision of the case and fresh proceedings are left upon (sic. open). All that is done is to vacate the order assailed by virtue of its inherent defect, but the proceedings are not terminated.

What is known as “useless formality theory” has received consideration of this Court in M.C. Mehta Vrs. Union of India, (1999) 6 SCC 237. It was observed as under: (SCC pp. 245-47, paras 22-23)

We do not propose to express any opinion on the correctness or otherwise of the “useless formality” theory and leave the matter for decision in an appropriate case, inasmuch as in the case before us, “admitted and indisputable” facts show that grant of a writ will be in vain as pointed out by Chinnappa Reddy, J.‟

As was observed by this Court we need not go into “useless formality theory” in detail; in view of the fact that no prejudice has been shown. As is rightly pointed out by learned counsel for the appellants, unless failure of justice is occasioned or that it would not be in public interest to dismiss a petition on the fact situation of a case, this Court may refuse to exercise the said juri iction (see Gadde Venkateswara Rao Vrs. Govt. of A.P., AIR 1966 SC 828). It is to be noted that legal formulations cannot be divorced from the fact situation of the case. Personal hearing was granted by the Appellate Authority, though not statutorily prescribed. In a given case post-decisional hearing can obliterate the procedural deficiency of a pre-decisional hearing. (See Charan Lal Sahu Vrs. Union of India, (1990) 1 SCC 613 = AIR 1990 SC 1480.)

Additionally, there was no material placed by the employee to show as to how he has been prejudiced. Though in all cases the post-decisional hearing cannot be a substitute for pre-decisional hearing, in the case at hand the position is different. The position was illuminatingly stated by this Court in Managing Director, ECIL Vrs. B. Karunakar, (1993) 4 SCC 727 which reads as follows:

As is evident from reading of the judgment though the case related to cancellation of registration certificate, the Court not only considered the question of cancellation of registration certificate but also suspension thereof and came to hold that the power of suspension/cancellation of registration certificate of a dealer clearly imposes civil consequence and therefore, even where there is no specific provision to follow the principles of natural justice, when an administrative action involves civil consequence, the doctrine of natural justice must be held to be applicable. In the case of Sidhartha Engineering Pvt. Ltd. Vrs. Assistant Commissioner of Sales Tax and another, (1999) 115 Sales Tax Cases 478 in paragraph-8 of the judgment, the Court held that natural justice is an inseparable ingredient of fairness and reasonableness. Observance of the principles is the pragmatic requirement of fair play in action. The rules of natural justice operate as implied mandatory procedural requirement and non- observance whereof invalidates the action. Reference may also be made to some other decisions in this connection. In the case of Sahara India (Firm) Vrs. Commissioner of Income-Tax and another, reported in (2008) 300 ITR 403 (SC) referring to large number of earlier decisions including the case of Maneka Gandhi (Mrs.) Vrs. Union of India (supra), the Hon‟ble Supreme Court came to a conclusion that even an administrative order or decision in matters involving civil consequences has to be made consistently with the rules of natural justice. The concept of natural justice is invariably read into administrative actions involving civil consequences, unless the statute conferring the power excludes its application by express language. A similar view was expressed by this Court in the case of M/s. Iron Exchange India Ltd. Vrs. State of Orissa and others, reported in 1995 (I) OLR 402. The Court held in the aforesaid decision that principles of natural justice must be read into unoccupied interstices of the statute unless there is a clear mandate to the contrary. Such power is inherent in every Tribunal, judicial or quasi-judicial character and the purpose is to avoid miscarriage of justice. In the case of Basanta Kumar Sahoo Vrs. The State of Orissa and others, reported in 1990 (II) OLR 408 while dealing with the case under the Urban Land (Ceiling and Regulation) Act, 1976, the Court held that where valuable right is sought to be taken away, an opportunity of hearing though not specifically provided in the Act, is desirable to be given. In the case of Kanak Cement Pvt. Ltd. Vrs. Sales Tax Officer, Assessment Unit, Rajgangpur, reported in (1997) 105 Sales Tax Cases 112, the Court observed that it is a fundamental requirement of the principles of natural justice that if any person is likely to be affected by the use of any material collected by the Revenue, those are to be brought to his notice, and disclosed to him. The requirement of natural justice is to disclose by way of confrontation the materials collected and proposed to be used against a dealer.

On reading of above judgments, it is clear that even in respect of suspension of registration certificate, civil consequence follows and therefore, observance of principle of natural justice is a necessity. We are, therefore, of the view that even though the statute is silent about issuance of a notice to show cause prior to passing of an order of suspension under Section 30 of the Act, when such order of suspension results in civil consequences, the principles of natural justice should be followed. We are, therefore, of the view that the order of suspension of registration certificate is liable to be quashed even though it is open for the petitioner under the Act to seek for restoration of the same.”

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”.

In passing an order of blacklisting the government department acts under what is described as a standardised Code. This is a code for internal instruction.

Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may be under a duty to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein.

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.” ii. UMC Technologies Private Limited Vrs. Food Corporation of India, (2021) 2 SCC 551, wherein the following is the observation:

Specifically, in the context of blacklisting of a person or an entity by the State or a State Corporation, the requirement of a valid, particularised and unambiguous show-cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatisation that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into Government contracts. This privilege arises because it is the State who is the counterparty in Government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting take away this privilege, it also tarnishes the blacklisted person’s reputation and brings the person’s character into question. Blacklisting also has long- lasting civil consequences for the future business prospects of the blacklisted person.

In the present case as well, the appellant has submitted that serious prejudice has been caused to it due to the Corporation's order of blacklisting as several other government corporations have now terminated their contracts with the appellant and/or prevented the appellant from participating in future tenders even though the impugned blacklisting order was, in fact, limited to the Corporation's Madhya Pradesh regional office. This domino effect, which can effectively lead to the civil death of a person, shows that the consequences of blacklisting travel far beyond the dealings of the blacklisted person with one particular Government Corporation and in view thereof, this Court has consistently prescribed strict adherence to principles of natural justice whenever an entity is sought to be blacklisted. ***

Thus, from the above discussion, a clear legal position emerges that for a Show-Cause Notice to constitute the valid basis of a blacklisting order, such notice must spell out clearly, or its contents be such that it can be clearly inferred therefrom, that there is intention on the part of the issuer of the notice to blacklist the noticee. Such a clear notice is essential for ensuring that the person against whom the penalty of blacklisting is intended to be imposed, has an adequate, informed and meaningful opportunity to show cause against his possible blacklisting.”

Usually, while participating in a tender, the bidder is required to furnish a statement undertaking that it has not been blacklisted by any institution so far and, if that is not the case, provide information of such blacklisting. This serves as a record of the bidder‟s previous experience which gives the purchaser a fair picture of the bidder and the conduct expected from it. Therefore, while the debarment itself may not be permanent and may only remain effective for a limited, pre- determined period, its negative effect continues to plague the business of the debarred entity for a long period of time. As a result, it is viewed as a punishment so grave, that it must follow in the wake of an action that is equally grave.

In the overall view of the matter more particularly in the peculiar facts of the case, we have reached the conclusion that asking the appellant herein to file his reply to the show cause notice and then await the final order which may perhaps go against him, leaving him with no option but to challenge the same before the juri ictional High Court will be nothing but an empty formality. Even otherwise, issuing of show cause notice if not always then at least most of the times is just an empty formality because at the very point of time the show cause notice is issued the Authority has made up its mind to ultimately pass the final order blacklisting the Contractor. In other words, the show cause notice in most of the cases is issued with a pre-determined mind. It has got to be issued because this Court has said that without giving an opportunity of hearing there cannot be any order of blacklisting. To meet with this just a formality is completed by the Authority of issuing a show cause notice.

The impugned Office Order dated 15.12.2025 is manifestation of haste approach on the part of the Managing Director of the OSWC. To reiterate, it can be said that whereas it is purported to have been signed on 12.12.2025, the said order is shown to have been issued on 15.12.2025 (Annexure-1) and communicated via e- mail on 17.12.2025 (Annexure-6). If the authority is so sanguine about the fact of passing the Office Order on 12.12.2025 terminating contract and inflicting punishment of debarment on the petitioner, even in absence of affording opportunity of hearing, the Office Order could have been issued/communicated on the same day of making it, i.e., 12.12.2025. The assumption of backdating the Office Order is fortified by the fact that the Office of OSWC acknowledged to have received the Representation dated 16.12.2025, which evinces that the Office Order did not come to exist even on 16.12.2025. It can, thus, be observed that in order to avoid giving audi alteram partem and consider the merit or testing the veracity of ―medical emergency‖, which led the petitioner to comply with the formalities as per terms of NIT/MTF with a delay for about 7-8 days counted from the due date 09.12.2025, the impugned decision has been taken in hot-haste and is shown as if the same was passed on 12.12.2025. 10. 7. Sri Gautam Mukherji, learned Senior Advocate drew attention of this Court to Guidelines issued by the Central Vigilance Commission (Annexure-9 of the writ petition and Annexure-E/1) wherein Paragraph 10.5.4 reads thus: “If, however, a request is received from the contractor for extension of time for submission of Security Deposit, the same may be considered in exceptional cases on merit and additional time may be considered as per the conditions of NIT with the approval of competent authority.”

Aforesaid discussion takes this Court to consider the affirmation of the opposite parties in Paragraph 3 of the reply-affidavit to the rejoinder-affidavit of the petitioner that: “Contrary to the petitioner‟s claim of backdating the termination order was duly signed by the competent authority on 12.12.2025. The delay in communication was solely due to intervening public holidays (13th and 14th December, 2025). In matters of commercial tenders where time is of the essence— specifically for the Public Distribution System (PDS)— the automatic consequences of default under Clause 8(iv) do not require a separate show cause notice once the deadline has passed.”

The aforesaid concept/notion is further fortified in the judgment rendered by the Apex Court in case of Raghunath Thakur Vrs. State of Bihar; (1989) 1 SCC 229 in the following:

It is manifest from the ratio of law enunciated in the above report that the order of blacklisting and/or debarment not only prevents and/or excludes a person from participating in any contractual relationship with the Government or its agencies but is also deprived of his livelihood as a stigma would be attached to him which cannot be inflicted without giving ample opportunity to defend. Even if the terms and conditions embodied in the tender document does not contain an express provision relating to issuance of a show cause preceding the order of blacklisting, yet the rule of natural justice being paramount cannot be abridged and/or whittled down which is one of the ethos of the constitutional rights guaranteed in the Constitution of India. The maxim audi alteram partem is ingrained and inhered into the legal system and even a person cannot be penalised and/or condemned without giving an opportunity of hearing. As indicated hereinabove the debarment/blacklisting has the blend of a civil death, such order cannot be passed without affording an opportunity to defend and for such reason the issuance of show cause becomes inevitable.

In a recent judgment rendered by the Hon‟ble Supreme Court in M/s. A.K.G. Construction and Developers Pvt. Ltd. Vrs. State of Jharkhand and others; (2026) 4 SCR 331, the Apex Court was considering a case where a show cause notice was issued to the contractor with regard to the termination of a contract for the reasons reflected in the said show cause notice but the authorities while terminating the contract proceeded to pass an order of blacklisting and/or debarment. The Apex Court did not interfere with the order of termination of a contract but set aside the order of the debarment as both the circumstances relating to a termination of a contract and imposition of a blacklisting and/or debarment are distinct, different and separate. It is held that the show cause notice which was restricted to a termination of contract cannot be stretched to mean that it is also for the debarment in the following:

Returning to the facts of the present case, at the outset, it is apparent that the show cause notice dated 04.06.2024 does not purport to be a show cause notice for blacklisting at all. It perhaps expects the contractor to assume that it is for termination as well as for blacklisting. Even if we accept the submissions of Mr. Kumar Anurag Singh that, as there is no provision for prior notice before termination, this show cause notice must be taken to be for blacklisting, we are of the opinion that it still falls short of the requirement of a proper show cause notice for blacklisting. This is for the reason that as the decision to blacklist is independent of the decision to terminate, the Department must demonstrate application of mind before it takes the next step of blacklisting the contractor, over an order of termination. Upon taking such a decision, it must also issue a show cause notice calling upon the contractor to explain why a consequential order of blacklisting should also not be passed. The letter must be indicative of the proposed decision to blacklist and the requirement of the contractor to respond to it. The show cause notice dated 04.06.2024 falls short of these requirements. Similarly, the final order of blacklisting, dated 23.08.2024, also does not list the reasons as to why an order of blacklisting has become necessary.‟ ***”

This Court finds that there is a lot of substance in the aforesaid contention.

It is well settled that a quasi-judicial authority, while acting in exercise of its statutory power must act fairly and must act with an open mind while initiating a show cause proceeding. A show cause proceeding is meant to give the person·proceeded against a reasonable opportunity of making his objection against the proposed charges indicated in the notice.

Expressions like „a reasonable opportunity of making objection‟ or „a reasonable opportunity of defence‟ have come up for consideration before this Court in the context of several statutes.

A Constitution Bench of this Court in Khem Chand Vrs. Union of India and others, reported in AIR 1958 SC 300, of course in the context of service jurisprudence, reiterated certain principles which are applicable in the present case also.

Chief Justice S.R. Das speaking for the unanimous Constitution Bench in Khem Chand (supra) held that the concept of „reasonable opportunity‟ includes various safeguards and one of them, in the words of the learned Chief Justice, is:

It is no doubt true that at the stage of show cause, the person proceeded against must be told the charges against him so that he can take his defence and prove his innocence. It is obvious that at that stage the authority issuing the chargesheet, cannot, instead of telling him the charges, confront him with definite conclusions of his alleged guilt. If that is done, as has been done in this instant case, the entire proceeding initiated by the show cause notice gets vitiated by unfairness and bias and the subsequent proceeding become an idle ceremony.

Justice is rooted in confidence and justice is the goal of a quasi-judicial proceeding also. If the functioning of a quasi-judicial authority has to inspire confidence in the minds of those subjected to its juri iction, such authority must act with utmost fairness. Its fairness is obviously to be manifested by the language in which charges are couched and conveyed to the person proceeded against. In the instant case from the underlined portion of the show cause notice it is clear that the third respondent has demonstrated a totally close mind at the stage of show cause notice itself. Such a close mind is inconsistent with the scheme of Rule 43 which is set out below. The aforesaid rule has been framed in exercise of the power conferred under Section 33 of The Marine Products Export Development Authority Act, 1972 and as such that Rule is statutory in nature.

It is of course true that the show cause notice cannot be read hyper-technically and it is well settled that it is to be read reasonably. But one thing is clear that while reading a show-cause notice the person who is subject to it must get an impression that he will get an effective opportunity to rebut the allegations contained in the show cause notice and prove his innocence. If on a reasonable reading of a show- cause notice a person of ordinary prudence gets the feeling that his reply to the show cause notice will be an empty ceremony and he will merely knock his head against the impenetrable wall of prejudged opinion, such a show cause notice does not commence a fair procedure especially when it is issued in a quasi-judicial proceeding under a statutory regulation which promises to give the person proceeded against a reasonable opportunity of defence.

Therefore, while issuing a show-cause notice, the authorities must take care to manifestly keep an open mind as they are to act fairly in adjudging the guilt or otherwise of the person proceeded against and specially when he has the power to take a punitive step against the person after giving him a show cause notice.

The principle that justice must not only be done but it must eminently appear to be done as well is equally applicable to quasi judicial proceeding if such a proceeding has to inspire confidence in the mind of those who are subject to it.

A somewhat similar observation was made by this Court in the case of Kumaon Mandal Vikas Nigam Limited Vrs. Girja Shankar Pant & others, (2001) 1 SCC 182. In that case, this court was dealing with a show cause notice cum charge sheet issued to an employee. While dealing with the same, this Court in paragraph 25 (page 198 of the report) by referring to the language in the show cause notice observed as follows:

Going by the aforesaid test any man of ordinary prudence would come to a conclusion that in the instant case the alleged guilt of the appellant has been prejudged at the stage of show cause notice itself.”

Similar view was expressed by this Court in the case of Commissioner of Central Excise, Nagpur Vrs. Ballarpur Industries Ltd., (2007) 8 SCC 9. In paragraph 27 of the said report, learned Judges made it clear that if there is no invocation of the concerned rules in the show-cause notice, it would not be open to the, Commissioner to invoke the said Rule.”

In this context, useful guidance may be drawn from the decision in M/s. Kranti Associates (P) Ltd & Anr. Vrs. Masood Ahmed Khan & Ors., (2010) 9 SCC 496, wherein, this Court emphasized that fairness, transparency, and accountability are inseparable from the duty to provide reasons. The Court held that failure to furnish reasons violates the principles of natural justice and renders the right of appeal or judicial review illusory. In paragraph 51 of the judgment, the Court distilled the following key principles:

This Court in Raj Kumar Dey and Others Vrs. Tarapada Dey and Others, (1987) 4 SCC 398, while quoting, approving and applying the maxim to the facts of that case, had the following to say:

Applying the same maxim and highlighting its principle, this Court in HUDA and Another Vrs. Dr. Babeswar Kanhar and Another, (2005) 1 SCC 191 stated that every consideration of justice and expediency would require that the accepted principle which underlies Section 10 of the General Clauses Act should be applied in cases where it does not otherwise in terms apply [Para 5].

Closer to the facts of the present case is the judgment in Rosali V. Vrs. TAICO Bank and Others (2009) 17 SCC 690. In that case, an auction was held after 4.00 p.m. when the banks were closed. Order XXI Rule 84 of the Code of Civil Procedure mandates that “on every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent on the amount of his purchase- money to the officer or other person conducting the sale, and in default of such deposit, the property shall forthwith be re-sold”. In Rosali (supra), the 25% 114:

Decision making authorities, like the tendering authority here, could not have turned a blind eye to undisputed ground realities and compelling necessities, like the one that presented itself here. After all, they do not live in ivory towers.”

In other words, where the case is of an ordinary breach of contract and the explanation offered by the person concerned raises a bona fide dispute, blacklisting/ debarment as a penalty ought not to be resorted to. Debarring a person albeit for a certain number of years tantamounts to civil death inasmuch as the said person is commercially ostracised resulting in serious consequences for the person and those who are employed by him.

Too readily invoking the debarment for ordinary cases of breach of contract where there is a bona fide dispute, is not permissible. Each case, no doubt, would turn on the facts and circumstances thereto.

Examining the facts of this case from that perspective, we find that the appellant, after the award of the tender, has admittedly paid an amount of Rs.3,71,96,265, though, according to the Corporation, the outstanding amount as on the date of the debarment was Rs.14,63,24,727. However, as would be clear from the facts discussed hereinabove, right from the inception there have been issues between the appellant and the Corporation with regard to the fulfilment of the reciprocal obligations in the bid document. There has been exchange of correspondence between the parties with each side blaming the other for not performing the reciprocal obligations. While the appellant had a case with regard to the non- issuance of work orders; non-receipt of formal format of Bank Guarantee; refusal of no-objection certificate for obtaining connection from Calcutta Electric Supply Corporation Ltd.; existence of only 200 out of 250 allotted street hoardings and so on demonstrating breach of obligations by the Corporation, the Corporation had a case that Bank Guarantee was not the mode of payment and as such there was no reason to insist on Bank Guarantee; that in the joint inspection the appellant's men failed to cover all the areas and thereafter when the appellant was asked to submit a list of allotted location, the appellant failed to furnish the same and further there was huge default on the part of the appellant.

Even in the order dated 02.03.2016 by which the appellant was debarred for a period of five years, the reason given is that the tender notice had clearly stated that the street hoardings in the annexures would be allotted on “as is where is” basis; that the company having understood the scope and effect of the terms and conditions of the notice accepted the award; that “no-objection certificate” is not required in respect of the existing hoardings; that there was no document to show that the company had applied to Calcutta Electric Supply Corporation Ltd. for connection and that it appeared to the Corporation that the company did not have the financial capacity to pay and as such the company was creating problems on one pretext or the other since obtaining the allotment of sites. The order also stated that the appellant had set up a bad example to others having interest to enjoy the advertisement rights.

All these reasons fall far short of rendering the conduct of the appellant in the present case, so abhorrent as to justify the invocation of the drastic remedy of blacklisting/debarment. The appellant very clearly has been subjected to a disproportionate penalty. The Corporation has lifted a sledgehammer to crack a nut. We disapprove of the said course of action on the facts of this case. ***

The Division Bench has, in our opinion, not appreciated the case in its proper perspective. Merely saying that the blacklisting order carried reasons is not good enough. Do the reasons justify the invocation of the penalty of blacklisting and is the penalty proportionate, was the real question.

The Division Bench has observed that blacklisting is a business decision by which the party affected by the breach decides not to enter into any contractual relationship with the party committing the breach. It also observed that between two private parties the right to take any such decision is absolute and untrammelled by any constraints whatsoever. The observations are too sweeping in their ambit and wholly overlook the fact that the respondent Corporation is a statutory body vested with the duty to discharge public functions. It is not a private party. Any decision to blacklist should be strictly within the parameters of law and has to comport with the principle of proportionality.

The Division Bench having noticed the fact that any decision to blacklist will be open to scrutiny on the anvil of the doctrine of proportionality has failed to apply the principle to the facts of the case in the correct perspective. The Division Bench has also failed to correctly appreciate the ratio of the decision in B.S.N. Joshi & Sons Ltd. Vrs. Nair Coal Services Ltd., (2006) 11 SCC 548. 37. There has been no enquiry by the Division Bench as to whether the conduct of the appellant was part of the normal vicissitudes in business and common place hazards in commerce or whether the appellant had crossed the rubicon warranting a banishment order, albeit for a temporary period in larger public interest.”

Even if there had been a minor deviation from explicit terms of the NIT, it would not be sufficient by itself in the absence of mala fide for courts to set aside the tender at the behest of an unsuccessful bidder. [Central Coalfields Ltd Vrs. SLL-SML (Joint Venture Consortium), (2016) 8 SCC 622]. This is because notice must be kept of the impact of overturning an executive decision and its impact on the larger public interest in the form of cost overruns or delays.”