Singhaniya Group And Industries vs. Atal Bihari Vajpayee University Bilaspur

Facts

The petitioner, Singhaniya Group and Industries, a registered GST supplier of furniture, had been a regular supplier to Atal Bihari Vajpayee University through the GeM Portal, successfully completing multiple work orders in 2025 without any complaints. However, on December 3, 2025, the respondent University issued an order blacklisting the petitioner firm. The petitioner was not issued a prior show cause notice or granted an opportunity of hearing before this blacklisting order was passed. The petitioner only became aware of the order through RTI proceedings and subsequently submitted representations which yielded no effective action. Aggrieved by this action, the petitioner filed a writ petition before the High Court challenging the blacklisting order.

Held

The Court held that the blacklisting order dated 03.12.2025 passed by the respondent University against the petitioner was vitiated due to a clear violation of the principles of natural justice. It was undisputed that no show cause notice was issued to the petitioner, nor was any opportunity of hearing afforded to them prior to the blacklisting. Furthermore, the petitioner was not even supplied a copy of the order contemporaneously and came to know about it later through RTI proceedings. The Court relied on Supreme Court pronouncements in Erusian Equipment & Chemicals Ltd., Gorkha Security Services, and Kulja Industries Ltd., which unequivocally state that blacklisting orders, having serious civil consequences, require prior notice and an opportunity to be heard. The Court found that the respondent University failed to demonstrate compliance with these mandatory requirements. The action was deemed arbitrary and in violation of Articles 14 and 19(1)(g) of the Constitution of India. The Court also referenced Tata Cellular v. Union of India, emphasizing that even in contractual matters, the State and its instrumentalities must act fairly and non-arbitrarily. Consequently, the impugned order was found unsustainable. The writ petition was allowed, the blacklisting order was quashed and set aside, and the respondent was directed to restore the petitioner to the list of eligible suppliers, subject to due process if fresh proceedings were initiated.

Key Issues

1. Whether the blacklisting order dated 03.12.2025 passed by the respondent University against the petitioner is illegal, arbitrary, and violative of the principles of natural justice, specifically the requirement of issuing a show cause notice and providing an opportunity of hearing, as mandated by Article 14 of the Constitution of India and established judicial precedents? Petitioner's arguments: The petitioner contended that the blacklisting order, having serious civil consequences amounting to "civil death" in commercial dealings, was passed without adhering to the principles of natural justice. They relied on Supreme Court judgments in Erusian Equipment & Chemicals Ltd. v. State of West Bengal, Gorkha Security Services v. Govt. (NCT of Delhi), and Kulja Industries Ltd. v. Chief Gen. Manager, W.T. Project, BSNL, emphasizing the mandatory nature of show cause notices and opportunities for hearing before blacklisting. The petitioner argued that the absence of notice and hearing rendered the order unsustainable and arbitrary, violating Articles 14 and 19(1)(g) of the Constitution. Respondent's arguments: The respondent University argued that the writ petition was not maintainable, asserting that the blacklisting was a contractual matter and an administrative decision taken within its domain. They claimed the action was in accordance with law and that the petitioner could not claim the order to be void solely on the ground of alleged absence of notice, as it depends on facts. The University maintained that the petitioner was aware of the issues and that the decision was based on complaints and administrative satisfaction, aimed at maintaining transparency and integrity in public procurement.