M/S ASCENT TECHNOLOGY SOLUTION vs CHHATTISGARH STATE WAREHOUSING CORPORATION

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2026:CGHC:19543-DB
Digitally signed
by SAGRIKA
AGRAWAL
Date:
2026.04.30
10:49:06 +0530
SAGRIKA
AGRAWAL
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 1785 of 2026
M/s Ascent Technology Solution Through- Sole Proprietor, Anand
Suhane, S/o Shri G.D. Suhane, Aged About 45 Years, Office Address-
433, Beside Anchal Nursing Home, Mahaveer Nagar Ring Road No. 1
Raipur, District Raipur (C.G.)
... Petitioner(s)
versus
1 - Chhattisgarh State Warehousing Corporation Through Managing
Director, Head Office, Sector- 24, Atal Nagar, Nawa Raipur, District
Raipur (C.G.)
2 - Chhattisgarh State Industrial Development Corporation Through
Managing Director, First Floor, Udhyog Bhawan, Ring Road No. 01,
Telibandha, Raipur, District Raipur (C.G.)
... Respondent(s)
:
For Petitioner(s) Dr. Sudeep Agrawal, Advocate
For Respondent No. 1
:
Mr. Sajal Kumar Gupta, Advocate along
with Mr. Trivikram Nayak, Advocate
For Respondent No. 2
:
Mr. Syed Jayed Ziya Ali, along with Mr.
Anumesh Shrivastava, Advocate

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Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri Ravindra Kumar Agrawal, Judge
Order on Board

28/04/2026

heard Mr. Mr. Sajal Kumar Gupta, Advocate along with Mr. Trivikram
Nayak, Advocate and Mr. Syed Jayed Ziya Ali, along with Mr. Anumesh
Shrivastava, Advocate for the respective Respondents.
1. The present petition has been filed by the petitioner seeking the
following relief(s):
“"10.1 That, this Hon'ble Court may kindly be
pleased to quash the impugned order No.
14300/CGWC/Tec/2025 Nawa Raipur, dated
26.11.2025 (Annexure P-1) passed by the
respondent no. 1/Chhattisgarh State Warehousing
Corporation wherein the Security Deposit has been
forfeited and further the petitioner firm has been
blacklisted for a period of five years as being
without any authority of law and even without
adhering to the principles of natural justice and
equity.
10.2 Any other relief or relief(s) which this Hon'ble
Court may think proper in view of the facts and
circumstances of the case may also kindly be

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granted, in the interest of justice.”
2. The petitioner, who is a sole proprietorship firm represented
through its proprietor, calls in question the legality and validity of the
impugned order dated 26.11.2025, whereby the petitioner has been
blacklisted for five years by the respondent authorities and its security
deposit has also been forfeited. The record reflects that pursuant to NIT
No. 74 dated 10.10.2022 issued by the respondent No.2/CSIDC for the
supply and installation of CCTV Surveillance Systems at various
centres of the Chhattisgarh State Warehousing Corporation across the
State, the petitioner was awarded the contract under the CSIDC rate
contract. In furtherance thereof, supply orders dated 08.10.2023 and
10.10.2023 were issued, stipulating completion of work within a period
of 45 days. It is the specific case of the petitioner that the entire work of
supply and installation was completed within the stipulated time frame in
accordance with the contractual terms and conditions, without any delay
or deficiency attributable to the petitioner.
3. It further appears that after completion of installation, the
respondent authorities issued various notices dated 17.05.2024,
29.11.2024 and 22.01.2025 directing the petitioner to carry out repair
and maintenance work of the installed CCTV systems at different
centres. The petitioner contends that it duly complied with all such
directions and undertook necessary repair, replacement and
maintenance work promptly, including installation of new cameras at
locations where the earlier units were found missing, despite such
circumstances being beyond the petitioner’s control.

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4. However, the respondent No.1, without issuing any specific show
cause notice proposing blacklisting or forfeiture of security deposit and
without affording any opportunity of hearing, proceeded to pass the
impugned order dated 26.11.2025, blacklisting the petitioner firm and
forfeiting its security deposit. The petitioner submits that such action
entails serious civil and financial consequences and could not have
been taken in the absence of due process. It is further submitted that
the petitioner submitted representation dated 27.11.2025 and
24.12.2025 seeking revocation of the blacklisting order and release of
the forfeited security deposit, however, the said representations have
not been considered till date. In this backdrop, the petitioner has
approached this Court invoking its writ jurisdiction, contending that the
impugned action is arbitrary, violative of principles of natural justice, and
unsustainable in law.
5.
Learned counsel for the petitioner would submit that the petitioner
firm has approached this Court challenging the impugned order dated
26.11.2025 (Annexure P-1) passed by the respondent authorities,
whereby the petitioner has been blacklisted for a period of five years
and its security deposit has been forfeited. It is submitted that the
impugned order has been passed without issuing any specific show
cause notice indicating the proposal or intention of the respondent No.1
to blacklist the petitioner. By straightaway passing the blacklisting order,
the authorities have acted in gross violation of the principles of natural
justice and equity, thereby rendering the impugned order arbitrary and
illegal.

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6. It is further submitted that the petitioner had duly complied with all
contractual obligations and directives issued by the respondent
authorities. Specifically, pursuant to notices dated 17.05.2024,
29.11.2024, and 22.01.2025, the petitioner carried out necessary
repairs, replacements, and maintenance of the CCTV cameras across
all nominated centres, including the replacement of missing cameras,
without raising any objection. Despite such compliance, the authorities
arbitrarily imposed a blacklisting order coupled with the forfeiture of
security deposit. It is submitted that such an action is disproportionate
and grossly penal in nature, resulting in severe civil consequences,
including commercial stigma and the inability to participate in future
government contracts, amounting to a form of “civil death” for the
petitioner. It is also submitted that unilateral termination of the
contract/agreement is arbitrary, illegal and unjustifiable as there is an
arbitration clause in the agreement, and in spite of that by acting
capriciously in a colourful and unfair manner, the impugned order has
been issued, which is clearly against the settled principles of law.
Further, the breach of terms and conditions of the contract on the part of
the petitioner does not arise as the petitioner has written several
letters/representations to the Respondent No. 1, time and again
requesting them to cooperate in the execution of work, and thereafter,
there were reasons attributable to the Respondent No. 1.
7. In the present case, the petitioner has been subjected to
blacklisting and security deposit forfeiture without any specific show
cause notice indicating the intention to blacklist, without recording any

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subjective satisfaction, and despite fully complying with all contractual
obligations, including remedial measures and replacements requested
by the respondent authorities. The action of the respondent is therefore
arbitrary, disproportionate, and violative of principles of natural justice,
equity, and settled legal norms regarding blacklisting. In these
circumstances, the impugned order dated 26.11.2025 deserves to be
quashed with consequential relief of release of the forfeited security
deposit.
8. He would rely upon the judgment dated 28-08-2025, passed by
the Coordinate Bench of this Court in W.P.(C) No. 1135/2025
( Recorders and Medicare Systems Pvt. Ltd. vs. State of C.G . ),”
Nasir Ahmed v. Assistant Custodian General” , AIR 1980 1157, and
“ Gorkha Security Services v. Govt. (NCT of Delhi) and Others ”
(2014) 9 SCC 105.
9. On the other hand, learned counsel for the respective respondents
vehemently objected and submits that the impugned order dated
26.11.2025, blacklisting the petitioner and forfeiting the security deposit,
was passed in exercise of the statutory and contractual powers
conferred upon the respondent authorities under the CSIDC rate
contract and NIT No. 74 dated 10.10.2022. It is submitted that the
petitioner had entered into a contractual obligation to supply, install, and
maintain CCTV Surveillance Systems across various centres of the
Chhattisgarh State Warehousing Corporation within the stipulated
timelines and in accordance with specifications. The respondents
contend that despite multiple reminders and notices issued to the

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petitioner firm, including those dated 17.05.2024, 29.11.2024, and
22.01.2025, there were instances of deficiencies in the performance,
delay in remedial measures, and failure to ensure proper maintenance
of certain CCTV cameras. Consequently, the respondents were
constrained to initiate penal action, including blacklisting and forfeiture
of security deposit, to safeguard the interests of the public authorities
and to ensure compliance with contractual obligations.
10. It is further submitted by the respondents that blacklisting of a
contractor is an administrative action intended to protect the integrity
and efficiency of public procurement and government contracts, and is
well within the powers of the authority. The respondents contend that
the petitioner was aware of the consequences of non-compliance with
the terms of the contract, including the possibility of blacklisting, as the
same was explicitly mentioned in the tender documents and rate
contract. The respondents would also submit that the petitioner was
afforded ample opportunity to respond to the notices and to remedy
deficiencies, and that the repeated failure to maintain operational CCTV
systems justified issuance of the impugned order. The forfeiture of
security deposit is further submitted to be in accordance with the terms
of the contract as a security for performance, and arises out of the
petitioner’s alleged failure to discharge contractual duties satisfactorily.
11. It is also submitted that the impugned action is administrative in
nature and does not violate principles of natural justice, as adequate
communication regarding deficiencies was made through notices, and
the petitioner had been given a reasonable opportunity to address the

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same. It is thus submitted that the impugned order is legal, valid, and
justified in the facts and circumstances of the case, and the writ petition
lacks merit.
12. We have heard learned counsel for the respective parties and
perused the material annexed with the petition and gone through the
pleading.
13. It is undisputed that the petitioner was awarded a contract under
NIT No. 74 dated 10.10.2022 and the CSIDC Rate Contract for the
supply, installation, and maintenance of CCTV Surveillance Systems at
various centres of the Chhattisgarh State Warehousing Corporation.
The petitioner has placed on record documents, including supply
orders, repair reports, and correspondence (Annexures P-4 to P-10),
which demonstrate that the CCTV systems were installed and
necessary repairs and replacements were carried out in response to
notices dated 17.05.2024, 29.11.2024, and 22.01.2025, including the
replacement of missing cameras. The petitioner has shown a bona fide
and timely compliance with contractual obligations.
14. The impugned blacklisting order dated 26.11.2025 has been
challenged primarily on the ground that no specific show cause notice
indicating the intention to blacklist the petitioner was issued, and no
subjective satisfaction regarding non-performance or breach was
recorded by the respondent authorities. The petitioner’s submissions
are supported by the principles laid down by the Hon’ble Supreme Court
in  Gorkha Security Services (supra) , which emphasize that
blacklisting is a stigmatic action that requires an adequate, specific, and

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meaningful opportunity to be afforded to the party concerned. In the
present case, the petitioner’s conduct indicates no mala fide intent or
deliberate default, and the impugned action appears arbitrary and
disproportionate. In the case of Gorkha Security Services (supra), the
Hon’ble Supreme Court has held that:-
21. The central issue, however, pertains to the requirement
of stating the action which is proposed to be taken. The
fundamental purpose behind the serving of show-cause
notice is to make the notice understand the precise case set
up against him which he has to meet. This would require the
statement of imputations detailing out the alleged breaches
and defaults he has committed, so that he gets an
opportunity to rebut the same. Another requirement,
according to us, is the nature of action which is proposed to
be taken for such a breach. That should also be stated so
that the notice is able to point out that proposed action is not
warranted in the given case, even if the defaults/breaches
complained of are not satisfactorily explained. When it
comes to blacklisting, this requirement becomes all the more
imperative, having regard to the fact that it is harshest
possible action.
26. In the present case, it is obvious that action is taken as
provided in sub-clause (ii). Under this clause, as is clear from
the reading thereof, the Department had a right to cancel the
contract and withhold the agreement. That has been done.
The Department has also a right to get the job which was to
be carried out by the defaulting contractor, to be carried out
from other contractor(s). In such an event, the Department
also has a right to recover the difference from the defaulting
contractor. This clause, no doubt, gives further right to the

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Department to blacklist the contractor for a period of 4 years
and also forfeit his earnest money/security deposit, if so
required. It is thus apparent that this sub-clause provides for
various actions which can be taken and penalties which can
be imposed by the Department. In such a situation which
action the Department proposes to take, need to be
specifically stated in the show-cause notice. It becomes all
the more important when the action of blacklisting and/or
forfeiture of earnest money/security deposit is to be taken, as
the clause stipulates that such an action can be taken, if so
warranted. The words "if so warranted", thus, assume great
significance. It would show that it is not necessary for the
Department to resort to penalty of blacklisting or forfeiture of
earnest money/security deposit in all cases, even if there is
such a power. It is left to the Department to inflict any such
penalty or not depending upon as to whether circumstances
in a particular case warrant such a penalty. There has to be
due application of mind by the authority competent to impose
the penalty, on these aspects. Therefore, merely because of
the reason that Clause 27 empowers the Department to
impose such a penalty, would not mean that this specific
penalty can be imposed, without putting the defaulting
contractor to notice to this effect.
33. When we apply the ratio of the aforesaid judgment to the
facts of the present case, it becomes difficult to accept the
argument of the learned Additional Solicitor General. In the
first instance, we may point out that no such case was set up
by the respondents that by omitting to state the proposed
action of blacklisting the appellant in the show-cause notice,
has not caused any prejudice to the appellant. Moreover,
had the action of blacklisting being specifically proposed in
the show-cause notice, the appellant could have mentioned

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as to why such extreme penalty is not justified. It could have
come out with extenuating circumstances defending such an
action even if the defaults were there and the Department
was not satisfied with the explanation qua the defaults. It
could have even pleaded with the Department not to blacklist
the appellant or do it for a lesser period in case the
Department still wanted to blacklist the appellant. Therefore,
it is not at all acceptable that non-mentioning of proposed
blacklisting in the show-cause notice has not caused any
prejudice to the appellant. This apart, the extreme nature of
such a harsh penalty like blacklisting with severe
consequences, would itself amount to causing prejudice to
the appellant.
15. The respondents contend that blacklisting and security deposit
forfeiture are administrative measures designed to safeguard public
contracts and ensure compliance. While the Court recognizes the
importance of maintaining integrity in public procurement, it is evident
from the record that the petitioner had undertaken all repair and
replacement obligations promptly, and there is no evidence of
intentional default or dereliction. In these circumstances, continuation of
the blacklisting order would be manifestly unfair and contrary to the
principles of natural justice.
16. Considering the above, the Court finds that the blacklisting order
dated 26.11.2025 is disproportionate and violative of principles of
natural justice. Accordingly, the blacklisting of the petitioner firm
is quashed with immediate effect. However, as regards the forfeited
security deposit, the Court notes that the contract between the parties
contains a valid arbitration clause, which provides an independent

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mechanism for the resolution of disputes relating to performance or
financial claims. The petitioner is therefore directed to pursue its claim
for refund of the security deposit through arbitration under the Dispute
Resolution Clause, i.e. Clause 24 of the conditions of contract in the
NIT, in accordance with the terms of the contract.
17. In view of the above, the writ petition is  partly allowed, the
impugned blacklisting is quashed, and the petitioner is relieved from the
disqualification arising therefrom, but the question of security deposit
shall be adjudicated in arbitration as per the contractual terms. The
petitioner may raise its dispute regarding the forfeiture of security
deposit in the arbitration proceeding.
18. The parties shall bear their own costs.
Sd/- Sd/-