ZEN PLUS PRIVATE LTD., THROUGH ITS AUTHORIZED SIGNATORY MILTON SINGH vs THE STATE OF JHARKHAND

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IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No. 3011 of 2025
Zen Plus Private Ltd., Dadar, Mumbai (Maharashtra), through its
authorized signatory, Milton Singh, S/o Sikander Prasad Singh,
R/o House No. 10, near Auropliss Campus, Kumudani, Ghosh
Road, Barmasiya, P.O. & P.S.-Deoghar, District-Deoghar
….. Petitioner
Versus
1. The State of Jharkhand
2. The Secretary, Department of Health, Medical Education &
Family Welfare, Government of Jharkhand, Ranchi
3. The Jharkhand Rural Health Mission Society, through its Mission
Director, Ranchi ….. Respondents
With
W.P. (C) No. 5360 of 2025
M/s Ziquitza Health Care Limited, Worli, Mumbai (Maharashtra),
through its authorized signatory, Rajneesh Chaturvedi, S/o
Santosh Chaturvedi, R/o Ward No. 28, Lane Number-2, Khunthi,
P.O. & P.S.-Satna, District-Satna (Madhya Pradesh)
….. Petitioner
Versus
1. The State of Jharkhand, through the Secretary, Department of
Health, Medical Education & Family Welfare, Ranchi
2. The Jharkhand Rural Health Mission Society, through its Mission
Director, Ranchi ….. Respondents
-----
CORAM
HON’BLE THE CHIEF JUSTICE
HON’BLE MR. JUSTICE RAJESH SHANKAR
-----
For the Petitioners: Mr. Ajit Kumar, Sr. Advocate
Ms. Aprajita Bhardwaj, Advocate
[W.P. (C) No. 3011 of 2025]
Mr. Indrajeet Sinha, Advocate
Ms. Tanya Singh, Advocate
[W.P. (C) No. 5360 of 2025]
For the State: Mr. Ashutosh Anand, A.A.G.-III
[W.P. (C) No. 3011 of 2025]

Mr. Vibhor Mayank, A.C. to A.G.
[W.P. (C) No. 5360 of 2025]
-----
05/01.09.2026
1. Heard learned counsel for the parties.
2. Learned counsel for the parties agree that both these writ
petitions can be disposed of by a common order since the
challenge therein is to the communication/order dated
17.06.2025 by which the petitioner-M/s Ziquitza Health Care
Limited has been blacklisted for a period of two years and it is
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alleged that the petitioner-M/s Zen Plus Private Ltd. has also
been blacklisted for the same period from carrying out any
operations/works in the Department of Health, Medical
Education & Family Welfare, Government of Jharkhand.
3. Accordingly, we issue Rule in both the petitions. At the request
of and with the consent of the learned Counsel for the parties,
we make the Rule returnable forthwith.
4. Mr Ajit Kumar, learned Sr. counsel appearing for the petitioner in
W.P. (C) No. 3011 of 2025, i.e., M/s Zen Plus Private Ltd.,
submits that the impugned order, upon its proper reading, does
not even blacklist the petitioner he represents. In any event, he
submits that no show cause notice whatsoever was issued to
M/s Zen Plus Private Ltd. before this impugned order was
passed. Therefore, he submits that on these grounds, the
impugned order must be struck down so far as it is sought to be
applied to M/s Zen Plus Private Ltd.
5. Mr Indrajeet Sinha, learned counsel for the petitioner in W.P. (C)
No. 5360 of 2025 i.e., M/s Ziquitza Health Care Limited, submits
that the show cause notice dated 26.09.2024 and even further
communication dated 16.01.2025, which preceded the impugned
communication/order dated 17.06.2025, make no reference
whatsoever to the proposal for blacklisting. He submits that even
the circumstances surrounding these communications give no
hint that any blacklisting was proposed. He submits that no
blacklisting order can be made without a proper show cause
notice indicating that blacklisting is proposed. He submits that
such action of blacklisting without proper show cause notice
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would be contrary to the law laid down in the cases of Gorkha
Security Services v. Government (NCT of Delhi) & Others
reported in (2014) 9 SCC 105; UMC Technologies Private
Limited v. Food Corporation of India & Another reported in
(2021) 2 SCC 551 and Bacha F. Guzdar v. Commissioner
of Income-Tax, Bombay reported in (1954) 2 SCC 563.
6. Mr. Ashutosh Anand, learned A.A.G.-III and Mr. Vibhor Mayank,
learned A.C. to A.G. appearing on behalf of the State, submit
that a proper show cause notice was issued to the petitioners
and the mere non-mention of blacklisting therein had occasioned
no prejudice whatsoever to the petitioners. They submit that this
was an egregious case of submitting a fake certificate to claim
experience, and to this charge, there was virtually no defence.
They submit that the petitioners have not pleaded any prejudice
arising from the non-reference to the proposed action of
blacklisting. They submit that from reading of the show cause
notice and the circumstances surrounding the same, it would be
clearly inferred that such an action of blacklisting was proposed.
7. They submit that even by specific reference to the proposed
action of blacklisting, the petitioners would have had no defence
to offer. They invoked the useless formality theory, as suggested
in paragraph No. 17 of S.L. Kapoor v. Jagmohan & Others,
reported in (1980) 4 SCC 379. Based on all these submissions,
learned counsel submit that these writ petitions should be
dismissed and discretion should not be exercised in favour of the
petitioners, who submitted fake certificates to obtain
government contracts.
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8. Mr Ashutosh Anand, in addition to the above, submits that M/S
Ziquitza Health Care Limited owned one hundred per cent of the
shares of M/S Zen Plus Private Ltd. after the demerger order
dated 05.07.2024, effective from 01.04.2022. He therefore
submits that the impugned order concerned both petitioners,
who are liable to be blacklisted for their role in submitting fake
certificates to obtain government contracts. He hinted that the
State was entitled to lift the corporate veil in such
circumstances.
9. The rival contentions now fall for our determination.
10. The impugned communication/order dated 17.06.2025, after
referring to certain factual aspects, in its penultimate paragraph,
states as follows:
“Hence, M/s Ziquitza Health Care Limited (as
demerged resulting in the formation of M/s Zen Plus
Private Limited) is blacklisted for carrying out any
operations/works in the Department of Health and Family
Welfare, Government of Jharkhand for a periods of two
years.”
11. On a reading of the aforesaid, it is quite clear that M/s Ziquitza

Health Care Limited has been blacklisted for a period of two
years from carrying out any operations/works in the Department
of Health, Medical Education & Family Welfare, Government of
Jharkhand. However, the above extracted portion from the
impugned communication/order does not suggest that even M/s
Zen Plus Private Ltd. has been blacklisted for the same works
and for the same period.
12. The above extracted portion merely describes M/s Ziquitza
Health Care Limited as an entity after its demerger ordered by
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the NCLT, Mumbai on 05.07.2024, effected from 01.04.2022.
The circumstance that M/s Ziquitza Health Care Limited may be
the owner of 100% of the shares of M/s Zen Plus Private Ltd. is
not sufficient to obliterate the distinction between a company
and its shareholders or to rush to lift the corporate veil.
13. There is a legal distinction between a company, which has its
own corporate existence and the shareholders that may
comprise it. The fact that M/S Ziquitza Health Care Limited may
be the owner of 100% of the shares of M/S Zen Plus Private Ltd
is not prima facie sufficient to lift the corporate veil, and that too
without giving any notice to the company of the proposed
blacklisting.
14. Therefore, based upon the impugned communication/order
dated 17.06.2025, there is no question of blacklisting M/s Zen
Plus Private Ltd., i.e., the petitioner in W.P. (C) No. 3011 of
2025.
15. However, on a demurrer, even if we were to hold that the
impugned order/communication applies to M/s Zen Plus Private
Ltd., then, in the absence of any show cause notice being issued
to M/s Zen Plus Private Ltd. about the proposed action of
blacklisting and the grounds in support thereof, the impugned
order/communication qua M/s Zen Plus Private Ltd. cannot be
sustained.
16. It is more than well settled that blacklisting of any company has
serious civil consequences and therefore the same must be
preceded by compliance with the principles of natural justice and
fair play. Since this is altogether absent qua M/s Zen Plus Private
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Ltd., the impugned communication/order, assuming that it
indeed blacklists M/s Zen Plus Private Ltd., cannot be sustained
and is liable to be set aside.
17. So far as the petitioner in W.P. (C) No. 5360 of 2025, i.e., M/s
Ziquitza Health Care Limited, is concerned, we refer to the show
cause notice dated 26.09.2024, which is Annexure-7 (page 134)
of the said writ petition. This notice, in its concluding paragraph,
merely states that if the explanation is not found to be
satisfactory, then action as permissible under the law will be
commenced.
18. There is another notice dated 16.01.2025 (Annexure-9 at page
138), which merely calls for information from M/S Ziquitza
Health Care Limited. Again, even in this communication, there is
no hint of the proposed action of blacklisting.
19. Based upon a conjoint reading of the show cause notice dated
26.09.2024 and the communication dated 16.01.2025, which are
the only two communications preceding the impugned
communication/order dated 17.06.2025, it is clear that there was
no express mention of a proposal for blacklisting and further,
from the contents of the two communications, no inference
would be drawn that such an action was indeed proposed. In the
absence of either a specific mention or the possibility of a clear
inference that such an action was proposed, blacklisting orders
would be rendered vulnerable.
20. The argument about lack of prejudice or useless formality theory
clearly does not apply in the present situation. The State’s
satisfaction that the noticee will have no defence to offer is by
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no means sufficient. Even assuming that, on factual aspects, the
defence may be thin, still, if the noticee is informed that the
consequence would lead to blacklist, it is always open to the
noticee to persuade the State that a hard action of blacklisting is
not warranted. The noticee may also plead for leniency by
setting out mitigating factors, if any. An order of blacklisting
therefore cannot be a bolt from the blue.
21. In the case of Gorkha Security Services (supra), the Hon’ble
Supreme Court noted that the show cause notice was
conspicuously silent about the blacklisting action. The argument
that a clause in the contract permitted the State to blacklist the
defaulting contractor was held insufficient to infer blacklisting.
The Hon’ble Supreme Court has held that the mere existence of
Clause 27 in the agreement entered into between the parties
would not suffice to meet the mandatory requirement by vaguely
mentioning other “actions as deemed fit”. The Hon’ble Supreme
Court has held that without any specific stipulation in this behalf,
the respondents could not have imposed the penalty of
blacklisting.
22. The Hon’ble Supreme Court has explained that no doubt rules of
natural justice are not embodied rules nor can they be lifted to
the position of fundamental rights. However, their aim is to
secure justice and to prevent miscarriage of justice. It is now a
well-established proposition of law that unless a statutory
provision either specifically or by necessary implication excludes
the application of any rules of natural justice, any exercise of
power prejudicially affecting another must be in conformity with
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the rules of natural justice. When it comes to blacklisting, it is
termed “civil death”. It would be difficult to accept the
proposition that, without even putting the noticee to such a
contemplated action and giving him a chance to show cause as
to why such an action should not be taken, a final order can be
passed blacklisting such a person only on the premise that this is
one of the actions so stated in the provisions of the NIT.
23. In Gorkha Security Services (supra), the prejudice argument
almost identical to the one now raised on behalf of the
respondents was raised and considered by the Hon’ble Supreme
Court. In this regard, the Hon’ble Supreme Court has observed
that had the action of blacklisting been specifically proposed in
the show cause notice, the appellant could have mentioned as to
why such an extreme penalty is not justified. It could have
pleaded extenuating circumstances to defend such an action,
even if the defaults were there and the Department was not
satisfied with the explanation qua the defaults. It could have
pleaded with the Department not to blacklist the appellant, or to
do so for a lesser period if the Department still wanted to
blacklist the appellant. Therefore, it was not at all acceptable
that non-mentioning of the proposed blacklisting in the show
cause notice had not caused any prejudice to the appellant. That
apart, the extreme nature of such a harsh penalty like
blacklisting with severe consequences would itself amount to
causing prejudice to the appellant.
24. In our judgment, the above observations of the Hon’ble
Supreme Court in the case of Gorkha Security Services
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(supra) afford a complete answer to the argument on behalf of
the respondents that the petitioners herein have not pleaded or
established any prejudice or that specific mention of the
proposed action of blacklisting would have made no difference to
the matter and therefore would be regarded as a useless
formality.
25. In UMC Technologies Private Limited (supra), the Hon’ble
Supreme Court, in similar facts, has held that the plain reading
of the show cause notice makes it clear that the action of
blacklisting was neither expressly proposed nor could it have
been inferred from the language implied in the show cause
notice. Further, the mere existence of a clause in the bid
document mentioning blacklisting as a bar to eligibility cannot
satisfy the mandatory requirement of a clear mention of the
proposed action in the show cause notice. The Hon’ble Supreme
Court has explained that this is crucial due to the severe
consequences of blacklisting and the stigmatisation that accrues
to a person/entity being blacklisted. Blacklisting denies a person
or an entity the privileged opportunity to enter into government
contracts. Since the corporation’s notice was completely silent
about blacklisting and the circumstances surrounding it, and did
not even give any hint of the proposed action of blacklisting, the
Hon’ble Supreme Court interfered with the order of blacklisting.
26. For the above reasons, we are satisfied that the impugned
communication/order dated 17.06.2025 is liable to be set aside
and is hereby set aside qua both the petitioners.
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27. However, we clarify that setting aside the impugned
communication/order will not preclude the respondents from
issuing a fresh show cause notice/s to the petitioners if they so
desire, and disposing of them in accordance with law and on
their own merits.
28. The present writ petitions are accordingly allowed, and the rule
therein is made absolute in the above terms. There shall,
however, be no order for costs.

(M. S. SONAK, C.J.)

(RAJESH SHANKAR, J.)
01.09.2026
Satish/Vikas/
A.F.R.

Uploaded on 07.09.2026

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