M/S. H R K SOLUTIONS LIMITED vs THE UNION OF INDIA

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2026:CGHC:21310-DB
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 2284 of 2026
1 - M/s. H R K Solutions Limited Through its Operation Manager Shahid
Khan, Authorized Representative of The Petitioner, Having Registered
Office At 3rd Floor, Office No. 308 to 310, Sacred World Mall, Vitthal
Rao Shivarkar Road, Wanwadi, Pune, Maharashtra.
... Petitioner
versus
1 - The Union of India Through its Secretary, Ministry of Railways, Rail
Bhawan, New Delhi – 110001
2 - South Eastern Central Railway Through its Divisional Railway
Manager, Bilaspur, District- Bilaspur (C.G.)
3 - The General Manager, South East Central Railway, Bilaspur
Division, Bilaspur, Chhattisgarh.
4 - The Divisional Railway Manager, South East Central Railway,
Bilaspur Division, Bilaspur, Chhattisgarh.
5 - Sr. Divisional Mechanical Engineer (Sr. DME) South East Central
Railway (SECR), Bilaspur Division, Chhattisgarh.
6 - Sr. CDO/BSP, South East Central Railway, Bilaspur, Chhattisgarh.
Digitally signed by
MOHAMMED
AADIL KHAN
Date: 2026.05.12
12:37:46 +0530
7 - Asst. Divisional Mechanical Engineer (ADME) South East Central
Railway (SECR), Bilaspur Division, Chhattisgarh.

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... Respondents
(Cause title taken from Case Information System)
For Petitioner : Mr. Gagan Tiwari, Advocate.
For Union of
India/Respondents
: Mr. Ramakant Mishra, Deputy S.G. with
Mr. Niraj Baghel and Ms. Sweta Rai,
Union Govt. Counsel.
Hon'ble Shri Ramesh Sinha, Chief Justice
Hon'ble Shri R avindra Kumar Agrawal, Judge
Order on Board
Per Ramesh Sinha, C.J.
07-05-2026
1. The present petition has been filed by the Petitioner seeking the
following relief(s):-
“1] That, this Hon'ble Court may kindly be pleased to issue suitable
directions/orders/writs to the respondent authorities to set-aside
the impugned order dated 24.07.2025 (Annexure P-1) issued by
Respondent No.5 by which the Petitioner has been debarred for a
period of 02 years and the contract dated 13.09.2024 has been
terminated by the Respondent No.05 for being illegal and
arbitrary;
2] That, this Hon'ble Court be pleased to direct the respondent
authority to refund forfeited amount of Performance Guarantee,
set-aside exorbitant penalties and payment of admitted dues for
work already executed by the Petitioner, in the intrest of justice;
3] That, to grant any other relief(s)/order(s)/direction(s) in favor of
the petitioner, which may deem fit and proper in the facts and
circumstances of the case, may also be allowed.”
2. The brief facts of the case, as mentioned in the petition are that,

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the Petitioner which is a company engaged in providing railway facility
management and coach cleaning services, was awarded Tender No.
Mech-BSP-05-Station dated 05.06.2024 vide GeM Contract dated
13.09.2024 valued at Rs. 1,05,65,810/- for cleaning and watering of
trains at various stations under SECR Bilaspur and it commenced work
from 20.09.2024 after furnishing a Performance Guarantee of Rs.
5,28,400/-. It is case of the petitioner that during execution of the
contract, the Petitioner also carried out additional work as directed by
the Respondents; however, despite satisfactory performance, the
Respondents permitted a third-party agency to undertake part of the
contractual work and subsequently issued letter dated 14.06.2025
indicating vague deficiencies and notice 07.07.2025 without furnishing
any detailed inspection report or supporting material. Although the
Petitioner submitted detailed replies and sought verification of actual
performance, the Respondents, without conducting any enquiry or
granting an opportunity of hearing, arbitrarily terminated the contract
vide notice dated 24.07.2025 under Clause 7.4 of GCC (Service) 2018,
forfeited the Performance Guarantee and debarred the Petitioner from
participating in tenders for two years without issuance of any separate
show cause notice for blacklisting/debarment. The Petitioner further
contends that despite execution of work for approximately 308 days and
raising bills amounting to Rs. 44,57,903/-, the Respondents failed to
release legitimate dues and instead imposed excessive penalties
amounting to Rs. 87,01,431/-. Repeated representations and legal
notice seeking release of payments, refund of the Performance

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Guarantee and revocation of the illegal debarment remained
unanswered, compelling the Petitioner to approach this Hon’ble Court.
3. Learned counsel for the Petitioner submits that the impugned
termination and debarment order dated 24.07.2025 issued by
Respondent No.05 is wholly arbitrary, illegal and unsustainable in law,
inasmuch as no specific show cause notice was ever issued to the
Petitioner indicating that the Respondents were contemplating the
extreme action of debarment/blacklisting against the Petitioner. The only
notice issued to the Petitioner was the vague 7-day notice dated
07.07.2025, which merely contemplated action under Clause 7.4 of
GCC (Service) 2018 relating to termination/rescission of the contract
and nowhere disclosed any proposal for blacklisting or debarment.
Consequently, the subsequent action of debarring the Petitioner for a
period of two years travels beyond the scope of the said notice and is
therefore without jurisdiction and liable to be quashed. It is further
submitted that neither the General Conditions of Contract nor the
Special Conditions of the contract dated 13.09.2024 contain any
provision authorizing the Respondents to impose the penalty of
debarment in the facts and circumstances of the present case. The
impugned action of blacklisting/debarment, which entails serious civil
and commercial consequences affecting the Petitioner’s right to
participate in future tenders and carry on business, could not have been
imposed without issuance of a separate and specific show cause notice
and without affording an adequate opportunity of hearing, as mandated
under settled principles of natural justice. The Petitioner had

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satisfactorily executed the contractual work continuously for more than
300 days by deploying adequate manpower, machinery and supervision
and had duly replied to every communication issued by the
Respondents while undertaking corrective measures wherever required;
however, the Respondents failed to conduct any independent inspection
or verification before passing the impugned order. The 7-day notice
itself was vague, non-speaking and devoid of any specific particulars or
supporting documents, thereby denying the Petitioner a meaningful
opportunity to effectively respond to the allegations. The impugned
order dated 24.07.2025 is cryptic, non-speaking and passed
mechanically without consideration of the detailed replies submitted by
the Petitioner and therefore stands vitiated by arbitrariness and violation
of principles of natural justice. The law on the issue is well settled by the
Hon’ble Supreme Court in UMC Technologies (P) Ltd. v. Food
Corporation of India , reported in (2021) 2 SCC 551, wherein it has
been categorically held that for a show cause notice to constitute a valid
basis for blacklisting, the notice must clearly spell out the intention to
blacklist so as to afford the noticee an adequate and meaningful
opportunity to show cause against such proposed action. Since
admittedly no such notice contemplating debarment was ever issued to
the Petitioner, the impugned order deserves to be quashed and set
aside.
4. On the other hand, Mr. Ramakant Mishra, learned Deputy Solicitor
General appears on behalf of the respondents-Railways fairly submits
that the notice which was issued to the Petitioner prior to issuance of

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the impugned order dated 24.07.2025 by which the contract dated
13.09.2024 has been cancelled and further the Petitioner has been
debarred from participating in the bid for a period of two years, did not
had the mention of any debarment/blacklisting of the Petitioner for
future tenders. He further submits that clause 8.2 of the General Terms
and Conditions provides for demand of Arbitration and the Petitioner
ought to have taken recourse to the said provision before approaching
this Hon’ble Court.
5. We have heard learned counsel appearing for the parties, perused
the pleadings and documents appended with the petition.
6. The grievance of the Petitioner is that after award of the work
order, the respondents/Railways availed the services from the Petitioner
but without any fault the Petitioner’s contract was terminated without
affording proper opportunity of hearing. Further, the notice issued to the
petitioner on 07.07.2025 (Annexure P/8) states that if the performance
of the petitioner did not improve, on expiry of the period of 7 days’, the
contract shall stand rescinded and the services under the said contract
would be carried out independently without his participation and the
performance guarantee would also be encashed/forfeited. However, the
said does not state anything with regard to blacklisting/debarment of the
Petitioner from participation in future tenders floated by the
Respondents. When the Petitioner did not had the notice of
blacklisting/debarment, then the question of giving any reply by the
Petitioner does not arise and as such, without affording proper
opportunity of hearing on that aspect, the Respondent authorities could

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not have passed the order debarring the Petitioner for a period of two
years.
7. The Hon’ble Supreme Court, Gorkha Security Services v.
Government (NCT of Delhi) , reported in (2014) 9 SCC 105, has
described blacklisting as being equivalent to the civil death of a person
because blacklisting is stigmatic in nature and debars a person from
participating in government tenders thereby precluding him from the
award of government contracts. It was held thus:
“16. It is a common case of the parties that the blacklisting has
to be preceded by a show-cause notice. Law in this regard is
firmly grounded and does not even demand much amplification.
The necessity of compliance with the principles of natural
justice by giving the opportunity to the person against whom
action of blacklisting is sought to be taken has a valid and solid
rationale behind it. With blacklisting, many civil and/or evil
consequences follow. It is described as “civil death” of a person
who is foisted with the order of blacklisting. Such an order is
stigmatic in nature and debars such a person from participating
in government tenders which means precluding him from the
award of government contracts.”
8. The said principle has been reiterated by the Hon’ble Supreme
Court in UMC Technologies Pvt. Ltd. v. Food Corporation of India ,
reported in (2021) 2 SCC 551, which reads as under:
“14. Specifically, in the context of blacklisting of a person or an
entity by the state or a state corporation, the requirement of a
valid, particularized and unambiguous show cause notice is

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particularly crucial due to the severe consequences of
blacklisting and the stigmatization 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
takes 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.”
9. In light of the said decisions, it is clear that a prior show cause
notice granting a reasonable opportunity of being heard is an essential
element of all administrative decision-making and particularly so in
decisions pertaining to blacklisting which entail grave consequences for
the entity being blacklisted. In this case, furnishing of a valid show
cause notice is critical and a failure to do so would be fatal to any order
of blacklisting pursuant thereto.
10. With respect to the dispute between the parties whether the
petitioner had failed to provide optimum services as required by the
respondent authorities, this Court cannot adjudicate the said issue as it
involves disputed questions of facts as according to the Petitioner, the
Petitioner was executing the contract in a smooth and satisfactory

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manner, on the other hand, as per the Respondents, it was the
Petitioner who was not desirous of fulfilling its obligations under the
contract, sincerely. Even otherwise, Clause 8.2 of the General
Conditions of Contract provides for demand of arbitration which the
Petitioner may take recourse to. However, so far as the order dated
24.07.2025 (Annexure P/1) only with respect to blacklisting/ debarment
of the Petitioner for a period of two years is concerned, the same stands
quashed.
11. Consequently, this petition stands partly allowed .
Sd/- - Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
Aadil