Admitted statutory non-compliance validates debarment and satisfies the principles of natural justice.

The petitioner, M/s. Arohi Elevators Pvt. Ltd., was engaged by the Steel Authority of India Limited (SAIL) under a maintenance contract for lifts at the Bokaro Steel Plant

SAIL observed that the petitioner was failing to comply with the Payment of Wages Act, a mandatory requirement under the work orders

On August 16, 2025, the petitioner sent an email to SAIL expressing an inability to modify its established wage payment system to align with the Central Labour Commissioner (CLC) requirements for a single contract and requested foreclosure of the contract

SAIL subsequently issued two show-cause notices regarding the banning of future business dealings

On February 24, 2026, SAIL issued the impugned order banning the petitioner from business dealings for two years, effective from October 3, 2025, to October 2, 2027

The petitioner challenged this order, alleging it was non-speaking and violated the principles of natural justice

The court applied the administrative law principles of natural justice, specifically the requirement for "speaking orders" (reasoned decisions) and the necessity of providing a fair opportunity to be heard before passing adverse orders

It also emphasized the statutory obligation of employers to comply with the Payment of Wages Act as incorporated into contractual terms

The court relied on the principle that if the reasons for an administrative action are clearly discernible from the record and the correspondence between parties, the order cannot be deemed non-speaking

The court rejected the petitioner's contention that the order was non-speaking. It observed that the petitioner’s own communication dated August 16, 2025, explicitly admitted an inability to modify its wage system to meet statutory requirements

The court noted that SAIL issued two separate show-cause notices, ensuring the petitioner had an opportunity to respond

In its replies, the petitioner did not deny the allegations of non-compliance but instead raised external issues such as delayed payments by SAIL

The court reasoned that since the petitioner flatly refused to comply with statutory provisions on the grounds of internal company policy, SAIL’s decision to ban the firm was neither unfair nor a result of non-application of mind

The court concluded that the reasons for the ban were clearly outlined in the order and supported by the petitioner’s own admissions in previous correspondence

The impugned order was found to be a reasoned order passed after following the principles of natural justice

Consequently, the petition was dismissed without costs

Additionally, the court directed the Registry to send the order to the Payment of Wages Authority at Bokaro/Dhanbad to investigate the petitioner’s wage structure regarding its workmen