Blacklisting cannot stand unless the show-cause notice clearly proposes that penalty.

The petitioner, a manpower supply agency, challenged the communication dated 24.10.2025 by which the respondents blacklisted it for two years.

The blacklisting followed a show-cause notice dated 24.09.2025 alleging breach of tender conditions and requiring the petitioner to explain within three days why action “in accordance with law” should not be initiated.

The petitioner contended that the notice did not expressly propose blacklisting, nor could such an intention be inferred from it, and that the impugned order was unreasoned and failed to consider its response.

The respondents asserted that the petitioner had been informed that four candidates were required to attend interviews on 24.09.2025, but none attended, constituting a breach of the tender conditions.

In its response, the petitioner stated that one candidate had attended and another could not attend due to the untimely death of his uncle.

1. Whether a blacklisting order can be sustained when the preceding show-cause notice neither expressly proposed blacklisting nor clearly implied that blacklisting was intended?

2. Whether the impugned blacklisting communication was invalid for being non-speaking and for failing to consider the explanation submitted by the petitioner?

The Court applied the principles of natural justice and fair play governing blacklisting, particularly the requirement that a show-cause notice must disclose both the material grounds for the proposed action and the specific penalty or action contemplated.

Relying on Gorkha Security Services v. Government (NCT of Delhi) & Ors., (2014) 9 SCC 105, the Court held that a notice preceding blacklisting must clearly indicate the precise proposed action, either expressly or by necessary implication, because blacklisting carries serious civil and commercial consequences.

It also relied on UMC Technologies Pvt. Ltd. v. Food Corporation of India & Anr., (2021) 2 SCC 551, which held that a mere reference to tender violations, a vague statement that appropriate action would be taken, or the existence of a blacklisting clause in the bid document does not satisfy the requirement of a clear and meaningful notice of proposed blacklisting.

Further, the final decision must reflect consideration of the explanation submitted by the affected party and must not be unreasoned or non-speaking.

The Court found that the show-cause notice dated 24.09.2025 merely alleged breach of tender conditions and required the petitioner to show cause why action “in accordance with law” should not be initiated; it contained no express reference to blacklisting and did not otherwise indicate that blacklisting was contemplated.

Applying Gorkha Security Services and UMC Technologies, the Court held that such vague language did not provide the petitioner with an informed and meaningful opportunity to defend itself specifically against the serious consequence of blacklisting.

The Court further noted that the impugned communication did not demonstrate any consideration of the petitioner’s explanation regarding the attendance of the candidates and the death of one candidate’s uncle.

Even assuming that the petitioner had breached the tender conditions, the respondents could not impose the harsh penalty of blacklisting without issuing a proper notice and considering the cause shown.

The communication dated 24.10.2025 was consequently quashed and set aside.

The respondents were, however, permitted to proceed in accordance with law by issuing a proper show-cause notice and granting the petitioner a reasonable opportunity to respond.

The rule was made absolute to that extent, without any order as to costs.