Blacklisting order passed without affording reasonable opportunity of hearing violates principles of natural justice and is unsustainable.

The petitioner, a registered government contractor, challenged an order dated June 6, 2024, issued by the Indore Municipal Corporation. This order blacklisted the petitioner for three years, terminated their contract, and forfeited their security deposit based on allegations of overcharging construction costs by approximately ₹52.61 lakhs

The petitioner further sought the release of outstanding payments totaling ₹12–14 crores for completed works

The petitioner contended that the blacklisting occurred without providing a prior hearing or following due process

1. Whether an order of blacklisting can be sustained if passed without affording the concerned party a reasonable opportunity of being heard

2. Whether the court should direct the immediate release of disputed outstanding payments in a writ proceeding

The court applied the fundamental principle of natural justice, specifically the doctrine of Audi Alteram Partem, which mandates that no person shall be condemned unheard.

In the context of administrative law, the court emphasized that blacklisting—a punitive action with significant civil consequences—requires a proper hearing to satisfy the "rule of law"

The court’s reasoning centered on the procedural irregularity of the respondent's actions. During the proceedings, the counsel for the respondent conceded that no opportunity of hearing was granted to the petitioner prior to the issuance of the blacklisting order

The court determined that this omission directly violated settled legal principles regarding administrative fairness.

Regarding the monetary claims, the court noted that while the petitioner claimed entitled dues, the respondent disputed the liability. Consequently, the court found it appropriate to remand the procedural aspect of the blacklisting to the authority while allowing the petitioner to submit a formal representation regarding the financial disputes for administrative consideration

The court directed the respondent authority to conduct a fresh inquiry and pass an appropriate order only after providing the petitioner a proper opportunity of hearing, ideally within one month. Regarding the outstanding payments, the petitioner was directed to submit a representation within seven days, which the authority must decide upon within one week of receipt. The petition was disposed of with these directions.