Blacklisting without a specific show-cause notice and hearing violates natural justice.

The petitioner, an MSME engaged in manufacturing and supplying UPS systems, batteries and backup equipment, supplied products and rendered services to the National Institute of Technology, Silchar (“NIT”).

Following complaints regarding certain supplies, NIT issued emails dated 16 September 2025 and 18 September 2025 seeking clarification regarding compliance with the Minimum Guaranteed VAH under two GeM orders.

The petitioner responded to the communications.

Thereafter, by communication dated 27 October 2025, NIT banned or suspended the petitioner from participating in all NIT tenders for two years.

The petitioner challenged the action under Article 226 of the Constitution, contending that no proper show-cause notice, hearing, or notice of the proposed blacklisting had been given.

1. Whether the emails dated 16 September 2025 and 18 September 2025 constituted a valid show-cause notice and adequate opportunity before the petitioner was blacklisted or suspended.

2. Whether the impugned communication dated 27 October 2025, imposing a two-year ban without a proper opportunity, was legally sustainable.

The Court applied the principles of natural justice governing blacklisting.

Relying principally on Erusian Equipment & Chemicals Ltd. v. State of West Bengal, (1975) 1 SCC 70, it held that an order of blacklisting, having adverse civil consequences, must be preceded by an opportunity of hearing.

It further relied on Raghunath Thakur v. State of Bihar, (1989) 1 SCC 229; Gorkha Security Services v. Government (NCT of Delhi), (2014) 9 SCC 105; Daffodills Pharmaceuticals Ltd. v. State of Uttar Pradesh, (2020) 18 SCC 550; and State Bank of India v. Rajesh Agarwal, (2023) 6 SCC 1.

The governing rule is that the opportunity must be meaningful and must disclose the proposed penal consequence, enabling the affected party to fully explain its position; a mere factual query or general correspondence does not satisfy this requirement.

The Court examined the emails dated 16 and 18 September 2025 and found that they merely sought information regarding compliance with the Minimum Guaranteed VAH under the relevant GeM orders.

Neither communication indicated that blacklisting, suspension, or any other penal consequence was under consideration.

Accordingly, they could not be treated as a show-cause notice or as a meaningful opportunity to defend against the proposed two-year ban.

The Court also rejected NIT’s contention that the petitioner had admitted the alleged default, holding that the response dated 18 September 2025 did not amount to an admission of misconduct and, in any event, could not cure the absence of a proper pre-decisional hearing.

Since blacklisting carries adverse civil consequences, the failure to provide a specific opportunity, including personal hearing, rendered the condition precedent to such action unsatisfied.

The communication was therefore set aside.

The Court clarified that its decision would not prevent NIT from taking fresh action against the petitioner, provided such action is taken strictly in accordance with law.