### Requirement of Prior Show-Cause Notice is Mandatory for Order of Blacklisting to Comply with Natural Justice

The petitioner, a firm supplying medicines, challenged an order dated March 5, 2016, issued by Respondent No. 3, which debarred (blacklisted) the firm from future tender proceedings due to alleged irregularities in the supply of Meropenem injections

The petition also originally sought a refund of ₹38,08,200 allegedly illegally recovered by the State, but the petitioner withdrew this specific challenge during proceedings to pursue it in an alternative forum

The primary challenge remained the legality of the blacklisting order, which the petitioner claimed was passed without a show-cause notice or an opportunity for a hearing

Whether the order of blacklisting dated March 5, 2016, was legally sustainable despite the absence of a prior show-cause notice or an opportunity for hearing

The court primarily applied the principles of natural justice as interpreted by the Supreme Court in *Gorkha Security Services v. Government of NCT of New Delhi (2014)*

This precedent establishes that blacklisting involves "civil death" because it precludes a person from government contracts, necessitating a prior show-cause notice

The court also referenced *Erusian Equipment & Chemicals Ltd. v. State of W.B. (1975)* and *Patel Engg. Ltd. v. Union of India (2012)*, which mandate that while the State has the power to blacklist for legitimate purposes, it must act fairly, rationally, and in compliance with Article 14 of the Constitution

The court found that although the respondents alleged serious irregularities and claimed the order was based on an opinion from the Additional Advocate General, they could not demonstrate that any show-cause notice was issued to the petitioner prior to the debarment

Applying the ratio in *Gorkha Security Services*, the court reasoned that since blacklisting carries significant "civil and/or evil consequences" and is stigmatic in nature, the failure to provide the petitioner with an opportunity to respond to the allegations constituted a fatal procedural lapse

The court noted that while an oral hearing might not always be mandatory, the issuance of a written show-cause notice is a non-negotiable prerequisite for blacklisting

Consequently, the High Court quashed the blacklisting order dated March 5, 2016

The petition was allowed in part, with liberty reserved for the respondents to take fresh action against the petitioner in accordance with the law

No order as to costs was made