Tender authorities cannot blacklist bidders without prior show-cause notice and a reasonable opportunity to be heard.

The petitioner’s bid for road-strengthening and maintenance work was accepted, and a Letter of Acceptance was issued on 2 March 2026.

He had remitted the EMD and furnished a fixed security deposit of ₹2,32,500.

The Model Code of Conduct operated from 15 March to 7 May 2026.

By order dated 19 June 2026, the first respondent recorded that the petitioner had failed to execute the contract, forfeited the EMD, and barred him from participating in tenders floated by the District Rural Development Agency in Kanyakumari District.

The petitioner challenged the order, including the blacklisting, on the ground that he had not been given notice or an opportunity to respond.

1. Whether the authority was justified in forfeiting the petitioner’s EMD for failure to execute the contract after the Model Code of Conduct ceased to operate.

2. Whether the petitioner could be barred from participating in tenders without a prior show-cause notice and reasonable opportunity to respond.

Under Clause 12 of the tender conditions, the authority could forfeit the EMD if the successful bidder failed to sign the agreement within the specified period of fifteen days from the Letter of Acceptance.

Clause 37 permitted blacklisting as a penalty for violation of the tender terms, but did not prescribe the procedure for imposing it.

The Court applied the principle affirmed in Erusian Equipment and Chemicals Limited v. State of West Bengal, (1975) 1 SCC 70, that blacklisting has serious civil consequences, and relied also on M/s. AKG Construction and Developers Private Limited v. State of Jharkhand and others, SLP(C) No. 23858 of 2025, cited by the petitioner: before blacklisting, the affected party must receive a show-cause notice and a reasonable opportunity to respond.

The Court upheld the EMD forfeiture because the tender conditions authorised it for failure to sign within the specified time, and the petitioner had not executed the contract even after the Model Code of Conduct ended on 7 May 2026.

The impugned order was issued about one and a half months later, and the Court found no infirmity in the forfeiture.

By contrast, the bar on participating in future tenders was imposed without a show-cause notice.

Although Clause 37 authorised blacklisting, it did not dispense with the procedural protection required given blacklisting’s serious civil consequences; that part of the order was therefore unsustainable.

The EMD forfeiture was left undisturbed.

The fixed security deposit was directed to be refunded within thirty days of receipt of a copy of the order.

No costs were awarded, and the connected miscellaneous petition was closed.