Orissa High Court
Dharitree Enterprises vs Odisha State Warehousing on 22 July, 2026
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.36978 of 2025
In the matter of an Application under Articles 226 & 227
of the Constitution of India, 1950.
***
Dharitree Enterprises
Represented through its
Managing Partner
Kuldip Kumar Agrawal
Aged about 42 years
Son of Late Sitaram Agrawal
At/P.O./P.S.: Kesinga
District: Kalahandi. ... Petitioner
-VERSUS-
1. Odisha State Warehousing
Corporation (OSWC)
Represented through its
Managing Director
Plot No.2, Cuttack Road
Bhubaneswar - 751 006
District: Khordha.
2. Chairman, Tender Committee
Odisha State Warehousing Corporation
At: Plot No.2, Cuttack Road
Bhubaneswar - 751 006
District: Khordha ... Opposite Parties.
Advocates appeared in this case:
For the Petitioner : Mr. Gautam Mukherji
Senior Advocate
W.P.(C) No.36978 of 2025 Page 1 of 93
Assisted by
M/s. Krushna Chandra Dash,
Manoj Kumar Sahoo,
Sanjay Kumar Das,
Prangya Paramita Barik,
Advocates
For the Opposite Parties : Mr. Bijaya Kumar Dash,
Senior Advocate
Assisted by
M/s. Smruti Ranjan Das,
Ritesh Pradhan,
Subhashree Samantaray,
Advocates
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDON
AND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMAN
Dates of Hearing : 31.03.2026, 08.07.2025 & 15.07.2026
::
Date of Judgment : 22.07.2026
J UDGMENT
MURAHARI SRI RAMAN, J.--
The petitioner, Handling and Transporting Contractor
selected as the lowest bidder in response to Notice
Inviting e-Tender vide No. COM/H&T/Tender/l3/2025/
3660, dated 04.10.2025, assails Office Order dated
15.12.2025 purported to have been signed by the
W.P.(C) No.36978 of 2025 Page 2 of 93
Managing Director, Odisha State Warehousing
Corporation, Bhubaneswar on 12.12.2025 (Annexure-1),
whereby besides debarring it from participating in any
future tenders of the Odisha State Warehousing
Corporation for a period of three years from the date of
issuance of said order under Clause 8(iv) and IX(f) of the
HTC Model Tender Form, terminated the contract for
handling of food grains at the State Warehousing
Corporation, Kesinga (Internal and RH Kesinga) for a
period of three years on the ground of non-submission of
Security Deposit and Bank Guarantee within stipulated
period, i.e., on or before 09.12.2025, and beseeches
invocation of exercise of power conferred on this Court
under the provisions of Articles 226 and 227 of the
Constitution of India for grant of following relief(s):
"In the above premises, it is therefore prayed that the
Hon‟ble Court may graciously be pleased to consider the
fact stated in this writ application, admit the same, issue
notices/rule nisi to the opposite parties, calling upon them
to file show cause as to why the prayer made in this writ
petition shall not be allowed.
And in the event, the opposite parties fail to show cause
or show insufficient cause then the Hon‟ble Court may
graciously be pleased to make the rule absolute and this
writ application may be allowed, thereby the impugned
Office Order dated 15.12.2025 illegally terminating of
contract of petitioner and debarring him to participate in
future tender for three years under Annexure-1 may be
quashed.
W.P.(C) No.36978 of 2025 Page 3 of 93
And further a writ of mandamus be issued, directing the
opposite party No.1 to allow petitioner to operate/execute
his Handling and Transporting work in Kesinga (lnternal
and RH) warehouse forthwith.
And/or pass such other order/orders, direction/
directions, writ/writs as the Hon‟ble Court may deem fit
and proper under the facts and circumstances of the
present case in the interest of justice and equity. And for
this he shall ever pray."
Facts:
2. The Odisha State Warehousing Corporation (for brevity,
―OSWC‖) has its warehouses/godowns situated at
different places/locations of the State and most of the
warehouses are utilized/hired by the Food Corporation
of India. As per the guideline and parameters of the Food
Corporation of India, the Schedule of Rate (SOR) and the
period of contract as well as the terms and conditions of
the Handling and Transport Contractors are regulated
through the OSWC. The Food Corporation of India hires
the warehouses of the OSWC and pays the amount/bills
of Handling and Transporting Contractors by adding 8%
supervision charge to the OSWC. In this usual
practice/process Handling and Transporting Contractors
are appointed by the OSWC through e-tender and they
operate their Handling and Transporting of food grain
stock of the Food Corporation of India.
W.P.(C) No.36978 of 2025 Page 4 of 93
2.1. The petitioner participated in response to the Notice
Inviting e-Tender No. COM/H&T/Tender/13/2025/
3660, dated 04.10.2025 (for convenience referred to as
―NIT‖) floated by the OSWC-opposite party No.1 inviting
application for appointment of Handling and
Transporting Contractors in three warehouses for
operation of food grain stock of Food Corporation of
India and got selected as the L-I bidder in respect two
warehouses, but so far as the subject warehouse namely
Kesinga (Internal & RH) is concerned, the Letter of
Acceptance dated 20.11.2025 was issued in its favour
with instruction to submit ―required security amount in
shape of Demand Draft and in shape of Bank
Guarantee‖, i.e., 5% of the value of the contract within
15 working days and to execute agreement.
2.2. The petitioner received the Letter of Acceptance dated
20.11.2025 through e-mail on 21.11.2025, when the son
of the Managing Partner was being under treatment in a
hospital in Bhubaneswar since 19.11.2025 for around
three days. After returning to Kesinga the Managing
Partner fell sick and was under medication since
25.11.2025 for around two weeks. Disclosing such fact a
representation dated 07.12.2025 was stated to have
been submitted to the Managing Director, OSWC with a
request to grant two weeks' time for submission of
security deposit and Bank Guarantee. After recovery, the
W.P.(C) No.36978 of 2025 Page 5 of 93
petitioner submitted an amount of Rs.32,25,000/-
through RTGS, i.e., 50% of the requisite total security
deposit of Rs.64,50,000/- on 16.12.2025 in terms of
Clause 8(a) of Model Tender Form.
2.3. A letter dated 16.12.2025 was communicated to the
Managing Director informing deposit being made
towards Security Deposit through RTGS and reiterated
that due to medical issues there was some delay in
compliance of terms of Letter of Acceptance. A request
was also made to allow the petitioner to execute the
agreement in respect of OSWC, Kesinga.
2.4. Having acknowledged to have received the above amount
towards Security Deposit and the Representation dated
16.12.2025, the opposite party No.1 (OSWC)
communicated the Office Order passed by the Managing
Director vide Annexure-1 to the petitioner through Chief
General Manager, OSWC, Bhubaneswar enclosed with
the Forwarding Letter dated 16.12.2025 (Annexure-6)
being sent via e-mail dated 17.12.2025 (07:44PM). By
dint of said Office Order not only the Handling and
Transporting Contract is stated to have been terminated
in view of sub-clauses (a) and (b) of Clause XI, but also
the petitioner is debarred for three years from the date of
issue of the said order in terms of sub-clauses (iv) of
Clause 8 read with sub-clause (f) of Clause XI of the
Model Tender Form (―MTF‖, abbreviated).
W.P.(C) No.36978 of 2025 Page 6 of 93
2.5. Questioning the propriety of Office Order, dated
12.12.2025 bearing No.4595/Com/H&T/Ten/13/2025,
15.12.2025 issued by the Odisha State Warehousing
Corporation, Bhubaneswar and legality of the decision
taken by the Managing Director, OSWC, the petitioner
filed the instant writ petition.
Counter affidavit of the opposite parties:
3. A counter affidavit dated 16.03.2026, sworn to by the
Assistant Manager (Commercial) of the OSWC having
stated to have been authorized by the opposite parties,
has come to be filed on 17.03.2026 by asserting that in
view of item (a) of sub-clause (i) of Clause 8 of the NIT,
the petitioner was required to furnish 5% of the contract
value as Security Deposit and item (b) of sub-clause (i) of
Clause 8 of said NIT does not apply to the instant fact-
situation. There being no provision provided for
extension of period within which the successful bidder
was to furnish Security Deposit in shape of Demand
Draft or Pay Order in order to satisfy the requirement
under item (a) of sub-clause (i) of Clause 8 of the NIT,
the Office Order dated 15.12.2025 cannot be said to be
faulted with.
3.1. It is categorically asserted by the opposite parties that
―no such representation (dated 07.12.2025) or medical
documents were ever received by the OSWC prior to the
W.P.(C) No.36978 of 2025 Page 7 of 93
due date for submission of the Security Deposit‖. As
contradictory statements are made by the petitioner with
respect to ―medical emergency‖ in the representation
dated 16.12.2025, its plea can be regarded as
―afterthought‖.
3.2. Sub-clause (iv) of Clause 8 of the NIT/MTF empowers
opposite parties to summarily terminate the contract in
default of furnishing Security Deposit as envisaged
under items (a), (b) or (c) of sub-clause (i) of Clause 8.
Stand of the opposite parties is made clear by stating
that the deposit of Rs.32,25,000/- (50% of the total
Security Deposit of Rs.64,50,000/- to be ensured)
through RTGS on 16.12.2025 is beyond the due date,
i.e., 09.12.2025.
3.3. Being competent in terms of Clause 8(iv) of the NIT, the
Managing Director of OSWC approved the decision for
debarment and signed on 12.12.2025 upon
consideration of material on record and issued the said
Office Order on 15.12.2025 (since 13th and 14th of
December, 2025 were holidays). However, the said order
could be communicated by the Chief General Manager
vide Forwarding Letter bearing No.4683-- Com/H&T/
Tender/13/2025, dated 16.12.2025 via e-mail on
17.12.2025.
Hearing:
W.P.(C) No.36978 of 2025 Page 8 of 93
4. As the debarment/blacklisting order poses ―civil death‖1
of the petitioner's business activities and the same
debars it from participating in tenders, urgency in the
matter being shown, the matter is taken up for hearing
on many occasions including 31.03.2026, 08.07.2025
and 15.07.2026.
4.1. The pleadings being completed, on the consent of
counsel appearing for the respective parties the matter is
heard and disposed of at the stage of ―admission‖.
4.2. Patiently heard Sri Gautam Mukherji, learned Senior
Advocate assisted by Sri Krushna Chandra Dash,
learned Advocate for the petitioner; Sri Bijaya Kumar
Dash, learned Senior Advocate along with Sri Smruti
Ranjan Dash, learned Advocate for the opposite parties.
4.3. Being directed to list the matter for ―orders‖, the matter
being listed, and upon further hearing, the Judgment is
delivered.
Relevant clauses of NIT/MTF:
5. Relevant clauses of the NIT/MTF (Annexure-8 of the writ
petition and Annexure-A/1 enclosed with the counter
1 In Blue Dreamz Advertising (P) Ltd. Vrs. Kolkata Municipal Corporation, (2024) 15
SCC 264, it is succinctly stated as follows:
"In other words, where the case is of an ordinary breach of contract and the
explanation offered by the person concerned raises a bona fide dispute,
blacklisting/debarment as a penalty ought not to be resorted to. Debarring a
person albeit for a certain number of years tantamounts to civil death
inasmuch as the said person is commercially ostracised resulting in serious
consequences for the person and those who are employed by him."
W.P.(C) No.36978 of 2025 Page 9 of 93
affidavit) necessary for the present purpose are extracted
hereunder:
"8. Security Deposit.--
(i) The successful tenderer shall furnish, within fifteen
working days of acceptance of his tender, a security
Deposit for the due performance of his obligations
under the contract.
The Security Deposit shall consist of:
(a) A sum equivalent to 5% of the value of the
Contract in the form of Demand Draft or Pay
Order issued by a scheduled bank in favour of
the OSWC. The contractor at his option may
deposit 50 (fifty) percent of this amount within
fifteen working days of acceptance of his
tender while the balance 50 (fifty) percent may
be paid by the contractor by deductions at the
rate of 10 (ten) per cent from the admitted bills.
The Security Deposit shall not earn any
interest.
(b) Another sum equivalent to 05% of the value of
contract, in the form of an irrevocable and
unconditional Bank Guarantee issued by any
Scheduled Bank in the format prescribed in
Appendix-IV which shall be enforceable till six
months after the expiry of the contract period.
(c) If applicable, an additional sum equivalent to
05% of the value of the contract (in addition to
a & b above), in terms of an undertaking
provided by the tenderer for relaxation of
eligibility conditions, in the form of an
W.P.(C) No.36978 of 2025 Page 10 of 93
irrevocable and unconditional Bank Guarantee
issued by any Scheduled Bank in the format
prescribed in Appendix-V which shall be
enforceable till six months after the expiry of
the contract period.
(ii) In case of failure of tenderer to deposit the Bank
Guarantee as stipulated in clause-8(i) (b) & (c) within
15 working days of acceptance of his tender, further
extension of 15 working days can be given subject to
levy of penalty @ 1% of the whole amount of the
Security Deposit and another 15 working days with
levy of penalty @ 2% on the whole amount of the
Security Deposit by Managing Director.
Note.--
The penalty in second extension of 15 working days
will be 2% in addition to the first penalty of 1% on
the whole amount of the security deposit.
(iii) The Security deposit furnished by the Tenderer will
be subject to the terms and conditions given in the
tender and the Corporation will not be liable for
payment of any interest on the security deposit.
(iv) In the event of the Tenderer‟s failure, after the
communication of acceptance of the tender by the
Corporation, to furnish the requisite Security Deposit
under clause 8(i)a by the due date or requisite
Security Deposit in the form of Bank Guarantee
under 8(i)b & 8(i)c including extension period
(applicable to submission of BG only), his contract
shall be summarily terminated besides forfeiture of
the Earnest Money and the Corporation shall
proceed for appointment of another contractor. Any
W.P.(C) No.36978 of 2025 Page 11 of 93
losses or damages arising out of and incurred by the
Corporation by such conduct of the contractor will be
recovered from the contractor, without prejudice to
any other rights and remedies of the Corporation
under the Contract and Law.
The contractor will also be debarred from
participating in any future tenders of the Corporation
for a period of three years. After the completion of
prescribed period of three years, the party may be
allowed to participate in the future tenders of OSWC
provided all the recoveries/dues have been effected
by the Corporation and there is no dispute pending
with the contractor/party.
***
VIII Period of contract.--
i) The contract shall remain in force for a period of two
years from the date of award of the work or such
later date as may be decided by the Managing
Director.
ii) The Managing Director reserves the rights to
terminate the contract at any time during its
currency without assigning any reasons thereof by
giving Thirty Days Notice in writing to the Contractor
at the notified address and the Contractor shall not
be entitled to any compensation by reason of such
termination. The action of the Managing Director,
OSWC, Bhubaneswar under this clause shall be
final, conclusive and binding on the contractor.
IX Security Deposit.--
W.P.(C) No.36978 of 2025 Page 12 of 93
a) The successful Tenderer shall furnish within a
fifteen working days of acceptance of his tender, a
Security Deposit for the due, proper and complete
discharge of all their obligations under the contract.
The Security Deposit will comprise of the total of the
amounts specified in following clauses (i) (ii) and (iii):
(i) A sum equivalent to 5% of the value of the
Contract in the form of Demand Draft or Pay
Order issued by any scheduled bank in favour
of the Odisha State Warehousing Corporation.
The contractor at his option may deposit 50
(fifty) percent of this amount within fifteen
working days of acceptance of his tender while
the balance 50 (fifty) percent may be paid by
the contractor by deductions at the rate of 10
(ten) percent from the admitted bills. The
Security Deposit shall not earn any interest.
(ii) Another sum equivalent to 05% of the value of
contract, in the form of an irrevocable and
unconditional Bank Guarantee issued by any
Scheduled Bank in the format prescribed in
Appendix-IV which shall be enforceable till six
months after the expiry of contract period.
(iii) If applicable, an additional sum equivalent to
05% of the value of contract (in addition to i & ii
above), in terms of the undertaking provided by
the Tenderer (without experience) for relaxation
of eligibility conditions, in the form of an
irrevocable and unconditional Bank Guarantee
issued by any Scheduled Bank in the format
prescribed in Appendix-V which shall be
enforceable till six months after the expiry of
contract period.
W.P.(C) No.36978 of 2025 Page 13 of 93
b) In case of failure of tenderer to deposit the Bank
Guarantee as stipulated in clause IX (a) (ii) & (iii)
within 15 working days of acceptance of his tender,
further extension of 15 working days can be given
subject to levy of penalty @ 2% of the whole amount
of the Security Deposit and another 15 working days
with levy of penalty @ 2% on the whole amount of
the security deposit by Managing Director.
Note.--
The penalty in second extension of 15 working days
will be 2% in addition to the first penalty of 1% on
the whole amount of the security deposit.
c) Upon satisfactory performance of the services and
on completion of all the obligations by the contractor
under the terms of contract and on submission of
"No Due Certificate" from the concerned authority
designated under EPF and MP Act 1952 showing
due and correct deposit in respect of the employees
employed by or through him for the contract period
and on obtaining a "No Demand Certificate" from the
assigned authority of OSWC, the Security Deposit
will be refunded to the contractor subject to
deductions, if any from the Security as may be
necessary for recovering the claims of OSWC against
the contractor. The OSWC will not be liable for
payment of any interest on the Security Deposit. For
any EPF violations which may be detected at any
later stage, the contractor shall be liable and will be
proceeded against as per law. The tenderer should
be registered with EFFO as an independent
employer, having separate code number as required
for an employer under the provisions of EPF and MP
Act 1952 and the EPF Scheme framed there under.
W.P.(C) No.36978 of 2025 Page 14 of 93
d) The Managing Director shall have the rights to forfeit
the entire or part of the amount of security deposit
lodged by the contractors or to appropriate the
security deposit or any part, thereof in or towards
the satisfaction of any sum due to be claimed for
any damages, losses charges, expenses or costs
that may be suffered or incurred by the Corporation.
The decision of the Managing Director in respect of
such damages, losses, charges, costs or expenses
shall be final and binding on the contractors.
e) Whenever the Security Deposit falls short of the
specified amount, the Contractor shall make good
the deficit so that the total amount of Security
Deposit shall not at any time be less than specified
amount.
f) In the event of the Tenderer‟s failure, after the
communication of acceptance of the tender by the
Corporation, to furnish the requisite Security Deposit
under clause 8(i)a by the due date or requisite
security deposit in the form of Bank Guarantee
under 8(i)b & 8(i)c including extension period
(applicable to submission of BG only), his contract
shall be summarily terminated besides forfeiture of
the Earnest Money and the Corporation shall
proceed for appointment of another contractor. Any
losses or damages arising out of and incurred by the
Corporation by such conduct of the contractor will be
recovered from the contractor, without prejudice to
any other rights and remedies of the Corporation
under the Contract and Law. The contractor will also
be debarred from participating in any future tenders
of the Corporation for a period of three years. After
the completion of prescribed period of three years,
W.P.(C) No.36978 of 2025 Page 15 of 93
the party may be allowed to participate in the future
tenders of OSWC provided all the recoveries/dues
have been effected by the Corporation and there is
no dispute pending with the contractor/party."
Arguments advanced by the counsel representing
respective parties:
6. Sri Gautam Mukherji, learned Senior Advocate alleging
ante-dating of the Office Order purported to have been
signed on 12.12.2025 after receipt of Representation
dated 07.12.2025 along with documents showing
medical exigency which prevented the petitioner from
complying with the terms of Clause 8 within the period
stipulated. Expanding his argument further, it is
submitted that incorrect fact has been stated in the
counter affidavit that the opposite parties have not
received any ―medical document‖, though it is admitted
by them and the Representation dated 07.12.2025
reveals the following:
"I received your acceptance letter dated 20.11.2025, at
that time I was in Kalinga Hospital, Bhubaneswar to treat
of my son for liver disease. After return since 22.11.2025
I fell in sever viral fever and undergoing treatment with
routine medication for 2 weeks as advised by doctor.
Therefore, your goodself is earnestly requested to grant
me two weeks‟ time enabling me to submit the Security
Deposit and Bank Guarantee. Such unavoidable situation
due to ill health may kindly be accommodated."
W.P.(C) No.36978 of 2025 Page 16 of 93
6.1. In furtherance to such submission, Sri Gautam
Mukherji, learned Senior Advocate would point out that
the OSWC has acknowledged receipt of the
Representation dated 16.12.2025 of the petitioner along
with a copy of ―ICICI Bank Advice Receipt‖ depicting
transaction to the tune of Rs.32,25,000/- being made
through RTGS on 16.12.2025 (evidence of such receipt
is available at the bottom portion of Annexure-5 of the
writ petition and Annexure-D/1 of counter affidavit).
Refuting the contention of Sri Bijaya Kumar Dash,
learned Senior Advocate for OSWC, the learned Senior
Counsel for the petitioner would argue that had the
Office Order been signed on 12.12.2025 by the
Managing Director and stated to have been issued vide
No.4595/Com/H&T/Ten/13/2025/OSWC, dated
15.12.2025, his office should/could have refused to
acknowledge the receipt of the Representation dated
16.12.2025. The opposite parties of the OSWC having
shown such sanguine approach to terminate the
contract with the petitioner and clamping debarment
from participating in future tender ―from the date of
issuance of this order under the HTC MTF Clause 8(iv)
and IX(f)‖ there is no explanation as to why the
communication thereof was made on 17.12.2025 at
7:44PM. [See, Annexure-6 series enclosed with the writ
petition]. The factual details so far as medical exigency is
concerned, the authorities of the OSWC having not
W.P.(C) No.36978 of 2025 Page 17 of 93
discussed nor decided on its merit appreciating the
difficulty faced by the petitioner, it is insisted by Sri
Gautam Mukherji, learned Senior Advocate to show
indulgence in the Office Order dated 15.12.2026 by
exercising power under Articles 226 and 227 of the
Constitution of India.
6.2. Laying emphasis on the averment made at paragraph 10
of the writ petition that in view of Clause 10.5.4 of the
Guidelines issued by the Central Vigilance Commission
it is obligated on the opposite parties to consider the
exceptional case, like the present one, and extend the
time to furnish Security Deposit as required under
Clause 8 of the NIT/MTF. Having not done such exercise
by the opposite party No.1, his Office Order dated
15.12.2025 is arbitrary, whimsical and fanciful.
6.3. Sri Gautam Mukherji, learned Senior Advocate,
elaborating the statement made at paragraph 14 of the
writ petition, would vehemently contend that the
punitive action like debarring the petitioner from
participating in future tenders for three years without
affording a opportunity of hearing violates the principles
of natural justice and it is infraction of fair-play in
action. It is urged that such unilateral decision of the
Managing Director of OSWC coupled with termination of
contract vide Office Order dated 15.12.2026 would fall
within the meaning of ―unreasonableness‖ as envisioned
W.P.(C) No.36978 of 2025 Page 18 of 93
in Article 14 and the action impinges upon the
petitioner's fundamental right to carry on business as
postulated under Article 19(1)(g) of the Constitution of
India.
7. Repelling the contention of Sri Gautam Mukherji,
learned Senior Advocate for the petitioner, Sri Bijaya
Kumar Dash, learned Senior Advocate for the OSWC
submitted that the theory of ante-dating or back-dating
the Office Order is not supported by any material
particulars. There is no denial of the fact by the
petitioner that it received the Letter of Acceptance dated
20.11.2025 via e-mail on 21.11.2025 and fifteen working
days period stipulated for submission of Security
Deposit in shape of Demand Draft or Pay Order lapsed
on 09.12.2025 (vide paragraph 2 of the rejoinder
affidavit of the petitioner). Hence, he urged that failure
to comply with the terms of NIT/MTF triggered exercise
of power under Clause 8(iv) inasmuch as the petitioner
deposited Rs.32,25,000/- through RTGS, which is 50%
of the sum equivalent to 5% of the value of the contract
as per the requirement under item (a) of sub-clause (i) of
Clause 8 thereof. Since the circumstances enumerated
by the petitioner very well comprehended in item (a) of
sub-clause (i) of Clause 8, and the nature of deposit
made is not within the ken of either item (b) or item (c) of
sub-clause (i) of Clause 8, there was no impediment for
W.P.(C) No.36978 of 2025 Page 19 of 93
the Managing Director to take a decision not only to
terminate the contract but also to debar the petitioner
from participating in future tender for three years.
7.1. With vehemence it is submitted by Sri Bijaya Kumar
Dash, learned Senior Advocate that the Managing
Director being apprised of the factual details as available
on record, approved and signed the Office Order on
12.12.2025, which could be issued from the Office of the
Odisha State Warehousing Corporation, Bhubaneswar
only on 15.12.2025, as two days' holidays intervened in
between.
7.2. It is discernible from Letter dated 07.12.2025 that no
document was enclosed showing medical attendance.
Therefore, the statement of the petitioner is fallacious
that medical documents formed part thereof. It is the
Representation dated 16.12.2025 which was received in
the Office of OSWC. Therefore, there was no scope for
the Managing Director of OSWC to consider the medical
emergency or otherwise at the relevant point of time
when the Office Order was prepared and signed.
Analysis:
8. Having heard the counsel for the respective parties and
perused the record, the relevant facts emerge as follows:
W.P.(C) No.36978 of 2025 Page 20 of 93
i. Clause 8 of subject E-Tender for appointment of
Handling and Transport Contractor under item (a)
of sub-clause (i) requires "a sum equivalent to 5% of
the value of contract in the form of Demand Draft or
Pay Order issued by a Scheduled Bank in favour of
the OSWC" to be deposited towards Security
Deposit; nonetheless, the successful tenderer
within fifteen days of acceptance of the tender at
his option deposit 50% of such amount while the
balance 50% can be left for being deducted at the
rate of 10% from the admitted bills. Items (b) and
(c) of sub-clause (i) of Clause 8 speaks about
―another sum‖ and ―additional sum‖ to be secured
in the form of Bank Guarantee.
ii. The petitioner in his Letter (Representation) dated
16.12.2025 clarified that "we have deposited the
requisite security deposit for SWC, Kesinga (Internal
and RH Kesinga) amounting to Rs.32,25,000/-
through RTGS to corporate account number vide
ICICR52025121600742299, dated 16.12.2025
(copy enclosed) and rest fifty percent of Security
Deposit may kindly be deducted from out running
bills". Therefore, there is no confusion in mind that
the petitioner has impressed upon the OSWC to
treat such Security Deposit to fall within the
purview of item (a) of sub-clause (i) of Clause 8.
W.P.(C) No.36978 of 2025 Page 21 of 93
iii. The petitioner having transmitted such amount
through RTGS in terms of item (a) of sub-clause (i)
of Clause 8) on 16.12.2025, admittedly said
payment towards Security Deposit was made
beyond 09.12.2025, i.e., fifteen working days from
date of issue of Letter of Acceptance dated
20.11.2025.
iv. There is no denial of the fact by the OSWC that
Letter/Representation dated 16.12.2025 of the
petitioner was received by it on 16.12.2025.
However, the opposite parties disputed the fact that
"no such Representation (dated 07.12.2025) or
medical documents were ever received by the OSWC
prior to the due date for submission of the Security
Deposit".
v. However, the Representations dated 07.12.2026
and 16.12.2026 clarify that due to medical
emergency of the Managing Partner and his son,
the petitioner-firm could not satisfy the conditions
stipulated in Clause 8 of the NIT/MTF.
9. With the above background of factual scenario, minute
study of the documents available on record reveals that
no plausible reason to persuade this Court has been
ascribed to indicate as to why the Office Order being
signed on 12.12.2025 by the Managing Director of
W.P.(C) No.36978 of 2025 Page 22 of 93
OSWC and issued vide No.4595/Com/H&T/Ten/13/
2025, dated 15.12.2025 (though 13.12.2025 and
14.12.2025 were holidays on account of Second
Saturday and Sunday respectively) could be forwarded
to the petitioner on 17.12.2025 at 7:44PM even as
Letter/Representation dated 16.12.2025 enclosed with
the ICICI Bank Advice Receipt showing time at 4:15PM
was received by the OSWC on 16.12.2025.
9.1. The matter can be looked into from another angle.
Whereas the opposite parties have admitted by stating
that the due date for furnishing Security Deposit was
09.12.2025 (See paragraph 4 of the counter affidavit),
there is nothing placed on record with explanation to
suggest as to why immediate step on 10th or 11th of
December, 2025 could not be taken to terminate the
contract and pass orders thereon. All these events being
not sufficiently explained, the apprehension of the
petitioner that the Office Order purported to have been
signed on 12.12.2025 and stated have been issued on
15.12.2025 cannot be overlooked, the contention of the
petitioner cannot be discarded at the threshold. The
impugned Office Order (Annexure-1) terminating the
contract has impact of civil/evil consequences and
inflicting punishment like debarring the petitioner from
participating in future tenders for three years would
W.P.(C) No.36978 of 2025 Page 23 of 93
affect the livelihood of the personnel engaged for
carrying out the business.
9.2. In the case of Canara Bank Vrs. Debasis Das, (2003) 4
SCC 557 = (2003) 2 SCR 968 the principles of natural
justice has illuminatingly been discussed in the
following manner: (SCC)
"12. Residual and crucial question that remains to be
adjudicated is whether principles of natural justice
have been violated; and if so, to what extent any
prejudice has been caused. It may be noted at this
juncture that in some cases it has been observed
that where grant of opportunity in terms of principles
of natural justice does not improve the situation,
"useless formality theory" can be pressed into
service.
13. Natural justice is another name for common-sense
justice. Rules of natural justice are not codified
canons. But they are principles ingrained into the
conscience of man. Natural justice is the
administration of justice in a common-sense liberal
way. Justice is based substantially on natural
ideals and human values. The administration of
justice is to be freed from the narrow and restricted
considerations which are usually associated with a
formulated law involving linguistic technicalities and
grammatical niceties. It is the substance of justice
which has to determine its form.
14. The expressions "natural justice" and "legal justice"
do not present a watertight classification. It is the
substance of justice which is to be secured by both,
W.P.(C) No.36978 of 2025 Page 24 of 93
and whenever legal justice fails to achieve this
solemn purpose, natural justice is called in aid of
legal justice. Natural justice relieves legal justice
from unnecessary technicality, grammatical
pedantry or logical prevarication. It supplies
the omissions of a formulated law. As Lord
Buckmaster said, no form or procedure should ever
be permitted to exclude the presentation of a
litigant's defence.
15. The adherence to principles of natural justice as
recognized by all civilized States is of supreme
importance when a quasi-judicial body embarks on
determining disputes between the parties, or any
administrative action involving civil consequences is
in issue. These principles are well settled. The
first and foremost principle is what is
commonly known as audi alteram partem rule.
It says that no one should be condemned unheard.
Notice is the first limb of this principle. It must be
precise and unambiguous. It should apprise the
party determinatively of the case he has to meet.
Time given for the purpose should be adequate so as
to enable him to make his representation. In the
absence of a notice of the kind and such reasonable
opportunity, the order passed becomes wholly
vitiated. Thus, it is but essential that a party should
be put on notice of the case before any adverse
order is passed against him. This is one of the most
important principles of natural justice. It is after all
an approved rule of fair play. The concept has
gained significance and shades with time. When the
historic document was made at Runnymede in
1215, the first statutory recognition of this principle
found its way into the "Magna Carta". The classic
W.P.(C) No.36978 of 2025 Page 25 of 93
exposition of Sir Edward Coke of natural
justice requires to "vocate, interrogate and
adjudicate". Inthe celebrated case of Cooper Vrs.
Wandsworth Board of Works, (1863) 143 ER 414 =
14 CBNS 180 = (1861-73) All ER Rep Ext 1554 the
principle was thus stated : (ER p. 420)
„[E]ven God himself did not pass sentence upon
Adam before he was called upon to make his
defence. „Adam' (says God), „where art thou? Hast
thou not eaten of the tree whereof, I commanded
thee that thou shouldest not eat?' ***'
Since then the principle has been chiselled, honed
and refined, enriching its content. Judicial treatment
has added light and luminosity to the concept, like
polishing of a diamond.
16. Principles of natural justice are those rules
which have been laid down by the courts as
being the minimum protection of the rights of
the individual against the arbitrary procedure
that may be adopted by a judicial, quasi-
judicial and administrative authority while
making an order affecting those rights. These
rules are intended to prevent such authority from
doing injustice.
17. What is meant by the term "principles of natural
justice" is not easy to determine. Lord Summer (then
Hamilton, L.J.) in R. Vrs. Local Govt. Board, (1914) 1
KB 160 = 83 LJKB 86 (KB at p. 199) described the
phrase as sadly lacking in precision. In General
Council of Medical Education & Registration of U.K.
Vrs. Spackman, 1943 AC 627 = (1943) 2 All ER 337
= 112 LJKB 529 (HL) Lord Wright observed that it
W.P.(C) No.36978 of 2025 Page 26 of 93
was not desirable to attempt "to force it into any
Procrustean bed" and mentioned that one essential
requirement was that the Tribunal should be
impartial and have no personal interest in the
controversy, and further that it should give "a full
and fair opportunity" to every party of being heard.
18. Lord Wright referred to the leading cases on the
subject. The most important of them is Board of
Education Vrs. Rice, 1911 AC 179 = 80 LJKB 796 =
(1911-13) All ER Rep 36 (HL) where Lord Loreburn,
L.C. observed as follows: (All ER p. 38 C-F)
„Comparatively recent statutes have extended, if
they have not originated, the practice of imposing
upon departments or officers of State the duty of
deciding or determining questions of various kinds.
It will, I suppose, usually be of an administrative
kind; but sometimes it will involve matter of law as
well as matter of fact, or even depend upon matter
of law alone. In such cases, the Board of Education
will have to ascertain the law and also to ascertain
the facts. I need not add that in doing either they
must act in good faith and listen fairly to both sides,
for that is a duty lying upon everyone who decides
anything. But I do not think they are bound to treat
such a question as though it were a trial. *** The
Board is in the nature of the arbitral tribunal, and a
court of law has no jurisdiction to hear appeals from
their determination, either upon law or upon fact.
But if the court is satisfied either that the Board
have not acted judicially in the way which I have
described, or have not determined the question
which they are required by the Act to determine,
W.P.(C) No.36978 of 2025 Page 27 of 93
then there is a remedy by mandamus and
certiorari.'
Lord Wright also emphasized from the same decision
the observation of the Lord Chancellor that "the
Board can obtain information in any way they think
best, always giving a fair opportunity to those who
are parties to the controversy for correcting or
contradicting any relevant statement prejudicial to
their view". To the same effect are the observations
of Earl of Selbourne, L.O. in Spackman Vrs.
Plumstead District Board of Works, (1885) 10 AC
229 = 54 LJMC 81 = 53 LT 151 where the learned
and noble Lord Chancellor observed as follows:
„No doubt, in the absence of special provisions as to
how the person who is to decide is to proceed, law
will imply no more than that the substantial
requirements of justice shall not be violated. He is
not a judge in the proper sense of the word; but he
must give the parties an opportunity of being heard
before him and stating their case and their view. He
must give notice when he will proceed with the
matter and he must act honestly and impartially
and not under the dictation of some other person or
persons to whom the authority is not given by law.
There must be no malversation of any kind. There
would be no decision within the meaning of the
statute if there were anything of that sort done
contrary to the essence of justice.'
Lord Selbourne also added that the essence of
justice consisted in requiring that all parties should
have an opportunity of submitting to the person by
whose decision they are to be bound, such
considerations as in their judgment ought to be
W.P.(C) No.36978 of 2025 Page 28 of 93
brought before him. All these cases lay down the
very important rule of natural justice contained in
the oft-quoted phrase "justice should not only
bedone, but should be seen to be done".
19. Concept of natural justice has undergone a great
deal of change in recent years. Rules of natural
justice are not rules embodied always expressly in a
statute or in rules framed thereunder. They may be
implied from the nature of the duty to be performed
under a statute. What particular rule of natural
justice should be implied and what its context
should be in a given case must depend to a great
extent on the facts and circumstances of that case,
the framework of the statute under which the
enquiry is held. The old distinction between a
judicial act and an administrative act has withered
away. Even an administrative order which
involves civil consequences must be consistent
with the rules of natural justice. The
expression "civil consequences" encompasses
infraction of not merely property or personal
rights but of civil liberties, material
deprivations and non-pecuniary damages. In its
wide umbrella comes everything that affects a
citizen in his civil life.
20. Natural justice has been variously defined by
different Judges. A few instances will suffice. In
Drew Vrs. Drew and Lebura, (1855) 2 Macq 1 = 25
LTOS 282 (HL) (Macq at p. 8), Lord Cranworth
defined it as "universal justice". In James Dunber
Smith Vrs. Her Majesty the Queen, (1877-78) 3 AC
614 (PC) (AC at p. 623) Sir Robort P. Collier,
speaking for the Judicial Committee of the Privy
W.P.(C) No.36978 of 2025 Page 29 of 93
Council, used the phrase "the requirements of
substantial justice", while in Arthur John Spackman
Vrs. Plumstead District Board of Works, (1885) 10
AC 229 = 54 LJMC 81 = 53 LT 151 (AC at p. 240),
the Earl of Selbourne, S.C. preferred the phrase "the
substantial requirement of justice". In Vionet Vrs.
Barrett, (1885) 55 LJRD 39 (LJRD at p. 41), Lord
Esher, M.R. defined natural justice as "the natural
sense of what is right and wrong". While, however,
deciding Hookings Vrs. Smethwick Local Board of
Health, (1890) 24 QBD 712 Lord Esher, M.R. instead
of using the definition given earlier by him in Vionet
case, (1885) 55 LJRD 39 chose to define natural
justice as "fundamental justice". In Ridge Vrs.
Baldwin, (1963) 1 QB 539 = (1962) 1 All ER 834 =
(1962) 2 WLR 716 (CA) (QB at p. 578), Harman, L.J.,
in the Court of Appeal countered natural justice with
"fair play in action", a phrase favoured by
Bhagwati, J. in Maneka Gandhi Vrs. Union of India,
(1978) 1 SCC 248 = (1978) 2 SCR 621. In H.K. (An
Infant), Re (1967) 2 QB 617 = (1967) 1 All ER 226 =
(1967) 2 WLR 962 (QB at p. 630), Lord Parker, C.J.
preferred to describe natural justice as “a duty to
actfairly”. In Fairmount Investments Ltd. Vrs. Secy.
of State for Environment, (1976) 1 WLR 1255 =
(1976) 2 All ER 865 (HL) Lord Russell of Killowen
somewhat picturesquely described natural justice as
“a fair crack of the whip” while Geoffrey Lane, L.J.
in R. Vrs. Secy. of State for Home Affairs, ex p
Hosenball, (1977) 1 WLR 766 = (1977) 3 All ER 452
(CA) preferred the homely phrase “common
fairness”.
21. How then have the principles of natural justice been
interpreted in the courts and within what limits are
W.P.(C) No.36978 of 2025 Page 30 of 93
they to be confined? Over the years by a process of
judicial interpretation two rules have been evolved
as representing the principles of natural justice in
judicial process, including therein quasi-judicial and
administrative process. They constitute the basic
elements of a fair hearing, having their roots in the
innate sense of man for fair play and justice which
is not the preserve of any particular race or country
but is shared in common by all men. The first rule is
“nemo judex in causa sua” or “nemo debet esse
judex in propria causa sua” as stated in Earl of
Derby’s case, (1605) 12 Co Rep 114 = 77 ER 1390
that is, “no man shall be a judge in his own
cause”.Coke used the form “aliquis non debet esse
judex in propria causa, quia non potest esse judex et
pars” (Co. Litt. 1418), that is, “no man ought to be a
judge in his own case, because he cannot act as
judge and at the same time be a party”. The form
“nemo potest esse simul actor et judex”, that is, “no
one can be at once suitor and judge” is also at times
used. The second rule is “audi alteram partem”, that
is, “hear the other side”. At times and particularly in
continental countries, the form “audietur et altera
pars” is used, meaning very much the same thing. A
corollary has been deduced from the above two
rules and particularly the audi alteram partem rule,
namely “qui aliquid statuerit, parte inaudita altera
acquum licet dixerit, haud acquum fecerit” that is,
“he who shall decide anything without the
other side having been heard, although he may
have said what is right, will not have been
what is right” [see Boswel‟s case, (1605) 6 Co Rep
48b = 77 ER 326 (Co Rep at p. 52-a) or in other
words, as it is now expressed, “justice should not
only be done but should manifestly be seen to be
W.P.(C) No.36978 of 2025 Page 31 of 93
done”. Whenever an order is struck down as invalid
being in violation of principles of natural justice,
there is no final decision of the case and fresh
proceedings are left upon (sic. open). All that is
done is to vacate the order assailed by virtue of
its inherent defect, but the proceedings are not
terminated.
22. What is known as “useless formality theory” has
received consideration of this Court in M.C. Mehta
Vrs. Union of India, (1999) 6 SCC 237. It was
observed as under: (SCC pp. 245-47, paras 22-23)
„22. Before we go into the final aspects of this
contention, we would like to state that cases
relating to breach of natural justice do also
occur where all facts are not admitted or are
not all beyond dispute. In the context of those
cases there is a considerable case-law and
literature as to whether relief can be refused
even if the court thinks that the case of the
applicant is not one of “real substance” or that
there is no substantial possibility of his
success or that the result will not be different,
even if natural justice is followed see Malloch
Vrs. Aberdeen Corpn., (1971) 2 All ER 1278 =
(1971) 1 WLR 1578 (HL) (per Lord Reid and
Lord Wilberforce), Glynn Vrs. Keele University,
(1971) 2 All ER 89 = (1971) 1 WLR 487,
Cinnamond Vrs. British Airports Authority,
(1980) 2 All ER 368 = (1980) 1 WLR 582 (CA)
and other cases where such a view has been
held. The latest addition to this view is R. Vrs.
Ealing Magistrates’ Court, ex p Fannaran,
(1996) 8 Admn LR 351 (Admn LR at p. 358)
W.P.(C) No.36978 of 2025 Page 32 of 93
[see de Smith, Suppl. p. 89 (1998)] where
Straughton, L.J. held that there must be
„demonstrable beyond doubt’ that the result
would have been different. Lord Woolf in Lloyd
Vrs. McMahon, (1987) 1 All ER 1118 = 1987
AC 625 = (1987) 2 WLR 821 (CA) has also not
disfavoured refusal of discretion in certain
cases of breach of natural justice. The New
Zealand Court in McCarthy Vrs. Grant, 1959
NZLR 1014 however goes halfway when it
says that (as in the case of bias), it is sufficient
for the applicant to show that there is “real
likelihood — not certainty — of prejudice”. On
the other hand, Garner‟s Administrative Law
(8th Edn., 1996, pp. 271-72) says that slight
proof that the result would have been different
is sufficient. On the other side of the argument,
we have apart from Ridge Vrs. Baldwin, 1964
AC 40 = (1963) 2 All ER 66 = (1963) 2 WLR 935
(HL), Megarry, J. in John Vrs. Rees, (1969) 2 All
ER 274 = 1970 Ch 345 = (1969) 2 WLR 1294
stating that there are always “open and shut
cases” and no absolute rule of proof of
prejudice can be laid down. Merits are not for
the court but for the authority to consider.
Ackner, J. has said that the “useless formality
theory” is a dangerous one and, however
inconvenient, natural justice must be followed.
His Lordship observed that “convenience and
justice are often not on speaking terms”. More
recently, Lord Bingham has deprecated the
“useless formality theory” in R. Vrs. Chief
Constable of the Thames Valley Police Forces,
ex p Cotton, 1990 IRLR 344 by giving six
reasons. (See also his article “Should Public
W.P.(C) No.36978 of 2025 Page 33 of 93
Law Remedies be Discretionary?” 1991 PL,
p.64.) A detailed and emphatic criticism of the
“useless formality theory” has been made
much earlier in “Natural Justice, Substance or
Shadow” by Prof. D.H. Clark of Canada (see
1975 PL, pp. 27-63) contending that Malloch,
(1971) 2 All ER 1278 = (1971) 1 WLR 1578 (HL)
and Glynn, (1971) 2 All ER 89 = (1971) 1 WLR
487 were wrongly decided. Foulkes
(Administrative Law, 8th Edn., 1996, p. 323),
Craig (Administrative Law, 3rd Edn., p. 596)
and others say that the court cannot prejudge
what is to be decided by the decision-making
authority. de Smith (5th Edn., 1994, paras
10.031 to 10.036) says courts have not yet
committed themselves to any one view though
discretion is always with the court. Wade
(Administrative Law, 5th Edn., 1994, pp. 526-
30) says that while futile writs may not be
issued, a distinction has to be made according
to the nature of the decision. Thus, in relation
to cases other than those relating to admitted
or indisputable facts, there is a considerable
divergence of opinion whether the applicant
can be compelled to prove that the outcome will
be in his favour or he has to prove a case of
substance or if he can prove a “real likelihood”
of success or if he is entitled to relief even if
there is some remote chance of success. We
may, however, point out that even in cases
where the facts are not all admitted or beyond
dispute, there is a considerable unanimity that
the courts can, in exercise of their “discretion”,
refuse certiorari, prohibition, mandamus or
injunction even though natural justice is not
W.P.(C) No.36978 of 2025 Page 34 of 93
followed. We may also state that there is yet
another line of cases as in State Bank of
Patiala Vrs. S.K. Sharma, (1996) 3 SCC 364,
Rajendra Singh Vrs. State of M.P., (1996) 5
SCC 460 that even in relation to statutory
provisions requiring notice, a distinction is to be
made between cases where the provision is
intended for individual benefit and where a
provision is intended to protect public interest.
In the former case, it can be waived while in
the case of the latter, it cannot be waived.
23. We do not propose to express any opinion on
the correctness or otherwise of the “useless
formality” theory and leave the matter for
decision in an appropriate case, inasmuch as
in the case before us, “admitted and
indisputable” facts show that grant of a writ
will be in vain as pointed out by Chinnappa
Reddy, J.‟
23. As was observed by this Court we need not go into
“useless formality theory” in detail; in view of the
fact that no prejudice has been shown. As is rightly
pointed out by learned counsel for the appellants,
unless failure of justice is occasioned or that it
would not be in public interest to dismiss a petition
on the fact situation of a case, this Court may refuse
to exercise the said jurisdiction (see Gadde
Venkateswara Rao Vrs. Govt. of A.P., AIR 1966 SC
828). It is to be noted that legal formulations cannot
be divorced from the fact situation of the case.
Personal hearing was granted by the Appellate
Authority, though not statutorily prescribed. In a
given case post-decisional hearing can obliterate the
W.P.(C) No.36978 of 2025 Page 35 of 93
procedural deficiency of a pre-decisional hearing.
(See Charan Lal Sahu Vrs. Union of India, (1990) 1
SCC 613 = AIR 1990 SC 1480.)
24. Additionally, there was no material placed by the
employee to show as to how he has been prejudiced.
Though in all cases the post-decisional hearing
cannot be a substitute for pre-decisional hearing, in
the case at hand the position is different. The
position was illuminatingly stated by this Court in
Managing Director, ECIL Vrs. B. Karunakar, (1993) 4
SCC 727 which reads as follows:
„31. Hence, in all cases where the enquiry officer’s
report is not furnished to the delinquent
employee in the disciplinary proceedings, the
courts and tribunals should cause the copy of
the report to be furnished to the aggrieved
employee if he has not already secured it
before coming to the court/tribunal and give
the employee an opportunity to show how his
or her case was prejudiced because of the non-
supply of the report. If after hearing the
parties, the court/tribunal comes to the
conclusion that the non-supply of the report
would have made no difference to the ultimate
findings and the punishment given, the
court/tribunal should not interfere with the
order of punishment. The court/tribunal should
not mechanically set aside the order of
punishment on the ground that the report was
not furnished as is regrettably being done at
present. The courts should avoid resorting to
short cuts. Since it is the courts/tribunals
which will apply their judicial mind to theW.P.(C) No.36978 of 2025 Page 36 of 93
question and give their reasons for setting
aside or not setting aside the order of
punishment, (and not any internal appellate or
revisional authority), there would be neither a
breach of the principles of natural justice nor a
denial of the reasonable opportunity. It is only
if the court/tribunal finds that the furnishing of
the report would have made a difference to the
result in the case that it should set aside the
order of punishment. Where after following the
above procedure, the court/tribunal sets aside
the order of punishment, the proper relief that
should be granted is to direct reinstatement of
the employee with liberty to the authority/
management to proceed with the inquiry, by
placing the employee under suspension and
continuing the inquiry from the state of
furnishing him with the report. The question
whether the employee would be entitled to the
back wages and other benefits from the date of
his dismissal to the date of his reinstatement if
ultimately ordered, should invariably be left to
be decided by the authority concerned
according to law, after the culmination of the
proceedings and depending on the final
outcome. If the employee succeeds in the fresh
inquiry and is directed to be reinstated, the
authority should be at liberty to decide
according to law how it will treat the period
from the date of dismissal till the reinstatement
and to what benefits, if any and the extent of
the benefits, he will be entitled. The
reinstatement made as a result of the setting
aside of the inquiry for failure to furnish the
report, should be treated as a reinstatement for
W.P.(C) No.36978 of 2025 Page 37 of 93
the purpose of holding the fresh inquiry from
the stage of furnishing the report and no more,
where such fresh inquiry is held. That will also
be the correct position in law.‟***”
9.3. At this stage it is apposite to reproduce the observation
of a Division Bench of this Court made in the case of
Sponge Udyog Pvt. Ltd. Vrs. The Assistant Commissioner
of Sales Tax, Rourkela-II Circle, Rourkela, 2010 SCC
OnLine Ori 68:
“5. Admittedly before issuance of the order of
suspension, the petitioner had not been served with
any notice to show cause. Admittedly there is no
provision in the Act or the Rules for service of a
notice to show cause before an order of suspension
is passed. Under these circumstances, the Court is
called upon to decide as to whether a notice in the
present case is required to be served on the
petitioner to show cause before the order of
suspension was passed or not. In the case of M/s.
Ramkumar Jaigopal Vrs. Assistant Commissioner of
Sales Tax, Sambalpur, 2007 (I) OLR 534 the
challenge was in relation to cancellation of
registration certificate. The petitioner therein was a
registered dealer under the Sales Tax authorities for
more than 58 years and without giving an
opportunity of hearing, the registration certificate
was cancelled. The Court not only dealt with Section
31 of the Act dealing with cancellation of certificate
of registration but also Section 30 of the Act which
dealing with suspension of registration certificate. InW.P.(C) No.36978 of 2025 Page 38 of 93
paragraph-8 of the judgment relying on an earlier
decision of the Hon‟ble Supreme Court in the case
ofSmt. Maneka Gandhi Vrs. Union of India and
another, reported in AIR 1978 SC 597, the Court
made the following observation:
“*** It must be kept in mind that the power of
suspension/cancellation of registration certificate of
a dealer, clearly imposes civil consequence and in
this respect law is well settled in the case of Smt.
Maneka Gandhi Vrs. Union of India and another
reported in AIR 1978 SC 597 wherein, the Apex
Court has held that the rule of natural justice is
embodied in every Statute and even where there is
no specific provision for the same and when an
administrative action involves civil consequence, the
doctrine of natural justice must be held to be
applicable.‟
6. As is evident from reading of the judgment though
the case related to cancellation of registration
certificate, the Court not only considered the
question of cancellation of registration certificate but
also suspension thereof and came to hold that the
power of suspension/cancellation of registration
certificate of a dealer clearly imposes civil
consequence and therefore, even where there is no
specific provision to follow the principles of natural
justice, when an administrative action involves civil
consequence, the doctrine of natural justice must be
held to be applicable. In the case of Sidhartha
Engineering Pvt. Ltd. Vrs. Assistant Commissioner of
Sales Tax and another, (1999) 115 Sales Tax Cases
478 in paragraph-8 of the judgment, the Court held
that natural justice is an inseparable ingredient ofW.P.(C) No.36978 of 2025 Page 39 of 93
fairness and reasonableness. Observance of the
principles is the pragmatic requirement of fair play
in action. The rules of natural justice operate as
implied mandatory procedural requirement and non-
observance whereof invalidates the action.
Reference may also be made to some other decisions
in this connection. In the case of Sahara India (Firm)
Vrs. Commissioner of Income-Tax and another,
reported in (2008) 300 ITR 403 (SC) referring to large
number of earlier decisions including the case of
Maneka Gandhi (Mrs.) Vrs. Union of India (supra),
the Hon‟ble Supreme Court came to a conclusion that
even an administrative order or decision in matters
involving civil consequences has to be made
consistently with the rules of natural justice. The
concept of natural justice is invariably read into
administrative actions involving civil consequences,
unless the statute conferring the power excludes its
application by express language. A similar view was
expressed by this Court in the case of M/s. Iron
Exchange India Ltd. Vrs. State of Orissa and others,
reported in 1995 (I) OLR 402. The Court held in the
aforesaid decision that principles of natural justice
must be read into unoccupied interstices of the
statute unless there is a clear mandate to the
contrary. Such power is inherent in every Tribunal,
judicial or quasi-judicial character and the purpose
is to avoid miscarriage of justice. In the case of
Basanta Kumar Sahoo Vrs. The State of Orissa and
others, reported in 1990 (II) OLR 408 while dealing
with the case under the Urban Land (Ceiling and
Regulation) Act, 1976, the Court held that where
valuable right is sought to be taken away, an
opportunity of hearing though not specifically
provided in the Act, is desirable to be given. In the
W.P.(C) No.36978 of 2025 Page 40 of 93
case of Kanak Cement Pvt. Ltd. Vrs. Sales Tax
Officer, Assessment Unit, Rajgangpur, reported in
(1997) 105 Sales Tax Cases 112, the Court observed
that it is a fundamental requirement of the principles
of natural justice that if any person is likely to be
affected by the use of any material collected by the
Revenue, those are to be brought to his notice, and
disclosed to him. The requirement of natural justice
is to disclose by way of confrontation the materials
collected and proposed to be used against a dealer.
Admitted in the Act and the Rules, though there is
no provision for affording an opportunity of hearing
before an order of suspension is passed, the said
principle of natural justice has also not been
expressly excluded.
7. On reading of above judgments, it is clear that even
in respect of suspension of registration certificate,
civil consequence follows and therefore, observance
of principle of natural justice is a necessity. We are,
therefore, of the view that even though the statute is
silent about issuance of a notice to show cause prior
to passing of an order of suspension under Section
30 of the Act, when such order of suspension results
in civil consequences, the principles of natural
justice should be followed. We are, therefore, of the
view that the order of suspension of registration
certificate is liable to be quashed even though it is
open for the petitioner under the Act to seek for
restoration of the same.”
10. It is canvassed before this Court that mere termination
of contract does not contemplate step to be taken for
debarment/blacklisting the contractor in exercise of
W.P.(C) No.36978 of 2025 Page 41 of 93
Clause 8(iv) of the NIT (Annexure-A/1 enclosed with the
counter affidavit). The authority prior to taking a
decision to debar the petitioner ought to have conducted
enquiry and ought to make specific fact-finding that the
ground(s) existed warranting order to be passed for such
drastic action restricting business activity, thereby
affecting his right to livelihood inasmuch as order of
debarment/blacklisting would tantamount to ―civil
death‖2. Careful reading of Clause 8(iv) of the NIT
unequivocally lays down three circumstances to take
action or decide to pass order of debarment:
i. In the event of the Tenderer’s failure, after the
communication of acceptance of the tender by the
Corporation, to furnish the requisite Security
Deposit under item (a) of sub-clause (i) of Clause 8
by the due date, his contract shall be summarily
terminated besides forfeiture of the Earnest Money
and the Corporation shall proceed for appointment
of another contractor.
ii. Any losses or damages arising out of and incurred
by the Corporation by such conduct of the
contractor will be recovered from the contractor,
without prejudice to any other rights and remedies
of the Corporation under the Contract and Law.
2 See discussion of this Court in Shri Artatran Bhuyan Vrs. State of Odisha, 2025
(II) ILR-CUT 1042; Rinabala Sethi Vrs. State of Odisha, 2025 SCC OnLine Ori
4785.
W.P.(C) No.36978 of 2025 Page 42 of 93
iii. The contractor will also be debarred from
participating in any future tenders of the
Corporation for a period of three years.
10.1. As is laid down in the foregoing discussion, adherence of
audi alteram partem, one of the facets of the principles of
natural justice, is sine qua non consideration even for
taking administrative action. Without granting
reasonable, fair and meaningful opportunity of hearing
to the petitioner, the impugned order vide Annexure-1,
being vulnerable, whimsical and arbitrary, is liable to be
quashed.
10.2. Reference can be had to Swadeshi Cotton Mills Vrs.
Union of India, (1981) 1 SCC 664, wherein the following
has been stated:
“34. Be that as it may, the fact remains that there is no
consensus of judicial opinion on whether mere
urgency of a decision is a practical consideration
which would uniformly justify non-observance of
even an abridged form of this principle of natural
justice. In Durayappah Vrs. Fernando, (1967) 2 AC
337 Lord Upjohn observed that “while urgency may
rightly limit such opportunity timeously, perhaps
severely, there can never be a denial of that
opportunity if the principles of natural justice are
applicable.”
10.3. It does deserve to be quoted from Mangilal Vrs. State of
Madhya Pradesh, (2004) 2 SCC 447:
W.P.(C) No.36978 of 2025 Page 43 of 93
“Even if a statute is silent and there are no positive words
in the Act or the Rules made thereunder, there could be
nothing wrong in spelling out the need to hear the parties
whose rights and interest are likely to be affected by the
orders that may be passed, and making it a requirement
to follow a fair procedure before taking a decision, unless
the statute provides otherwise. The principles of natural
justice must be read into unoccupied interstices of the
statute, unless there is a clear mandate to the contrary.
No form or procedure should ever be permitted to exclude
the presentation of a litigant‟s defence or stand. Even in
the absence of a provision in procedural laws, power
inheres in every tribunal/court of a judicial or quasi-
judicial character, to adopt modalities necessary to
achieve requirements of natural justice and fair play to
ensure better and proper discharge of their duties.
Procedure is mainly grounded on the principles of natural
justice irrespective of the extent of its application by
express provision in that regard in a given situation. It
has always been a cherished principle. Where the statute
is silent about the observance of the principles of natural
justice, such statutory silence is taken to imply
compliance with the principles of natural justice where
substantial rights of parties are considerably affected.
The application of natural justice becomes presumptive,
unless found excluded by express words of statute or
necessary intendment. (See Swadeshi Cotton Mills Vrs.
Union of India, (1981) 1 SCC 664 = AIR 1981 SC 818). Its
aim is to secure justice or to prevent miscarriage of
justice. Principles of natural justice do not supplant the
law, but supplement it. These rules operate only in areas
not covered by any law validly made. They are a means
to an end and not an end in themselves. The principles of
natural justice have many facets. Two of them are: notice
of the case to be met, and opportunity to explain.”
W.P.(C) No.36978 of 2025 Page 44 of 93
10.4. Assistance of the following decisions may be beneficial in
the context of blacklisting/debarment:
i. Erusian Equipment and Chemicals Ltd. Vrs. State of
West Bengal, (1975) 1 SCC 70, wherein it has been
observed as follows:
“12. Under Article 298 of the Constitution the
executive power of the Union and the State
shall extend to the carrying on of any trade
and to the acquisition, holding and disposal of
property and the making of contracts for any
purpose. The State can carry on executive
function by making a law or without making a
law. The exercise of such powers and functions
in trade by the State is subject to Part III of the
Constitution. Article 14 speaks of equality
before the law and equal protection of the
laws. Equality of opportunity should apply to
matters of public contracts. The State has the
right to trade. The State has there the duty to
observe equality. An ordinary individual can
choose not to deal with any person. The
Government cannot choose to exclude persons
by discrimination. The order of blacklisting
has the effect of depriving a person of
equality of opportunity in the matter of
public contract. A person who is on the
approved list is unable to enter into
advantageous relations with the Government
because of the order of blacklisting. A person
who has been dealing with the Government in
the matter of sale and purchase of materials
has a legitimate interest or expectation. When
W.P.(C) No.36978 of 2025 Page 45 of 93
the State acts to the prejudice of a person
it has to be supported by legality.
***
15. The blacklisting order does not pertain to any
particular contract. The blacklisting order
involves civil consequences. It casts a slur.
It creates a barrier between the persons
blacklisted and the Government in the
matter of transactions. The blacklists are
“instruments of coercion”.
16. In passing an order of blacklisting the
government department acts under what is
described as a standardised Code. This is a
code for internal instruction.
***
19. Where the State is dealing with individuals in
transactions of sales and purchase of goods,
the two important factors are that an individual
is entitled to trade with the Government and an
individual is entitled to a fair and equal
treatment with others. A duty to act fairly
can be interpreted as meaning a duty to
observe certain aspects of rules of natural
justice. A body may be under a duty to give
fair consideration to the facts and to consider
the representations but not to disclose to those
persons details of information in its
possession. Sometimes duty to act fairly can
also be sustained without providing
opportunity for an oral hearing. It will depend
upon the nature of the interest to be affected,
W.P.(C) No.36978 of 2025 Page 46 of 93
the circumstances in which a power is
exercised and the nature of sanctions involved
therein.
***
20. Blacklisting has the effect of preventing a
person from the privilege and advantage
of entering into lawful relationship with
the Government for purposes of gains. The
fact that a disability is created by the order of
blacklisting indicates that the relevant
authority is to have an objective satisfaction.
Fundamentals of fair play require that the
person concerned should be given an
opportunity to represent his case before
he is put on the blacklist.”
ii. UMC Technologies Private Limited Vrs. Food
Corporation of India, (2021) 2 SCC 551, wherein the
following is the observation:
“13. At the outset, it must be noted that it is
the first principle of civilised
jurisprudence that a person against whom
any action is sought to be taken or whose
right or interests are being affected
should be given a reasonable opportunity
to defend himself. The basic principle of
natural justice is that before adjudication
starts, the authority concerned should
give to the affected party a notice of the
case against him so that he can defend
himself. Such notice should be adequate
and the grounds necessitating action andW.P.(C) No.36978 of 2025 Page 47 of 93
the penalty/action proposed should be
mentioned specifically and
unambiguously. An order travelling
beyond the bounds of notice is
impermissible and without jurisdiction to
that extent. This Court in Nasir Ahmad Vrs.
Custodian General, Evacuee Property, (1980) 3
SCC 1 has held that it is essential for the
notice to specify the particular grounds on the
basis of which an action is proposed to be
taken so as to enable the noticee to answer the
case against him. If these conditions are not
satisfied, the person cannot be said to have
been granted any reasonable opportunity of
being heard.
14. Specifically, in the context of blacklisting
of a person or an entity by the State or a
State Corporation, the requirement of a
valid, particularised and unambiguous
show-cause notice is particularly crucial
due to the severe consequences of
blacklisting and the stigmatisation that
accrues to the person/entity being
blacklisted. Here, it may be gainful to
describe the concept of blacklisting and the
graveness of the consequences occasioned by
it. Blacklisting has the effect of denying a
person or an entity the privileged opportunity of
entering into Government contracts. This
privilege arises because it is the State who is
the counterparty in Government contracts and
as such, every eligible person is to be afforded
an equal opportunity to participate in such
contracts, without arbitrariness andW.P.(C) No.36978 of 2025 Page 48 of 93
discrimination. Not only does blacklisting
take away this privilege, it also tarnishes
the blacklisted person’s reputation and
brings the person’s character into
question. Blacklisting also has long-
lasting civil consequences for the future
business prospects of the blacklisted
person.
15. In the present case as well, the appellant has
submitted that serious prejudice has been
caused to it due to the Corporation’s order of
blacklisting as several other government
corporations have now terminated their
contracts with the appellant and/or prevented
the appellant from participating in future
tenders even though the impugned blacklisting
order was, in fact, limited to the Corporation’s
Madhya Pradesh regional office. This domino
effect, which can effectively lead to the
civil death of a person, shows that the
consequences of blacklisting travel far
beyond the dealings of the blacklisted
person with one particular Government
Corporation and in view thereof, this
Court has consistently prescribed strict
adherence to principles of natural justice
whenever an entity is sought to be
blacklisted.
***
21. Thus, from the above discussion, a clear legal
position emerges that for a Show-Cause
Notice to constitute the valid basis of a
blacklisting order, such notice must spell
W.P.(C) No.36978 of 2025 Page 49 of 93
out clearly, or its contents be such that it
can be clearly inferred therefrom, that
there is intention on the part of the issuer
of the notice to blacklist the noticee. Such
a clear notice is essential for ensuring that the
person against whom the penalty of
blacklisting is intended to be imposed, has an
adequate, informed and meaningful
opportunity to show cause against his possible
blacklisting.”
10.5. Mere allegation of breach of contractual obligations
without anything more, per se, does not invite punitive
action, which has been succinctly laid down by the
Hon’ble Supreme Court of India in Techno Prints Vrs.
Chhattisgarh Textbook Corporation, (2025) 3 SCR 208:
“34. Plainly, if a contractor is to be visited with the
punitive measure of blacklisting on account of an
allegation that he has committed a breach of a
contract, the nature of his conduct must be so
deviant or aberrant so as to warrant such a punitive
measure. A mere allegation of breach of
contractual obligations without anything more,
per se, does not invite any such punitive
action.
35. Usually, while participating in a tender, the bidder is
required to furnish a statement undertaking that it
has not been blacklisted by any institution so far
and, if that is not the case, provide information of
such blacklisting. This serves as a record of the
bidder‟s previous experience which gives the
purchaser a fair picture of the bidder and theW.P.(C) No.36978 of 2025 Page 50 of 93
conduct expected from it. Therefore, while the
debarment itself may not be permanent and
may only remain effective for a limited, pre-
determined period, its negative effect continues
to plague the business of the debarred entity
for a long period of time. As a result, it is
viewed as a punishment so grave, that it must
follow in the wake of an action that is equally
grave.
36. In the overall view of the matter more particularly in
the peculiar facts of the case, we have reached the
conclusion that asking the appellant herein to file his
reply to the show cause notice and then await the
final order which may perhaps go against him,
leaving him with no option but to challenge the same
before the jurisdictional High Court will be nothing
but an empty formality. Even otherwise, issuing
of show cause notice if not always then at
least most of the times is just an empty
formality because at the very point of time the
show cause notice is issued the Authority has
made up its mind to ultimately pass the final
order blacklisting the Contractor. In other
words, the show cause notice in most of the
cases is issued with a pre-determined mind. It
has got to be issued because this Court has said
that without giving an opportunity of hearing there
cannot be any order of blacklisting. To meet with
this just a formality is completed by the Authority of
issuing a show cause notice.
10.6. The impugned Office Order dated 15.12.2025 is
manifestation of haste approach on the part of the
Managing Director of the OSWC. To reiterate, it can be
W.P.(C) No.36978 of 2025 Page 51 of 93
said that whereas it is purported to have been signed on
12.12.2025, the said order is shown to have been issued
on 15.12.2025 (Annexure-1) and communicated via e-
mail on 17.12.2025 (Annexure-6). If the authority is so
sanguine about the fact of passing the Office Order on
12.12.2025 terminating contract and inflicting
punishment of debarment on the petitioner, even in
absence of affording opportunity of hearing, the Office
Order could have been issued/communicated on the
same day of making it, i.e., 12.12.2025. The assumption
of backdating the Office Order is fortified by the fact that
the Office of OSWC acknowledged to have received the
Representation dated 16.12.2025, which evinces that
the Office Order did not come to exist even on
16.12.2025. It can, thus, be observed that in order to
avoid giving audi alteram partem and consider the merit
or testing the veracity of ―medical emergency‖, which led
the petitioner to comply with the formalities as per terms
of NIT/MTF with a delay for about 7-8 days counted
from the due date 09.12.2025, the impugned decision
has been taken in hot-haste and is shown as if the same
was passed on 12.12.2025.
10.7. Sri Gautam Mukherji, learned Senior Advocate drew
attention of this Court to Guidelines issued by the
Central Vigilance Commission (Annexure-9 of the writW.P.(C) No.36978 of 2025 Page 52 of 93
petition and Annexure-E/1) wherein Paragraph 10.5.4
reads thus:
“If, however, a request is received from the contractor for
extension of time for submission of Security Deposit, the
same may be considered in exceptional cases on merit
and additional time may be considered as per the
conditions of NIT with the approval of competent
authority.”
10.8. Having not denied availability and applicability of scope
for extension of time to comply with the conditions of
NIT, vide Paragraph 11 of the counter affidavit, it is
asserted by the deponent (opposite parties) that:
“In the present case, the petitioner never made any
request seeking extension of time for submission of the
Security Deposit within the stipulated period, either in the
form of Demand Draft or Bank Guarantee, nor did he
intimate the opposite party about any medical emergency
prior to the expiry of the prescribed time. On the contrary,
as stated by the petitioner himself in his representation
dated 16.12.2025, „due to unforeseen medical issues,
neither we had intimated to your good office nor
deposited the Security Deposit in time‟. This admission
unequivocally establishes that no request for extension
was ever made within the permissible timeframe.”
10.9. Be that be, though dispute has been set up by
contending that no Representation dated 07.12.2025
(prior to due date for compliance, i.e., 09.12.2025) was
received by the OSWC, it is not denied that the
documents showing medical treatment of son of the
W.P.(C) No.36978 of 2025 Page 53 of 93
Managing Partner and the Managing Partner himself are
fake or false. Be that as it may, the afore-discussed fact
and circumstances would lead to demonstrate that the
petitioner has not been afforded fair-deal and/or
opportunity of hearing when decisions of termination of
contract and debarment/blacklisting for three years
have been taken to the detriment of the petitioner.
10.10. Even assuming that the opposite party No.1 has
jurisdiction to terminate the contract and debar the
petitioner in adherence to Clause 8 of the NIT, the same
could not have been exercised in the absence of
thorough examination of jurisdictional facts3. Existence
of power is one thing and its exercise is another. Mere
existence least justifies the exercise. [Refer, Sarda Mines
Private Limited Vrs. State of Odisha, 2026 SCC OnLine
Ori 2303].
10.11. True it is that the factum of receipt of
Representation dated 07.12.2025 and medical exigency
are disputed questions to be left for taking a decision by
the competent authority. The fact remains that though
3 Following paragraphs in Arun Kumar Vrs. Union of India, (2007) 1 SCC 732 may
throw light on ―jurisdictional fact‖:
“A “jurisdictional fact” is a fact which must exist before a court, tribunal or an
authority assumes jurisdiction over a particular matter. A jurisdictional fact is one
on existence or non-existence of which depends jurisdiction of a court, a tribunal
or an authority. It is the fact upon which an administrative agency’s power to act
depends. If the jurisdictional fact does not exist, the court, authority or officer
cannot act. If a court or authority wrongly assumes the existence of such fact, the
order can be questioned by a writ of certiorari. The underlying principle is that by
erroneously assuming existence of such jurisdictional fact, no authority can confer
upon itself jurisdiction which it otherwise does not possess.”
W.P.(C) No.36978 of 2025 Page 54 of 93
Representation dated 16.12.2025 enclosed with the
documents showing medical treatment was received by
the OSWC, the same were not considered. The petitioner
is, thus, deprived of fair chance of presenting its case for
extension in terms of Paragraph 10.5.4 of the Guidelines
as enclosed at Annexure-E/1 of the counter affidavit,
which is not disputed or denied, but for objection that
“the petitioner never made any request seeking extension
of time for submission of Security Deposit within the
stipulated time”. Representation dated 07.12.2025 and
Representation dated 16.12.2025 are testimony to the
fact that the petitioner made request for extension. If the
contention of the opposite parties is considered to be
true, then they could have placed on record showing
return of amount received towards Security Deposit
made in terms item (i) of sub-clause (a) of Clause 8 of
the NIT (Annexure-5 series).
11. Aforesaid discussion takes this Court to consider the
affirmation of the opposite parties in Paragraph 3 of the
reply-affidavit to the rejoinder-affidavit of the petitioner
that:
“Contrary to the petitioner‟s claim of backdating the
termination order was duly signed by the competent
authority on 12.12.2025. The delay in communication
was solely due to intervening public holidays (13th and
14th December, 2025). In matters of commercial tenders
where time is of the essence– specifically for the Public
W.P.(C) No.36978 of 2025 Page 55 of 93
Distribution System (PDS)– the automatic
consequences of default under Clause 8(iv) do not
require a separate show cause notice once the
deadline has passed.”
11.1. Such a harsh, draconian, and capricious approach is
fundamentally offensive, falling foul of the core tenets of
natural justice and designed to prevent the petitioner
from taking part in future tenders. It is not the case of
the opposite parties that after termination of contract
with the petitioner any other person has been offered
with the contract in terms of sub-clause (iv) of Clause 8
of the NIT and the amount paid by the petitioner and
received by the opposite parties towards Security
Deposit on 16.12.2025 in the corporate account has
been refunded or restored to the petitioner. On the other
hand, the opposite parties are candid in making
statement at Paragraph 9 of the counter affidavit that
“the provision regarding extension is not automatic or
vested as a matter of right, but purely discretionary
and conditional”. With reference to Paragraph 11 of
said counter affidavit Sri Bijaya Kumar Dash, learned
Senior Advocate, made attempt to suggest that that in
absence of request for extension or deposit of the
Security Deposit within the prescribed timeframe as
required under Clause 8 of the NIT dated 04.10.2025,
the contract with the petitioner was summarily
terminated and such action cannot be said to be
W.P.(C) No.36978 of 2025 Page 56 of 93
unjustified. Reading of said paragraph would transpire
that “Consequently, the petitioner has been debarred
from participating in future tenders of OSWC for a period
of three years, in accordance with the applicable rules
and guidelines”.
11.2. On meticulous scrutiny of the Guidelines issued by
Central Vigilance Commission (Annexure-E/1 to the
counter affidavit) read with Clause 8 of the NIT
(Annexure-A/1 to the counter affidavit) it can
unequivocally be culled out that application of the basic
norms of natural justice before taking any action for
termination of contract and/or debarring the petitioner
from participating in future tenders has not been
excluded or carved out.
11.3. Repelling the contention of the opposite parties that the
termination of the contract and the debarment of the
petitioner are cause and effect, it is observed that the
OSWC has rather admitted, discretion is vested in the
authority concerned to consider. Of course, such
discretion is required to be exercised on the basis of
analysis of facts and circumstances of each case coupled
with rational in application of mind. What is not
explicitly excluded, it can be construed to have been
implicitly included.
W.P.(C) No.36978 of 2025 Page 57 of 93
11.4. It is trite on a conspectus of catena of decisions rendered
by different Courts that ―discretion‖ means use of private
and independent thought. When anything is left to be
done according to one’s discretion the law intends it to
be done with sound discretion and according to law.
Discretion is discerning between right and wrong and
one who has power to act at discretion is bound by rule
of reason. Discretion must not be arbitrary. The very
term itself stands unsupported by circumstances
imports the exercise of judgment, wisdom and skill as
contra-distinguished from unthinking folly, heady
violence or rash injustice. When applied to a Court of
Justice or Tribunal or quasi judicial body, it means
sound discretion guided by law. It must be governed by
rule, not by humour; it must not be arbitrary, vague and
fanciful but legal and regular. Discretion must be
exercised honestly and in the spirit of the statute. It is
the power given by a statute to make choice among
competing considerations. It implies power to choose
between alternative courses of action. It is not
unconfined and vagrant. It is canalized within banks
that keep it from overflowing.
11.5. It cannot be gainsaid that in order to impose stringent
condition, like ban/debarment/blacklisting which would
have effect of impinging upon constitutional right of the
contractor, the authority exercising such power must be
W.P.(C) No.36978 of 2025 Page 58 of 93
more circumspect and such recourse preventing the
contractor from carrying on business would have
unreasonable restriction on the right flowing from Article
19(1)(g). Article 14 of the Constitution of India
safeguards such persons being condemned without
affording opportunity of hearing. Such is the facet of
principles of natural justice, e.g., audi alteram partem.
11.6. This Court in Sumitra Sethy Vrs. The Indian Railways,
W.P.(C) No.6182 of 2025, vide Judgment dated
06.05.2026 observed thus:
“7. It is no gainsaying that the blacklisting or
debarment has an effect of eliminating a person
from participating in any contract with the
Government nor will have any such privilege and
advantage of entering into the contract with the
Government agencies. It is, in effect, deprived a
person from having any commercial
relationship with the Government or its
agencies and has an impact on the right to
trade or profession as provided under Article
19(1)(g) of the Constitution of India. Such
fundamental right is always subject to the
established procedure of law and in the event
it is found that the person has committed a
gross error or violated the terms and
conditions of the contract, there is no fetter in
debarring such person to participate in any
tender, nor will be entitled to establish a
contractual relationship with the public
authority. In such sense, it is time and again
W.P.(C) No.36978 of 2025 Page 59 of 93
regarded as a “civil death” and therefore, it is
a paramount duty of the authorities to adhere
the principles of natural justice before it
proceeds to inflict an order of debarment
and/or blacklisting on the person.
8. The aforesaid concept/notion is further fortified in
the judgment rendered by the Apex Court in case of
Raghunath Thakur Vrs. State of Bihar; (1989) 1 SCC
229 in the following:
„4. Indisputably, no notice had been given to the
appellant of the proposal of blacklisting the
appellant. It was contended on behalf of the
State Government that there was no
requirement in the rule of giving any prior
notice before blacklisting any person. Insofar
as the contention that there is no requirement
specifically of giving any notice is concerned,
the respondent is right. But it is an implied
principle of the rule of law that any order
having civil consequence should be passed
only after following the principles of natural
justice. It has to be realised that blacklisting
any person in respect of business ventures has
civil consequence for the future business of the
person concerned in any event. Even if the
rules do not express so, it is an elementary
principle of natural justice that parties affected
by any order should have right of being heard
and making representations against the order.
In that view of the matter, the last portion of
the order insofar as it directs blacklisting of the
appellant in respect of future contracts, cannot
be sustained in law. In the premises, thatW.P.(C) No.36978 of 2025 Page 60 of 93
portion of the order directing that the appellant
be placed in the blacklist in respect of future
contracts under the Collector is set aside. So
far as the cancellation of the bid of the
appellant is concerned, that is not affected.
This order will, however, not prevent the State
Government or the appropriate authorities from
taking any future steps for blacklisting the
appellant if the Government is so entitled to do
in accordance with law i.e. after giving the
appellant due notice and an opportunity of
making representation. After hearing the
appellant, the State Government will be at
liberty to pass any order in accordance with
law indicating the reasons therefor. We,
however, make it quite clear that we are not
expressing any opinion on the correctness or
otherwise of the allegations made against the
appellant. The appeal is thus disposed of.‟***
10. It is manifest from the ratio of law enunciated in the
above report that the order of blacklisting and/or
debarment not only prevents and/or excludes a
person from participating in any contractual
relationship with the Government or its agencies but
is also deprived of his livelihood as a stigma would
be attached to him which cannot be inflicted without
giving ample opportunity to defend. Even if the terms
and conditions embodied in the tender document
does not contain an express provision relating to
issuance of a show cause preceding the order of
blacklisting, yet the rule of natural justice being
paramount cannot be abridged and/or whittledW.P.(C) No.36978 of 2025 Page 61 of 93
down which is one of the ethos of the constitutional
rights guaranteed in the Constitution of India. The
maxim audi alteram partem is ingrained and
inhered into the legal system and even a
person cannot be penalised and/or condemned
without giving an opportunity of hearing. As
indicated hereinabove the debarment/blacklisting
has the blend of a civil death, such order cannot be
passed without affording an opportunity to defend
and for such reason the issuance of show cause
becomes inevitable.
11. In a recent judgment rendered by the Hon‟ble
Supreme Court in M/s. A.K.G. Construction and
Developers Pvt. Ltd. Vrs. State of Jharkhand and
others; (2026) 4 SCR 331, the Apex Court was
considering a case where a show cause notice was
issued to the contractor with regard to the
termination of a contract for the reasons reflected in
the said show cause notice but the authorities while
terminating the contract proceeded to pass an order
of blacklisting and/or debarment. The Apex Court
did not interfere with the order of termination
of a contract but set aside the order of the
debarment as both the circumstances relating
to a termination of a contract and imposition
of a blacklisting and/or debarment are
distinct, different and separate. It is held that
the show cause notice which was restricted to a
termination of contract cannot be stretched to mean
that it is also for the debarment in the following:
„3. Upon careful consideration of the impugned
State action, which terminates the contract and
blacklists the appellant without meaningfulW.P.(C) No.36978 of 2025 Page 62 of 93
distinction, we hold that the termination order
is substantiated and justified. However, the
blacklisting order suffers from patent
infirmities: it evinces no application of
mind, disregards the mandatory precept
of audi alteram partem, and fails to
precede with a show-cause notice
requiring the contractor to demonstrate
why such drastic action should not be
taken. Blacklisting, being stigmatic and
exclusionary in nature, cannot be imposed
mechanistically but must comport with
principles of natural justice and
reasonableness.
***
22. Returning to the facts of the present case, at
the outset, it is apparent that the show cause
notice dated 04.06.2024 does not purport to be
a show cause notice for blacklisting at all. It
perhaps expects the contractor to assume that
it is for termination as well as for blacklisting.
Even if we accept the submissions of Mr.
Kumar Anurag Singh that, as there is no
provision for prior notice before termination,
this show cause notice must be taken to be for
blacklisting, we are of the opinion that it still
falls short of the requirement of a proper show
cause notice for blacklisting. This is for the
reason that as the decision to blacklist is
independent of the decision to terminate, the
Department must demonstrate application of
mind before it takes the next step of
blacklisting the contractor, over an order of
W.P.(C) No.36978 of 2025 Page 63 of 93
termination. Upon taking such a decision, it
must also issue a show cause notice calling
upon the contractor to explain why a
consequential order of blacklisting should also
not be passed. The letter must be indicative of
the proposed decision to blacklist and the
requirement of the contractor to respond to it.
The show cause notice dated 04.06.2024 falls
short of these requirements. Similarly, the final
order of blacklisting, dated 23.08.2024, also
does not list the reasons as to why an order of
blacklisting has become necessary.‟ ***”
11.7. There is no cavil that the order of banning/blacklisting/
debarment would be akin to ―civil death‖, this Court in
Kwick Soft Solutions Pvt. Ltd., Tamilnadu Vrs. State of
Odisha, W.P.(C) No.24026 of 2024 vide order dated
21.08.20254 observed as follows:
“3. It is no doubt true that the debarment or blacklisting
of any individual or an entity to participate in a
tender process is akin to a “civil death” as a person
is deprived of entering into any commercial
relationship with the public or the Government. Any
order of debarment or blacklisting is always
regarded as a stigma attached to the commercial
dealing with the Government and in effect debars
from a person to have the award of the Government
contracts. The debarment or blacklisting has an
effect of bringing a person from the privilege
and advantage of entering into a lawful
relationship with the Government or its4 Referred to in Rinabala Sethi Vrs. State of Odisha, W.P.(C) No.21309 of 2024,
vide Judgment dated 22.12.2025 reported at 2025 SCC OnLine Ori 4785.
W.P.(C) No.36978 of 2025 Page 64 of 93
instrumentalities and above all impacts the
livelihood. In effect such debarment has a far-
reaching consequence in public contracts and,
therefore, the authority must view the misconduct
more scrupulously before taking a decision of
debarment/blacklisting. The misdeed must be of
such magnitude which in ordinary sense is not
expected from a reasonable man. It may at times
should be judged on the parameter of unfair means
or illegal gain. The minimal or accidental omission or
mistake, which was subsequently rectified, if it does
not, cause any prejudice or hinders in its invocation
as the Bank remain committed to the person, in
whose favour the Bank Guarantee is issued to
honour the same, the authority must view the
mistake in such perspective. Mere non-incorporation
of UIN of the Odisha Police and incorporation of the
PAN number of one of the Directors of the petitioner-
Company mistakenly neither invalidates the said
Bank Guarantee nor put any invasion into its
invocation by the Odisha Police in the event the
same is warranted from the conduct of the
petitioner. Apart from the same, the said ministerial
mistake was rectified by the Bank issuing the Bank
Guarantee, which does not in our view invites the
civil death as held by the Apex Court in the case of
Gorkha Security Services Vrs. Government (NCT of
Delhi) and others, (2014) 9 SCC 105 in the following:
„16. It is a common case of the parties that the
blacklisting has to be preceded by a show-
cause notice. Law in this regard is firmly
grounded and does not even demand much
amplification. The necessity of compliance with
the principles of natural justice by giving theW.P.(C) No.36978 of 2025 Page 65 of 93
opportunity to the person against whom action
of blacklisting is sought to be taken has a valid
and solid rationale behind it. With
blacklisting, many civil and/or evil
consequences follow. It is described as
“civil death” of a person who is foisted
with the order of blacklisting. Such an
order is stigmatic in nature and debars
such a person from participating in
government tenders which means
precluding him from the award of
government contracts.‟ ***”
11.8. It requires no authority to state that before taking action
for blacklisting/debarring contractor from participating
in the future tenders issue of a Show Cause Notice
indicating the reason for so doing is a necessary
requirement. Such show cause notice also requires
explicit mention about reasons for exercising such power
and resultant thereof. Had the authority wanted real
reason for the delay and non-accomplishment of the
terms of the NIT/MTF, it should/could have issued
notice to submit explanation for the delay and affording
opportunity of hearing. Failure to give such an
opportunity would render the Office Order dated
16.12.2025 legally fragile not on the ground of lack of
jurisdiction on the part of the authority concerned but
on the ground of violation of principles of natural justice.
There can be no dispute that while the authority is free
to exercise his jurisdiction on consideration of allW.P.(C) No.36978 of 2025 Page 66 of 93
relevant facts, a full opportunity to controvert the same
and to explain the circumstances surrounding such
facts, as may be considered relevant by the petitioner-
tenderer, must be afforded to him prior to the
finalization of the decision. See, Commissioner of Income
Tax Vrs. Amitabh Bachchan, (2016) 3 SCR 516.
11.9. In Oryx Fisheries Pvt. Ltd. Vrs. Union of India, (2010) 13
Addl. SCR 234 it has been stated thus:
“22. Relying on the underlined portions in the show
cause notice, learned counsel for the appellant urged
that even at the stage of the show cause notice the
third respondent has completely made up his mind
and reached definite conclusion about the alleged
guilt of the appellant. This has rendered the
subsequent proceedings an empty ritual and an idle
formality.
23. This Court finds that there is a lot of substance in
the aforesaid contention.
24. It is well settled that a quasi-judicial authority, while
acting in exercise of its statutory power must act
fairly and must act with an open mind while
initiating a show cause proceeding. A show cause
proceeding is meant to give the person·proceeded
against a reasonable opportunity of making his
objection against the proposed charges indicated in
the notice.
25. Expressions like „a reasonable opportunity of
making objection‟ or „a reasonable opportunity ofW.P.(C) No.36978 of 2025 Page 67 of 93
defence‟ have come up for consideration before this
Court in the context of several statutes.
26. A Constitution Bench of this Court in Khem Chand
Vrs. Union of India and others, reported in AIR 1958
SC 300, of course in the context of service
jurisprudence, reiterated certain principles which are
applicable in the present case also.
27. Chief Justice S.R. Das speaking for the unanimous
Constitution Bench in Khem Chand (supra) held that
the concept of „reasonable opportunity‟ includes
various safeguards and one of them, in the words of
the learned Chief Justice, is:
„(a) An opportunity to deny his guilt and
establish his innocence, which he can only
do if he is told what the charges leveled
against him are and the allegations on
which such charges are based;‟
28. It is no doubt true that at the stage of show cause,
the person proceeded against must be told the
charges against him so that he can take his defence
and prove his innocence. It is obvious that at that
stage the authority issuing the chargesheet, cannot,
instead of telling him the charges, confront him with
definite conclusions of his alleged guilt. If that is
done, as has been done in this instant case, the
entire proceeding initiated by the show cause notice
gets vitiated by unfairness and bias and the
subsequent proceeding become an idle ceremony.
29. Justice is rooted in confidence and justice is the goal
of a quasi-judicial proceeding also. If the functioning
of a quasi-judicial authority has to inspireW.P.(C) No.36978 of 2025 Page 68 of 93
confidence in the minds of those subjected to its
jurisdiction, such authority must act with utmost
fairness. Its fairness is obviously to be manifested
by the language in which charges are couched and
conveyed to the person proceeded against. In the
instant case from the underlined portion of the show
cause notice it is clear that the third respondent has
demonstrated a totally close mind at the stage of
show cause notice itself. Such a close mind is
inconsistent with the scheme of Rule 43 which is set
out below. The aforesaid rule has been framed in
exercise of the power conferred under Section 33 of
The Marine Products Export Development Authority
Act, 1972 and as such that Rule is statutory in
nature.
***
31. It is of course true that the show cause notice cannot
be read hyper-technically and it is well settled that it
is to be read reasonably. But one thing is clear that
while reading a show-cause notice the person who
is subject to it must get an impression that he will
get an effective opportunity to rebut the allegations
contained in the show cause notice and prove his
innocence. If on a reasonable reading of a show-
cause notice a person of ordinary prudence gets the
feeling that his reply to the show cause notice will
be an empty ceremony and he will merely knock his
head against the impenetrable wall of prejudged
opinion, such a show cause notice does not
commence a fair procedure especially when it is
issued in a quasi-judicial proceeding under a
statutory regulation which promises to give theW.P.(C) No.36978 of 2025 Page 69 of 93
person proceeded against a reasonable opportunity
of defence.
32. Therefore, while issuing a show-cause notice, the
authorities must take care to manifestly keep an
open mind as they are to act fairly in adjudging the
guilt or otherwise of the person proceeded against
and specially when he has the power to take a
punitive step against the person after giving him a
show cause notice.
33. The principle that justice must not only be
done but it must eminently appear to be done
as well is equally applicable to quasi judicial
proceeding if such a proceeding has to inspire
confidence in the mind of those who are subject
to it.
34. A somewhat similar observation was made by this
Court in the case of Kumaon Mandal Vikas Nigam
Limited Vrs. Girja Shankar Pant & others, (2001) 1
SCC 182. In that case, this court was dealing with a
show cause notice cum charge sheet issued to an
employee. While dealing with the same, this Court in
paragraph 25 (page 198 of the report) by referring to
the language in the show cause notice observed as
follows:
„25. Upon consideration of the language in the
show-cause notice-cum-charge-sheet, it has
been very strongly contended that it is clear
that the Officer concerned has a mindset even
at the stage of framing of charges and we also
do find some justification in such a submission
since the chain is otherwise complete.‟W.P.(C) No.36978 of 2025 Page 70 of 93
35. After paragraph 25, this Court discussed in detail
the emerging law of bias in different jurisdictions
and ultimately held in paragraph 35 (page 201 of
the report), the true test of bias is:
„35. The test, therefore, is as to whether a mere
apprehension of bias or there being a real
danger of bias and it is on this score that the
surrounding circumstances must and ought to
be collated and necessary conclusion drawn
therefrom– in the event however the
conclusion is otherwise inescapable that there
is existing a real danger of bias, the
administrative action cannot be sustained.‟
36. Going by the aforesaid test any man of ordinary
prudence would come to a conclusion that in the
instant case the alleged guilt of the appellant has
been prejudged at the stage of show cause notice
itself.”
11.10. In Commissioner of Central Excise, Bhubaneswar
Vrs. Champdany Industries Limited, (2009) 14 (Addl.)
SCR 211 it is unequivocally laid down as follows:
“50. Apart from that, the point on Rule 3 which has been
argued by the learned counsel for the Revenue was
not part of its case in the show-cause notice. It is
well settled that unless the foundation of the
case is made out in the show-cause notice,
Revenue cannot in Court argue a case not made
out in its show-cause notice. [See: Commissioner
of Customs, Mumbai Vrs. Toyo Engineering India
Limited, (2006) 7 SCC 592, para 16].
W.P.(C) No.36978 of 2025 Page 71 of 93
51. Similar view was expressed by this Court in the
case of Commissioner of Central Excise, Nagpur Vrs.
Ballarpur Industries Ltd., (2007) 8 SCC 9. In
paragraph 27 of the said report, learned Judges
made it clear that if there is no invocation of the
concerned rules in the show-cause notice, it would
not be open to the, Commissioner to invoke the said
Rule.”
11.11. The Supreme Court of India in case of
Commissioner of Customs, Mumbai Vrs. Toyo Engineering
India Limited, (2006) Supp.5 SCR 657 noted that the
Department cannot be allowed to travel beyond the show
cause notice and, therefore, it would be against the
principles of natural justice that a person who has not
been confronted with any ground is saddled with liability
thereof. Since the issue did not form the basis of the
show cause notice and was not even confronted to the
order passed beyond show cause notice is to be
quashed.
11.12. In the instant case, no show cause notice was
issued to the petitioner to place material to indicate
there were circumstances beyond his control which
caused the delay in complying with the terms of the
NIT/MTF; yet the opposite parties have taken decision to
inflict punishment not only by cancelling the contract
but also debarred it from participating in future tender.
W.P.(C) No.36978 of 2025 Page 72 of 93
11.13. In A.K.G. Construction and Developers Pvt. Ltd. Vrs.
State of Jharkhand, (2026) 4 SCR 331 it has been
highlighted as follows:
“23. The contractual relationship between the parties is
governed by two legal regimes. While GCC governs
termination, the 2012 Rules govern blacklisting.
Proceedings for termination should not be conflated
with proceedings for blacklisting. In the latter action,
what is at stake is the future of the contractor. A
blacklisting order assumes that the contractor
is an incorrigible entity, at least for some time
to come, in this case such an assumption was
intended to operate for five years. For giving
effect to such a premise, there has to be sufficient
evidence, clear application of mind and stronger
adherence to principles of natural justice5. The
blacklisting order dated 23.08.2004 falls short of
this requirement and is liable to be set aside.”
11.14. Mere existence of power would not be considered
that in every fact situation of default in complying with
the terms of NIT would attract debarment or blacklisting
of the tenderer/contractor. No finding of fact is rendered
by the authority in the Office Order of the Managing
Director, OSWC (Annexure-1) and therefore, it cannot
withstand judicial scrutiny.
5 Kulja Industries Ltd. Vrs. Chief General Manager, Western Telecom Project BSNL,
(2014) 14 SCC 731; Blue Dreamz Advertising (P) Ltd. Vrs. Kolkata Municipal
Corporation, (2024) 15 SCC 264, Techno Prints Vrs. Chhattisgarh Textbook
Corporation, (2025) 3 SCR 208.
W.P.(C) No.36978 of 2025 Page 73 of 93
12. In absence of show cause notice with proper, clear,
unequivocal and specific charge in adherence to the
tenet of natural justice, the approach of the Managing
Director of OSWC is not above reproach. In view of
A.K.G. Construction and Developers Pvt. Ltd. Vrs. State of
Jharkhand, (2026) 4 SCR 331 since it is not forthcoming
that the petitioner is incorrigible entity upon analysis of
sufficient evidence, clear application of mind and
stronger adherence to principles of natural justice, it is
entitled to the benefit of audi alteram partem and right to
reason with respect to cancellation of tender and
banning/blacklisting/debarment having impact on its
future transactions, which in the considered view of this
Court falls within the connotation of the expressions
―civil death‖ and ―civil consequences‖.
12.1. In this respect the decision of the Hon’ble Supreme
Court of India rendered in ASP Traders Vrs. State of
Uttar Pradesh, (2025) 7 SCR 1462 may be pertinent to
derive guidelines for the administrative authorities to
proceed with the show cause notice. The following
summation of principles as propounded in the said
reported case may be taken as guidelines in the present
matter:
“18. The principles of natural justice mandate that when
a taxpayer submits a response to a show cause
notice, the adjudicating authority is required toW.P.(C) No.36978 of 2025 Page 74 of 93
consider such response and render a reasoned,
speaking order. This is not a mere procedural
formality, but a substantive safeguard ensuring
fairness in quasi-judicial proceedings. The right to
appeal under Section 107 of the CGST Act, 2017, is
predicated upon the existence of a formal
adjudication. An appeal can lie only against an
„order‟, and in the absence of a reasoned order
passed under Section 129(3) of the Act, the taxpayer
is effectively deprived of the statutory remedy of
appeal. Such a deprivation undermines the
foundational principles of fairness, due process, and
access to justice, rendering the right of appeal
illusory or nugatory. It is now settled law that
failure to issue a speaking order in response to
a show cause notice creates a legal vacuum.
Any consequential action including imposition of tax
or penalty, would then be unsupported by authority
of law, thereby potentially violating Article 265 of
the Constitution of India, which prohibits the levy or
collection of tax except by authority of law.
18.1. In this context, useful guidance may be drawn from
the decision in M/s. Kranti Associates (P) Ltd & Anr.
Vrs. Masood Ahmed Khan & Ors., (2010) 9 SCC 496,
wherein, this Court emphasized that fairness,
transparency, and accountability are inseparable
from the duty to provide reasons. The Court held
that failure to furnish reasons violates the principles
of natural justice and renders the right of appeal or
judicial review illusory. In paragraph 51 of the
judgment, the Court distilled the following key
principles:
W.P.(C) No.36978 of 2025 Page 75 of 93
„a. In India the judicial trend has always been to
record reasons, even in administrative
decisions, if such decisions affect anyone
prejudicially.
b. A quasi-judicial authority must record reasons
in support of its conclusions.
c. Insistence on recording of reasons is meant to
serve the wider principle of justice that justice
must not only be done it must also appear to be
done as well.
d. Recording of reasons also operates as a valid
restraint on any possible arbitrary exercise of
judicial and quasi-judicial or even
administrative power.
e. Reasons reassure that discretion has been
exercised by the decision maker on relevant
grounds and by disregarding extraneous
considerations.
f. Reasons have virtually become as
indispensable a component of a decision
making process as observing principles of
natural justice by judicial, quasi-judicial and
even by administrative bodies.
g. Reasons facilitate the process of judicial review
by superior Courts.
h. The ongoing judicial trend in all countries
committed to rule of law and constitutional
governance is in favour of reasoned decisions
based on relevant facts. This is virtually the lifeW.P.(C) No.36978 of 2025 Page 76 of 93
blood of judicial decision making justifying the
principle that reason is the soul of justice.
i. Judicial or even quasi-judicial opinions these
days can be as different as the judges and
authorities who deliver them. All these
decisions serve one common purpose which is
to demonstrate by reason that the relevant
factors have been objectively considered. This
is important for sustaining the litigants‟ faith in
the justice delivery system.
j. Insistence on reason is a requirement for both
judicial accountability and transparency.
k. If a Judge or a quasi-judicial authority is not
candid enough about his/her decision making
process then it is impossible to know whether
the person deciding is faithful to the doctrine of
precedent or to principles of incrementalism.
l. Reasons in support of decisions must be
cogent, clear and succinct. A pretence of
reasons or „rubber-stamp reasons‟ is not to be
equated with a valid decision making process.
m. It cannot be doubted that transparency is the
sine qua non of restraint on abuse of judicial
powers. Transparency in decision making not
only makes the judges and decision makers
less prone to errors but also makes them
subject to broader scrutiny. (See David Shapiro
in Defence of Judicial Candor (1987) 100
Harward Law Review 731-737).
n. Since the requirement to record reasons
emanates from the broad doctrine of fairness in
W.P.(C) No.36978 of 2025 Page 77 of 93
decision making, the said requirement is now
virtually a component of human rights and was
considered part of Strasbourg Jurisprudence.
See (1994) 19 EHRR 553, at 562 para 29 and
Anya vs. University of Oxford, 2001 EWCA Civ
405, wherein the Court referred to Article 6 of
European Convention of Human Rights which
requires, “adequate and intelligent reasons
must be given for judicial decisions”.
o. In all common law jurisdictions judgments play
a vital role in setting up precedents for the
future. Therefore, for development of law,
requirement of giving reasons for the decision
is of the essence and is virtually a part of “Due
Process”.”
19. Therefore, even assuming that the payment was
made by the appellant, voluntarily or otherwise, the
proper officer could not be absolved of the statutory
obligation to pass a reasoned order in Form GST
MOV-09 and upload the corresponding summary in
Form GST DRC-07. Compliance with these
procedural requirements is essential not only for
ensuring transparency and accountability in tax
administration, but also for safeguarding the
taxpayer‟s appellate rights under the CGST Act,
2017. Such adherence is in consonance with the
constitutional mandate under Article 265 of the
Constitution of India.”
12.2. The record would reveal that the petitioner after receipt
of Office Order dated 15.12.2025 filed a Representation
on 17.12.2025 (Annexure-7), which is stated to be
pending consideration. The petitioner by way of said
W.P.(C) No.36978 of 2025 Page 78 of 93
representation made fervent prayer to revoke/cancel the
Office Order dated 15.12.2025 and furnished material
particulars therewith.
Conclusion:
13. With the above discussions and having at hand
authoritative exposition of law on the subject of
adherence to the principles of natural vis-Ã -vis
termination of contract contemporaneous with
imposition of punishment like debarment from
participation in future tenders, it can safely be
concluded that the petitioner was not afforded fair
opportunity to present its case. The drastic step taken
pursuant to such decision resulting in civil
consequences to the detriment of the petitioner as if
debarment is automatic consequence of termination of
contract is oppressive, unconscionable and inexplicable.
13.1. In Mohinder Singh Gill Vrs. The Chief Election
Commissioner, (1978) 2 SCR 272, it has been discussed
as follows:
“CIVIL CONSEQUENCE undoubtedly cover infraction of not
merely property or personal rights but of civil liberties,
material deprivations and non-pecuniary damages. In its
comprehensive connotation, everything that affects a
citizen in his civil life inflicts a civil consequence.
CIVIL is defined by Black (Law Dictionary, 4th Edn.) at p.
311:
W.P.(C) No.36978 of 2025 Page 79 of 93
“Ordinarily, pertaining or appropriate to a member of a
civitas of free political community; natural or proper to a
citizen. Also, relating to the community, or to the policy
and Government of the citizens and subjects of a State.
The word is derived from the Latin civilie, a citizen. In
law, it has various significations.‟„Civil Rights‟ arc such as belong to every citizen of the
State or country, or, in a wider sense, to all its
inhabitants, and are not connected with the organisation
or administration of Government. They include the rights
of property, marriage protection by the laws, freedom of
contract, trial by jury, etc. … Or, as otherwise defined,
civil rights are rights appertaining to a person in virtue of
his citizenship in a State or community. Rights capable or
being enforced or redressed in a civil action. Also a term
applied to certain rights secured to citizens of the United
States by the thirteenth and fourteenth amendments to
the constitution, and by various acts of congress made in
pursuance thereof. (p. 1487-Black‟s Legal Dictionary). ***”
13.2. The debarment, being construed as ―civil death‖, has
substantial impact on the fundamental right to carry on
business as envisioned under Article 19(1)(g) of the
Constitution of India, and as such penal action leads to
civil or evil consequences. Hence, the provisions vesting
power on the authority to impose penalties are required
to be conceived strictly.
13.3. It is true that penal provisions must be strictly
construed; but having regard to the nature of the
violation/contravention alleged/involved, such strict
construction may be refused to be adopted. Looking at
W.P.(C) No.36978 of 2025 Page 80 of 93
the gravity of non-compliance, narrow and pedantic,
literal and lexical construction of penal provisions can
be eschewed. Reference may be had to Murlidhar
Meghraj Loya Vrs. State of Maharashtra, (1976) 3 SCC
684 and Kisan Trimbak Kothula Vrs. State of
Maharashtra, (1977) 1 SCC 300.
13.4. Regard can be had to the nature of requirement under
the Letter of Acceptance dated 20.11.2025 with
reference to the documents enclosed with the writ
petition relating to demonstrating medical exigency
which led the petitioner to comply with the requirement
with a delay for around 7-8 days in making Security
Deposit. It is explained by the petitioner, such delay
cannot be treated as deliberate as circumstances beyond
control of the Managing Partner rendered it impossible
at the relevant period to satisfy the terms of Letter of
Acceptance. Reference can be had to the decision of the
Hon’ble Supreme Court of India in the case of Om
Gurusai Construction Company Vrs. M/s. V.N. Reddy and
Ors., (2023) 11 SCR 379, wherein it has been observed
that:
“19. This is a case where the appellant has complied
with the condition of furnishing the additional
performance security at the earliest possible time,
that it could possibly comply. That no one can be
compelled to perform an impossible task– Lex nonW.P.(C) No.36978 of 2025 Page 81 of 93
cogit ad impossibilia– is a well-accepted legal
principle.
20. This Court in Raj Kumar Dey and Others Vrs.
Tarapada Dey and Others, (1987) 4 SCC 398, while
quoting, approving and applying the maxim to the
facts of that case, had the following to say:
„6. … The other maxim is lex non cogit ad
impossibilia (Broom‟s Legal Maxims– page
162)– The law does not compel a man to do
that which he cannot possibly perform. The
law itself and the administration of it, said Sir
W. Scott, with reference to an alleged infraction
of the revenue laws, must yield to that to which
everything must bend, to necessity; the law, in
its most positive and peremptory injunctions, is
understood to disclaim, as it does in its general
aphorisms, all intention of compelling
impossibilities, and the administration of laws
must adopt that general exception in the
consideration of all particular cases.‟
21. Applying the same maxim and highlighting its
principle, this Court in HUDA and Another Vrs. Dr.
Babeswar Kanhar and Another, (2005) 1 SCC 191
stated that every consideration of justice and
expediency would require that the accepted principle
which underlies Section 10 of the General Clauses
Act should be applied in cases where it does not
otherwise in terms apply [Para 5].
22. Closer to the facts of the present case is the
judgment in Rosali V. Vrs. TAICO Bank and Others
(2009) 17 SCC 690. In that case, an auction was
held after 4.00 p.m. when the banks were closed.
W.P.(C) No.36978 of 2025 Page 82 of 93
Order XXI Rule 84 of the Code of Civil Procedure
mandates that “on every sale of immovable property
the person declared to be the purchaser shall pay
immediately after such declaration a deposit of
twenty-five per cent on the amount of his purchase-
money to the officer or other person conducting the
sale, and in default of such deposit, the property
shall forthwith be re-sold”. In Rosali (supra), the 25%
bid amount under Order XXI Rule 84 of the CPC was
directed to be paid the next day and it was so paid.
While accepting it as a valid deposit, this Court
quoted the following paragraph from the judgment of
the Karnataka High Court in Dakshayani vs. Branch
Manager, Indian Overseas Bank, AIR 1998 Kant
114:
„4. On that basis if we interpret the law though
there is no power in the Court to extend the
time fixed by the statute still the expression
immediately is capable of taking within its
sweep a situation where an act is impossible of
performance on the day on which the auction is
held as it happened in Savithramma case, ILR
1973 Kant 1277 when the bank itself was on
strike and no deposit could have been made in
the bank or in the event the auction-sale is held
after court hours, a receipt order in that regard
cannot be obtained for deposit of such an
amount. Such amount could be deposited only
after obtaining a receipt order. If next day also
happens to be a holiday, the day immediately
thereafter coming up which is a working day
will be the day on which such act will have to
be performed. If any other interpretation is
given it would stultify the very object of law.‟W.P.(C) No.36978 of 2025 Page 83 of 93
23. In view of the above, we have no hesitation to hold
that the deposit of the additional performance
security on 17.03.2021 was in due compliance of
Clause 2.22.0 (ix) of the tender conditions. There
was no breach of that clause.
24. Decision making authorities, like the tendering
authority here, could not have turned a blind
eye to undisputed ground realities and
compelling necessities, like the one that
presented itself here. After all, they do not live
in ivory towers.”
13.5. Thus, with the above discussed conspectus of legal
position with the power granted on the tendering
authority in Clause 8(iv) of the NIT, when the Office
Order purported to have been signed on 12.12.2025, but
issued on 15.12.2025 and communicated via e-mail on
17.12.2025 at 7:44PM with the Forwarding Letter dated
16.12.2025 issued from Corporate Office of OSWC is
scrutinized, it is emerged that the Representation dated
16.12.2025 indicating transfer of Security Deposit to the
account of the OSWC through RTGS (Annexure-5)
clearly depicts that the OSWC acknowledged the same to
have been received on the said date. Nonetheless, the
Forwarding Letter at Annexure-6 reflects that it is
prepared on 16.12.2025 to communicate the Office
Order dated 15.12.2025. It is demonstrably manifest
from the e-mail details dated 17.12.2025 (7:44PM) that
the Forwarding Letter dated 16.12.2025 and the OfficeW.P.(C) No.36978 of 2025 Page 84 of 93
Order No.4595, dated 15.12.2025 from the ―General
Manager Commercial [email protected]‖ to ―Kuldip Kumar
Agrawal [email protected]‖ were attached
and transmitted. Sri Gautam Mukherji, learned Senior
Advocate, rightly pointed out, the OSWC explained that
the mail was sent on 17.12.2025 because the preceding
days– 13.12.2025 (second Saturday) and 14.12.2025
(Sunday)– were holidays. However, there is no
explanation as to why the Office Order, if indeed signed
on 12.12.2025, could not have been sent on 15.12.2025.
Even if it is considered that there was no proof of
Representation dated 07.12.2025 being received by the
OSWC, the circumstances, as set out in writ petition,
counter affidavit, rejoinder affidavit and reply to
rejoinder affidavit, do lead this Court to believe that the
Office Order was not passed on 12.12.2025. This
assumption is fortified by the fact that there is no
whisper in Letter dated 16.12.2025 of the Chief General
Manager (Annexure-6) to indicate that the amount of
Security Deposit made over in the corporate account by
RTGS was refunded/returned to the petitioner or steps
in this regards being taken, even as it is the stand of the
OSWC that by passing Office Order dated 15.12.2025
(purported to have been signed on 12.12.2015) besides
terminating the contract, the petitioner was debarred
from participating in future tenders for three years.
W.P.(C) No.36978 of 2025 Page 85 of 93
13.6. The provision enabling the authority to impose a penalty
like banning/blacklisting/debarring is to be interpreted
strictly as the same would involve civil or evil
consequences having a restrictive impact on the
business of the petitioner (contractor) offending Article
14 read with Article 19(1)(g) of the Constitution of India.
Any decision to blacklist/debar a contractor from
participating in future tenders does need to be taken
strictly within the parameters of law and has to comport
with the principle of proportionality.
13.7. Such view has explicitly been stated in Blue Dreamz
Advertising (P) Ltd. Vrs. Kolkata Municipal Corporation,
(2024) 15 SCC 264 with the following observations:
“24. What is significant is that while setting out the
guidelines prescribed in USA, the Court noticed that
comprehensive guidelines for debarment were
issued there for protecting public interest from those
contractors and recipients who are non-responsible,
lack business integrity or engage in dishonest or
illegal conduct or are otherwise unable to perform
satisfactorily. The illustrative cases set out also
demonstrate that debarment as a remedy is to be
invoked in cases where there is harm or potential
harm for public interest particularly in cases where
the person‟s conduct has demonstrated that
debarment as a penalty alone will protect public
interest and deter the person from repeating his
actions which have a tendency to put public interest
in jeopardy. In fact, it is common knowledgeW.P.(C) No.36978 of 2025 Page 86 of 93
that in notice inviting tenders, any person
blacklisted is rendered ineligible. Hence,
blacklisting will not only debar the person
concerned from dealing with the employer
concerned, but because of the disqualification,
their dealings with other entities also is
proscribed. Even in the terms and conditions of
tender in the present case, one of the conditions of
eligibility is that the agency should not be
blacklisted from anywhere.
25. In other words, where the case is of an
ordinary breach of contract and the
explanation offered by the person concerned
raises a bona fide dispute, blacklisting/
debarment as a penalty ought not to be
resorted to. Debarring a person albeit for a
certain number of years tantamounts to civil
death inasmuch as the said person is
commercially ostracised resulting in serious
consequences for the person and those who are
employed by him.
26. Too readily invoking the debarment for ordinary
cases of breach of contract where there is a bona
fide dispute, is not permissible. Each case, no doubt,
would turn on the facts and circumstances thereto.
27. Examining the facts of this case from that
perspective, we find that the appellant, after the
award of the tender, has admittedly paid an amount
of Rs.3,71,96,265, though, according to the
Corporation, the outstanding amount as on the date
of the debarment was Rs.14,63,24,727. However,
as would be clear from the facts discussed
hereinabove, right from the inception there have
W.P.(C) No.36978 of 2025 Page 87 of 93
been issues between the appellant and the
Corporation with regard to the fulfilment of the
reciprocal obligations in the bid document. There has
been exchange of correspondence between the
parties with each side blaming the other for not
performing the reciprocal obligations. While the
appellant had a case with regard to the non-
issuance of work orders; non-receipt of formal format
of Bank Guarantee; refusal of no-objection certificate
for obtaining connection from Calcutta Electric
Supply Corporation Ltd.; existence of only 200 out of
250 allotted street hoardings and so on
demonstrating breach of obligations by the
Corporation, the Corporation had a case that Bank
Guarantee was not the mode of payment and as
such there was no reason to insist on Bank
Guarantee; that in the joint inspection the
appellant’s men failed to cover all the areas and
thereafter when the appellant was asked to submit
a list of allotted location, the appellant failed to
furnish the same and further there was huge default
on the part of the appellant.
28. Even in the order dated 02.03.2016 by which the
appellant was debarred for a period of five years,
the reason given is that the tender notice had clearly
stated that the street hoardings in the annexures
would be allotted on “as is where is” basis; that the
company having understood the scope and effect of
the terms and conditions of the notice accepted the
award; that “no-objection certificate” is not required
in respect of the existing hoardings; that there was
no document to show that the company had applied
to Calcutta Electric Supply Corporation Ltd. for
connection and that it appeared to the CorporationW.P.(C) No.36978 of 2025 Page 88 of 93
that the company did not have the financial capacity
to pay and as such the company was creating
problems on one pretext or the other since obtaining
the allotment of sites. The order also stated that the
appellant had set up a bad example to others having
interest to enjoy the advertisement rights.
29. All these reasons fall far short of rendering the
conduct of the appellant in the present case, so
abhorrent as to justify the invocation of the drastic
remedy of blacklisting/debarment. The appellant
very clearly has been subjected to a
disproportionate penalty. The Corporation has lifted
a sledgehammer to crack a nut. We disapprove of
the said course of action on the facts of this case.
***
34. The Division Bench has, in our opinion, not
appreciated the case in its proper perspective.
Merely saying that the blacklisting order carried
reasons is not good enough. Do the reasons justify
the invocation of the penalty of blacklisting and is
the penalty proportionate, was the real question.
35. The Division Bench has observed that blacklisting is
a business decision by which the party affected by
the breach decides not to enter into any contractual
relationship with the party committing the breach. It
also observed that between two private parties the
right to take any such decision is absolute and
untrammelled by any constraints whatsoever. The
observations are too sweeping in their ambit and
wholly overlook the fact that the respondent
Corporation is a statutory body vested with the duty
to discharge public functions. It is not a privateW.P.(C) No.36978 of 2025 Page 89 of 93
party. Any decision to blacklist should be
strictly within the parameters of law and has
to comport with the principle of
proportionality.
36. The Division Bench having noticed the fact that any
decision to blacklist will be open to scrutiny on the
anvil of the doctrine of proportionality has failed to
apply the principle to the facts of the case in the
correct perspective. The Division Bench has also
failed to correctly appreciate the ratio of the decision
in B.S.N. Joshi & Sons Ltd. Vrs. Nair Coal Services
Ltd., (2006) 11 SCC 548.
37. There has been no enquiry by the Division Bench as
to whether the conduct of the appellant was part of
the normal vicissitudes in business and common
place hazards in commerce or whether the appellant
had crossed the rubicon warranting a banishment
order, albeit for a temporary period in larger public
interest.”
13.8. In the wake of the above the Order dated 15.12.2025
passed by the Managing Director, Odisha State
Warehousing Corporation (Annexure-1) cannot be held
to be tenable in the eye of law and hence, the same is
liable to be quashed and set aside.
14. It was the plea of the OSWC in the counter affidavit that
it had no occasion to consider the documents showing
there was medical exigency at the relevant period as it
did not receive the Representation dated 07.12.2025.
Furthermore, though the Representation dated
W.P.(C) No.36978 of 2025 Page 90 of 93
16.12.2025 is not denied to have been received, it is
stated that there was no occasion to consider the same
inasmuch as the Office Order was signed on 12.12.2025.
It is asserted by the petitioner that Representation dated
17.12.2025 with a prayer to revoke the Office Order
dated 15.12.2025 is pending consideration. It is,
therefore, emanated from the events narrated hitherto
suggest that the OSWC had not considered the medical
documents enclosed with the writ petition and the
Representations dated 16.12.2025 and 17.12.2025 are
pending.
14.1. In Bharat Coking Coal Ltd. Vrs. AMR Dev Prabha, (2020)
16 SCC 759, it has been observed as follows:
“47. With regard to other allegations concerning
condonation of Respondent No. 6‟s delay in
producing guarantees, we would only reiterate that
there is no prohibition in law against public
authorities granting relaxations for bona fide
reasons. In Shobikaa Impex (P) Ltd. Vrs. Central
Medical Services Society, (2016) 16 SCC 233, it has
been noted that:
„… the State can choose its own method to arrive at
a decision and it is free to grant any relaxation for
bona fide reasons, if the tender conditions permit
such a relaxation. It has been further held that the
State, its corporations, instrumentalities and
agencies have the public duty to be fair to all
concerned. Even when some defect is found in the
decision-making process, the Court must exercise its
W.P.(C) No.36978 of 2025 Page 91 of 93
discretionary powers under Article 226 with great
caution and should exercise it only in furtherance of
public interest and not merely on the making out of a
legal point.‟
48. Even if there had been a minor deviation from
explicit terms of the NIT, it would not be sufficient by
itself in the absence of mala fide for courts to set
aside the tender at the behest of an unsuccessful
bidder. [Central Coalfields Ltd Vrs. SLL-SML (Joint
Venture Consortium), (2016) 8 SCC 622]. This is
because notice must be kept of the impact of
overturning an executive decision and its impact on
the larger public interest in the form of cost overruns
or delays.”
14.2. The documents enclosed with the writ petition
explaining the medical emergency evinces, in the present
case, the security deposit was delayed by barely 7-8
days.
15. This Court having thus quashed and set aside the Office
Order dated 15.12.2025 (Annexure-1), the matter
deserves to be reverted to the Managing Director, Odisha
State Warehousing Corporation, Bhubaneswar to
consider the facts in its proper perspective in order to
exercise the powers granted under the Notice Inviting
Tender and/or Model Tender Form, as the case may be,
along with CVC Guidelines as enclosed and marked as
Annexure-E/1 with the counter affidavit in the light of
the discussions made herein above and taking into
W.P.(C) No.36978 of 2025 Page 92 of 93
account the legal perspective as explained through
various judgments of the Court(s) referred to supra.
15.1. However, liberty is reserved to the petitioner to file its
reply/explanation with necessary documents in course
of hearing. Needless to observe that the authority shall
afford reasonable opportunity of hearing and pass
appropriate order afresh without being swayed away by
the decision already taken while passing the Office Order
dated 15.12.2025.
15.2. It is directed that the decision taken by the said
authority shall be communicated to the petitioner
forthwith. It is clarified that until the ground(s) taken by
the petitioner is examined in the light of discussions
made above and appropriate finding is recorded thereon,
the order of banning/blacklisting/debarment ceases to
operate.
16. In the result, finding merit in the writ petition the same
is allowed to the above extent and pending Interlocutory
Application(s), if any, shall stand disposed of, but in the
circumstances, there shall be no order as to costs.
I agree.
(HARISH TANDON) (MURAHARI SRI RAMAN)
CHIEF JUSTICE JUDGE
Signature Not Verified
High Court of Orissa, Cuttack
Digitally Signed The 22nd July, 2026/Aswini/MRS/Laxmikant
Signed by: ASWINI KUMAR SETHY
Designation: Personal Assistant
(Secretary in charge)
Reason: Authentication
Location: ORISSA HIGH COURT,
CUTTACK
W.P.(C) No.36978 of 2025 Page 93 of 93
Date: 22-Jul-2026 14:30:14
