MADHYA PRADESH HIGH COURT ISSUES JUDGEMENT FOR L N MALVIYA INFRA PROJECTS V/S MADHYA PRADESH RURAL ROAD DEVELOPMENT AUTHORITY AND OTHERS

JABALPUR, India, March 19 -- Madhya Pradesh High Court issued the following judgment/order on Feb. 13:

1. Petitioner impugns order dated 02.12.2025 whereby the petitioner has been black listed for a period of two years.

2. Learned counsel for the petitioner submits that there was no show cause notice issued to the petitioner specifically putting petitioner to notice that a black listing order is likely to be passed. He submits that the show cause notice merely stated that in case petitioner is not able to rectify defect, appropriate action in accordance with the terms and conditions of the contract will be taken.

3. Learned counsel for respondent very fairly states that the show cause notices issued to the petitioner stated that action in accordance with the terms and conditions of the contract would be taken. He submits that no separate notice putting the petitioner to notice that black listing order is likely to be passed, was ever issued.

4. Reference may be had to the judgement of the Hon'ble Supreme Court in the case of UMC Technologies Private Ltd. vs. Food Corporation of India and Another, (2021) 2 SCC 551 , wherein the Supreme Court has categorically held that a notice merely stating that appropriate steps shall be taken as per terms and conditions of contract would not suffice as a show cause notice for black listing. The Supreme Court has held as under :-

25. The mere existence of a clause in the bid document, which mentions blacklisting as a bar against eligibility, cannot satisfy the mandatory requirement of a clear mention of the proposed action in the show cause notice. The Corporation's notice is completely silent about blacklisting and as such, it could not have led the appellant to infer that such an action could be taken by the Corporation in pursuance of this notice. Had the Corporation expressed its mind in the show cause notice to blacklist, the appellant could have filed a suitable reply for the same. Therefore, we are of the opinion that the show cause notice dated 10.04.2018 does not fulfil the requirements of a valid show cause notice for blacklisting. In our view, the order of blacklisting the appellant clearly traversed beyond the bounds of the show cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 09.01.2019 cannot be sustained.

26. In view of our conclusion that the blacklisting order dated 09.01.2019 passed by the Corporation is contrary to the principles of natural justice, it is unnecessary for us to consider the other contentions of the learned counsel for the appellant. Having regard to the peculiar facts and circumstances of the present case, we deem it appropriate not to remit the matter to the Corporation for fresh consideration."

5. The Supreme Court has held in UMC Technologies Private Ltd. (supra) that mere existence of a clause in the bid document which mentions black listing does not satisfy mandatory requirement of a clear mention of the proposed action in the show cause notice. An action taken in such circumstances would be contrary to the principles of natural justice.

6. In view of the above, since notice issued to the petitioner did not put the petitioner to specific notice that a black listing order is likely to be passed, the impugned order dated 02.12.2025 is not sustainable and is accordingly set aside.

7. The petition is allowed in the above terms.

8. Needless to state it would be open to the respondent authority to take fresh action in accordance with law after complying with the principles of natural justice.

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