W.P.(C) No.36978 of 2025 Page 1 of 93

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 2 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

JUDGMENT

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 3 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 4 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 5 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 6 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 7 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 8 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 13

th and 14

th 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 9 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 10 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 11 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 12 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 13 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 14 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 15 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 16 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 17 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 18 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 19 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 20 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 21 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 22 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 23 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 10

th or 11

th 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 24 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 25 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 26 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 27 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 28 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 29 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 30 of 93

Council, used the phrase “the requirement s 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 31 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 32 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 33 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 34 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 35 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 36 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 the

W.P.(C) No.36978 of 2025 Page 37 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 38 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. In

W.P.(C) No.36978 of 2025 Page 39 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 of

W.P.(C) No.36978 of 2025 Page 40 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 41 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 42 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 43 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 44 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 45 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 46 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 47 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 and

W.P.(C) No.36978 of 2025 Page 48 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 and

W.P.(C) No.36978 of 2025 Page 49 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 50 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 the

W.P.(C) No.36978 of 2025 Page 51 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 52 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 writ

W.P.(C) No.36978 of 2025 Page 53 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 54 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 facts

3. 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 55 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 (13

th and

14

th 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 56 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 57 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 58 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 c hoice 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 59 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 60 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, that

W.P.(C) No.36978 of 2025 Page 61 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 whittled

W.P.(C) No.36978 of 2025 Page 62 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 meaningful

W.P.(C) No.36978 of 2025 Page 63 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 64 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

21.08.2025

4 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 its

4

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 65 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 the

W.P.(C) No.36978 of 2025 Page 66 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 all

W.P.(C) No.36978 of 2025 Page 67 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 of

W.P.(C) No.36978 of 2025 Page 68 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 inspire

W.P.(C) No.36978 of 2025 Page 69 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 the

W.P.(C) No.36978 of 2025 Page 70 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 71 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 72 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 73 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 justice

5. 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 74 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 to

W.P.(C) No.36978 of 2025 Page 75 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 76 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 life

W.P.(C) No.36978 of 2025 Page 77 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 78 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 79 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-à-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 80 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 81 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 non

W.P.(C) No.36978 of 2025 Page 82 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 83 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 84 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 Office

W.P.(C) No.36978 of 2025 Page 85 of 93

Order No.4595, dated 15.12.2025 from the ―General

Manager Commercial gm@oswc.in‖ to ―Kuldip Kumar

Agrawal dharitreeenterprises@gmail.com‖ 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 86 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 knowledge

W.P.(C) No.36978 of 2025 Page 87 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 88 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 Corporation

W.P.(C) No.36978 of 2025 Page 89 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 private

W.P.(C) No.36978 of 2025 Page 90 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 91 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 92 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. SLL­SML (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 93 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

High Court of Orissa, Cuttack

The 22

nd

July, 2026/Aswini/MRS/Laxmikant