M/S TECHNO PRINTS versus CHHATTISGARH TEXTBOOK CORPORATION & ANR.

M/S TECHNO PRINTS versus CHHATTISGARH TEXTBOOK CORPORATION & ANR.

While courts should generally not entertain challenges to show cause notices unless jurisdictional or mala fide defects are shown, an authority must exercise its power to blacklist cautiously because blacklisting is a drastic, stigmatic penalty requiring strong grounds; applying those principles to the facts, there was no sufficient reason to issue a show cause notice seeking blacklisting of the appellant, and therefore the part of the show cause notice invoking blacklisting was quashed while the Corporation may proceed with forfeiture of the EMD as permitted by contract.

Parties
Appellant: M/s Techno Prints; Respondent: Chhattisgarh Textbook Corporation
Jurisdiction
India
Judgment Date
11 February 2025
Procedural Posture
Civil Appeal (civil Appeal No. 2362 of 2025) / On Appeal From the Judgment and Order Dated 11.04.2023 of the High Court of Chhattisgarh at Bilaspur in WA No. 72 of 2023; Interim Stay of Further Proceedings Pursuant to Notice Dated 14.12.2022 (earlier)
Outcome
Appeal disposed of in part; show cause notice insofar as it called upon appellant to show cause why it should be blacklisted for three years quashed and set aside; respondent permitted to forfeit the EMD.
Legal Topics
Blacklisting, Show Cause Notice, Forfeiture of EMD, Breach of Contract, Reasonableness of Administrative Action
Tender Law Contract Law Administrative Law Judicial Review Writ Jurisdiction (article 226) Blacklisting Show Cause Notice Forfeiture of EMD +2 more

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Parties

M/s Techno Prints

Appellant

Chhattisgarh Textbook Corporation

Respondent

Procedural Posture

Civil Appeal (civil Appeal No. 2362 of 2025) / On Appeal From the Judgment and Order Dated 11.04.2023 of the High Court of Chhattisgarh at Bilaspur in WA No. 72 of 2023; Interim Stay of Further Proceedings Pursuant to Notice Dated 14.12.2022 (earlier)

Legal Issues

  1. 1 Whether a writ court should entertain challenge to a show cause notice calling for blacklisting
  2. 2 Whether the respondent Corporation was justified in issuing a show cause notice seeking to blacklist the appellant for three years and for forfeiture of the EMD
  3. 3 Standards and circumstances in which blacklisting may be imposed on a contractor

Ratio Decidendi

While courts should generally not entertain challenges to show cause notices unless jurisdictional or mala fide defects are shown, an authority must exercise its power to blacklist cautiously because blacklisting is a drastic, stigmatic penalty requiring strong grounds; applying those principles to the facts, there was no sufficient reason to issue a show cause notice seeking blacklisting of the appellant, and therefore the part of the show cause notice invoking blacklisting was quashed while the Corporation may proceed with forfeiture of the EMD as permitted by contract.

Court Disposition

Appeal disposed of in part; show cause notice insofar as it called upon appellant to show cause why it should be blacklisted for three years quashed and set aside; respondent permitted to forfeit the EMD.

Orders

  • Show cause notice calling upon the appellant to show cause why it should be blacklisted for three years is quashed and set aside.
  • Respondent Corporation may forfeit the EMD of Rs. 5,00,000.