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Supreme court: A Show Cause Notice Must Mention Intention To Blacklist The Noticee
The supreme court while setting aside a blacklisting order against UMC Technologies Private Limited observed that the contents of the blacklisting order must be made clear in terms of showing intention on the part of the issuer to blacklist the noticee.
The food corporation of India blacklisted the company from participating in any tenders for at least 5 years. The high court dismissed the challenge against this blacklisting order. The supreme court was approached after such a decision of the high court. The contention raised was that such a brutal action could not be taken without a show-cause notice to the noticee. Further, the supreme court said a vague show-cause notice would violate the principles of natural justice. The bench of justices S Abdul Nazeer and BR Gavai held that a clear notice showing intention should be given to the party who has been blacklisted so that the party gets an opportunity to show such a cause against possible blacklisting. The court referred to the notice given by the issuer in the case and observed that there could be no intention expressed or implied. Thus, no intention could be expressly or impliedly inferred from the notice. The mere existence of a bid clause in the document which marks blacklisting as a bar against eligibility cannot be the only action and therefore cannot be sufficient. Further, such blacklisting apart from imposing certain restrictions on the company to act also puts a major question in entering other contracts with the government, and all of this should also be taken into consideration before making such an application. It can be said that blacklisting leads to a civil death of a person.
The judgment said, “After listing 12 clauses of the “Instruction to Bidders”, which were part of the Corporation’s Bid Document dated 25.11.2016, the notice merely contains a vague statement that in light of the alleged leakage of question papers by the appellant, an appropriate decision will be taken by the Corporation,"
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