Allahabad High Court: In a set of two writ petitions filed by two companies against the orders passed by the District Magistrate (‘DM’) blacklisting them indefinitely, the Division Bench of Manish Kumar and Ranjan Roy, JJ., allowed the petitions, holding that the impugned orders were not per the law settled by the Supreme Court, and imposed a cost of Rs 50,000 on the DM to be paid to both the petitioners.
Background
The DM had issued an order blacklisting the petitioner companies. However, allegedly, no show cause notice was issued, and the order entailed an indefinite blacklisting, which is illegal. Aggrieved, the petitioners challenged the orders.
In the previous order dated 07-07-2025, the Court reiterated that an order of black listing cannot be passed without a show cause notice, and certainly not for an indefinite period. Despite the settled law which all authorities are bound to comply with, given Article 144 of the Constitution, the Court remarked that every day it was flooded with such petitions challenging orders of debarment or black listing. Therefore, it was high time that the Court made officers accountable for such a lapse, as ultimately, the petitioner had been made to run to the Court, which would have entailed expenses apart from other hardships, and this too wastes the Court’s time. Accordingly, the Court directed the DM and District Basic Education Officer (‘DBEO’), Unnao, to file affidavits within 10 days justifying the impugned action.
In compliance with the last order, the DM filed his affidavit stating that the petitioners were declared technically disqualified on the ground that the EMD submitted by the firm had not been verified by the respective bank. An information in this regard was communicated to the petitioner as per the mechanism on the Government e-Marketplace (‘GeM’) portal, while granting them 48 hours to furnish the reason for the same. as per condition 29 of the additional terms of the bid process, the Government had the right to blacklist a company if the documents presented by the company were found to be false.
Further, the DM stated that it has also been provided in the terms and conditions of the tender that if any seller had any objection/grievance against these additional clauses or otherwise on any aspect of this bid, they could raise the same within four days of bid publication on GeM. However, the petitioner did not submit any explanation in furtherance of the said notice; therefore, the impugned action was taken.
He also stated that when no response was received within 48 hours, the seven firms were directed to be blacklisted. Even thereafter, when no response was sent by the firms in question, in such circumstances, the impugned order was passed.
Analysis
The Court stated that apparently, the impugned orders were in the teeth of the judgments referred to by the Court in the last order and not sustainable. The Court reiterated that many petitions were being filed against blacklisting orders which had been passed either without issuing any show cause notice or for an indefinite period.
“After all, how many times will the Court pronounce its judgment as to the procedure and the law on the subject of blacklisting. The Officers should be aware of it, especially when they have a battery of lawyers to assist them right from the High Court to the District level.”
The Court added that if the officers were not aware of the law in such matters, then they should take legal opinion before proceeding against any firm, as it may have serious consequences for the firm/company. However, none of this exercise was done, and the Court was compelled to pass the last order.
The Court remarked that the DM, in his affidavit, had not even referred to the judgments referred to by the Court in the last order. It appeared that he did not even bother to go through the said decisions; otherwise, he would not have offered the explanation which he tried to put forth before the Court.
“This is nothing but an intransigent attempt to justify an unjustifiable act in the teeth of law declared by the Supreme Court.”
The Court added that the provisions cited by the DM could not be applied without putting the petitioners on notice and the basis/material on which the action of blacklisting was being proposed, thereby giving them a reasonable opportunity to respond. Apart from other aspects, proportionality was also an issue to be considered in such matters.
The Court further noted that in para 20, the DM had stated that he did not wilfully violate any order passed by this Court or the Supreme Court. However, in case there was any violation, the same was only due to inadvertence; it was neither deliberate nor intentional. Therefore, any action taken by him may not be construed as a violation of the orders passed by the Court. The Court stated that the DM did not even accept that he had erred, given the law declared by the Supreme Court, but offered a conditional explanation.
“It is not a case of inadvertence but one of absolute lack of application of mind to the law on the subject.”
Regarding the blacklisting being indefinite, the Court noted that the DM contended that the period was not indefinite and the petitioners had been blacklisted in the ordinary course only for one year. Noting this, the Court stated that the period of backlisting had to be mentioned in the order, which was not done. Furthermore, no document was annexed to show any provision that was known to the petitioners, prescribing a time limit of one year of blacklisting. Thus, the Court held that this explanation was an eyewash and did not stand scrutiny on the anvil of law declared by the Supreme Court.
The Court added that the DM had not mentioned anywhere that any show cause notice was issued to the petitioners proposing an action of blacklisting against it, even if it was permissible under condition 29 of the GeM tender process. The Court remarked that this was why it had proposed to impose a cost of at least Rs. 50,000. Accordingly, the Court rejected the reasons given in the counter-affidavit of the DM outright.
“The Officer, it seems, is adamant not only to defy the law declared by the Supreme Court, but he has even tried to justify it on unacceptable grounds rather than accepting his error.”
The Court noted that the DBEO, who passed the consequential order of blacklisting, had reiterated the stance of the DM in her reply. While denying that she had wilfully violated any order passed by the Court or the Supreme Court, in case there was any violation, then it was only due to inadvertence, it was neither deliberate nor intentional. She further ensured that she would take due care in the future so that no action taken by her may be perceived to be in violation and submitted an apology.
The Court also noted that there was no such apology in the affidavit submitted by the DM. the Court further referred to the relevant extract of the decision taken by the District Level Committee headed by the Dm, which demonstrated that the decision to blacklist the firms was taken by the DM, though the said document was signed by the other members of the Committee too.
Furthermore, the Court noted that the DM circulated the order of blacklisting the petitioners vide its letter to all the DMs of Uttar Pradesh without verifying whether the blacklisting order had been issued following the law declared by the Supreme Court.
The Court held that as per the decision taken by the DM in the District Level Committee meeting, the DBEO issued the blacklisting order, without satisfying herself as to what the procedure was before blacklisting the firm/company and what the law was on this subject.
Thus, the Court quashed the impugned orders with liberty to the respondents to proceed against the petitioners afresh per law, keeping in mind the observations made hereinabove. The Court further imposed a cost of Rs 50,000 upon the DM in each of the cases, payable to the petitioners, and a cost of Rs 25,000 was imposed upon the DBEO to be paid within one month. Accordingly, the writ petitions were allowed in the aforesaid terms.
[Cropscare Infotech Pvt. Ltd. Lucknow v. State of U.P., Writ C No. 6285 of 2025, decided on 23-07-2025]
Advocates who appeared in this case:
For the petitioner: Advocates Amit Jaiswal, Adesh Srivastava, and Shobhit Mohan Shukla
For the respondent: C.S.C., Abhinav Singh
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