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Mica Cargo Movers Vs. Union of India and Ors. - (High Court of Delhi) (02 May 2023)

Before taking extreme action of blacklisting, the entity has to be put to notice for the same



By way of present petition filed under Article 226 of the Constitution of India, 1950, the Petitioner seeks setting aside of order passed by Respondent No. 2/Northern Railway whereby Petitioner's registration as a contractor with Indian Railways, was cancelled alongwith cancellation of lease contracts, forfeiture of security deposit and blacklisting for a period of 5 years.

Before taking extreme the action of blacklisting, the entity has to be put to notice for the same so that it can answer. An 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 the State acts to the prejudice of a person it has to be supported by legality.

The impugned actions against the Petitioner firm have been taken without issuance of any independent show cause notice or affording a hearing. Even otherwise, the ostensible reason for taking the impugned action also does not survive. In view of the above, present Court finds merit in submissions of learned counsel for the petitioner and directs setting aside of the impugned order. Petition allowed.


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