Court holds blacklisting without hearing as arbitrary, directs fresh notice and opportunity to be heard under Rajasthan Transparency in Public Procurement Act
In a significant judgment delivered on August 12, 2026, the Rajasthan High Court, presided over by Justice Anoop Kumar Dhand, set aside the order blacklisting M/s S.S. Corporation, a contractor, for three years from participating in government tenders. The Court ruled that the impugned blacklisting order, passed by the Deputy Conservator of Forests, Wildlife, Udaipur, violated the fundamental principles of natural justice as the petitioner was not afforded an opportunity to be heard before the punitive measure was imposed.
The petitioner, M/s S.S. Corporation, represented by its proprietor Mr. Shailendra Suhalka, challenged the blacklisting order dated April 29, 2026, which barred them from tendering for government contracts due to alleged non-payment of outstanding dues related to a contract for operating golf carts at Sajjangarh Biological Park, Udaipur.
The petitioner contended that although several notices were issued demanding payment of dues, no show-cause notice was served indicating that failure to pay would result in blacklisting. The petitioner emphasized that denial of a hearing opportunity amounted to a breach of natural justice, referencing precedents including the Supreme Court’s ruling in M/s A.K.G. Construction and Developers Pvt. Ltd. vs. State of Jharkhand (2026) and other authoritative judgments.
The respondents, represented by the Additional Advocate General, argued that the Rajasthan Transparency in Public Procurement Act, 2012, mandates debarment for non-compliance such as default in payment, and hence the blacklisting order was justified. They asserted that the petitioner had been repeatedly notified to clear dues.
Upon detailed examination, the Court observed that the notices issued only demanded payment but did not warn the petitioner of the consequences of blacklisting if dues remained unpaid. The absence of a clear show-cause notice and the failure to provide a hearing opportunity before blacklisting were found to be a violation of the audi alteram partem rule—a cardinal principle of natural justice requiring that a person must be given a chance to present their case before adverse action is taken.
The Court relied heavily on landmark precedents including the Constitution Bench judgment in Olga Tellis vs. Bombay Municipal Corporation (1985) which emphasized that natural justice cannot be bypassed on the ground that it would not have made a difference. It also referred to Khem Chand vs. Union of India (1957) elucidating the need for informing the charges and allowing the accused to defend themselves adequately.
Consequently, the Court quashed the blacklisting order and remanded the matter back to the respondents with directions to issue a fresh show-cause notice specifying allegations clearly. The respondents were mandated to consider the petitioner’s reply and pass orders only after providing a fair hearing, ensuring strict adherence to the principles of natural justice and relevant statutory provisions.
This judgment reinforces the judiciary’s commitment to fair administrative action and serves as a reminder to government authorities to comply with procedural fairness before imposing punitive measures such as blacklisting contractors.
Bottom Line:
Principles of Natural Justice - Blacklisting of a contractor without providing an opportunity of hearing violates the principles of natural justice.
Statutory provision(s):
Section 40, Rajasthan Transparency in Public Procurement Act, 2012 (RTPP Act, 2012)
M/s S.S. Corporation v. State of Rajasthan, (Rajasthan) : Law Finder Doc Id # 2967321
