The Allahabad High Court, Lucknow Bench, has quashed blacklisting orders issued against two private firms, ruling that such an action cannot be taken without a proper show-cause notice and cannot be for an indefinite period. Criticizing the officials for their “intransigent attempt to justify an unjustifiable act,” the court imposed costs of Rs. 50,000 on the District Magistrate of Unnao and Rs. 25,000 on the District Basic Education Officer, Unnao.
The division bench of Justice Rajan Roy and Justice Manish Kumar was hearing two writ petitions filed by M/S Cropscare Infotech Pvt. Ltd. and M/S Aero Infomedia Pvt. Ltd., which challenged the decisions to blacklist them.
Background of the Case
The petitioners, two private limited companies, had approached the High Court through separate writ petitions challenging the orders blacklisting them. As both cases involved similar facts and legal issues, the court decided them together through a common judgment.
During a hearing on July 7, 2025, the court had noted that the legal position on blacklisting is well-settled by the Supreme Court in several cases, including Eursian Equipment and Chemicals Vs. State of W.B. and Kulja Industries Ltd. Vs. Chief General Manager, Western Telecom Project, BSNL. The established law requires a show-cause notice before any blacklisting order is passed, and such an order cannot be for an indefinite period.
Expressing dismay over the frequent filing of such petitions, the court had observed, “…it is high time we make the officers accountable for such lapse.” It directed the District Magistrate (DM) and the District Basic Education Officer (BSA) of Unnao to file personal affidavits justifying their actions and to show cause why a “heavy cost of at least Rs. 50,000/- each be not imposed upon them.” The court had also stayed the impugned orders pending the next hearing.
Arguments of the Respondents
In response, the District Magistrate, Unnao, Sri Gaurang Rathi, filed an affidavit stating that the petitioners’ firms were declared technically disqualified because the “EMD submitted by the firm has not been verified by the respective bank.” He contended that an information notice was communicated to the petitioners via the GeM portal on their registered mobile number and email, granting 48 hours to explain the disqualification. “Thus, it is wrong to say that the petitioner firm was not given any notice,” the DM’s affidavit stated.
The DM referred to Condition 29 of the bid’s additional terms, which stipulated that if documents were found to be forged, the firm’s earnest money would be forfeited, the contract cancelled, and the firm would be blacklisted. He also cited a Ministry of Finance circular providing for debarment for breaching the “code of integrity.”
Regarding the blacklisting being for an indefinite period, the DM submitted that “in ordinary course the Black listing on the GeM portal is done for one year only” and could be extended to a maximum of two years. He thus claimed the petitioners’ contention was “wrong.”
The District Magistrate’s affidavit concluded with the statement: “That thus the deponent has not willfully violated any order passed by this Hon’ble Court or Hon’ble Supreme Court. However, in case there is any violation the same is only due to inadvertence, it is neither deliberate nor intentional.”
The District Basic Education Officer, Unnao, filed a separate response reiterating the DM’s stand but also submitted an apology and assured the court of due care in the future.
Court’s Analysis and Observations
The High Court outrightly rejected the justifications provided by the District Magistrate. The bench held that the blacklisting order was “in the teeth of the judgments referred in our order” and unsustainable for two primary reasons: first, no show-cause notice proposing the specific action of blacklisting was given, and second, the order was for an indefinite period.
The court observed that the DM had not even bothered to go through the Supreme Court decisions cited in its previous order, which are binding on all authorities under Article 144 of the Constitution. It termed the DM’s response as “nothing but an intransigent attempt to justify an unjustifiable act in the teeth of law declared by Hon’ble the Supreme Court.”
The court clarified that the general provisions cited by the DM could not be applied “without putting the petitioners to notice proposing the action of blacklisting giving them reasonable opportunity to respond and the basis/material on which such action was proposed.”
On the duration of the blacklisting, the court held that the period must be mentioned in the order itself. It found the DM’s explanation to be an “eyewash” that “does not stand scrutiny on the anvil of law declared by Hon’ble the Supreme Court,” as no document was produced to show the petitioners were aware of any one-year time limit.
The court took a dim view of the DM’s conditional explanation, noting, “He does not even accept that he has erred in view of the law declared by Hon’ble Supreme Court but offers 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.” The court also pointed out that unlike the BSA, the DM offered no apology.
The judgment highlighted that the decision to blacklist the firms was taken by the District Magistrate in a District Level Committee meeting and that he had circulated the blacklisting order to all District Magistrates in Uttar Pradesh “without verifying as to whether the blacklisting order had been issued in accordance with law declared by Hon’ble Supreme Court.”
Final Decision
For the aforesaid reasons, the High Court allowed both writ petitions and quashed the impugned blacklisting orders.
The court granted liberty to the authorities to proceed against the petitioners afresh, but strictly “in accordance with law keeping in mind the observations made hereinabove.”
Concluding the matter, the court imposed a cost of Rs. 50,000 upon the District Magistrate, Unnao, in each of the two cases, payable to the respective petitioners. A further cost of Rs. 25,000 was imposed upon the District Basic Education Officer, Unnao. The costs are to be paid within one month.
