Govt can’t blacklist private firm sans proper grounds: Allahabad HC

The petitioner firm had entered into a contract with the Uttar Pradesh Power Corporation Limited for maintenance and development works of poles and electrical wires across different parts of the state

The Allahabad high court has held that a private firm supplying equipment to the electricity department cannot be blacklisted either by the government or the department by a non-speaking order i.e. without providing facts of the matter and grounds for blacklisting it.

The bench comprising Justice Shekhar B Sharaf and justice VC Dixit allowed the writ petition filed by Sri Ganesh Enterprises which had challenged its blacklisting by the government for three years. (For Representation)

The bench comprising Justice Shekhar B Sharaf and justice VC Dixit allowed the writ petition filed by Sri Ganesh Enterprises which had challenged its blacklisting by the government for three years. The order dated January 7, 2025, came into limelight on Thursday.

The petitioner firm had entered into a contract with the Uttar Pradesh Power Corporation Limited for maintenance and development works of poles and electrical wires across different parts of the state.

Appearing for the petitioner firm, advocate Tanisha Jahangir Monir argued, “A show-cause notice was issued to the petitioner on May 14, 2024, which did not mention the factum of blacklisting. By the order dated October 26, 2024, the objections filed by the petitioner were rejected by the authority concerned without giving any adequate ground for rejection and subsequently by the impugned order dated December 2, 2024 the petitioner company was blacklisted.”

“The decision to blacklist must be reasonable, fair, and proportionate to the gravity of the alleged offence or breach, avoiding arbitrariness or discrimination. However, the petitioner was blacklisted by a non speaking order just by quoting that the quality of work done by it were not as per contract,” the advocate argued.

“Due process was not followed in the instant matter. It is well established that the rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law,” Monir said.

The court after hearing parties concerned allowed the petition while observing, “Upon perusal of the order, we find that the order does not satisfactorily comply with the requirements that have to be adhered to by the authority before blacklisting of a firm.”