Holding

A show‑cause notice cannot be quashed unless issued by an authority lacking jurisdiction or with mala‑fides, and blacklisting is permissible only when the contractor’s conduct is deviant or aberrant, not merely for breach of contract.

Summary

The appellant, a printing firm, was issued a show‑cause notice by the Chhattisgarh Textbook Corporation seeking an explanation why it should not be blacklisted for three years and its EMD forfeited, alleging breach of tender clauses relating to time‑bound delivery and other obligations. The appellant challenged the notice in a writ petition, which was dismissed by the High Court and the appellate court, leading to the present appeal. The Supreme Court examined whether a writ court can entertain a challenge to a show‑cause notice and whether the corporation was justified in invoking blacklisting for mere contractual breach, especially given the COVID‑19 pandemic. Relying on precedents, the Court held that a show‑cause notice is not an adjudicatory order and can only be quashed if issued by an authority lacking jurisdiction or with mala‑fides, and that blacklisting is a drastic measure requiring a clear, deviant conduct beyond simple breach. Consequently, the Court quashed the portion of the notice calling for blacklisting while allowing the corporation to forfeit the EMD, and dismissed the appeal.

Issues considered

Whether a writ court can entertain a petition challenging a show‑cause notice issued by a statutory authority.
Whether the corporation was justified in issuing a show‑cause notice seeking blacklisting of the appellant for alleged breach of tender clauses.

Legislation cited

Constitution of India

Subjects

TenderTender agreementBreach of contractBlacklistingPower of the Authority to blacklistShow cause noticeSecurity deposit/EMDForfeiture of EMDRecovery of damagesLegal redressViolation of tender termsCOVID-19 pandemicTextbook printing tenderStigma of blacklistingPunitive measure of blacklisting

Judgment

[2025] 3 S.C.R. 208 : 2025 INSC 236

M/s Techno Prints
v.
Chhattisgarh Textbook Corporation & Anr.
(Civil Appeal No. 2362 of 2025)
12 February 2025
[J.B. Pardiwala and R. Mahadevan, JJ.]

Issue for Consideration
Whether the respondents-Corporation justified in calling upon the
appellant-contractor to show cause as to why they should not be
blacklisted for a period of three years on alleged violation of the
clauses of the tender; and whether the appeal should be entertained
arising from a challenge to the show cause notice.

Headnotes†
Tender – Tender agreement – Breach of contract – Blacklisting –
Power of the Authority to blacklist – Scope – Show cause
notice – Issuance of – Appellant was assigned a contract
by the respondent no.1 – Issuance of show cause notice by
respondent no.1 to the appellant to show cause as to why it
should not be blacklisted for a period of three years and the
security deposit/EMD be forfeited for violation of the clauses of
the tender agreement – Writ petition by the appellant – Rejected
by the Single Judge of the High Court – Appeal thereagainst,
also dismissed – Correctness:
Held: Ordinarily, a writ court should not entertain any petition,
seeking to challenge a show cause notice unless the Court is
convinced that the same has been issued by an authority having
no jurisdiction, or the same is tainted with mala fides – Sum and
substance of the clauses of the tender is that if the appellant is
unable to complete the work of printing within the stipulated time
then the consequences will be blacklisting – Guiding principles
as to when and in what circumstances a blacklisting order can be
passed then, should be borne in mind by the Authority at the time
of issuing a show cause notice – On facts, no good reason for the
Authority to issue show cause notice calling upon the contractor
why he should not be blacklisted – There is always an inherent
power in the Authority to blacklist a contractor but there should
[2025] 3 S.C.R. 209

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

be reasonable ground to exercise such power – Final order in
any case cannot travel beyond the show cause notice – Whether
show cause notice makes out a case for blacklisting, should be
the test to determine whether it is a genuine case to blacklist a
contractor or visit him with any other penalty, like forfeiture of
EMD, recovery of damages – Once an order of blacklisting is
passed the same would put an end to the business of the person
concerned, it is a drastic step – While the debarment itself may
not be permanent and may only remain effective for a limited,
pre-determined period, its negative effect continues to plague the
business of the debarred entity for a long period of time – If a
contractor is to be visited with the punitive measure of blacklisting
on account of an allegation that he has committed a breach of a
contract, the nature of his conduct must be so deviant or aberrant
so as to warrant such a punitive measure – Mere allegation of
breach of contractual obligations without anything more, per se,
does not invite any such punitive action – Respondent no.1 to
forfeit the EMD, however notice calling upon the appellant as to
why it should not be blacklisted is quashed and set aside. [Paras
16, 24, 29, 30, 32-37]

Case Law Cited
Kulja Industries Limited v. Chief General Manager Western Telecom
Project BSNL & Ors. [2013] 14 SCR 430 : AIR 2014 SC 9; The
Blue Dreamz Advertising Pvt. Ltd. & Anr. v. Kolkata Municipal Corp.
& Ors. [2024] 8 SCR 189 : 2024 INSC 589; Erusian Equipment
& Chemicals Ltd. v. State of W.B. [1975] 2 SCR 674 : (1975) 1
SCC 70 – referred to.

List of Acts
Constitution of India.

List of Keywords
Tender; Tender agreement; Breach of contract; Blacklisting; Power
of the Authority to blacklist; Show cause notice; Security deposit/
EMD; Inherent power in the Authority to blacklist a contractor;
Forfeiture of EMD; Recovery of damages; Legal redress; Violation
of tender terms; COVID-19 pandemic; Textbook printing tender;
Stigma of blacklisting; Punitive measure of blacklisting.
210 [2025] 3 S.C.R.

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Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2362 of 2025
From the Judgment and Order dated 11.04.2023 of the High Court
of Chhattisgarh at Bilaspur in WA No. 72 of 2023

Appearances for Parties
Gaurav Agarwal, Sr. Adv., Chandrashekhar A Chakdabbi, Vaibhav
Shukla, Himanshu Sinha, Anshul Rai, Advs. for the Appellant.
Ankit Mishra, Archit Mandhyan, Ms. Kanupriya Mishra, Shantanu
Krishna, Advs. for the Respondents.

Judgment / Order of the Supreme Court

Order

1. Leave granted.
2. This appeal arises from the judgment and order passed by the
High court of Chhattisgarh at Bilaspur in Writ Appeal No.72 of
2023, by which the writ appeal filed by the appellant herein, came
to be dismissed and thereby the judgment and order passed by the
Learned Single Judge, rejecting the writ petition of the appellant
came to be affirmed.
3. The facts giving rise to this appeal may be summarized as under:-
(a) The appellant herein, is in the business of printing past many
years.
(b) The appellant company is one of the 30 firms, registered with the
Chhattisgarh Text Book Corporation (respondent no.1 herein).
(c) The subject matter of this litigation is the show cause notice
that came to be issued by the respondent no.1 to the appellant
firm, calling upon the firm to show cause as to why it should
not be blacklisted for a period of three years and the EMD
of Rs.5,00,000/- (Rupees Five Lakh only), be forfeited. The
appellant firm was also called upon to show cause as to why
the loss incurred by the corporation, due to its default in fulfilling
its terms of contract, be recovered.
[2025] 3 S.C.R. 211

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

4. Prima facie, it appears that the petitioner firm was declared as L-1
in one of the tenders issued by the corporation i.e. the respondent
no.1. According to the respondent no.1, the appellant firm violated
few clauses of the tender agreement.
5. The relevant clauses of the tender document/agreement which
according to the respondent no.1, have been breached, read thus:-
“16.1 Period of supply of books maximum 90 days as
per mentioned in the work order from the date of printing
order. It will be imperative upon the bidder to complete
the allotted printing & binding work within stipulated time
period i.e. maximum 90 days as per mentioned in the work
order. In emergency the CGPPN will reduce period for
supply of books as per requirements. The 22/52 decision
of the Managing Director in this regard will be final and
binding on concerned bidder.
xxx xxx xxx
16.3 If the progress of work at any stage is found slower
than expected and if the Nigam is convinced that the
printer will not be able to complete the work in time, the
Nigam shall cancel the contract in full or in part and give
it to other printer at the cost and risk of defaulting printer.
In the event of such cancellation, the security deposit/EMD
of the printer shall be forfeited and the printer will not be
entitled to any compensation.
xxx xxx xxx
16.9 If the tenderer is awarded to the lowest rate printer on
the basis of L-1 rate of group/groups and Nigam allots the
printing works to the tenderer on the basis of his L1 rate
(Lowest Tenderer) of group/groups then also if tenderer
refuses to do the printing work or work not completed,
in this condition Nigam has right to put the tenderer in
BLACK LIST for 3 (Three) years and security deposit and
EMD will be forfeited.”
6. The show cause notice issued by the respondent no.1 was made
a subject matter of challenge, by filing writ petition before the High
Court.
212 [2025] 3 S.C.R.

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7. The Learned Single Judge rejected the writ petition holding as under:-
“8. Having heard the contention put forth on either side and
on perusal of records what is required to be taken note
of at this juncture is the opening paragraph of the order
of the High Court in WPC No. 1297/2021 (Sharda Offset
Printers Pvt. Ltd. v. Chhattisgarh Textbook Corporation
& another) and the operative part of the judgment of the
said writ petition is reproduced hereinunder for ready
reference:
“1. The challenge in this writ petition is to the
order dated 02.01.2021 passed by respondent
No.1 whereby the petitioner has been blacklisted
for a period of 3 years. 23. Therefore, when
the order of blacklisting is compared with the
show cause notice, in the instant case, it clearly
spells out that the order of blacklisting exceeded
the grounds which were given in show cause.
The main emphasis was that the petitioner
has received paper material in excess of bank
guarantee for which the agreement contains
measures under Clause 6.1.4. The black-listing
was made under Clauses 13.3 & 13.6 of the
agreement with respect to furnishing of bank
guarantee. Even Clause 3 was not part of the
show cause. The show cause notice was only
confined to Clause 13.3 & 13.6. Reading of
clause 13.3 & 13.6 would show that they are
in general terms as Clause 13.3 purports that
any failure to fulfill contractual obligations or
breach of any provisions of agreement, may
render the bidder to be black-listed. Clause
13.6 further purports that if the printer is found
to influence any staff of the Nigam in any
unauthorised manner will also be blacklisted. In
the Statement of Chinta Ram Sahu and in police
enquiry against him, nothing was found against
the petitioner and omnibus inference cannot
be drawn that the petitioner had influenced
the staff of the Corporation and had influenced
[2025] 3 S.C.R. 213

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

the Police, thereby the petitioner was liable to
be blacklisted. 24. Applying the principles laid
down by the Supreme Court, I am of the view
that the blacklisting order in this case travelled
beyond the scope of show cause notice, as
such, is liable to be quashed. Accordingly the
order dated 02.01.2021 is quashed. With the
above observations, this writ petition is allowed.”
9. The plain reading of the aforesaid order would clearly
give an indication that the challenge in the earlier round
of litigation was confined to the order of blacklisting.
Further that the High Court had only tested the order of
blacklisting qua the show cause notice that was earlier
issued on 13.04.2020 while deciding the writ petition.
The High Court at no point of time had precluded the
respondents from conducting an inquiry and proceeding
in accordance with law. It had only found the order of
blacklisting earlier passed on 02.01.2021 to be bad in law
and contrary to the contents of the show cause notice
dated 13.04.2020.
10. The plain reading of the averments of the show cause
notice would by itself show that the respondents have
made certain serious allegations against the petitioner in
respect of the lifting of the papers from the respondent-
Corporation by material suppression of facts so far as
furnishing of the Bank Guarantee is concerned.
11. Only because the earlier order of blacklisting having
been quashed by the High Court would not preclude
the respondent-Corporation from initiating appropriate
proceedings for the irregularity committed by the petitioner,
if any, in accordance with law. That it is for this reason that
the petitioner has been issued with a fresh show cause
notice spelling out the allegations that has been made
against him. The petitioner can very well provide all the
explanations to the allegations made to the respondents
supported with all relevant documents in their support.
Upon such explanation being submitted the respondent
authorities are duty bound to duly consider the same and
214 [2025] 3 S.C.R.

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after due consideration alone, can they take an appropriate
decision to proceed further, if required.
12. Further, what is also reflected from the proceedings
is that, subsequent to allowing of the earlier writ petition,
the respondents have now issued with a detailed show
cause notice to the petitioner on 14.12.2022, which is
under challenge in the present writ petition. The notice
would clearly give an indication of the details of the
papers that the petitioner had collected for the printing
and publication purpose at the different point of time
from the respondent-Corporation. The core question that
needs to be consider is that since there was no challenge
to the show cause notice earlier and that it was order of
blacklisting alone which was under challenge, would not
preclude the respondents from conducting an inquiry in
respect of an allegation as is reflected in the show cause
notice against the petitioner.
13. The further question to be considered also is the fact
that if at all if the earlier writ petition stands allowed which
was exclusively challenging the order of blacklisting would
it not amount to the respondents being precluded for all
time to come from initiating any action in respect of any
illegality which was detected by the respondents in respect
of the contract entered into between the petitioner and
the respondents. All the contentions and the allegations
that the petitioner raises is only trying to establish the fact
that the allegations leveled against the petitioner does
not stand the test of law as it has already been subjected
to test in the earlier round of litigation i.e. in WPC No.
1325/2021. Whereas on the perusal of the order of the
earlier writ petition would clearly give an indication that the
challenge in the said writ petition was only to the order of
blacklisting. That it was only the order of blacklisting which
was subjected to scrutiny by the writ Court and it was
only the order of blacklisting which has been set aside/
quashed. The writ Court in the earlier judgment in WPC
No. 1325/2021 has not held that the allegations leveled
against the petitioner is not made out. All that it has been
held by the writ Court was that the grounds raised for
[2025] 3 S.C.R. 215

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

blacklisting, was not reflected in the show cause notice
and the order of blacklisting was traveling beyond the
scope of the show cause notice.
14. Under the circumstances, the subsequent show cause
notice in respect of the same contract would be sustainable
and the same cannot be held to be either arbitrary or
bad in law at this stage. The petitioner would have all the
rights and liberty to put up their explanation so far as the
allegations are concerned in their response which they
are required to submit to the show cause notice. That
upon such reply being furnished the authorities concerned
are duty bound to duly consider the same and then take
an appropriate decision whether to proceed further on
the show cause notice proceedings in the light of the
explanation so submitted by the petitioner or not?
15. This view of this Court stands fortified from the order
of the Hon’ble Supreme Court in the case of “STATE OF
UTTAR PRADESH V. BRAHM DATT SHARMA & ANR.”
(1987) 2 SCC 179 and “SECRETARY, MINISTRY OF
DEFENCE & ORS. V. PRABHASH CHANDRA MIRDHA”
(2012) 11 SCC 565. This Court in the recent past in WPC
No. 4431/2019 (Kavita Sharma v. State of Chhattisgarh and
others) while deciding the matter on an inquiry report that
was furnished to the petitioner therein had while deciding
the writ petition on 05.12.2019 in paragraphs No. 11 to
14 has held as under:
“11. The High Court in exercise of its powers
under Article 226 of the Constitution of India
would not substitute itself as a fact finding
body to ascertain the correctness in respect
of the allegations made neither can this Court
in exercise of writ jurisdiction conduct a roving
enquiry against the allegations which have been
levelled against the petitioner.
12. The Supreme Court in the case of State
of Uttar Pradesh v. Brahm Datt Sharma &
Anr. [1987 2 SCC 179] dealing with the
scope of judicial interference in disciplinary
216 [2025] 3 S.C.R.

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matters was of the opinion that, “the purpose
of issuing show cause notice is to afford an
opportunity of hearing to the Government
servant and once cause is shown and is open
to the Government to consider the matter in
the light of the facts and submissions placed
by the Government servant, only thereafter
a final decision in the matter could be taken.
Interference by the Court before that stage
would be premature and the Hon’ble Supreme
Court went on holding that, the High Court in
our opinion ought not have interfered with the
show cause notice.
13. Again, the Hon’ble Supreme Court in the
case of Secretary, Ministry of Defence & Ors. v.
Prabhash Chandra Mirdha [2012 11 SCC 565] in
paragraph 8, 10 & 12 has held as under:- “8. The
law does not permit quashing of chargesheet
in a routine manner. In case the delinquent
employee has any grievance in respect of the
charge-sheet he must raise the issue by filing a
representation and wait for the decision of the
disciplinary authority thereon. 10. Ordinarily a
writ application does not lie against a charge-
sheet or show-cause notice for the reason that
it does not give rise to any cause of action. It
does not amount to an adverse order which
affects the right of any party unless the same has
been issued by a person having no jurisdiction/
competence to do so. A writ lies when some
right of a party is infringed. In fact, chargesheet
does not infringe the right of a party. It is only
when a final order imposing the punishment or
otherwise adversely affecting a party is passed,
it may have a grievance and cause of action.
Thus, a charge-sheet or show-cause notice in
disciplinary proceedings should not ordinarily
be quashed by the court. 12. Thus, the law on
the issue can be summarised to the effect that
[2025] 3 S.C.R. 217

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

the charge-sheet cannot generally be a subject
matter of challenge as it does not adversely
affect the rights of the delinquent unless it is
established that the same has been issued
by an authority not competent to initiate the
disciplinary proceedings. Neither the disciplinary
proceedings nor the charge-sheet be quashed
at an initial stage as it would be a premature
stage to deal with the issues.
14. Keeping in view the aforesaid legal
pronouncements as is laid down by the Hon’ble
Supreme Court and also taking into consideration
the fact that the petitioner has also submitted
a detailed reply to the show-cause notice, the
authorities are yet to take a decision on the
show-cause notice. The present writ petition
in its present form would not be sustainable.
The authorities concerned are expected to
take a decision objectively, considering all the
submissions that the petitioner has made in the
reply to the Show-Cause Notice.”
16. Given the said facts, reserving the right
of the petitioner to submit a detailed reply to
the show cause notice, the writ petition at this
juncture stands rejected.”
8. The appellant being dissatisfied with the order passed by the Learned
Single Judge, rejecting his writ petition went in appeal.
9. The Appellate Court dismissed the appeal, holding as under:-
“4. A careful perusal of the aforesaid part of the notice would
show that it is only a show cause notice and appellant’s
response has been sought to decide the issue and nothing
has been adjudicated to say that the respondent has
already taken final decision in the matter. The learned
Single Judge after detailed hearing has clearly held in
paragraphs No.9 to 14 as under:-
“9. The plain reading of the aforesaid order would clearly
give an indication that the challenge in the earlier round
218 [2025] 3 S.C.R.

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of litigation was confined to the order of blacklisting.
Further that the High Court had only tested the order of
blacklisting qua the show cause notice that was earlier
issued on 13.04.2020 while deciding the writ petition.
The High Court at no point of time had precluded the
respondents from conducting an inquiry and proceeding
in accordance with law. It had only found the order of
blacklisting earlier passed on 02.01.2021 to be bad in law
and contrary to the contents of the show cause notice
dated 13.04.2020.
10. The plain reading of the averments of the show cause
notice would by itself show that the respondents have
made certain serious allegations against the petitioner in
respect of the lifting of the papers from the respondent-
Corporation by material suppression of facts so far as
furnishing of the Bank Guarantee is concerned.
11. Only because the earlier order of blacklisting having
been quashed by the High Court would not preclude
the respondent-Corporation from initiating appropriate
proceedings for the irregularity committed by the petitioner,
if any, in accordance with law. That it is for this reason that
the petitioner has been issued with a fresh show cause
notice spelling out the allegations that has been made
against him. The petitioner can very well provide all the
explanations to the allegations made to the respondents
supported with all relevant documents in their support.
Upon such explanation being submitted the respondent
authorities are duty bound to duly consider the same and
after due consideration alone, can they take an appropriate
decision to proceed further, if required.
12. Further, what is also reflected from the proceedings
is that, subsequent to allowing of the earlier writ petition,
the respondents have now issued with a detailed show
cause notice to the petitioner on 14.12.2022, which is
under challenge in the present writ petition. The notice
would clearly give an indication of the details of the
papers that the petitioner had collected for the printing
and publication purpose at the different point of time
[2025] 3 S.C.R. 219

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

from the respondent-Corporation. The core question that
needs to be consider is that since there was no challenge
to the show cause notice earlier and that it was order of
blacklisting alone which was under challenge, would not
preclude the respondents from conducting an inquiry in
respect of an allegation as is reflected in the show cause
notice against the petitioner.
13. The further question to be considered also is the fact
that if at all if the earlier writ petition stands allowed which
was exclusively challenging the order of blacklisting
would it not amount to the respondents being precluded
for all time to come from initiating any action in respect
of any illegality which was detected by the respondents
in respect of the contract entered into between the
petitioner and the respondents. All the contentions and
the allegations that the petitioner raises is only trying to
establish the fact that the allegations leveled against the
petitioner does not stand the test of law as it has already
been subjected to test in the earlier round of litigation
i.e. in WPC No. 1325/2021. Whereas on the perusal of
the order of the earlier writ petition would clearly give
an indication that the challenge in the said writ petition
was only to the order of blacklisting. That it was only the
order of blacklisting which was subjected to scrutiny by
the writ Court and it was only the order of blacklisting
which has been setaside/quashed. The writ Court in
the earlier judgment in WPC No. 1325/2021 has not
held that the allegations leveled against the petitioner
is not made out. All that it has been held by the writ
Court was that the grounds raised for blacklisting, was
not reflected in the show cause notice and the order
of blacklisting was traveling beyond the scope of the
show cause notice.
14. Under the circumstances, the subsequent show
cause notice in respect of the same contract would be
sustainable and the same cannot be held to be either
arbitrary or bad in law at this stage. The petitioner
would have all the rights and liberty to put up their
explanation so far as the allegations are concerned
220 [2025] 3 S.C.R.

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in their response which they are required to submit
to the show cause notice. That upon such reply being
furnished the authorities concerned are duty bound to
duly consider the same and then take an appropriate
decision whether to proceed further on the show cause
notice proceedings in the light of the explanation so
submitted by the petitioner or not?””
10. In such circumstances record to above, the appellant is here before
this Court with the present appeal.
11. We have heard Mr. Gaurav Agarwal, the learned senior counsel,
appearing for the appellant and Mr. Ankit Mishra, the learned counsel
appearing for the respondent nos.1 and 2, respectively.
12. We take notice of the order passed by this Court dated 17.05.2023,
the same reads thus:-
“Mr. Priyank Upadhyay, learned Advocate on Record
accepts notice on behalf of the respondents. Hence, issue
of formal notice to the respondents is dispensed with.
Objections to the petition, if any, be filed.
In the meanwhile, there shall be stay of further proceedings
pursuant to the notice dated 14.12.2022.”
13. Thus, it appears that by way of interim order, the further proceedings
of the show cause notice were stayed.
14. The short point that falls for our consideration in this appeal is
whether we should entertain this appeal arising from a challenge to
the show cause notice.
15. The second point that falls for our consideration is whether the
respondents in the facts of this case more particularly having regard
to the nature of violation were justified in calling upon the appellant
to show cause as to why they should not be blacklisted for a period
of three years.
16. It is true that ordinarily, a Writ Court should not entertain any petition,
seeking to challenge a show cause notice unless the Court is
convinced that the same has been issued by an authority having
no jurisdiction, or the same is tainted with mala fides.
[2025] 3 S.C.R. 221

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

17. Here is a case where the appellant was assigned a contract of printing
books by the corporation. This contract was entered into sometime
in 2020. Unfortunately, from mid 2020, the entire country was in
the grip of COVID-19 pandemic. It has been fairly accepted by the
appellant that the obligation in terms of the contract could not be
discharged due to circumstances beyond its control. In other words,
the appellant was prescribed to abide by the time period which was
prescribed in the tender notice.
18. The aforesaid at best could be said to be a case of breach of contract.
The only point is whether such a breach of contract would entail the
consequences of getting blacklisted.
19. It is true that the terms of the tender document do provide that if the
party is unable to fulfill its terms of agreement, he would be liable
to be blacklisted.
20. We do not propose to test the legality and validity of such stipulation
in the tender agreement. The inherent power is always there with the
party floating the tender. However, we are testing its reasonableness
on the basis of the facts which are before us. In other words, has the
appellant done something so gross that it deserves to be blacklisted.
21. Mr. Gaurav Agarwal, the learned senior counsel appearing for the
appellant would submit that one cannot blacklist or even be called
upon to show cause as to why you should be blacklisted, unless there
is an intent to cheat or take undue advantage which is not there in
the present case. He would submit that there is nothing to indicate
that the appellant deliberately defaulted. In such circumstances, the
proceedings instituted against the appellant deserves to be dropped.
22. On the other hand, the learned counsel appearing for the corporation
would submit that the action of blacklisting would not depend upon as
to whether default of the appellant herein, was deliberate or not, or
there was any intention to take undue advantage or to cheat or not.
It depends upon the contravention of the contract and the damage
caused to the respondents.
23. The show cause notice reads thus:
“Chhattisgarh Textbook Corporation
Office Complex, Block-B, Sector-24 Atai Nagar,
Nava Raipur
No./2806/PPN/Printing/2020-21 /2022 Raipur on 14/12/2022
222 [2025] 3 S.C.R.

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To,
Techno Prints,
Behind Banjari Mata Mandir,
Near Heera Steel,
Rawanbhata
Raipur Chhattisgarh.
Subject: Show cause notice.
Ref:-Your letter dated 23.12.2020, 06.01.2021, 03.06.2021,
08.11.2021, 03.12.2021, 15.02.2022, 01.04.2022 regarding
EMD refund for the academic session 2020-21.
The EMD amount deposited by you in the textbook printing
tender for the education session 2020-21 has been sought
through the letters referred to in the subject. In this regard,
the factual details of the textbook printing done by you for
the education session 2020-21 are presented as follows-
For working on the L1 rates received from you by
participating in the issued tender for the printing of
textbooks under the education session 2020-21 by the
Corporation contract was done on Date 23.12.2019. In
paragraph 6.1 of the textbook printing tender issued by the
CG Textbook Corporation in the education session 2020-
21, the printing capacity of 08 m tonne per day for single
web offset machine and 16 m tonne per day for double
or more web offset machines was fixed for the printers.
Accordingly, work order for the printing work of about
1267.496 MT of textbooks is provided to you through the
referred work orders as per the agreed capacity of double
offset machine filled by you in the tender and L-1 in 10
groups details of which are as follows:
Order No. 3776 Date 08.01.2020
GROUP SUB NAME OF CLASS APPROX BOOK 70 GSM 220 GSM L-1
MEMBER GROUP BOOK PAGE NO. PAPER COVER
NUMBER NO. QUANTITY PAPER
IN M. SHEETNO.
TONNE
A English (SZ) 5 108 236275 55.182 60250 0.2090
A English (SZ) 5 108 14208 3.138 3623 0.2090
[2025] 3 S.C.R. 223

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

B English (SZ) 6 128 248514 68.789 63371 0.2090
B English(SZ) 6 128 13698 3.792 3493 0.2090
13 B Ganit(SZ) 7 272 2589769 152.326 66037 0.2090
17 A Hindi(SZ) 2 104 239607 53.888 61100 0.2090
17 A Hindi(SZ) 2 104 34201 7.692 8721 0.2090
38 A Hindi 3 160 30295 10.482 7725 0.2090
Sargujiha-
Sanskrit(SZ)
38 A Hindi 3 160 5396 1.867 1376 0.2090
Sargujiha-
Sanskrit(SZ)
38 B Ganit(SZ) 4 160 214923 74.363 54805 0.2090
Total 431.698 330501

Order No. 4013 Date 17.01.2020
GROUP SUB NAME OF CLASS APPROX BOOK 70 GSM 220 GSM L-1
MEMBER GROUP BOOK PAGE NO. PAPER COVER
NUMBER NO. QUANTITY PAPER
IN M. SHEETNO.
TONNE
A Vigyan(SZ) 10 360 234862 182.840 59890 0.2150
B English(SZ) 7 144 236402 73.616 60283 0.2090
B English(SZ) 7 144 9034 2.813 2304 0.2090
Total 259.269 122477

ORDER NO. 4460 DATE 18.02.2020
GROUP SUB NAME OF CLASS APPROX BOOK 70 GSM 220 GSM L-1
MEMBER GROUP BOOK PAGE NO. PAPER COVER
NUMBER NO. QUANTITY PAPER
IN M. SHEETNO.
TONNE
1 B Science(SZ) 10 216 16563 7.737 4224 0.20
1 C Ganit(SZ) 6 244 246729 130.187 62926 0.20
1 A History and 6 128 8717 2.413 2223 0.20
Civics(SZ)
20 B Paryawaran(SZ) 7 124 239544 64.234 61084 0.2090
20 A Hindi(SZ) 3 128 240413 66.546 61305 0.2090
20 A Hindi(SZ) 7 128 8850 2.450 2257 0.2090
B Yog Siksha 1 56 534393 64.715 53481 0.2090
Part -1 (SZ)
C Ganit (SZ) 2 180 209730 81.637 55244 0.2090
B Ganit (SZ) 3 196 216645 91.825 38316 0.2150
224 [2025] 3 S.C.R.

Digital Supreme Court Reports

A Shyamala 10 192 150260 62.388 1472 0.2150
Sanskrit (SZ)
A Shyamala 10 192 5772 2.397 478792 0.2150
Sanskrit(SZ)
Total 576.529 478792

Printing tender clause 16.1 mentions that
16.1 Period of supply of books maximum 90 days as per
mentioned in the work order from the date of printing
order. It will be imperative upon the bidder to complete
the allotted printing & binding work within stipulated time
period i.e. maximum 90 days as per mentioned in the work
order. In emergency the CGPPN will reduce period for
supply of books as per requirements. The decision of the
Managing Director in this regard will be final and binding
on concerned bidder.
In the sequence of which the printers who were given the
printing work order under the printing work order A, 4460
dated 18.02.2020, were instructed to complete the printing
and delivery work within 60 days from the date of issue
of the printing order as per the deadline.
In this regard, your letter was received in the office on
05.03.2020, through which you have requested to extend
the time period to 90 days, while the corporation had also
entered into an agreement with other 24 printers, out of
which on the said date Printing work orders were also
issued to 09 other printers as per the same time limit.
Barring 02 organizations affiliated to you, Ramraja Printers
and Pragati Printers, no objection was lodged in relation
to the said printing work order by other printers.
Post textbook printing tender, in paragraph 91, provision
was made for supply of paper for printing to the printers
as follows:-
9.1 After issuance of letter of acceptance the selected
bidder shall furnish bank guarantee/FDR valid for one year
from any nationalized / schedule bank for 20% of the cost
of paper required to complete the work entrusted to him.
[2025] 3 S.C.R. 225

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

If bidder is L-1 in more than one group he may furnish
bank guarantee/FDR (as mentioned above) for one or
more number of groups, and CGPPN will allot the paper
double the amount of bank guarantee/FDR deposited by
him, for the allotted group/groups. For example- if the
bidder deposits bank guarantee/FDR for one group (i.e.
20% of cost of paper required to complete the work of
concerned group) than paper required for that particular/
single group will be allotted but quantity of paper should
not exceed double of the amount of bank Guarantee /
FDR. Next allotment of paper will be done strictly after
80% supplies received in concern depot. If the progress of
the printing work is found unsatisfactory then MD CGPPN
reserve the right to allot the remaining work of concern
group/ remaining group to another printer on L-1 rate
according to his capacity.
According to the above provision of the tender, you have
to print textbooks by 17.02.20 about 280 MT Reel paper
was supplied, against which you have submitted your
complaint, in situation of date 11.03.2020, the books were
supplied to the depot using only 136 MT of paper.
According to provision of Printing Tender Clause 16.3:-
16.3 If the progress of work at any stage is found slower
than expected and if the Nigam is convinced that the
printer will not be able to complete the work in time, the
Nigam shall cancel the contract in full or in part and give
it to other printer at the cost and risk of defaulting printer.
In the event of such cancellation, the security deposit/EMD
of the printer shall be forfeited and the printer will not be
entitled to any compensation.
Accordingly, for the slow pace of printing work, you
were issued notice letter No.4825 dated 11.03.2020 by
the corporation, after which you sent the letter dated
17.03.2020 to the positive branch of the corporation and
gave the printing order No.4480 dated 18.02.2020 due
to non-availability of the following textbooks for positive
printing, inability, was expressed in the printing work-
226 [2025] 3 S.C.R.

Digital Supreme Court Reports

GROUP SUB NAME OF CLASS APPROX BOOK 70 GSM 220 GSM L-1
MEMBER GROUP BOOK PAGE NO. PAPER COVER
NUMBER NO. QUANTITY PAPER
IN M. SHEETNO.
TONNE

B Science (SZ) 6 216 16563 7.737 4224 Techno

A Hindi (SZ) 7 128 240413 66.546 61305 Techno

A Hindi (SZ) 7 128 8850 2.450 2257 Techno

A Shyamla 10 192 150260 62.388 38316 Techno
Sanskrit (SZ)

A Shyamala 10 192 5772 2.397 1472 Techno
Sanskrit (SZ)

Total 421858 141.518 141.518 107574

According to the approval of the Managing Director, in point
A.02 of the printing order No.4480 dated 18.02.2020, the
following points were mentioned in relation to the supply
of positive / CDs -
2. According to clause 13.3.1 of the tender to the printers
by the Corporation As far as possible positive / CD of the
books mentioned in the supply order will be given along
with the printing order. In case of having only one positive
set, the printers will have to take turns (sharing basis) to
complete the printing work using the positive set or CD
directly. Printing plate will have to be made by CTP and
printed. Check the positive/CD as far as possible. After
receiving the positives, in case of shortage or damage in
any positives, it will be the responsibility of the printer to
complete the printing work by creating new positives from
the CD supplied by the corporation. Necessary terms and
conditions regarding the positive/ CD being supplied are
attached.
According to the above paragraph, in the printing work order
issued on 18.02.2020, the printing work was completed
by other printers using positive/CD on sharing basis. No
objection was lodged by him in this. Accordingly, you have
clearly violated the provisions of clause 13.3.1 of the tender.
[2025] 3 S.C.R. 227

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

Again by sending a letter to the Corporation on 13.04.2020,
you were informed about the closure of the printing press
dated 22.03.2020, as well as a request was made to extend
the printing and distribution work by 02 months from 17
April 2020 due to the Corona lockdown.
Due to Corona lockdown on behalf of the corporation,
the period of printing work has been extended from 17th
April 2020 to 17th May 2020 till the date of printing and
distribution, till the email letter dated 28.04.2020, out of
1267.496 melons allotted by the corporation as per your
printing capacity, only 549.927 melons have been printed.
Final consent was given for the printing of while the other
printers of the corporation completed the allotted work
by continuing the printing work even during the corona
lockdown.
According to the report of the NIC branch of the
Corporation, the printing capacity till 22.03.2020, the date
of implementation of the Corona Lockdown, by you as per
90 days (in the last 75 days, the printing work allotted by
the Chhattisgarh Textbook Corporation was 1267.5 MT,
out of which 15213 textbooks of Niton i.e. 11.15 percent
Only the printing work was completed.
According to provision of Printing Tender Clause 16.3:-
16.3 If the progress of work at any stage is found slower
than expected and if the Nigam is convinced that the
printer will not be able to complete the work in time, the
Nigam shall cancel the contract in full or in part and give
it to other printer at the cost and risk of defaulting printer.
In the event of such cancellation, the security deposit/EMD
of the printer shall be forfeited and the printer will not be
entitled to any compensation.
Printing and distribution work of unprinted 717.569 meter
textbooks of your firm by the corporation. Printers had
to be supplied and completed. Of the 1267.496 MT
allocated by you, only 549.927 MT work was completed
as follows:-
228 [2025] 3 S.C.R.

Digital Supreme Court Reports

GROUP SUB NAME CLASS APPROX BOOK 70 GSM 220 GSM L-1
MEMBER GROUP OF BOOK PAGE NO. PAPER COVER
NUMBER NO. QUANTITY PAPER
IN M. SHEETNO.
TONNE
10 A English (SZ) 5 108 236275 55.182 60250 0.2090
10 A English (SZ) 5 108 14208 3.318 3623 0.2090
10 B English (SZ) 6 128 248514 68.789 63371 0.2090
10 B English (SZ) 6 128 13698 3.792 3493 0.2090
13 B Ganit (SZ) 7 272 258969 152.326 66037 0.2090
17 A (i) Hindi (SZ) 2 104 107652 24.211 27451 0.2090
62 C (i) Hindi (SZ) 2 104 32000 7.197 8160 0.2090
38 A Hindi 3 160 30295 10.482 7725 0.2090
Sargujiha-
sanskrit (NZ)
38 A Hindi 4 160 214923 74.363 54805 0.2090
Sargujiha-
sanskrit (NZ)
38 B Ganit (NZ) 4 160 214923 74.363 54805 0.2090
17 B English (SZ) 7 144 236402 73.616 60283 0.2090
17 B English (SZ) 7 144 9034 2.813 2304 0.2090
20 B Paryavaran (SZ) 3 124 239544 64.234 61034 0.2090
11 B Science (SZ) 6 216 16563 7.737 4224 0.2090
Total 1663473 549.927 424186

It is mentioned in printing tender clause 16.9 that:-
16.9 If the tenderer is awarded to the lowest rate printer on
the basis of L-2 rate of group/groups and Nigam allots the
printing works to the tenderer on the basis of his 1-1 rate
(Lowest Tenderer) of group/groups then also if tenderer
refuse to do the printing work or work not completed.
In this condition Nigam has right to put the tenderer in
BLACKLIST for 3 (Three) years and security deposit and
EMD will be forfeited.
Since even after being L-1 in different groups of the tender,
due to not completing the allotted textbook printing within
the stipulated time period, the Corporation had to get it
completed by allotting it to other printers, therefore the
tender clause 16.3 and 16.9. Why not recover the said
compensation from your security amount and balance
deposits as per the provision of clause 16.3 and 16.9?
[2025] 3 S.C.R. 229

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

In the light of the above mentioned facts, you have clearly
violated the provisions of section 16.1, 16.3, 13.3.
Why not invoke provision 16.9 against you? In respect of
the mentioned facts, give written reply to the show cause
notice issued as above within 02 weeks from the date of
receipt of the notice.
(Ordered by the Managing Director)
General Manager
Chhattisgarh Textbook
Corporation
Raipur
Page number//PPN/Printing/2020-21/2022Raipur Date
//2022
Copy to.
1. Personal Assistant, Honorable President, C.G,
Textbook
Corporation Raipur for information.
2. Personal Assistant Managing Director C.G. Textbook
Corporation Raipur for information.
General Manager
Chhattisgarh Textbook
Corporation
Raipur”
(Emphasis supplied)

24. Thus, according to the Corporation the appellant herein violated the
clauses 13.3, 16.1, 16.3 and 16.9 respectively of the terms of the
Agreement. The sum and substance of all these clauses is that if
the appellant is unable to complete the work of printing within the
stipulated period of time then the consequences would be blacklisting.
The Corporation rejected the say of the appellant herein that he was
unable to adhere to the prescribed time limit due to the Covid-19
pandemic.
25. This Court in Kulja Industries Limited v. Chief General Manager
Western Telecom Project BSNL & Ors. reported in AIR 2014 SC
230 [2025] 3 S.C.R.

Digital Supreme Court Reports

9 has made pertinent observations as regards the power of an
Authority to blacklist a company on the basis of the terms of the
underlying contract. In the said case, Kulja Industries (Contractor) was
blacklisted by BNSL (Authority) on the allegations of having obtained
fraudulent payments from the Authority. This Court in the said case
set aside the order of blacklisting passed by the Authority as it had
the effect of permanently affecting the business of the contractor. This
Court identified the limits of powers of statutory authorities to take
coercive actions against companies. This Court after examining the
terms and conditions prescribed in the tender document relating to
disqualification and blacklisting observed that the power to disqualify
a contractor was provided for in the tender document and such power
could be read as an inherent power and in terms of the same, the
Authority would have to show that the supplier:
a. Habitually failed to supply the equipment in time;
b. The equipment supplied by the supplier did not perform
satisfactorily or were not of a particular standard; or
c. Failed to honour the bid without sufficient grounds.
26. Undoubtedly, Kulja Industries (supra) looked into the final order of
blacklisting passed by the Authority concerned. We are still at the
stage of a show cause notice. However, what is important to note,
are the aforesaid three guiding situations or grounds on which the
Authority may be justified in exercising its power to blacklist the
contractor.
27. This Court in The Blue Dreamz Advertising Pvt. Ltd. & Anr. v. Kolkata
Municipal Corp. & Ors. reported in 2024 INSC 589 while quashing
and set asiding the blacklisting order as affirmed by the High Court
in almost identical facts observed as under:
1. In case there exists a genuine dispute between the parties
based on the terms of the contract, blacklisting as a penalty
cannot be imposed.
2. The penalty of blacklisting may only be imposed when it is
necessary to safeguard the public interest from irresponsible
or dishonest contractors, and
3. The Corporation being a statutory body, have a higher threshold
to satisfy before passing such blacklisting order and therefore,
the measures undertaken by it should be reasonable.
[2025] 3 S.C.R. 231

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

28. Again, the aforesaid decision of this Court was rendered in a case
where the blacklisting order was already passed.
29. However, what is important for us to say is that when there are
guiding principles explained by this Court as to when & in what
circumstances a blacklisting order can be passed then, in our opinion
such principles should also be borne in mind by the Authority at the
time of issuing a show cause notice. We say so because in the facts
of a given case like the one on hand, on the face of which it could
be said that there was no good reason for the Authority to issue a
show cause notice calling upon the contractor why he should not be
blacklisted. Why ask the contractor to face the proceedings when
applying the aforesaid principles, the issue of show cause notice
would be an empty formality. We are saying all this keeping in mind
the peculiar facts of this case.
30. Therefore, the Authority is expected to be very careful before issuing
a show cause notice. It is expected to understand the facts well and
try to ascertain what sort of violation is said to have been committed
by the contractor. As noted above, there is always an inherent power
in the Authority to blacklist a contractor. But possessing such inherent
power and exercising such power are two different situations and
connotations. There may be a power but there should be reasonable
ground to exercise such power.
31. To put it by way of an illustration, the Police has the power to arrest
but it is not necessary that in all cases arrest must be effected. The
Police should know whether at all arrest is necessary.
32. We may put it in a slightly different way. Take for instance, the show
cause notice in the present case is the final order of blacklisting.
The final order in any case cannot travel beyond the show cause
notice. Therefore, we take the show cause notice as the final order.
Whether it makes out a case for blacklisting? This should be the test
to determine whether it is a genuine case to blacklist a contractor
or visit him with any other penalty like forfeiture of EMD, recovery
of damages etc. We say so because once an order of blacklisting
is passed the same would put an end to the business of the person
concerned. It is a drastic step. Once the final order blacklisting the
Contractor is passed then the Contractor is left with no other option
but to go to the High Court invoking writ jurisdiction under Article 226
of the Constitution and challenge the same. If he succeeds before
232 [2025] 3 S.C.R.

Digital Supreme Court Reports

the Single Judge then it is well and good otherwise he may have to
prefer a writ appeal or LPA as the case may be. This again would
lead to unnecessary litigation in the High Courts. The endeavour
should be to curtail the litigation and not to overburden the High
Courts with litigations of the present type more particularly when the
law by and large is very well settled and there is no further scope
of any debate.
33. As observed by this Court in Erusian Equipment & Chemicals
Ltd. Vs. State of W.B. reported in (1975) 1 SCC 70, an order
of blacklisting casts a slur on the party being blacklisted and is
stigmatic. Given the nature of such an order and the import thereof,
it would be unreasonable and arbitrary to visit every contractor who
is in breach of his contractual obligations with such consequences.
There have to be strong, independent and overwhelming materials
to resort to this power given the drastic consequences that an order
of blacklisting has on a contractor. The power to blacklist cannot
be resorted to when the grounds for the same are only breach or
violation of a term or condition of a particular contract and when
legal redress is available to both parties. Else, for every breach
or violation, though there are legal modes of redress and which
compensate the party like the Corporation before us, it would resort
to blacklisting and at times by abandoning or scuttling the pending
legal proceedings.
34. Plainly, if a contractor is to be visited with the punitive measure of
blacklisting on account of an allegation that he has committed a
breach of a contract, the nature of his conduct must be so deviant or
aberrant so as to warrant such a punitive measure. A mere allegation
of breach of contractual obligations without anything more, per se,
does not invite any such punitive action.
35. Usually, while participating in a tender, the bidder is required to
furnish a statement undertaking that it has not been blacklisted by
any institution so far and, if that is not the case, provide information
of such blacklisting. This serves as a record of the bidder’s previous
experience which gives the purchaser a fair picture of the bidder and
the conduct expected from it. Therefore, while the debarment itself
may not be permanent and may only remain effective for a limited,
pre-determined period, its negative effect continues to plague the
business of the debarred entity for a long period of time. As a result,
[2025] 3 S.C.R. 233

M/s Techno Prints v.
Chhattisgarh Textbook Corporation & Anr.

it is viewed as a punishment so grave, that it must follow in the wake
of an action that is equally grave.
36. In the overall view of the matter more particularly in the peculiar
facts of the case, we have reached the conclusion that asking the
appellant herein to file his reply to the show cause notice and then
await the final order which may perhaps go against him, leaving him
with no option but to challenge the same before the jurisdictional
High Court will be nothing but an empty formality. Even otherwise,
issuing of show cause notice if not always then at least most of the
times is just an empty formality because at the very point of time
the show cause notice is issued the Authority has made up its mind
to ultimately pass the final order blacklisting the Contractor. In other
words, the show cause notice in most of the cases is issued with a
pre-determined mind. It has got to be issued because this Court has
said that without giving an opportunity of hearing there cannot be any
order of blacklisting. To meet with this just a formality is completed
by the Authority of issuing a show cause notice.
37. We clarify that it shall be open for the respondent Corporation to
forfeit the EMD of Rs. 5,00,000/-. However, the show cause notice
calling upon the appellant as to why it should not be blacklisted is
quashed and set aside.
38. Without saying anything further, we dispose of this appeal in the
aforesaid terms.
39. Except the blacklisting part, all other parts of the show cause notice,
are remained untouched.
40. Pending application(s), if any, shall stand disposed of.

Result of the case: Appeal disposed of.

†
Headnotes prepared by: Nidhi Jain