SC bench comprising of Justice Abdul Nazeer and Justice BR Gavai observed in the case of UMC TECHNOLOGIES PRIVATE LIMITED V. FOOD CORPORATION OF INDIA that a shw cause notice must clearly mention the intention to blacklist the noticee. The court also said that its contents shall be in such a manner that it can clearly be inferred from it that there is an intention to blacklist on the part of the issuer of notice.
In the case Food Corporation of India issued a blacklisting order to blacklist the company from participating in any further tenders of corporation for the period of 5 years. They approached the SC against the order of HC where the challenge of blacklisting was dismissed. The petitioners contended that the order to blacklist cannot be made without specified proposal to show cause such an action.
SC agreed to the contentions and set aside the order of blacklisting Umc Technologies Private Limited. The SC said that the action was blacklisting was not expressly made, and it could not even have been inferred from the show cause notice. They further said that, only because of existing clause in Bid Document which says blacklisting as a bar against eligibility cannot satisfy the requirements of clear mention. They added that- “Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.”
Lastly, the court while dismissing the order of blacklisting said that blacklisting has the effect to take the privileged opportunity to enter into a government contract and the principle of natural justice must be looked into whenever any entity is blacklisted.
