2025:HHC:41908 IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CWP No.13579 of 2025 Decided on: 04 th December , 2025 __________________________________________________ Nitin Bhardwaj ....Petitioner Versus State of H.P. and Others ...Respondents ___________________________________________________ Coram Hon’ble Mr. Justice G.S. Sandhawalia, Chief Justice Hon'ble Mr. Justice Jiya Lal Bhardwaj, Judge Whether approved for reporting? 1 For the petitioner: Mr. Suneet Goel, Senior Advocate with Mr. Vivek Negi and Mr. Vishwas Kaushal, Advocates. For the respondents: Mr. Pranay Pratap Singh, Additional Advocate General, for the respondents- State. G.S. Sandhawalia, Chief Justice (Oral) By way of the present writ petition, the petitioner seeks quashing of the decision of respondent No.3 dated 28.07.2025 (Annexure P-10), debarring him from participating in the tender for a period of six months and all consequential actions and further seeks directions permitting him to participate in re-tendering of the work in question, which is for the Block Development Office Building at Churag, Tehsil Karsog, District Mandi, H.P. (SH: Civil Work, Water Supply and Sanitary Installation etc.). 1 Whether reporters of Local Papers may be allowed to see the judgment? 2 2. Vide office order dated 04.07.2025 (Annexure P-7), the Executive Engineer (RD&PR), Mandi, District Mandi, H.P., came to the conclusion that only five bidders had been found eligible for the tender dated 06/07.03.2025 and the petitioner was also one of the five bidders. 3. One of the bidders, Surjeet Singh, had raised written objections regarding submissions made by the present petitioner on the ground that he had uploaded his bid and shown work-in-hand as ‘NIL’ on his letter head. However, it was found that there was an ongoing work in his favour which was 85% complete for “Construction of road Cylinder Godown Village Navara to Imla Khad Baral Pul (Karsog) K, 0/00 to 1/330 (SH formation cutting protection work, cross drainage work, drain parapets in km.0/000 to 1/330) under NABARD RIDF-XXIX” and thus it was confirmed that the petitioner was already executing a Government contract. 4. It was noticed that as per Rule 16 of the Standard Bidding Document, the petitioner had shown no work-in-hand and factually it was found that there was work in progress and he had given a wrong declaration. In pursuance of the same, the impugned order dated 28.07.2025 (Annexure P-10) was then passed, wherein for the reasons therein, he was debarred from participating in the tenders for a period of six months with immediate effect. The 3 relevant portion of the said order reads as under:- “Subject:- Request for Action against Sh. Nitin Bhardwaj (Reg. No.HP-MZ-UP-grad-0021) - Concealment of Work- in-Hand. Sir, It is respectfully submitted that Sh. Nitin Bhardwaj, contractor (Registration No.HP-MZ-UP-grad-0021), while participating in the tendering process of this office for construction of BDO Office Churag District Mandi, submitted incorrect information by not disclosing the details of work-in- hand. However, as per the report received from HPPWD Division Karsog, he is presently executing work under that division, which was not reflected in the work-in-hand statement submitted by him. This act of suppression of material facts amounts to misleading the department and is a serious violation of tendering norms. In view of this, this office has debarred Sh. Nitin Bhardwaj from participating in tenders invited by this office for a period of six (6) months with immediate effect. You are requested to kindly take appropriate action at your level in this regard. Enclosed herewith are the following documents for your reference: 1. Work-in-hand detail submitted by the contractor. 2. Work-in-hand report received from HPPWD Division Karsog.” 5. It is also not disputed that the petitioner has also placed on record a certificate dated 18.08.2025 which shows that for the “Construction of road Cylinder Godown Village Navara to Imla Khad Baral Pul (Karsog) K, 0/00 to 1/330” work, and the same was still in 4 progress. 6. It is the case of the learned Senior Counsel for the petitioner that there was deviation in that work and it is on that account he had given a declaration that there was no work in progress and it is thus contended that the blacklisting order has been done without giving him an opportunity of hearing. It is further submitted that the tender in question dated 06/07.03.2025 also stands recalled. Vide interim order dated 25.08.2025, he had been permitted to participate provisionally in a tender which was again opened on 08.08.2025 for the said work in question for which he has now filed the writ petition. It is thus his submission that he is the sole bidder and therefore pressed for his relief No.(c) that he should be granted the said tender as such. 7. Learned counsel for the State has specifically referred to the reply as such filed by respondents No.1 and 3 to show that the declaration had been given ‘NIL’ regarding the work-in-hand and in such circumstances, the order had been passed. It was also pointed out that one Mr. Abhinav Kaushal had been shown as a member of the full time staff of the petitioner while referring to an affidavit dated 31.08.2024 (Annexure R-3/7). The GSTIN number and PAN details submitted by Mr. Abhinav Kaushal as such and the purchases from M/s Sharma Machinery Store would go on to show 5 that there was a nexus as such between the two and the petitioner was not coming with clean hands and had given a wrong declaration. On proper enquiry in the matter, it had been gone into and therefore the tender had been cancelled on account of wrong declaration as apparently, the earlier work of “Construction of road Cylinder Godown Village Navara to Imla Khad Baral Pul (Karsog)” was still in progress while referring to the certificate dated 18.08.2025 itself. It is in such circumstances, it is submitted that the order of blacklisting him for six months is justified in the facts and circumstances of the case. 8. We are thus of the considered opinion that the petitioner was not put to notice as such regarding the blacklisting aspect and it was always open to the State as such to reject the bid of the petitioner and to give it to the next L1. However, for reasons best known to State, it has opted to recall the whole tender process and issue the same tender for the fourth time on 07/08.08.2025. 9. Thus, we are of the considered opinion that limited relief that can be granted is on the issue of blacklisting for following the principle of natural justice so that the petitioner can put forth his case and submit his proper explanation after the necessary show cause notice is issued. 10. It is a settled principle that blacklisting is a harsh 6 penalty with severe consequences and causes prejudice to the contractor and thus the principles of natural justice have to be followed and the Rule of Audi Alteram Partem has to be applied as per law laid down in M/s Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal and Anr., (1975) 1 SCC 70, AIR 1975 SC 266, wherein it has been held as under:- “20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.” 11. In Gorkha Security Services vs. Govt. of NCT of Delhi, AIR 2014 SC 3371, the aforesaid judgment was resultantly followed. The relevant paras of the said judgment read as under:- “17. It is a common case of the parties that the blacklisting has to be preceded by a show cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting many civil and/or evil consequences follow. It is described as “civil death” of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in Government Tenders which means precluding 7 him from the award of Government contracts. Way back in the year 1975, this court in the case of M/s. Erusian Equipment & Chemicals Ltd. vs. State of West Bengal & Anr. (1975) 1 SCC 70 (AIR 1975 SC 266), highlighted the necessity of giving an opportunity to such a person by serving a show cause notice thereby giving him an opportunity to meet the allegations which were in the mind of the authority contemplating blacklisting of such a person. This is clear from the reading of Para Nos.12 and 20 of the said judgment. Necessitating this requirement, the court observed thus:. “12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with 8 the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. 20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist”. Again, in Raghunath Thakur v. State of Bihar and Ors. (1989) 1 SCC 229 : (AIR 1989 SC 620) the aforesaid principle was reiterated in the following manner:- “4. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not 9 express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In that view of the matter, the last portion of the order insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the blacklist in respect of future contracts under the Collector is set aside. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for blacklisting the appellant if the Government is so entitled to do in accordance with law i.e. after giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons therefor. We, however, make it quite clear that we are not expressing any opinion on the correctness of otherwise of the allegations made against the appellant. The appeal is thus disposed of.” Recently, in the case of Patel Engineering Ltd. vs. Union of India and Anr. (2012) 11 SCC 257 (AIR 2012 SC 2342 : 2012 AIR SCW 3260) speaking through one of us (Jasti Chelameswar, J.) this Court emphatically reiterated the principle by explaining the same in the following manner: “13. The concept of “blacklisting” is explained by this Court in Erusian Equipment & Chemicals Ltd. 10 v. State of W.B. (AIR 1975 SC 266) as under: “20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains.” 14. The nature of the authority of the State to blacklist the persons was considered by this Court in the abovementioned case and took note of the constitutional provision (Article 298), which authorises both the Union of India and the States to make contracts for any purpose and to carry on any trade or business. It also authorises the acquisition, holding and disposal of property. This Court also took note of the fact that the right to make a contract includes the right not to make a contract. By definition, the said right is inherent in every person capable of entering into a contract. However, such a right either to enter or not to enter into a contract with any person is subject to a constitutional obligation to obey the command of Article 14. Though nobody has any right to compel the State to enter into a contract, everybody has a right to be treated equally when the State seeks to establish contractual relationships. The effect of excluding a person from entering into a contractual relationship with the State would be to deprive such person to be treated equally with those, who are also engaged in similar activity. 15. It follows from the above judgment in Erusian Equipment case that the decision of the State or its instrumentalities not to deal with certain persons or class of persons on account of the undesirability of entering into the contractual relationship with such 11 persons is called blacklisting. The State can decline to enter into a contractual relationship with a person or a class of persons for a legitimate purpose. The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such power. The only legal limitation upon the exercise of such an authority is that the State is to act fairly and rationally without in any way being arbitrary thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors.” 18. Thus, there is no dispute about the requirement of serving show cause notice. We may also hasten to add that once the show cause notice is given and opportunity to reply to the show cause notice is afforded, it is not even necessary to give an oral hearing. The High Court has rightly repudiated the appellant's attempt in finding foul with the impugned order on this ground. Such a contention was specifically repelled in Patel Engineering (supra).” 12. The said view was also followed in UMC Technologies Private Limited vs. Food Corporation of India and another (2021) 2 SCC 551, wherein it was held that the show cause notice must clearly spell out from its contents and has to be clearly inferred as such and that the blacklisting deprives the person of the privilege of entering into government contracts and has long-lasting civil consequences in the business prospects. The mere existence of a 12 power in a clause of the bid document cannot satisfy the mandatory requirement of a proposed action. The relevant paragraph reads as under:- “25. The mere existence of a clause in the bid document, which mentions blacklisting as a bar against eligibility, cannot satisfy the mandatory requirement of a clear mention of the proposed action in the show cause notice. The Corporation’s notice is completely silent about blacklisting and as such, it could not have led the appellant to infer that such an action could be taken by the Corporation in pursuance of this notice. Had the Corporation expressed its mind in the show cause notice to black list, the appellant could have filed a suitable reply for the same. Therefore, we are of the opinion that the show cause notice dated 10-4-2018 does not fulfill the requirements of a valid show cause notice for blacklisting. In our view, the order of blacklisting the appellant clearly traversed beyond the bounds of the show cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 9-01-2019 cannot be sustained.” 13. Thus, we are of the considered opinion that the order dated 28.07.2025 is liable to be quashed on this ground. Ordered accordingly. Resultantly, it is open to the State as such to issue a fresh show cause notice to the petitioner and take appropriate action for violations of any of the terms and conditions. 14. The fourth tender (Annexure R-3/20) would go on to show that there is a recommendation for recalling the tender to ensure maximum participation on account of the fact that only one 13 single envelope had been found in the tender box. 15. In such circumstances, the prayer as such for consideration against the fourth tender also cannot be accepted and no mandamus can be issued as it is a settled principle that the State has to have free play in the joints and cannot be forced as such to enter into a contract. 16. It is settled principle that there is no vested right as such of award of the tender and the petitioner could have only applied for the same and freedom of contract is with the State and it cannot be directed that the tender be awarded to him as has been held by the Apex Court in Montecarlo Limited v. National Thermal Power Corporation Limited, (2016) 15 SCC 272. 17. The Apex Court has also held that only if the transaction is malafide or allegations of selection of a competent contractor is tailor-made, Courts are to interfere and would not otherwise sit like a court of appeal and the authorities would be best judge of its requirements and if two interpretations are possible, then the appropriate authority following certain principles, as such has to be respected. 18. Reference can also be made to Michigan Rubber (India) ltd. vs. State of Karnataka & Ors. (2012) 8 SCC 216 and the earlier observations made in Raunaq International Ltd vs. 14 I.V.R. Construction Ltd. (1999) 1 SCC 492. 19. Keeping in view the above, we are of the considered opinion that the petitioner only has a right of consideration and this Court would not further enforce such a right as such in the absence of any legal right. Therefore writ of mandamus cannot be issued in such circumstances. 20. Accordingly, the writ petition stands disposed of in the aforesaid terms. All pending applications also stand disposed of accordingly. ( G.S. Sandhawalia ) Chief Justice 04 th December , 2025 ( Jiya Lal Bhardwaj ) (ankit) Judge