- 1 - NC: 2025:KHC:16120 WP No. 35902 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 35902 OF 2024 (GM-RES) BETWEEN: M/S. CORESONANT SYSTEMS PRIVATE LIMITED, REGISTERED OFFICE AT NO. 15-27, BABY'S EDUCATIONAL COMPLEX, BEERAPPAGADDA, UPPAL, HYDERABAD - 500 039. (REGISTERED UNDER THE PROVISIONS OF THE COMPANIES ACT, 2013) REPRESENTED BY ITS ASSOCIATE VICE PRESIDENT (AVP)- DELIVERY SRI. GITTI VENKATESH, S/O GITTI SRIHARI, AGED 47 YEARS, R/AT 1-4-27/72/137, ANANDB, KAVADIGUDA, ENGLISH UNION SCHOOL, PADMASHALL COLONY, HYDERABAD, A.P.- 500 080. …PETITIONER (BY SRI. DHYAN CHINNAPPA, SR. COUNSEL A/W SRI. MOHAMMED SHAMEER, ADVOCATE) AND: 1. THE UNION OF INDIA REPRESENTED BY SECRETARY, MINISTRY OF PORTS, SHIPPING AND WATERWAYS, OFFICE AT ROOM NO. 401, Page No. 01 is retyped and replaced vide chamber order dated 03.05.2025 Digitally signed by NAGAVENI Location: High Court of Karnataka - 2 - NC: 2025:KHC:16120 WP No. 35902 of 2024 PARIVAHAN BHAVAN, 1, PARLIAMENT STREET, NEW DELHI - 110 001. 2. THE EXECUTIVE ENGINEER (E) II, NEW MANGALORE PORT AUTHORITY, PANAMBUR, MANGALORE - 575 010. …RESPONDENTS (BY SRI. VENKATANARAYANA B.S, ADVOCATE FOR R1; SRI. R. SUBRAMANYA, ADVOCATE FOR R2) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER BEARING NO. NMPA/CME/2023-24/RFID DATED 19.12.2024 IS PRODUCED HEREWITH AS ANNX-J PASSED BY THE R-2 AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner, M/s. Coresonant Systems Private Limited (hereinafter referred to as 'the Company' for short) is at the doors of this Court calling in question an order dated 19.12.2024 by which the Company is blacklisted by respondent No.2 - New Mangalore Port Authority (hereinafter referred to as 'the authority' for short). - 3 - NC: 2025:KHC:16120 WP No. 35902 of 2024 2. Heard Shri Dhyan Chinnappa, learned Senior counsel along with Shri Mohammed shameer, learned counsel appearing for the petitioner; Shri Venkatanarayana B.S., learned counsel appearing for respondent No.1 and Shri R. Subramanya, learned counsel appearing for respondent No.2. 3. Sans detail facts in brief are as follows: The petitioner is said to be a private limited company and is said to be the leading provider of Radio Frequency Identification (RFID), access control system solutions in several ports of the country and is said to have 12years of experience in delivering those services across the nation. 4. Respondent No.2 issues a notice inviting tender on 21.02.2024, through their online portal for the work of Operation and Comprehensive Annual Maintenance Contract (CMAC) of the RFID system for a period of 5years. Pursuant to the e-tender notification on the portal, the petitioner participates in the tender by submitting his bid. At the time of submission of the technical bid, the petitioner had submitted an International Organization of Standardization ('the ISO' for short) certificate bearing No.9001:2015, ISO/IEC 20000-1- Page No.03 is retyped and replaced vide chamber order dated 03.05.2025 - 4 - NC: 2025:KHC:16120 WP No. 35902 of 2024 2018, ISO 27001:2022. The petitioner long after the said submission, receives an electronic mail from respondent No.2 holding that the certificate submitted by the petitioner could not be verified for its authenticity and therefore, cannot be considered for evaluation of tender. The petitioner then submits its reply through the e-mail on 24.04.2024, by producing an appropriate copy of the ISO certificate. 5. Respondent No.2 then declares that the tender of the petitioner has non-responsive and the petitioner was disqualified in terms of the tender notification for further participation in the tender. 6. When things stood thus, respondent No.2 issues a show cash notice dated 01.08.2024, seeking clarification regarding authenticity of ISO certificate submitted by the petitioner, at the time of submission of its technical bid. The petitioner is said to have replied to the same attaching the documents i.e., ISO certificates, which could be authenticated. Notwithstanding the reply, it transpires that respondent No.2 passes an order debarring the petitioner from participating in any tender of the authority for a period of two years, which is - 5 - NC: 2025:KHC:16120 WP No. 35902 of 2024 blacklisting the petitioner for a period of two years. It is this that has driven the petitioner to this Court in the subject petition. 7. Shri Dhyan Chinnappa, learned Senior counsel appearing for the petitioner would contend that the Company, which has undertaken projects with the same authority in the past, does have a certificate. The certificate produced along with the tender documents, if could not be authenticated, it was open to the authority to seek an authenticated copy. It cannot be said that the petitioner does not have an ISO certificate and has produced a fake certificate. Blacklisting the petitioner for a period of two years results in serious civil consequence and the blacklisting order is passed without considering any of the contents of the reply of the petitioner. He would seek quashment of the same. 8. Shri R. Subramanya, learned counsel representing the authority would vehemently refute the submissions contending that the petitioner is guilty of production of fake ISO certificate, this could not be authenticated. The petitioner was issued a notice, he has submitted his reply. Not being - 6 - NC: 2025:KHC:16120 WP No. 35902 of 2024 satisfied with the reply, the order is passed. He would submit no fault can be found with the order, as the petitioner has played fraud. He would admit that the petitioner is not the one, who has been declared successful in the tender. His tender at the technical bid stage itself is closed. Nonetheless, he would submit that such tenderers, who would produce false certificates should not be spared. 9. I have given my anxious consideration to the submissions made by the respective learned counsel and have produced the material available on record. 10. The afore-narrated facts are not in dispute. Based upon the submissions at the initial stage, this Court passed the following interim order on 27.03.2025: "The petitioner is before this Court calling in question an order, which prohibits the petitioner from participating in the tender - any kind of tender, in any of the ports. The respondent, who has directed that the petitioner is blacklisted is the New Mangalore Port Trust. The petitioner participates in a tender and submits certain certificates i.e., the ISO certificates. The certificates are found to be fabricated on a later point in time by the tender accepting authority and communicates to the petitioner that the petitioner has played a fraud. The learned Senior counsel submits that it came as a bolt from the blue, as the petitioner themselves were not aware with regard to the agency printing a - 7 - NC: 2025:KHC:16120 WP No. 35902 of 2024 fabricated certificate and submitting to them and they submitting to the NMPT. The learned Senior counsel would further submit that as soon as the communication comes about, the certificates were procured from some other agency and submitted to the respondent. Therefore, the submission with regard to the certificates was complied with. The learned counsel appearing for the respondent - NMPT would vehemently refute the submission contending that no new document can be accepted after the tender. Whatever document was with the tender would be valid throughout. Though the submission would become acceptable in the first blush, the issue in the lis is not with regard to the petitioner not having the registration itself. Certification of registration is a consequence of registration. The learned senior counsel has produced documents to demonstrate that the registration was granted on 27.03.2024 and bids were submitted on 30.03.2024 and therefore, on the date of submission of the bid, the registration of the petitioner had happened. The certificate was immediately replaced from a different agency and those certificates are not found fault with In that light, the petitioner becomes entitled to an interim order, as it is prayed for, till the next date of hearing. List this matter on 17.04.2025 in preliminary hearing." The interim order succinctly captured the issue. The issue is whether the petitioner has a ISO certificate or he has produced a bogus ISO certificate, without the registration with the International Organization of Standardization. - 8 - NC: 2025:KHC:16120 WP No. 35902 of 2024 11. The petitioner participates in the tender. He submits his bid along with ISO certificate that was in his possession. The tender is scrutinized. The scrutiny of the tender leads to a communication by way of an electronic mail. The electronic mail dated 24.04.2024 reads as follows. "Sir, ISO certificates submitted by you a MQC documents for subject tender could not be verified for genuineness by sending confirmation email to M/s.HMC on the email ids provided in the ISO certificates and the emails were undelivered. In this regard, to confirm the certificates, emails were sent to M/s. ELACI accreditation agency and also to International Accreditation Forum (IAF). In response, both the agencies have informed via return email that the ISO certificates submitted by you are FAKE and FRAUD. (Copy attached) Hence the ISO certificates submitted by you cannot be considered for evaluation of tender." (Emphasis supplied) The reply of the petitioner given the next day, reads as follows: "Dear Sir, Thank you for bringing the issue to our notice. Our Admin team has taken up the issue with the ISO consultant, M/s. Legal Raasta. Please - 9 - NC: 2025:KHC:16120 WP No. 35902 of 2024 find the communication to the ISO consultant and their response attached. Alternatively, please find attached ISO certifications issued by ODC, SACASP accreditation agency to Coresonant Systems. Additionally, we are also sharing covering letter and profile of ODC for your kind verification. We request your kind consideration." (Emphasis supplied) Communications galore. A show cause notice is then issued to the company by the authority, holding that petitioner have played fraud in producing a fake certificate. The crux of the notice, is as follows: "In view of the above, M/s. Coresonant Systems Pvt. Ltd., Hyderabad is hereby called upon, to show cause as for why action should not be initiated against M/s. Coresonant Systems Pvt. Ltd for indulging in fraudulent practice by submitting FAKE and FRAUD ISO certificates for getting qualified in the subject tender. Your response in writing, explaining the reasons if any and addressing the specific charge that have been made against you, should reach this Office within 10 days from the date of issue of this notice. If you fail to respond to this notice within the stipulated period, it will be presumed that you have no explanation to offer for your actions and further action will be taken as per the clause 2.21 of the tender, to declare M/s. Coresonant Systems Pvt. Ltd., Hyderabad ineligible to be awarded contracts for a period of 3 years." (Emphasis supplied) - 10 - NC: 2025:KHC:16120 WP No. 35902 of 2024 The petitioner then reply to the said notice, which reads as follows: "Dear Sir, Please find the attached response to show cause notice. The print copy of the same is also dispatched. I will be sharing the docket number shortly. We further submit that when such important communication which needs time bound response are sent by postal mail without an email or phone call intimation of the same then valuable time is lost which is not only unfair to the receiver but also could lead to adverse consequences. For instance, this letter dated Aug 1st, 2024 was received by us on Aug 5th, 2024. All the while your good office had multiple email ids of M/s. Coresonant team members (including the undersigned) as we communicated numerous times in email previously. We therefore request that, going forward at least, your good office kindly intimate the receiver by email or phone call of such an important communication letter." Nonetheless, an order is passed debarring the petitioner for a period of two years. The gist of the order reads as follows: "25. Whereas the contents of your reply have been examined in detail. Further your action of submitting another set of documents in the place of initially submitted documents proves beyond doubt that you had not submitted legitimate documents in the first instance. - 11 - NC: 2025:KHC:16120 WP No. 35902 of 2024 26. The examination of facts clearly establishes that M/s. Coresonant System Pvt. Ltd. has made misleading/ false representation in form/statements and attachment submitted in proof of qualification requirement. In view of the above, by invoking provision under Clause No.2.4.3 of the tender document, M/s. Coresonant System Pvt. Ltd is hereby debarred from participating in any of the tenders of New Mangalore Port Authority for a period of 2 years from the date of this order." (Emphasis supplied) To a pointed query, learned counsel appearing for the authority submits that whether the petitioner did have a registration or not and if he had a registration already, why would he furnish a fake certificate. There is astounding silence, and no reply. 12. Therefore, the issue is, if the petitioner did not have an ISO certificate at all, it would have been circumstance altogether different, and undoubtedly, the petitioner would be guilty of production of fake ISO certificate. It is an admitted fact that the petitioner had an ISO certificates and what was appended to the tender document was a certificate, which could not be authenticated. - 12 - NC: 2025:KHC:16120 WP No. 35902 of 2024 13. In the light of the fact that the petitioner is holding a certificate, it is difficult to accept the submissions of the learned counsel appearing for the authority. It now becomes apposite to consider the judgments of the Apex Court answering identical circumstances. The Apex Court in the case of GORKHA SECURITY SERVICES Vs. GOVT. (NCT OF DELHI) reported in (2014) 9 SCC 105 has held as follows: "Contents of the show-cause notice 21. The central issue, however, pertains to the requirement of stating the action which is proposed to be taken. The fundamental purpose behind the serving of show- cause notice is to make the noticee understand the precise case set up against him which he has to meet. This would require the statement of imputations detailing out the alleged breaches and defaults he has committed, so that he gets an opportunity to rebut the same. Another requirement, according to us, is the nature of action which is proposed to be taken for such a breach. That should also be stated so that the noticee is able to point out that proposed action is not warranted in the given case, even if the defaults/breaches complained of are not satisfactorily explained. When it comes to blacklisting, this requirement becomes all the more imperative, having regard to the fact that it is harshest possible action. 27. We are, therefore, of the opinion that it was incumbent on the part of the Department to state in the show-cause notice that the competent authority intended to impose such a penalty of blacklisting, so as to provide adequate and meaningful opportunity to the appellant to show cause against the same. However, we may also add that even if it is not mentioned specifically but from the reading of the - 13 - NC: 2025:KHC:16120 WP No. 35902 of 2024 show-cause notice, it can be clearly inferred that such an action was proposed, that would fulfil this requirement. In the present case, however, reading of the show-cause notice does not suggest that noticee could find out that such an action could also be taken. We say so for the reasons that are recorded hereinafter. 28. In the instant case, no doubt the show-cause notice dated 6-2-2013 was served upon the appellant. Relevant portion thereof has already been extracted above (see para 5). This show-cause notice is conspicuously silent about the blacklisting action. On the contrary, after stating in detail the nature of alleged defaults and breaches of the agreement committed by the appellant the notice specifically mentions that because of the said defaults the appellant was “as such liable to be levied the cost accordingly”. It further says “why the action as mentioned above may not be taken against the firm, besides other action as deemed fit by the competent authority”. It follows from the above that main action which the respondents wanted to take was to levy the cost. No doubt, the notice further mentions that the competent authority could take other actions as deemed fit. However, that may not fulfil the requirement of putting the defaulter to the notice that action of blacklisting was also in the mind of the competent authority. Mere existence of Clause 27 in the agreement entered into between the parties, would not suffice the aforesaid mandatory requirement by vaguely mentioning other “actions as deemed fit”. As already pointed out above insofar as penalty of blacklisting and forfeiture of earnest money/security deposit is concerned it can be imposed only, “if so warranted”. Therefore, without any specific stipulation in this behalf, the respondent could not have imposed the penalty of blacklisting. (Emphasis supplied) - 14 - NC: 2025:KHC:16120 WP No. 35902 of 2024 Later, the Apex Court in the case of KULJA INDUSTRIES LIMITED. Vs. CHIEF GENERAL MANAGER, WESTERN TELECOM PROJECT BHARAT SANCHAR NIGAM LIMITED, reported in (2014) 14 SCC 731 has held as follows: 22. The guidelines also stipulate the factors that may influence the debarring official's decision which include the following: (a) The actual or potential harm or impact that results or may result from the wrongdoing. (b) The frequency of incidents and/or duration of the wrongdoing. (c) Whether there is a pattern or prior history of wrongdoing. (d) Whether the contractor has been excluded or disqualified by an agency of the Federal Government or has not been allowed to participate in State or local contracts or assistance agreements on the basis of conduct similar to one or more of the causes for debarment specified in this part. (e) Whether and to what extent did the contractor plan, initiate or carry out the wrongdoing. (f) Whether the contractor has accepted responsibility for the wrongdoing and recognized the seriousness of the misconduct. (g) Whether the contractor has paid or agreed to pay all criminal, civil and administrative liabilities for the improper activity, including any investigative or - 15 - NC: 2025:KHC:16120 WP No. 35902 of 2024 administrative costs incurred by the Government, and has made or agreed to make full restitution. (h) Whether the contractor has cooperated fully with the government agencies during the investigation and any court or administrative action. (i) Whether the wrongdoing was pervasive within the contractor's organization. (j) The kind of positions held by the individuals involved in the wrongdoing. (k) Whether the contractor has taken appropriate corrective action or remedial measures, such as establishing ethics training and implementing programs to prevent recurrence. (l) Whether the contractor fully investigated the circumstances surrounding the cause for debarment and, if so, made the result of the investigation available to the debarring official.” (Emphasis supplied) Long before the afore-quoted judgments, the Apex Court in the case of ERUSIAN EQUIPMENT & CHEMICALS LIMITED. Vs. STATE OF WEST BENGAL, reported in (1975) 1 SCC 70 has held as follows: "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 - 16 - NC: 2025:KHC:16120 WP No. 35902 of 2024 play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist." (Emphasis supplied) This Court in GANESH Vs. STATE OF KARNATAKA1 has held as follows: "6. ...... Moreover, the reason stated in the impugned order that the petitioner had furnished fake bank guarantee in the year 2013 and therefore that forms the basis for blacklisting the petitioner, seems to be very remote. The respondents have admitted that they have settled the bills tendered by the petitioner for the works undertaken during the year 2013. consequent to the completion of the work and setting of the accounts, the petitioner was permitted to take back the bank guarantee. There was no reason furnished or even stated by the third respondent- Executive Engineer before permitting the petitioner to take back the bank guarantee pointing out that the bank guarantee furnished was fake. It is also difficult to understand how the third respondent has come to a conclusion that the bank guarantee furnished by the petitioner was fake having permitted the petitioner to take back the bank guarantee after completion of the works and having settled the bills in favour of the petitioner. This itself shows that no opportunity was given to the petitioner before the impugned order blacklisting the petitioner was passed. 7. In the decision cited by the learned counsel for the petitioner, the Apex Court has held that it is 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 1 2020 SCC Online Kar 3064 - 17 - NC: 2025:KHC:16120 WP No. 35902 of 2024 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 flow. It is described as "civil death" of a person who is foisted with the order of blacklisting. It was therefore held that such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts. Therefore, the high handed action of the respondents in blacklisting the petitioner has prevented the petitioner from participating in any Government tenders since May 2019." (Emphasis supplied) In the light of the unequivocal fact, that the petitioner did have ISO certificate and if having so, which was valid even on the date of the tender, it is un-understandable why he would play alleged fraud by submitting a alleged fake certificate. 14. As observed in the course of the order, it is not the case of the respondents that the Company did not have the ISO certification. It is a matter of fact that without ISO certification, earlier tenders that the petitioner has executed would not have been executed. In that light, the petition deserves to succeed leading to obliteration of the order. - 18 - NC: 2025:KHC:16120 WP No. 35902 of 2024 15. For the aforesaid reasons, the following: ORDER i) The writ petition is allowed. ii) The order bearing No.NMPA/CME/2023- 24/RFID dated 19.12.2024 passed by respondent No.2 stands quashed. Sd/- (M.NAGAPRASANNA) JUDGE JY List No.: 1 Sl No.: 100 CT: BHK