1 2026:CGHC:9002-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 769 of 2026 M/s Janki Technology Through Its Proprietor Varun Kumar Jain, Having Registered O+ce At Behind Rajdhani Mart, Near Shrishti Palazzo, Sita Vihar Colony, Avanti Vihar, Telibandha, Raipur, Chhattisgarh. ... Petitioner(s) versus 1 - Union Of India Through Its Secretary, Ministry Of Railways, Rail Bhawan, New Delhi 110001. 2 - South Eastern Central Railway Through Its Divisional Railway Manager, Raipur, Distt. Raipur, Chhattisgarh. 3 - Senior Divisional Electrical Engineer (Trs) South Eastern Central Railway, Bhilai, Distt. Durg, Chhattisgarh. ... Respondent(s) For Petitioner(s) : Mr. Gagan Tiwari, Advocate. For Respondent(s) : Mr. Ramakant Mishra, Deputy Solicitor General. Hon’ble Mr. Ramesh Sinha, Chief Justice H on’ble Mr. Arvind Kumar Verma, Judge Judgment on Board Per Ramesh Sinha, Chief Justice 20/02/2026 1. Heard Mr. Gagan Tiwari, learned counsel for the petitioner as well as Mr. Ramakant Mishra, learned Deputy Solicitor General for the Union of India/respondents. 2. Today, the matter is listed for hearing on IA No. 2, application for 2 exemption from <ling typed copy of certain pages. The application is allowed and with the consent of learned counsel appearing for the parties, the matter is heard <nally. 3. By this petition under Article 226 of the Constitution of India, the petitioner seeks for the following relief(s): “10.1 To issue suitable directions/orders/writs to the respondent authorities to set-aside the impugned order dated 11.02.2026 (Annexure P-1) issued by Respondent No.3 by which the Respondent No.03 has been debarred for a period of 02 years and the contract dated 13.02.2025 has been terminated by the Respondent No.03 for being illegal and arbitrary; 10.2 To grant any other relief(s)/order(s)/direction(s) in favour of the petitioner, which may deem *t and proper in the facts and circumstances of the case, may also be allowed.” 4. The petitioner is a proprietorship <rm involved in transportation business namely "M/s Janki Technology" and provides transportation solutions/ hiring/ renting of vehicles and primarily participates in tenders rolled out by the instrumentalities of the State and provides transportation services to various Government bodies. The respondent No.03 issued tender for "Hiring of one four wheeler Non-AC diesel driven vehicle for DME/TRS/BIA of Electric Loco Shed, SEC Railway, Bhilai for two years". As per the requirements of the tender documents, the petitioner placed his bid at GeM Portal and emerged as successful bidder and thereafter GeM Contract No. 511687731921877 was executed between the petitioner and the respondent authorities on 13.02.2025. The respondent No.03 vide letter dated 13.02.2025 issued the order for commencement of work and further directed for payment of 5% performance guarantee and submission of certain documents before commencement of work. The respondent No.03 also directed to make available certain documents 3 with respect to the rented vehicle. Another reminder letter dated 01.04.2025 with respect to the earlier letter dated 13.02.2025 was issued. The petitioner submitted the performance guarantee of Rs. 75000/- and also showed the relevant documents with respect to the rented vehicle to the respondent authorities and commenced work from 25.03.2025 in lieu of the work commencement order and the vehicle was placed at the designated place as per the conditions of the contract. 5. Mr. Gagan Tiwari, learned counsel for the petitioner submits that the respondent No. 3 was callous with respect to issuing of the monthly remuneration even though the bills were raised by the petitioner on a monthly basis and as the bills were not cleared by the respondent No.03 the petitioner started facing di+culties in paying the Drivers timely as a result of which the Drivers retaliated by not showing up with vehicle for two days on 19.06.2025 and 20.06.2025. Even though the respondent No.03 did not make any payment as per the contract dated 13.02.2025, the respondent No. 03 swiftly issued letters dated 19.06.2025 and 20.06.2025 and imposed penalty of Rs 1000/- upon the petitioner as per the conditions of contract. The petitioner had to keep rendering his services and a similar situation again arose and the designated driver refused to show up for work due to delay in payment of wages and the vehicle could not be placed on work for 02 days i.e., 12.09.2025 and 13.09.2025. The petitioner herein again had to clear the dues of the Driver out of his own pocket. The respondent No.03 immediately issued letter dated 13.09.2025 for the reason of absence of driver on 12.09.2025 and 13.09.2025 with caution of strict action against the petitioner. The respondent No.03 again issued a similar letter dated 15.09.2025 citing the same reason of absence of driver on 15.09.2025. After issuing the said letter, the respondent No.03 issued a performance notice on the 4 same day i.e., 15.09.2025 again and by way of the said performance notice, the respondent No. 03 speci<cally mentioned that a notice was being issued according to clause 7.4 of the General Conditions of the Contract to terminate the contract. The petitioner kept rendering his services and requested for payment as the petitioner had not received any payment since the day the petitioner commenced work for the respondent authorities, and aggrieved by the continuous non-payment of dues, the petitioner herein by way of letter dated 04.12.2025 demanded clearance of dues for the vehicle rent. The respondent No.03 issued a letter dated 05.12.2025 i.e. the very next day, directing the petitioner to submit certain documents with respect to rented vehicle as per clause 21 and 22 of the contract which is valid driving licence, RC book, insurance papers, paper of taxi/maxi quota, Fast-Tag, and pollution certi<cate. 6. Mr. Tiwari submits that the documents demanded were already showed by the petitioner to the satisfaction of the respondent authorities before the commencement of work and only thereafter the petitioner was allowed to commence the work on 25.03.2025. Further, the as per the payment clause 22 of the contract, the payment was to be settled every month but in the instant case, the respondent No.03 not even once directed submission of the documents of the rented vehicle when the monthly bills were raised before. Further by way of reminder letter dated 01.04.2025 the same documents were demanded by the respondent No.03 and the same were showed by the petitioner to the respondent No.03 and the same is proof that there was no mention of submission of the said documents between 01.04 2025 to 05.12.2025. Thus, it became very clear that the respondent No.03 issued the said letter only to delay the payment of dues. Even after a period of more than a month, when the dues were not cleared by the respondent No.03, the petitioner herein 5 wrote submitted two letters, both dated 07.01.2026 demanding payment of dues since commencement of work from March 2025, and also speci<cally explained in the said letters that he is facing <nancial hardship and further informed the respondent No.03 of continuous threats of non-cooperation from Driver in case of non-payment of salary. The respondent No.03 refused to accept the aforesaid letters physically and assured payment within few days but when the payment was not received within a reasonable time, the petitioner herein forwarded the letter dated 07.01.2026 vide e-mail on 31.012026. 7. Mr. Tiwari submits that even though the petitioner had clearly explained that the threats of non-cooperation from designated Driver due to non- payment of dues through the aforesaid letter dated 07.01.2026 vide e- mail dated 31.01.2026, the respondent No.03 remained unbothered and did not clear the pending dues, due to which the deputed Driver abstained from work on 02.02.2026. The respondent No.03 thereafter, immediately issued letter dated 02.02.2026 and threatened the petitioner with strict action. The petitioner also raised an invoice on 02.02.2026 of Rs.7,18,322/ of the pending dues since March, 2025 and requested payment of the same. Thereafter, the respondent No.03 issued a very cryptic letter dated 03.02.2026 and in the garb of replying to the earlier letter dated 07.01.2026 threatened the petitioner with strict action for non-adherence to the terms of the contract. In the earlier letter dated 07.01.2026, the petitioner highlighted the di+culties faced by him because of non-payment of dues, but in the aforesaid reply dated 03.02.2026, the respondent No. 03 has not addressed the failure of payment of dues as per contract even once and only tried to shift the blame over to the petitioner. After issuance of the aforesaid letter dated 03.02.2026, the respondent No.03 on the very same day, issued a 7 6 day’s notice in terms of clause 7.4 of the contract dated 03.02.2026 and demanded reply of the same within 7 days, further threatening of termination of the contract and forfeiture of the performance guarantee. 8. Mr. Tiwari argues that the said notice dated 03.02.2026 nowhere mentions any contemplation of debarment/blacklisting of the petitioner. The petitioner duly replied to the said notice on 10.02.2026. The petitioner herein by way of another reply also dated 10.02.2026, replied to earlier letter dated 03.02.2026. The petitioner raised his grievance on the GeM Portal and a con<rmation of grievance was received by the petitioner vide e-mail dated 10.02.2026. The petitioner also sent a legal notice to the respondent No.03 on 11.02.2026 for non-payment of dues and arbitrary action of 7-days notice without any fault of the petitioner. Thereafter, the respondent No.03 issued letter dated 11.02.2026 in response to the earlier reply submitted by the petitioner to the 7 day’s dated 10.02.2026. The respondent No.03 has resorted to false and vague reasons and further cited Clause 12 of the Special Conditions of contract which provides that the respondent authorities can terminate the contract without assigning any reason. Even though the respondent No.03 speci<cally mentioned in the above mentioned letter dated 11.02.2026 that the same is in response to the reply dated 10.02.2026 of the petitioner to the 7-day’s notice, but it is most unfortunate, that the respondent No.02 after issuing the above mentioned letter, issued the impugned termination notice on the same day i.e. 11.02.2026, and terminated the contract dated 13.02.2025 and debarred the petitioner from participating in any bid with the Railway Division for 02 years and also, forfeited the performance guarantee and other dues payable to the petitioner. The action of debarment is completely illegal as the respondent No.01 as the action of debarment is nowhere provided in the 7 contract dated 13.02.2025 and thus, not permissible. Mr. Tiwari lastly submits that the respondent No.03 on the earlier occasion of issuing 7- day notice dated 03.02.2026 or the aforesaid letter dated 11.02.2026 nowhere mentions that the impugned action of debarment is being contemplated against the petitioner, and thus the same is illegal and arbitrary and the same deserves to be set aside by this Hon’ble Court. 9. On the other hand, Mr. Ramakant Mishra, learned Deputy Solicitor General appears on behalf of the respondents-Railways fairly submits that the notices which were issued to the petitioner prior to issuance of the impugned order dated 11.02.2026 by which the contract dated 13.02.2025 has been cancelled and further the petitioner has been debarred from participating in the bid for a period of two years, did not had the mention of any debarment/blacklisting of the petitioner for future tenders. He further submits that clause 8.2 of the General Terms and Conditions provides for demand of Arbitration and the petitioner ought to have taken recourse to the said provision before approaching this Hon’ble Court. 10. We have heard learned counsel appearing for the parties, perused the pleadings and documents appended with the petition. 11. The grievance of the petitioner is that after award of the work order, the respondent/Railways availed the services from the petitioner but did not made payment on time which resulted in ine+cient rendering of service by the petitioner. Further, the notices issued to the petitioner on 03.02.2026 (Annexure P/6) states that if the performance of the petitioner did not improve, on expiry of the period of 7 day’s, the contract shall stand rescinded and the services under the said contract would be carried out independently without his participation and the performance guarantee would also be encashed/forfeited. However, the said does not 8 state anything with regard to blacklisting/debarment of the petitioner from participation in future tenders Joated by the respondents. When the petitioner did not had the notice of blacklisting/debarment, then the question of giving any reply by the petitioner does not arise and as such, without aKording proper opportunity of hearing on that aspect, the respondent authorities could not have passed the order debarring the petitioner for a period of two years. 12. The Supreme Court, Gorkha Security Services v. Government (NCT of Delhi), reported in (2014) 9 SCC 105, has described blacklisting as being equivalent to the civil death of a person because blacklisting is stigmatic in nature and debars a person from participating in government tenders thereby precluding him from the award of government contracts. It was held thus: “16. 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 *rmly grounded and does not even demand much ampli*cation. 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 him from the award of government contracts.” 13. The said principle has been reiterated by the Supreme Court in UMC Technologies Pvt. Ltd. v. Food Corporation of India, reported in (2021) 2 SCC 551, which reads as under: “14. Speci*cally, in the context of blacklisting of a person or an entity by the state or a state corporation, the requirement of a valid, particularized and unambiguous show cause notice is particularly crucial due to the severe consequences of blacklisting and the 9 stigmatization that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the e8ect of denying a person or an entity the privileged opportunity of entering into government contracts. This privilege arises because it is the State who is the counterparty in government contracts and as such, every eligible person is to be a8orded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting takes away this privilege, it also tarnishes the blacklisted person’s reputation and brings the person’s character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person.” 14. In light of the said decisions, it is clear that a prior show cause notice granting a reasonable opportunity of being heard is an essential element of all administrative decision-making and particularly so in decisions pertaining to blacklisting which entail grave consequences for the entity being blacklisted. In this case, furnishing of a valid show cause notice is critical and a failure to do so would be fatal to any order of blacklisting pursuant thereto. 15. With respect to the dispute between the parties whether the petitioner had failed to provide optimum services as required by the respondent authorities, this Court cannot adjudicate the said issue as it involves disputed questions of facts as according to the petitioner, because of non payment of the dues by the respondents, the petitioner could not provide services e+ciently and on the other hand, and as per the respondents, it was the petitioner who was not desirous of ful<lling its obligations under the contract, sincerely. Even otherwise, Clause 8.2 of the General Conditions of Contract provides for demand of arbitration which the petitioner may take recourse to. However, so far as the order dated 11.02.2026 (Annexure P/1) only with respect to blacklisting/ debarment 10 of the petitioner for a period of two years is concerned, the same stands quashed. 16. Consequently, this petition stands partly allowed. Sd/- Sd/- (Arvind Kumar Verma) (Ramesh Sinha) JUDGE CHIEF JUSTICE Bablu / Amit AMIT KUMAR DUBEY Digitally signed by AMIT KUMAR DUBEY Date: 2026.02.20 14:30:13 +0530