1 2026:CGHC:18294-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 1898 of 2026 M/s Ramraja Minerals And Construction Pvt. Through Its Director Shri Jayendra Singh Bhandari, Aged About 48 Years, S/o Shri Man Singh Bhandari, Having Office At Ramraja House Plot No. 289/197, Vip Road, Post Mana, Amlidih, Distt. Raipur, Chhattisgarh. 492015. ... Petitioner(s) versus 1 - State Of Chhattisgarh Through Principal Secretary, Department Of Urban Administration And Development, Indrawati Bhawan, Block D, Fourth Floor, Atal Nagar, Raipur, Chhattisgarh. 2 - Municipal Corporation Raipur Through Its Commissioner, Distt. Raipur, Chhattisgarh. ... Respondent(s) For Petitioner(s) : Mr. Adarsh Patel, Advocate appearing through virtual mode and Mr. Amit Singh, Advocate For State-authority For Respondent No. 2 : : Mr. Praveen Das, Addl. A. G. Mr. Pankaj Agrawal, Advocate SAGRIKA AGRAWAL Digitally signed by SAGRIKA AGRAWAL Date: 2026.04.23 10:44:22 +0530 2 Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri R avindra Kumar Agrawal , Judge Order on Board Per Ramesh Sinha, Chief Justice 22/04/2026 1. Heard Mr. Adarsh Patel, learned counsel for the petitioner appearing through virtual mode and Mr. Amit Singh, Advocate. Also heard Mr. Praveen Das. Addl. Advocate General as well as Mr. Pankaj Agrawal, learned counsel for Respondent No. 2. 2. The present writ petition has been preferred under Article 226 of the Constitution of India calling in question the legality, validity and propriety of the order dated 31.12.2025 passed by Respondent No. 2, whereby the tender bearing No. 177070 dated 06.10.2025 has been cancelled, the petitioner has been debarred/blacklisted for a period of one year, and the Fixed Deposit Receipt (FDR) amounting to Rs. 1,50,000/- submitted by the petitioner has been forfeited. 3. The present petition has been filed by the petitioner seeking the following reliefs:- 10.1 To issue a writ of certiorari and to quash and set aside the order dt. 31.12.2025 (Annexure- P/4) passed by Respondent no. 2 by which the tender allotted in favor of the petitioner has been- cancelled and blacklisting/debard for a period of one year has been directed. 10.2 To issue a writ of mandamus to direct the respondent No.2 allowing the petitioner to continue with the work and to adjust the additional performance bank guarantee with the outstanding dues. 10.3 To issue a writ of mandamus and to direct the respondent no. 2 to consider the pending 3 representation submitted by the petitioner and pass a reasoned order. 10.4 Any other suitable relief deemed fit in the facts and circumstances of the case may also kindly be granted together with the cost of this Petition.” 4. The brief facts of the case as emerges from the pleadings of the petition are that, the Petitioner Company, a duly incorporated entity engaged in execution of public infrastructure and road construction works, through its Director, challenging the arbitrary and illegal action of Respondent No. 2 in cancelling the tender, forfeiting security, and debarring/blacklisting the Petitioner for a period of one year. The Respondent No. 2 had issued NIT No. 117/15 FC/NAPANI/2025 dated 06.10.2025 inviting bids for road repair and BT topping works, pursuant to which the Petitioner participated in accordance with the prescribed tender conditions and was declared the L-1 bidder at 21.35% below SOR. Subsequently, while issuing the Letter of Acceptance, the Petitioner was directed to deposit an additional performance guarantee of Rs. 24,17,550/-, however, instead of refusing compliance, the Petitioner made a bona fide request for adjustment of the said amount against its admitted outstanding dues of Rs. 1,64,40,496.90/- payable by the Respondents under a prior agreement. Despite such reasonable request and without issuing any show cause notice, granting opportunity of hearing, or considering the adjustment request, the Respondent No. 2 passed the impugned order dated 31.12.2025 cancelling the tender, forfeiting the FDR of Rs. 1,50,000/- and debarring/blacklisting the Petitioner for one year. The Petitioner immediately submitted a detailed representation dated 03.01.2026 4 seeking reconsideration, highlighting that no loss was caused to the Corporation and that the request was bona fide, however, the same was not considered or decided by a reasoned order. The impugned action, passed in violation of principles of natural justice, has resulted in grave civil consequences including financial loss, reputational damage and complete exclusion from participation in future tenders across departments, thereby rendering the present petition necessary. 5. Learned counsel for the petitioner would submit that the impugned order dated 31.12.2025 is ex facie arbitrary, illegal and violative of the settled principles of natural justice, and is therefore liable to be quashed. The Respondent No. 2 has proceeded to cancel the tender, forfeit the security deposit and impose the extreme penalty of blacklisting without issuance of any show cause notice or affording an opportunity of hearing to the Petitioner. It is a settled position of law that any action entailing serious civil and commercial consequences must strictly adhere to the principle of audi alteram partem. In the present case, the Petitioner had neither refused compliance nor abandoned the contract rather, it had made a bona fide and commercially prudent request for adjustment of the additional performance guarantee against admitted outstanding dues payable by the Respondents themselves. Despite this, the Respondents failed to consider the said request and proceeded in a mechanical and punitive manner, without recording any reasons, quantifying any loss, or demonstrating any prejudice caused to the public exchequer. The impugned action, therefore, is not only disproportionate but also suffers from complete non-application of mind. 5 6. It is further submitted that the blacklisting/debarment of the Petitioner for a period of one year, without any independent show cause notice proposing such action, is wholly unsustainable in law and violative of Article 14 of the Constitution of India. In the present case, the alleged lapse pertains merely to timing of deposit of additional performance guarantee, for which the Petitioner had already sought adjustment against admitted dues; thus, imposition of such a harsh and stigmatic penalty is grossly disproportionate and arbitrary. Moreover, the Respondents have failed to consider the Petitioner’s detailed representation dated 03.01.2026, further demonstrating non- application of mind and reinforcing the illegality of the impugned order. Hence, the impugned action deserves to be set aside in the interest of justice, fairness and equity. 7. Per contra, learned State counsel submits that impugned order dated 31.12.2025 is lawful, justified and passed strictly in accordance with the terms and conditions of the tender as well as settled principles governing public procurement. The Petitioner, despite being declared L-1, failed to comply with a mandatory condition of the Letter of Acceptance, namely, deposit of the additional performance guarantee within the stipulated time, which constituted a fundamental breach going to the root of the contract. The so-called request for adjustment of dues was unilateral, dehors the tender conditions and not permissible in law, as contractual obligations cannot be substituted by self-serving proposals. In such circumstances, the Respondent Authority was well within its jurisdiction to cancel the tender, forfeit the earnest money/security and take consequential action including debarment, in order to maintain discipline, transparency and sanctity of 6 the tender process. It is further submitted that in matters of contractual and commercial decisions, the scope of judicial review is limited, and unless arbitrariness or mala fide is established, the decision of the tendering authority ought not to be interfered with. The impugned action being based on non-compliance of essential tender conditions and taken in public interest, does not warrant interference by this Court. 8. Learned counsel for Respondent No. 2/Municipal Corporation would submit that the impugned order dated 31.12.2025 has been passed in a fair, transparent and lawful manner, strictly in accordance with the terms and conditions of the tender and in larger public interest. The action of debarment has been taken in exercise of administrative powers to maintain integrity and credibility of the tendering process, and cannot be termed arbitrary or disproportionate in the facts of the present case. The Municipal Corporation, being a public body entrusted with execution of essential civic works, is required to act decisively against non-compliant bidders to prevent delays and ensure timely completion of public projects. Hence, the impugned order calls for no interference under writ jurisdiction. 9. We have heard learned counsel for the parties and perused the material annexed with the petition. 10. It is well settled that blacklisting entails serious civil and commercial consequences and cannot be imposed without strict adherence to the principles of natural justice. The Hon’ble Supreme Court in Gorkha Security Services v. Govt. of NCT of Delhi, (2014) 9 SCC 105 has categorically held that a valid show cause notice must not only contain 7 the allegations but must also clearly specify the proposed action of blacklisting, so as to enable the notice to effectively respond. Similarly, in UMC Technologies Private Limited v. Food Corporation of India (AIR 2021 SC 166), it has been reiterated that blacklisting, being punitive in nature, requires a meaningful opportunity of hearing and strict compliance with principles of fairness. In the present case, it is an admitted position that no specific show cause notice proposing blacklisting was issued to the Petitioner, nor any opportunity of hearing was afforded prior to passing the impugned order. The impugned order is also non-speaking and does not disclose any independent reasons justifying such extreme penalty. 11. However, insofar as the action of cancellation of tender and forfeiture of security deposit is concerned, this Court is of the considered opinion that the scope of judicial review in contractual matters is limited. The Hon’ble Supreme Court in Jagdish Mandal v. State of Orissa, (2007) 14 SCC 517, has held that interference is warranted only when the decision-making process is arbitrary, mala fide or intended to favour someone. In the present case, the petitioner admittedly did not deposit the additional performance guarantee within the stipulated period, which constituted non-compliance of a material condition of the Letter of Acceptance. Though the petitioner sought adjustment against alleged outstanding dues, such request was not accepted by the Respondent authority. In absence of any established mala fides or arbitrariness in the decision-making process, this Court is not inclined to interfere with the cancellation of tender and consequential forfeiture. 12. Accordingly, in view of the aforesaid analysis, the writ petition is partly allowed. The impugned order dated 31.12.2025 (Annexure-P/4) 8 passed by Respondent No. 2 insofar as it relates to blacklisting and debarring the petitioner from participating in future tender processes is hereby quashed. 13. With respect to the remaining claims, the petitioner is at liberty to avail appropriate remedy, including invocation of the arbitration clause, if so advised. 14. No order as to costs. Sd/- Sd/- (Ravindra Kumar Agrawal) (Ramesh Sinha) Judge Chief Justice sagrika