Judgment : Pankaj Purohit, J. Vide earlier order dated 13.02.2026, it was stated by learned State Counsel that pursuant to the order dated 09.12.2024 passed by Coordinate Bench of this Court, the instructions were called from State; however, he submits that he would go through the instructions dated 11.02.2026. Two weeks’ time was given to learned State Counsel to go through the instruction, but still learned State Counsel is not in a position to submit before this Court as to what were those instructions. 2. This matter relates to the permanent blacklisting of the petitioner. 3. In view of the aforesaid reasons and since the matter is listed for final hearing, this Court has left with no option but to proceed with finally on the merits of the case. 4. Heard learned counsel for the parties. 5. This writ petition has been filed by petitioner under Article 226 of the Constitution of India, assailing the order dated 07.10.2019 passed by respondent-authorities, whereby, petitioner has been placed under the category of blacklisted entities and recovery of certain amounts has also been directed. 6. The facts, in brief, giving rise to the present writ petition are that petitioner is a society engaged in implementation of developmental schemes. In the year 2005, respondent department initiated a scheme known as “Indira Mahila Samekit Vikas Yojana” (IMSVY) with the objective of promoting self-help groups and facilitating livelihood activities in hilly regions of the State of Uttarakhand. Pursuant thereto, petitioner was selected for implementation of the said scheme in Bhilangana Valley, District Tehri Garhwal, and an agreement dated 14.09.2005 was executed between the parties, incorporating terms and conditions governing the project. In terms of agreement, petitioner undertook various activities including formation of self-help groups, training, and facilitation of livelihood initiatives. It is stated that during the course of implementation, petitioner also undertook construction of a Collection and Grading Centre at Village Dopardhar for the benefit of such self-help groups. Petitioner asserts that the said construction was carried out within financial parameters of the Scheme. Subsequently, certain allegations came to be raised regarding irregularities in the execution of project, particularly in relation to utilization of an amount of Rs.50,000/-. On the basis of such allegations, an external monitoring agency, namely Agricultural Finance Corporation (AFC), conducted an inspection in October 2006 and submitted a report pointing out certain irregularities. 7. Subsequently, certain allegations came to be raised regarding irregularities in the execution of project, particularly in relation to utilization of an amount of Rs.50,000/-. On the basis of such allegations, an external monitoring agency, namely Agricultural Finance Corporation (AFC), conducted an inspection in October 2006 and submitted a report pointing out certain irregularities. 7. Thereafter, criminal proceedings were initiated against petitioner by registration of an FIR dated 12.11.2007 u/s 406 and 420 IPC . However, upon investigation, police submitted a final report dated 22.11.2008 concluding that no corroborative evidence of misutilization of funds was found against petitioner. The said final report was accepted by the competent court vide order dated 27.09.2012, and the proceedings attained finality. Parallelly, administrative action was also initiated against petitioner. An order of blacklisting came to be passed against petitioner in the year 2007 in an ex-parte manner. Aggrieved thereby, petitioner approached this Court by filing Writ Petition No.2324 of 2007 (M/S), which was allowed and the said order was quashed, with liberty to respondents to pass a fresh order after affording opportunity of hearing. Pursuant thereto, a fresh order dated 07.05.2010 was passed by respondent authorities again placing petitioner under the category of blacklisted entities and directing recovery. Petitioner challenged the said order by filing Writ Petition No.1338 of 2010 (M/S), which was also allowed by a Coordinate Bench of this Court vide judgment dated 13.12.2017, whereby, impugned order was set aside, while granting liberty to respondents to proceed afresh in accordance with law. Thereafter, respondents proceeded in the matter and ultimately passed impugned order dated 07.10.2019, again placing petitioner under the category of blacklisted entities and directing recovery of certain amounts. It is this order which is under challenge in the present writ petition. 8. Learned counsel for petitioner submits that the impugned order dated 07.10.2019 is wholly arbitrary, illegal and unsustainable in the eyes of law, inasmuch as the same is nothing but a mere reiteration of the earlier blacklisting orders, which have already been set aside by this Court in earlier rounds of litigation. It is contended that despite clear directions issued by a Coordinate Bench of this Court while quashing the previous orders, respondent authorities have failed to undertake any independent consideration of the matter and have mechanically reproduced earlier findings, thereby rendering the impugned order vitiated on account of non-application of mind. 9. It is contended that despite clear directions issued by a Coordinate Bench of this Court while quashing the previous orders, respondent authorities have failed to undertake any independent consideration of the matter and have mechanically reproduced earlier findings, thereby rendering the impugned order vitiated on account of non-application of mind. 9. He further submits that very foundation of the impugned action, namely the alleged misutilization of an amount of Rs.50,000/-, is factually incorrect and wholly misconceived. Elaborating upon the same, he contends that petitioner had undertaken two distinct constructions under two separate funding sources-one, the construction of a Collection and Grading Centre at Village Dopardhar under the IMSVY Scheme, and the other, construction of a school roof at Village Laini from funds received from the Canadian High Commission. It is thus urged that there has been no diversion or misutilization of funds, and the allegation forming the basis of blacklisting is demonstrably false. 10. He further contends that even the Canadian High Commission, which had released funds for the separate project, has categorically stated that it has no complaint whatsoever regarding utilization of the funds by the petitioner. In such circumstances, it is argued that the respondent authorities could not have formed any adverse opinion alleging financial impropriety, particularly when the funding agency itself has expressed complete satisfaction. It is also contended that the same set of allegations had earlier formed the basis of criminal proceedings initiated against petitioner by way of FIR dated 12.11.2007 u/s 406 and 420 IPC . However, after due investigation, police submitted a final report dated 22.11.2008 concluding that no evidence of misutilization of funds was found. The said final report was accepted by competent criminal court vide order dated 27.09.2012 and has attained finality. He also submits that once the competent criminal court has accepted the closure report on identical allegations, it is not open for the respondents to proceed on the same set of facts and impose the drastic consequence of blacklisting, in absence of any independent material. 11. It is further contended by learned counsel for the petitioner that the impugned order records findings which are ex facie perverse and contrary to the material on record, inasmuch as despite the criminal proceedings having culminated in favour of petitioner, respondents have erroneously referred to existence of evidence against petitioner, thereby indicating non-application of mind. 11. It is further contended by learned counsel for the petitioner that the impugned order records findings which are ex facie perverse and contrary to the material on record, inasmuch as despite the criminal proceedings having culminated in favour of petitioner, respondents have erroneously referred to existence of evidence against petitioner, thereby indicating non-application of mind. It is contended that even otherwise, the action of blacklisting is wholly disproportionate, as any alleged discrepancy pertained to a limited amount and could at best warrant recovery, and not the extreme penalty of blacklisting. It is lastly submitted that the impugned order appears to have been passed in haste, without genuine reconsideration of the matter. 12. Learned State Counsel submits that impugned order dated 07.10.2019 has been passed strictly in accordance with law and in compliance with the liberty granted by this Court in earlier rounds of litigation. It is contended that respondents were well within their right to reconsider the matter and pass a fresh order after examining the material on record, and merely because earlier orders were set aside, it does not preclude the State from taking appropriate action where irregularities are found in execution of a government scheme. 13. He further submits that petitioner was entrusted with implementation of a public welfare scheme involving utilization of government funds, and therefore, was under a strict obligation to ensure transparency and proper accounting. Learned State counsel contends that the report submitted by monitoring agency pointed out irregularities in execution of project, including issues relating to utilization of funds, and the same constituted sufficient basis for initiating action against petitioner. 14. It is argued by learned State Counsel that the scope of administrative action is distinct from criminal proceedings, and mere acceptance of a final report in a criminal case does not bar the State from taking departmental or administrative action based on available material. Learned State Counsel further argued that adequate opportunity of hearing was afforded to petitioner, and replies submitted by petitioner were duly considered before passing the impugned order. It is contended that the explanation furnished by petitioner was found unsatisfactory in light of the material available on record, and the competent authority, upon due consideration, arrived at a conscious decision to blacklist petitioner. It is contended that the explanation furnished by petitioner was found unsatisfactory in light of the material available on record, and the competent authority, upon due consideration, arrived at a conscious decision to blacklist petitioner. It is thus urged that no interference is called for in exercise of writ jurisdiction, as the impugned order does not suffer from any illegality warranting interference by this Court. 15. Having heard learned counsel for the parties and having perused the entire material available on record, this Court finds that controversy in the present case lies within a narrow compass, namely, whether impugned order dated 07.10.2019 satisfies requirement of a fresh and independent consideration in terms of the liberty granted by Coordinate Bench of this Court in earlier rounds of litigation. At the outset, it is not in dispute that earlier orders of blacklisting passed against petitioner had been set aside by this Court, lastly vide judgment dated 13.12.2017, while granting liberty to respondents to proceed afresh in accordance with law. Such liberty, in the considered view of this Court, necessarily obligated respondents to undertake an independent and objective evaluation of the material on record, duly considering the explanation furnished by petitioner. However, from a perusal of the impugned order, it is evident that the findings recorded therein substantially reiterate conclusions drawn in earlier proceedings, without demonstrating any fresh application of mind. The impugned action, therefore, bears the imprint of a mechanical exercise rather than a genuine reconsideration, which cannot be sustained in law. 16. This Court further finds that the foundational allegation against petitioner pertains to alleged misutilization of a sum of Rs.50,000/-. In this regard, it is an admitted position that criminal proceedings were initiated on identical allegations, which culminated in submission of a final report by the investigating agency, concluding absence of any corroborative evidence against petitioner. The said report was accepted by competent criminal court vide order dated 27.09.2012 and has attained finality. While it is true that the standard of proof in criminal proceedings differs from that applicable in administrative action, respondents were nevertheless required to demonstrate some independent material justifying the conclusion of misconduct. In absence of any such material, and particularly in the face of closure of criminal proceedings on the same set of facts, adverse findings recorded in impugned order cannot be said to rest on a sound evidentiary basis. 17. In absence of any such material, and particularly in the face of closure of criminal proceedings on the same set of facts, adverse findings recorded in impugned order cannot be said to rest on a sound evidentiary basis. 17. It is also of significance that the allegation of diversion of funds from the Canadian High Commission has not been substantiated by any cogent material. On the contrary, record indicates that the said funding agency itself has expressed no grievance with regard to utilization of the funds released to petitioner. This aspect, which goes to the root of matter, has not been meaningfully dealt with in the impugned order, thereby rendering decision-making process deficient. 18. Equally, this Court finds merit in the submission of learned counsel of petitioner that the replies furnished pursuant to earlier directions of this Court have not been duly considered. The impugned order merely records that the replies were found unsatisfactory, without adverting to the specific explanations offered by petitioner, particularly with regard to separate utilization of funds and the outcome of criminal proceedings. Such a cursory treatment of petitioner’s response falls short of the requirement of a reasoned decision and is indicative of non-application of mind. In this context, it would be apposite to refer to the judgment of Hon’ble Supreme Court in the case of Kulja Industries Ltd. v. Chief General Manager, W.T. Project, BSNL , (2014) 4 SCC 731 wherein, it has been held that every action of the State must be informed by reason and is subject to judicial review on the touchstone of fairness, non-arbitrariness and adherence to principles of natural justice. The impugned order, viewed in light of the aforesaid principle, clearly fails to meet the said standard. 19. Further, even assuming that some discrepancy could be attributed to petitioner, action of blacklisting, which entails serious civil consequences and affects petitioner’s right to participate in future engagements, appears to be disproportionate to the nature of allegations. The impugned order does not reflect any consideration of proportionality, which is an essential facet of administrative decision-making. 20. In view of the aforesaid discussion, this Court is of the considered opinion that the impugned order dated 07.10.2019 suffers from non-application of mind, is based on unsubstantiated findings, and has been passed without due consideration of the petitioner’s explanation. The very foundation of action being unsustainable, order cannot be upheld even to a limited extent. 20. In view of the aforesaid discussion, this Court is of the considered opinion that the impugned order dated 07.10.2019 suffers from non-application of mind, is based on unsubstantiated findings, and has been passed without due consideration of the petitioner’s explanation. The very foundation of action being unsustainable, order cannot be upheld even to a limited extent. 21. Accordingly, the writ petition is allowed. The impugned order dated 07.10.2019 passed by the respondent authorities is hereby set aside.