ORDER Sanjay Yadav, J. 1. Issue, though a singular one, but of a contextual magnitude, which crops up for consideration is whether the Respondents though employer in a contract matter, are justified in their action of suspending commercial relations with the Petitioner for the period of five years without affording an opportunity of hearing. Undisputed Facts: 2. Petitioner, a Public limited company, registered under the relevant provisions of the Companies Act, 1956 was awarded a turnkey contract under Rajiv Gandhi Gramin Vidyutikaran Yojna, for construction of high tension/low tension lines, installation of distribution transformers and providing service connections to below poverty line consumers in different package, viz. SN1-04 for Seoni District and CHD-01 to CHD-05 for Chhindwara District, as per approval accorded by the Respondents' Board of Directors vide their decision dated 8.9.06 taken in its 20th meeting. Total cost of award, supply+erection was for Rs .89.63 crores. 3. Agreements between the Petitioner and Respondent No. 2 was entered into. The works awarded as per the agreement were to be completed upto May 2008 in phased manner. 4. Work as per stipulation could not be accomplished whereon, the Board of Directors in its 36th meeting dated 1.4.09 resolved to terminate the contract by invoking Clause 42 of the agreement. The validity whereof is being questioned and is a subject matter of writ petition: W.P. No. 7808/09, MAYTAS Infra Ltd. v. M.P. Poorva Kshetra Vidyut Vitran Co. Ltd. and Ors.. While terminating the contract it was also decided to suspend commercial relations with the Petitioner for a period of five years. It was also resolved, as evident from Annexure R/6, that the decision dated 1.4.2009 regarding suspension of commercial relations be not disclosed to the firm. It is this decision which is being questioned herein in this writ petition. DISOUISITION- 5. Contentions of the Petitioner is that the termination of the contract being under Clause 42 "Contractors Default" of General Terms and conditions of the Contracts (Annexure-P/2) and the said clause since does not provide that if contract is being rescinded/cancelled the same would automatically lead to black listing of the contractor, the action of Respondents in suspending the commercial relations for a period of 5 years without affording any opportunity of hearing is an arbitrary exercise of power. 6. 6. It is contended that the decision regarding suspension of commercial relations for five years came to its knowledge only after when in response to NIT floated by Respondent No. 2 on 8.12.2010, the Petitioner went to obtain the tender/bidding documents and the same was declined. 7. It is urged that on an inquiry being made in the office of Respondent No. 2, the Petitioner was asked to check the list of vendors with whom the commercial relations are suspended, whereon, the Petitioner came across the fact that by order No. EX/WS/RE/RGGVY/2232 dated 9.4.09, the commercial relations with the Petitioner have been suspended for five years. 8. It is submitted that, the decision of suspension of commercial relation for a period of five years is in violation of principles of natural justice as no opportunity of hearing has been afforded. It is contended that Petitioner was entitled for an opportunity of hearing as the decision has not only affected the commercial activities with the Respondent No. 2 but also with other Respondents who are in the process of issuing NI Ts. 9. It is urged that, the impugned action violates the fundamental rights of the Petitioner, its promoters, shareholders, employees and officials as guaranteed under Articles 14 and 19(1)(g) of the Constitution of India. 10. The Petitioner accordingly seeks quashment of the order dated 9.4.09 and direction to the Respondents not to deprive the Petitioner from participation in any of its tender process or from having any commercial relations. CONTRARIETY- 11. The Respondent on its turn jettisons the contentions raised. 12. It is urged that Board of directors in its 36th meeting dated 1.4.09 besides terminating the contracts awarded to the Petitioner in Seoni and Chhindwara Districts also resolved to debar the Petitioner firm from future business with the answering Respondent for a period of five years. This decision, it is urged, is a consequential action based on the non-performance of contract which led to its termination under Clause 42 thereof. 13. It is contended that even if any specific notice had been given to the Petitioner for debarring it would have proved to be a useless formality in as much as the Petitioner was given opportunity against non-performance of Contract which led to its termination and the consequential action of suspension of commercial relations for five years. 14. 13. It is contended that even if any specific notice had been given to the Petitioner for debarring it would have proved to be a useless formality in as much as the Petitioner was given opportunity against non-performance of Contract which led to its termination and the consequential action of suspension of commercial relations for five years. 14. It is urged that the Suspension of Commercial relations for five years does not tantamount to blacklisting the Petitioner. In support of this contention the Respondent has placed reliance on a "SECRET" communique bearing No. 511/145-A-66/1468 dated 4th October 1967 (AnnexureR/7), which lays down standardized code for blacklisting suppliers. Drawing distinction between blacklisting (paragraph 3) and suspension of business (paragraph 4), it is contended that, whereas an order of blacklisting implies that all departments of State Government are forbidden from the dealing with the firm; an order for suspension of business may be passed where pending full enquiry into the allegations, the competent authority is of the view that it is not desirable that business with the firm should continue. 15. Pertinent it is to note that paragraph 3 and 4 of Annexure R/7 lays down respective conditions in the event whereof the order in respect of blacklisting or suspension of business is passed. Be that as it may. For the present, the contention of the Respondent is that, since the decision is for suspension of business, the fact and the reasons thereof are not communicated as per stipulation contained in the letter dated 4.10.67. 16. In nutshell, it is urged on behalf of the Respondent that because the Petitioner was a non-performer of a contract which led to the termination thereof as per Clause 42 therein, no further notice is warranted before taking decision for suspension of future commercial relations. The decision, it is contended is just and proper and does not suffer from vice of arbitrariness. It is accordingly urged that, petition deserves to be dismissed. THE SYNTHESIS- 17. The decision, it is contended is just and proper and does not suffer from vice of arbitrariness. It is accordingly urged that, petition deserves to be dismissed. THE SYNTHESIS- 17. Before dwelling upon the rival contentions opportune it would be to first deal with the aspect of whether in a case as the present one where in a commercial transaction, between the parties where one of it is a State functionary the failure on the part of the Contractor, in absence of the specific terms and conditions in the Contract, would automatically debar such contractor from having future business transactions or suspension of business interest, without affording any opportunity of hearing, for a term suo-motu decided by such functionaries. 18. The issue leads us to dwell into various aspect and the facets of the Doctrine of Natural Justice which envelope within its fold the facets of procedural justice which creeps in when an administrative action as the present one is being scanned. Code of fair administrative procedure is being evolved over the years in the field of administrative law with growing governmental powers, the importance whereof has been noted in the following terms by the authors of Administrative Law: Seventh Edition: H.W.R. Wade and C.F. Forsyth: Chapter 13: Page 463: Quoting Jackson J., an American Judge [as he stated in Shaughnessy v. United States: (1953) 345 US 206 ] that, procedural fairness and regularity are of the indispensable essence of liberty. Authors observe that "Procedure is not a matter of secondary importance. As governmental powers continually grow more drastic, it is only by procedural fairness that they are rendered tolerable." As said Frankfurter J. in Mc Nabb v. United States: (1943) 318 US 332: "The history of liberty has largely been the history of the observance of procedural safeguards. 19. Trite it is that the concept of Natural Justice comprises two fundamental rules of fair procedure: (i) that a man may not be a judge in his own cause and (ii) that a man's defence must always be fairly heard [Please see S.L. Kappor v. Jagmohan and Ors.: (1980) 4 SCC 379 , (paragraph 9). Baldev Singh and Ors. v. Himachal Pradesh and Ors.: AIR 1987 SC 1239 , (paragraph 5)]. 20. Baldev Singh and Ors. v. Himachal Pradesh and Ors.: AIR 1987 SC 1239 , (paragraph 5)]. 20. The application of these fundamental rules to the administrative action is also settled [Please see State of Haryana v. Ram Kishan and Ors.: AIR 1988 SC 1301 , (paragraph 10) and Cantonment Board, Dinapore and Ors. v. Taramani Devi: AIR 1992 SC 61 ,(paragraph 5)]. In M/s Southern Painters v. Fertilizers & Chemicals Travancore Ltd. and Anr. : AIR 1994 SC 1277 , (paragraph 9)]. 21. In Principle of Statutory Interpretations; By G.P. Singh, 12th Edition, learned Author has succinctly observed the importance of principle of natural justice in the Indian Context in the following terms- In India a liberal interpretation of Articles 14 and 21 of the Constitution readily brings in the requirements of natural justice to administrative actions against a person. It has become an implied principle of the rule of law that any order having civil consequences should be passed only after following the principles of natural justice." But whether the same would apply also in respect of powers being exercised under a contract is what is to be seen in the present context and more particularly in the context of present case where because of the contractual relations there is an exercise of administrative powers in suspending future commercial relations under the pretext that the same is the fall out of the breach of contract. 22. True it may be that, because of the non-performance of the contract, the same may result in cost escalation and the delay in the work. But in absence of specific term or a condition in the contract, whether the employer have the liberty to suspend future commercial relationship? Such a clause in a contract may not be unexceptional, in which case, the termination of contract and the suspension of future commercial relations may go hand in hand. But in absence of such term, in our considered opinion incumbent it would be upon the employer, the State functionary as the present one, to adhere to procedural fairness and, before imposing, to say, an economic sanction, should give an opportunity of hearing. Because the instrumentality of State like the Respondent cannot afford to penalize without affording an opportunity of hearing. Because the instrumentality of State like the Respondent cannot afford to penalize without affording an opportunity of hearing. And as observed in A.L. Kaira v. The Project and Equipment Corporation of India Ltd.; AIR 1984 SC 1361 , that an action per se arbitrary is a denial of equal protection of law as guaranteed under Article 14 of the Constitution of India. 23. The Respondents during course of hearing attempted to press in service the aspect of sufficient compliance, submitting that since the action taken against the Petitioner is under Clause 42 of the agreement and before terminating the contract, the Petitioner contractor was given the opportunity of hearing; such a hearing it is urged is sufficient to meet out the principle of natural justice and a further notice would be an exercise in futility, a useless formality. 24. We are not impressed with the submission of learned Counsel for Respondents for the simple reason that the consequences of two orders are different. An order terminating a contract may result in abatement of existing contract. The suspension of commercial relation on the other hand, however, results in ceasing of future business, which leads to drastic consequence, as the same may result in an economic death of a commercial institution. The basic fallacy in the approach of the Respondent thus is that dual consequences have been visioned as arising out of one decision. Whereas, such an action is not supported by any of the terms of contract wherefrom the action of termination of contract emanates. 25. Much emphasis is also laid upon by the Respondent on paragraph 4 of the letter dated 4.10.1967 (Annexure R/7) to substantiate that, the decision of suspension of business can be taken by competent authority and the fact of and the reasons need not be communicated to the firm concerned. 26. Paragraph 4 of the communication dated 4.10.1967 is in the following terms: 4. Suspension of business: (I) Suspension of business may be ordered where pending full enquiry into the allegations, the competent authority is of the view that it is not desirable that business with the farm should continue. Such an order may be passed: (i)- If the firm is suspected to be of doubtful loyalty to India. Suspension of business: (I) Suspension of business may be ordered where pending full enquiry into the allegations, the competent authority is of the view that it is not desirable that business with the farm should continue. Such an order may be passed: (i)- If the firm is suspected to be of doubtful loyalty to India. (ii)- If the police recommend such a course in respect of in case under investigation; and (iii)- If the competent authority is prima facie of the view that the firm is guilty of an offence involving moral turpitude in relation to business dealing which if established would result in its blacklisting. (iv) If the competent authority is of the view that the firm is a confirmed evader of Central/State Sales Tax over a period of years and that all reasonable efforts to recover the amount of tax from them have failed. (II) Orders regarding (i) and (ii) above shall be passed to the recommendation of the General Administration Department ('X' section) and will be given effect to by all other departments. Orders regarding (iii) above may be issued by the administrative department concerned. Orders regarding (iv) above may be issued by the Administrative Department Concerned. Orders regarding (iv) above may be issued by the administrative department concerned who should send copies thereof to all other departments for giving effect thereto and endorse a copy to General Administrative Department ('X' section) for communicating the same to the Government of India. (III) The fact of and the reasons for suspension of business shall not be communicated to the firm concerned. 27. Fair reading of the clause reveals that it is only on happening of events mentioned therein that leads to suspension of business. The allegation whereunder such an action can be taken would be in the event of: (i) doubtful loyalty to India, (ii) police recommendation in respect of in case under investigation, (iii) prima.facie guilty of an offence involving moral turpitude, (iv) firm is a confirmed evader of Central/State Sales Tax and efforts to recover the amount have failed. 28. In the case at hand no material is brought on record by Respondent as would fulfill the conditions stipulated in paragraph 4 of the letter dated 4.10.1967. The same, therefore, does not render any help to the Respondent to cover up their action, nor does it lend any legal colour to it. 29. 28. In the case at hand no material is brought on record by Respondent as would fulfill the conditions stipulated in paragraph 4 of the letter dated 4.10.1967. The same, therefore, does not render any help to the Respondent to cover up their action, nor does it lend any legal colour to it. 29. Letter debarring the Petitioner from future business is in following terms: Confidential M.P. POORV KSHETRA VIDYUT VITRAN CO. LTD., BLOCK-73rd Floor, Shakti Bhawan Jabalpur No. EZ/WS/RE/RGGVY/2232 Jabalpur Dated 09.04.09 Subject: Debarring of M/s Maytas Infra Pvt. Ltd., Hyderabad. It has been decided to debar M/s Maytas Infra Pvt. Ltd. Hyderabad from future business with the EZ Company for a period of 5 years for all the items/contracts due to default by contractor in execution of the RDDVY works awarded to them for construction of New II KV line, LT line, 25 & 16 KVA, 11/0.4 KV. Distribution substations and Extension of Service Lines including house wiring for BPL house holds in package SNI-04 of Seoni District and packages CHD-01 to CHD-05 of Chhindwara District against this office award Nos. as shown below: Sl.No. LOA details Name of Block cover under RGGVY Cost of Award supply+Erection 1. EZ/WS/RGGVY/SNI-04/ORD/4657 Dt.19.10.06 Dhanora & Ghansor 16.66 2. EZ/WS/RGGVY/CHD-01/ORD/4852 Dt.27.10.06 Tamiya & Jamai 11.87 3. EZ/WS/RGGVY/CHD-02/ORD/4853 Dt.27.10.06 Amarwara, Harrai 23.58 Sl.No. LOA details Name of Block cover under RGGVY Cost of Award supply+Erection 4. EZ/WS/RGGVY/CHD-03/ORD/4854 Dt.27.10.06 Parasiya & Pandhurna 13.23 5. EZ/WS/RGGVY/CHD-04/ORD/4855 Dt.27.10.06 Chhindwara & Mohkhed 13.43 6 EZ/WS/RGGVY/CHD-05/ORD/4856 Dt.27.10.06 Sausar and Bichhua 10.86 The facts of debarring should not be disclosed to the firm, whose full address is given below: Maytas Infra Pvt. Limited, 6-3-1186/5/A. 3rd Floor, Amongh Plaza, Begumpet Hyderabad-500016 (AP) Chief Engineer (W&P EZ) M.P.P.K.V.V. Co. Ltd., Jabalpur 30. Admittedly, the decision to debar the Petitioner from future business has been taken without affording any opportunity of hearing, nor the same was communicated to the Petitioner. 31. During course of hearing it was proposed to the Respondent to cancel such an order and they would be at liberty to take fresh decision after affording an opportunity of hearing. However, after seeking instructions, learned Counsel for the Respondent submits that the Respondent is not inclined to withdraw the same. 31. During course of hearing it was proposed to the Respondent to cancel such an order and they would be at liberty to take fresh decision after affording an opportunity of hearing. However, after seeking instructions, learned Counsel for the Respondent submits that the Respondent is not inclined to withdraw the same. Therefore, since we are of the considered opinion that the decision to suspend future business relation is without affording any opportunity, of hearing the same is not sustainable being void ab initio and is hereby quashed. 32. The Respondent would be liable to bear the cost of this petition which we quantify to Rs. 2000/-. Though a fervent plea was put-forth by learned Counsel for the Respondent against the imposition of cost; however, in a given facts of present case we are not inclined to exonerate the Respondent from bearing the cost. It is ordered accordingly.