JUDGMENT M.S. Sonak, J. 1. Rule. Rule is made returnable with the consent of all the parties forthwith. 2. This petition challenges two letters both dated 10th April 2013 (Exh.A & Exh.M1), which bar a Joint Venture between the petitioner and Insituform Technologies, Inc. (titled “M/s. Insituform - SPML JV”) for a period of two years from 26th November 2011 to 25th November 2013 from participating in the tenders invited by respondent No.1 the Dy. Chief Engineer (S.O) P & C, and respondent No.4 - The Chief Engineer, Mumbai Sewage Disposal Project of the Municipal Corporation of Greater Mumbai. 3. The challenge to the letter dated 10th April 2013 issued by respondent No.4 (Exh.M1), no longer survives, in view of the affidavit-in-reply dated 10th June 2013 filed by one Pravinchandra Kachru Kedar, Executive Engineer (MSDP) representing respondent No.2 stating that it has been decided that the petitioner can be allowed to participate in any non - S.O. Department's tenders and that the Joint Venture of the petitioner and Cadagua SA has been allowed to participate in the tender process of Colaba WwTF. The reference in this judgment to the impugned letter dated 10th April, 2013 is therefore to the one annexed as Exhibit 'A' to the petition. 4. Mr. Madon, the learned senior counsel appearing for the petitioner submitted that the impugned letter virtually blacklists the JV of which the petitioner is a part for a period of two years without affording any opportunity to the petitioner to show cause. Mr. Madon contends that blacklisting certainly visits the petitioner with serious civil consequences, therefore, the respondents were duty bound to comply with the principles of natural justice and fair play prior to blacklisting or debarring the petitioner from participating in tender process. He further contended that the reasons stated in the affidavit-in-reply filed on behalf of the respondents were untenable and in any case the respondents were not entitled to supplement reasons in the shape of affidavit or otherwise, particularly when such reasons did not find place in the impugned letter. 5. In support of his first contention, Mr. Madon relied upon the decision of the Supreme Court in the case of M/s Erusian Equipment & Chemicals Ltd. Vs. 5. In support of his first contention, Mr. Madon relied upon the decision of the Supreme Court in the case of M/s Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal & another - (1975) 1 SCC 70 and in support of the second contention, reliance was place on the decision in case of MohinderSingh Gill & another Vs. The Chief Election Commissioner, New Delhi & ors – (1978) 1 SCC 405 . 6. Shri. Sakhare, the learned senior counsel appearing for the respondents submitted that the consultants of respondent No.2 M/s. Mott MacDonald Pvt. Ltd brought to the notice of respondent No.2 that the petitioner had been blacklisted by UP Jal Nigam for improper workmanship. Further, in respect of another contract, although the JV of the petitioner had been recommended for being awarded a contract, the petitioner delayed the entire process, thereby compelling the respondent No.2 to re-tender the works. This involved financial implication and delays in the execution of crucial works under the JNURM scheme. It is in the light of these facts that the impugned letters were issued. 7. It is admitted that the petitioner was not given any opportunity for showing cause prior to the issuance of the impugned letter. There is and there can be no dispute that the impugned letter blacklists the petitioner/ the JV of which the petitioner is a part for a period of two years. The impugned letters, undoubtedly visit the petitioner with serious civil consequences. In the circumstances, it was incumbent upon the respondents to have complied with the principles of natural justice and fair play prior to the issuance of the impugned letters blacklisting the petitioner. 8. In the case of M/s Erusian Equipment & Chemicals Ltd. Vs. State of West Bengal & another - (1975) 1 SCC 70 , the Supreme Court at paragraph Nos.18,19 and 20 observed as under: “18. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods in discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods in discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Just as exclusion of the lowest tender will be arbitrary, similarly exclusion of a person who offers the highest price from participating at a public auction would also have the same aspect of arbitrariness. 19. Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may be under a duty to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein. 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 play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.” (emphasis supplied) 9. From the aforesaid, it is clear that the principles of fair play require that a contractor should be given an opportunity to represent his case before he is blacklisted. It is settled law that the State need not enter into any contract with any one, but if it does so, it must do so fairly. In this case, we are not concerned with the ultimate decision arrived at by the respondents. It is settled law that the State need not enter into any contract with any one, but if it does so, it must do so fairly. In this case, we are not concerned with the ultimate decision arrived at by the respondents. However, the decision making process is flawed for failure to comply with the principles of natural justice and fair play prior to the issuance of the impugned letters dated 10th April 2013 blacklisting the petitioner or the JV of which the petitioner is a part. 10. There is yet another circumstance, which we must advert to. As we noted earlier, the impugned letters dated 10th April, 2013, came to be issued by two separate Departments of respondent No.2 itself viz. respondent Nos.1 and 4. In so far as Exh.M1, issued by respondent no.4 is concerned, the higher authorities of respondent No.2 have taken a decision to permit the petitioner to participate in the tender process despite the report of the consultant commenting upon the petitioner, in so far as some other works entrusted to the petitioner or the JV are concerned. The blacklisting is now restricted only in terms of the letter at Exh.A to the petition. 11. A reference was made to the Rules governing the Registration of Contractors for Engineering Works framed by respondent No.2, which contain provisions and procedures to be adopted for the purposes of de-registration of a contractor. Mr. Sakhare submitted that the said rules are in-applicable in the present case as the petitioner is admittedly not a registered contractor with respondent No.2. Be that as it may, we are of the opinion that the principles of natural justice and fair play are required to be complied with by respondents prior to blacklisting any contractor. That the procedure prescribed under the said Rules may not be applicable does not obviate the necessity to comply with the principles of natural justice and fair play in cases such as the one before us. 12. Further the impugned order does not contain any reasons. It does not even indicate an independent application of mind by respondent No.1. The letter merely states as under:- “This has reference to your above letter under reference No.1, in which you have requested to release the E.M.D. paid by you for above contract/tender along with the interest. 12. Further the impugned order does not contain any reasons. It does not even indicate an independent application of mind by respondent No.1. The letter merely states as under:- “This has reference to your above letter under reference No.1, in which you have requested to release the E.M.D. paid by you for above contract/tender along with the interest. You are hereby informed that your request regarding release of E.M.D. has been considered by higher authority and the said matter is processed further. However due to delayed response from you during process of above tender, there was no outcome of the bidding process, hence as per the Directives of Higher Authorities M/s. Insituform – SPML Infra JV has been barred for a period of two years starting from 26/11/2011 & upto 25/11/2013 from participating in the tenders invited by Dy. Chief Engineer (S.O.) P & C, which may please be noted.” The action is therefore not even taken by respondent No.1. He has done so allegedly on the 'directives” of others. There is nothing to indicate the actual consequences of the petitioners alleged delayed response while processing the previous tenders. There are several important aspects that can arise and to which the petitioner would be entitled to respond to. 13. The quashing and setting aside of the impugned letters, however, shall not preclude the respondents from following the due process of law and thereafter taking an appropriate decision in the matter of blacklisting the petitioner. Accordingly, we make it clear that in case the respondents desire to consider blacklisting the petitioner, the respondents will give an opportunity to the petitioner to represent their case, so that there is compliance with the principles of natural justice and fair play and only thereafter take an appropriate decision in the matter. 14. In the light of aforesaid, we pass following order; Rule is made absolute in terms of prayers (a) and (b). The respondents, however are at liberty, to take any steps against the petitioner in accordance with law.