JUDGMENT : S.J. VAZIFDAR, J. The petitioner seeks a writ of certiorari to quash the 1st respondent’s action of blacklisting/debarring it from tendering for contracts issued by respondent No. 1, an order setting aside the award of work to respondent No. 2 and a writ of mandamus directing respondent No. 1 to consider its bid. 2. This petition raises an interesting question of law relating to blacklisting. M/s Sunrise Integrated Facility Pvt. Ltd. (SIF Pvt. Ltd.) is a sister concern of the petitioner. The respondents contend that the directors of the petitioner and the directors of M/s SIF Pvt. Ltd. are the same. We will assume that to be so. 3. M/s SIF Pvt. Ltd. had entered into a contract with respondent No. 1 for providing staff relating to its food and beverage section at the hotels run by respondent No. 1. Disputes and differences arose between respondent No. 1 and M/s SIF Pvt. Ltd. Respondent No. 1 contended that M/s SIF Pvt. Ltd. had failed to provide the required staff. By a notice dated 26.02.2016, respondent No. 1 called upon M/s SIF Pvt. Ltd. to show cause why action ought not to be taken against it for the same as per the terms and conditions of the contract dated 30.10.2015. By a communication dated 10.05.2016, respondent No. 1 stated that M/s SIF Pvt. Ltd. had failed to submit its reply and that instead it had submitted a letter dated 20.04.2016 stating that it was withdrawing from the tender/contract. Respondent No. 1, therefore, stated that M/s SIF Pvt. Ltd. had committed a breach of the contract and, therefore, cancelled the contract with immediate effect and debarred M/s SIF Pvt. Ltd. in respect of future tenders for a period of three years and forfeited the security deposit. M/s SIF Pvt. Ltd. invoked the arbitration agreement. Respondent No. 1, however, contended that the disputes are not referable to arbitration, inter alia, on the ground that there are no disputes. M/s SIF Pvt. Ltd. has filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator in accordance with the arbitration agreement between itself and respondent No. 1. Admittedly, no application has been made for interim reliefs either under Section 9 or under Section 17 to stay the order of blacklisting. 4. M/s SIF Pvt. Ltd. has filed a petition under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator in accordance with the arbitration agreement between itself and respondent No. 1. Admittedly, no application has been made for interim reliefs either under Section 9 or under Section 17 to stay the order of blacklisting. 4. We must proceed, therefore, on the basis that M/s SIF Pvt. Ltd. as on date stands blacklisted and that the directors of M/s SIF Pvt. Ltd. and the petitioner are the same. The question that arises for consideration is whether the petitioner can be deemed to have been blacklisted or be blacklisted without anything more by reason of the fact that the only directors in M/s SIF Pvt. Ltd. are also the only directors in the petitioner-company. 5. As far as this petition is concerned, the facts are as follows: Respondent No. 1 issued a notice dated 29.07.2016 inviting e-tenders from reputed parties/agencies dealing in the works specified therein for its hotels/units in Chandigarh. The works included the mechanized cleaning services in the hotels/units of the 1st respondent. The petitioner had submitted its bid only in respect of this work and not in respect of the other works which also formed part of the same e-tender notice. The last date for submission of bids was 16.08.2016. A meeting of the 1st respondent was held for the technical evaluation of the e-tenders in respect of the said works on 08.09.2016. The minutes of the meeting state that in view of M/s SIF Pvt. Ltd. having been blacklisted, on account of the directors of both the companies being the same, the petitioner should also be treated as debarred and could not participate in the tender. Admittedly, the petitioner was not served a show cause notice, nor afforded an opportunity of being heard in relation to the deemed blacklisting or even the proposed blacklisting. 6. It is contended on behalf of the respondents, however, that as the directors of the petitioner and the directors of M/s SIF Pvt. Ltd. are the same and as M/s SIF Pvt. Ltd. has been blacklisted after following the due process of law including issuing a show cause notice, the petitioner ought also to be deemed to have been blacklisted in accordance with law. We do not agree. 7. We do not agree. 7. It is not necessary to emphasize the adverse effects of blacklisting and the manner in which a party may be blacklisted/debarred. They have been referred to at length in a series of judgements. It is sufficient to refer to paragraph 17 of the judgement of the Supreme Court in Kulja Industries Limited Vs Chief General Manager, Western Telecom Project, Bharat Sanchar Nigam Limited and others (2014) 14 SCC 731 which reads as under:- “17. ------------------------------ The freedom to contract or not to contract is unqualified in the case of private parties. But any such decision is subject to judicial review when the same is taken by the State or any of its instrumentalities. This implies that any such decision will be open to scrutiny not only on the touchstone of the principles of natural justice but also on the doctrine of proportionality. A fair hearing to the party being blacklisted thus becomes an essential precondition for a proper exercise of the power and a valid order of blacklisting made pursuant thereto. The order itself being reasonable, fair and proportionate to the gravity of the offence is similarly examinable by a writ court. The legal position on the subject is settled by a long line of decisions rendered by this Court starting with Erusian Equipment & Chemicals Ltd. v. State of W.B. [ (1975) 1 SCC 70 ] where this Court declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the authority passing any such order was required to give a fair hearing before passing an order blacklisting a certain entity. This Court observed: “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.” 8. The petitioner and M/s SIF Pvt. Ltd. are separate legal entities. The fact that the directors of the two companies are the same does not make any difference. They still are separate legal entities. 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.” 8. The petitioner and M/s SIF Pvt. Ltd. are separate legal entities. The fact that the directors of the two companies are the same does not make any difference. They still are separate legal entities. Whether the corporate veil ought to be lifted or not is a different matter altogether. We do not suggest that in cases of blacklisting the corporate veil can never be lifted. If, for instance the purpose of incorporating a separate legal entity is to circumvent an order of blacklisting even in anticipation, it may well be possible for the party inviting tenders to lift the corporate veil and avoid such circumvention. That will, however, be on account of the incorporation being founded in deceit and fraudulent. The existence of common directors may even warrant the lifting of the corporate veil in an action for winding up the companies on the ground that the company incorporated under the Companies Act, 1956 is nothing but a glorified partnership. That too is a different matter. However, the mere fact that the same persons promote/incorporate different companies would not entitle a party inviting tenders to paint each of them with the same brush by deeming the associate or sister concern to be blacklisted merely on account of one of the group companies being blacklisted. Such a view would have disastrous consequences upon group companies especially upon larger groups. There is no warrant for deeming all the companies in a group to be blacklisted on account of one of the group companies being blacklisted. 9. Parties are entitled to arrange their business affair in a manner permissible in law. One of the methods is by incorporating different companies. A web of companies is not unknown to corporate law and the corporate world often resorts to the same for a variety of reasons. The incorporation of separate legal entities even by the same promoters does not necessarily imply a fraudulent intention. That being so, it follows that the blacklisting of one company does not lead to the blacklisting of the associate or sister companies however closely related they may be. In the present case, for instance M/s SIF Pvt. Ltd. was blacklisted on account of its failure to provide the necessary staff. That being so, it follows that the blacklisting of one company does not lead to the blacklisting of the associate or sister companies however closely related they may be. In the present case, for instance M/s SIF Pvt. Ltd. was blacklisted on account of its failure to provide the necessary staff. The nature of the contract between the petitioner and respondent No. 1 is different from the contract between M/s SIF Pvt. Ltd. and respondent No. 1. The financial position of the petitioner and M/s SIF Pvt. Ltd. may be entirely different. Assuming that the breach by M/s SIF Pvt. Ltd. was on account of financial stringency, it does not necessarily follow that there would be a breach for that reason or for any other reason by the petitioner. 10. Having said that we wish to make it clear that we do not suggest that there is no case for blacklisting the petitioner on account of M/s SIF Pvt. Ltd. being blacklisted by lifting the corporate veil. However, it would be necessary to consider all the facts and circumstances of the case before doing so. This can only be done by affording the petitioner an opportunity of showing cause to a proposed blacklisting. A group company cannot be deemed to be blacklisted on account of one of the sister companies in the group being blacklisted. 11. We appreciate that there are time constraints when inviting tenders and bids are submitted by a company whose sister or associate concern has been blacklisted and when a decision is taken as to whether that blacklisting ought to be visited upon the company that submits the bid. However, that must be done for otherwise it would be unfair in the extreme to bidders who are otherwise eligible and competent. The failure to follow the law prior to blacklisting a party has serious and unfair adverse effects upon group and sister companies. 12. In these circumstances, in our opinion, the law relating to blacklisting would apply equally where the party inviting bids intends blacklisting or debarring a company on the ground that its associate or group company has been blacklisted. In such cases, the party inviting tenders must afford the bidding company an opportunity of being heard before debarring it. 13. 12. In these circumstances, in our opinion, the law relating to blacklisting would apply equally where the party inviting bids intends blacklisting or debarring a company on the ground that its associate or group company has been blacklisted. In such cases, the party inviting tenders must afford the bidding company an opportunity of being heard before debarring it. 13. We would restrict these observations to cases where the blacklisted party and/or its sister/associate concern is a separate legal entity such as a company incorporated by or under a statute. We are not concerned for instance with cases where both the parties are partnership firms. Different considerations may well apply for a partnership firm is not a separate legal entity, but only a compendious method of referring to the partners collectively. We express no opinion about such cases. 14. In the present case, admittedly a show cause notice has not been given and the petitioner has not been afforded an opportunity of being heard. In fact, the 1st respondent has considered the petitioner to be automatically blacklisted on account of its associate company-M/s SIF Pvt. Ltd. – having been blacklisted. The order blacklisting the petitioner is, therefore, quashed and set aside with liberty to the 1st respondent to consider the case of blacklisting only after following the procedure prescribed by law for the same. 15. It is not possible, however, to set the clock back in the present case. The petitioner has challenged the award of the contract to respondent No. 2 – M/s Oscar Security and Fire Service. We refer to the minutes of the meeting held on 08.09.2016 at which the 1st respondent came to the conclusion that the petitioner must also be considered to be debarred. Those minutes were not communicated to the petitioner. However, on 04.10.2016, respondent No. 1 uploaded the results of the technical bids. The notice expressly stated that the petitioner’s bid was not admitted, meaning thereby that it was not responsive. No reasons are furnished for the same. For that reason also the order of blacklisting or deemed blacklisting is liable to be quashed. However, the petitioner did not challenge the same immediately as it ought to have. Thereafter, the financial bids were opened and evaluated and ultimately the work was awarded in favour of respondent No. 2. No reasons are furnished for the same. For that reason also the order of blacklisting or deemed blacklisting is liable to be quashed. However, the petitioner did not challenge the same immediately as it ought to have. Thereafter, the financial bids were opened and evaluated and ultimately the work was awarded in favour of respondent No. 2. Respondent No. 2 was not responsible for any error in the process leading to the petitioner being blacklisted or considered to be blacklisted. Respondent No. 2 was, therefore, perfectly justified in making all necessary arrangements for executing the work. In the written statement filed in Court today, respondent No. 2 has furnished particulars of the arrangements made and the amounts spent to execute the work. The writ petition was filed only on 30.01.2017 and respondent No. 2 was served with the same only on 04.02.2017. There is, thus, a delay of four months. This is not a case of mere delay. On account of the delay, respondent No. 2 has altered its position to its detriment irretrievably. 16. The contract is for a period of four years. The amount of difference is not such as would warrant interference despite these facts. 17. In these circumstances, the petition is disposed of by quashing and setting aside the 1st respondent’s decision to blacklist or consider the petitioner as having been blacklisted. The 1st respondent is at liberty to adopt proceedings in accordance with law for the purpose of blacklisting, if it so desires. However, no reliefs are granted in this petition cancelling the work awarded to respondent No. 2. The petitioner is at liberty to adopt appropriate proceedings for damages that it may have suffered.