ORDER : 1. The present writ petition has been filed for quashing the order contained in Letter No. 776.CE(T)/JUSNL dated 10.08.2016 issued under the signature of the respondent no. 2 whereby the said authority has debarred the petitioner from participating in future tender to be floated by the respondent no. 1. 2. The learned Senior Counsel for the petitioner submits that pursuant to NIT No. 121/PR/JUSNL/2015-16, the petitioner was awarded the work of Design, Engineering, Supply, Erection, Testing and Commissioning of 220/132/33kV (2x150+2x50) MVA Grid Sub-Station (in short ‘GSS’) at Jaina More, Bokaro. The site was not free from encumbrances. There were 140 trees and bushes, 12 electrical distribution feeder line poles, 3 hand pumps, 2 water wells as also 11 offices/residential quarters and abandoned civil storage structures. The petitioner vide letter dated 11.04.2016 requested for providing the site free from all encumbrances, however the respondent no. 2 did not take care to remove the obstructions in execution of the work which caused delay in completion of the work. However, the respondent no. 2 vide impugned order dated 10.08.2016 debarred the petitioner from participating in future tenders. The petitioner has challenged the order of debarment on the ground that there is no specific guideline laid down in the general terms and conditions of the contract for debarring the petitioner from participating in the future tenders. It is further submitted that the delay in execution of work occasioned only due to the fault of the respondents in handing over the site free from all encumbrances. It is also submitted that no show cause notice has been issued to the petitioner for the proposed action of debarment. The learned Senior Counsel for the petitioner puts reliance upon the judgment of the Hon’ble Supreme Court rendered in the case of Gorkha Security Services Vs. Government (NCT of Delhi) and others reported in (2014) 9 SCC 105 and Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project, Bharat Sanchar Nigam Ltd. and others reported in (2014) 14 SCC 731 . 3. Per contra, the learned Senior Counsel for the respondent-JUSNL submits that in spite of repeated notices to the petitioner, it delayed the completion of work. A committee was constituted to assess the slow progress of work vide office order no. Chief General Manager, Western Telecom Project, Bharat Sanchar Nigam Ltd. and others reported in (2014) 14 SCC 731 . 3. Per contra, the learned Senior Counsel for the respondent-JUSNL submits that in spite of repeated notices to the petitioner, it delayed the completion of work. A committee was constituted to assess the slow progress of work vide office order no. 1280 dated 18.07.2016 and the committee submitted the report on 08.08.2016 stating that the cause of delay is due to poor planning of the entire work by the petitioner, lack of adequate experience in handling such project and lack of positive approach by the petitioner to handle such turn-key project. It was further reported that the hurdle of cutting of trees and demolishing of residential buildings had affected the civil work in 220 KV S/Y but not in 33 KV and 132 KV S/Y area and thus the same did not hamper the overall progress of the work, rather only some parts of the total work. 4. Though both the parties have raised several allegations and counter allegations against each other for the delay caused in execution of work, there is no reason to enter into such factual disputes which cannot be entertained in writ jurisdiction of this Court. 5. The Hon’ble Supreme Court in the case of Kulja Industries case (supra) has held as follows: “25. Suffice it to say that “debarment” is recognized and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the “debarment” is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor.” 6. In the aforesaid case, it has been specifically held that the debarment can never be permanent. However, in the present case, the period of debarment has not been specified in the impugned letter. It has merely been mentioned that the same will be effective till further notice. In the aforesaid case, it has been specifically held that the debarment can never be permanent. However, in the present case, the period of debarment has not been specified in the impugned letter. It has merely been mentioned that the same will be effective till further notice. The relevant part of the said letter dated 10.08.2016 is quoted here-in-below:- “In view of above, and after considering all the facts, it has been decided to debar your firm i.e M/s Technofab Engineering-EMC Joint Venture and any other firm(s) directly or indirectly associated with your firm to participate in any of the tenders floated by JUSNL, and award of any new work till further notice. The above decision has been taken to protect the interests of JUSNL, however this decision will be further reviewed on the basis of the progress of the work allotted to you by LOI No. 104 dated 01.04.2016 and P.O No. 15 & W.O No. 04 both dated 17.05.2016. This decision comes into effect immediately.” 7. Further, in the case of Gorkha Security Services (supra), the Hon’ble Supreme Court has held as follows:- “16. It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as “civil death” of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts. 17. Way back in the year 1975, this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B., highlighted the necessity of giving an opportunity to such a person by serving a show-cause notice thereby giving him opportunity to meet the allegations which were in the mind of the authority contemplating blacklisting of such a person. This is clear from the reading of paras 12 and 20 of the said judgment. Necessitating this requirement, the Court observed thus: (SCC pp. 74-75) “12. This is clear from the reading of paras 12 and 20 of the said judgment. Necessitating this requirement, the Court observed thus: (SCC pp. 74-75) “12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. * * * 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.” 18. Again, in Raghunath Thakur v. State of Bihar the aforesaid principle was reiterated in the following manner: (SCC p. 230, para 4) “4. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Indisputably, no notice had been given to the appellant of the proposal of blacklisting the appellant. It was contended on behalf of the State Government that there was no requirement in the rule of giving any prior notice before blacklisting any person. Insofar as the contention that there is no requirement specifically of giving any notice is concerned, the respondent is right. But it is an implied principle of the rule of law that any order having civil consequence should be passed only after following the principles of natural justice. It has to be realised that blacklisting any person in respect of business ventures has civil consequence for the future business of the person concerned in any event. Even if the rules do not express so, it is an elementary principle of natural justice that parties affected by any order should have right of being heard and making representations against the order. In that view of the matter, the last portion of the order insofar as it directs blacklisting of the appellant in respect of future contracts, cannot be sustained in law. In the premises, that portion of the order directing that the appellant be placed in the blacklist in respect of future contracts under the Collector is set aside. So far as the cancellation of the bid of the appellant is concerned, that is not affected. This order will, however, not prevent the State Government or the appropriate authorities from taking any future steps for blacklisting the appellant if the Government is so entitled to do in accordance with law i.e. after giving the appellant due notice and an opportunity of making representation. After hearing the appellant, the State Government will be at liberty to pass any order in accordance with law indicating the reasons there for. We, however, make it quite clear that we are not expressing any opinion on the correctness or otherwise of the allegations made against the appellant. The appeal is thus disposed of.” 19. Recently, in Patel Engg. Ltd. v. Union of India speaking through one of us (Justice Chelameswar, J.) this Court emphatically reiterated the principle by explaining the same in the following manner: (SCC pp. 262-63, paras 13-15) “13. The concept of ‘blacklisting’ is explained by this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B. as under: (SCC p. 75, para 20) ‘20. Ltd. v. Union of India speaking through one of us (Justice Chelameswar, J.) this Court emphatically reiterated the principle by explaining the same in the following manner: (SCC pp. 262-63, paras 13-15) “13. The concept of ‘blacklisting’ is explained by this Court in Erusian Equipment & Chemicals Ltd. v. State of W.B. as under: (SCC p. 75, para 20) ‘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.’ 14. The nature of the authority of the State to blacklist the persons was considered by this Court in the abovementioned case and took note of the constitutional provision (Article 298), which authorises both the Union of India and the States to make contracts for any purpose and to carry on any trade or business. It also authorises the acquisition, holding and disposal of property. This Court also took note of the fact that the right to make a contract includes the right not to make a contract. By definition, the said right is inherent in every person capable of entering into a contract. However, such a right either to enter or not to enter into a contract with any person is subject to a constitutional obligation to obey the command of Article 14. Though nobody has any right to compel the State to enter into a contract, everybody has a right to be treated equally when the State seeks to establish contractual relationships. The effect of excluding a person from entering into a contractual relationship with the State would be to deprive such person to be treated equally with those, who are also engaged in similar activity. 15. It follows from the above judgment in Erusian Equipment case that the decision of the State or its instrumentalities not to deal with certain persons or class of persons on account of the undesirability of entering into the contractual relationship with such persons is called blacklisting. The State can decline to enter into a contractual relationship with a person or a class of persons for a legitimate purpose. The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such power. The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such power. The only legal limitation upon the exercise of such an authority is that the State is to act fairly and rationally without in any way being arbitrary—thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors.” 20. Thus, there is no dispute about the requirement of serving show-cause notice. We may also hasten to add that once the show-cause notice is given and opportunity to reply to the show-cause notice is afforded, it is not even necessary to give an oral hearing. The High Court has rightly repudiated the appellant’s attempt in finding foul with the impugned order on this ground. Such a contention was specifically repelled in Patel Engg.” 8. In the aforesaid judgment, the Hon’ble Supreme Court has held that when a contract is entered between two private parties, then in case of any breach by one party, the other party has every right to blacklist the defaulter and such right is unqualified. However, when the order of blacklisting is passed by the State or its instrumentalities, the same is within the realm of power of judicial review of the writ court and the same has to be tested in the touchstone of the principles of natural justice, doctrine of proportionality, reasonableness and fairness. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the government/its instrumentalities for the purposes of gains. Thus, before taking such a harsh decision, the person concerned should be given an opportunity to represent his case before he is put on the blacklist. The show cause notice should not be a mere formality rather the same should specifically mention the grounds on which the department necessitates the proposed action so that the person aggrieved may explain the circumstance properly. 9. The show cause notice should not be a mere formality rather the same should specifically mention the grounds on which the department necessitates the proposed action so that the person aggrieved may explain the circumstance properly. 9. The respondents have tried to justify the issuance of impugned letter by stating that several notices were issued to the petitioner regarding its poor performance, however on perusal of the said notices, it appears that same were not in accordance with the requirement of show cause notice so as to contain the proposed action and the extent thereof for the delay in execution of work. Thus, the impugned letter of debarment is contrary to the law laid down by the Hon’ble Supreme Court in the case of Gorkha Security Services (supra). 10. Under the aforesaid circumstance, the present writ petition is allowed. The impugned letter no. 776.CE(T)/JUSNL dated 10.08.2016 issued by the respondent no. 2 is quashed being contrary to the ratio laid down by the Hon’ble Supreme Court in this regard. However, it is made clear that the observation made in this case will not come in way of the respondents in taking any appropriate action against the petitioner in accordance with law. 11. I.A. No. 885 of 2017 and I.A. No. 4128 of 2017 also stand disposed of.