ORDER : The present case is taken up through video conferencing. 2. The learned counsel for the petitioner while making argument has confined the prayer in the present writ petition to the extent of quashing and setting aside the order as contained in memo no. 598 dated 11.04.2017 issued under the signature of the Deputy Inspector General of Police (Budget), Jharkhand Ranchi (the respondent no. 5) whereby the petitioner-company has been blacklisted permanently without following the principles of natural justice. 3. The factual background of the case as stated in the writ petition is that the respondent no. 5 invited quotation for Group Insurance coverage for various police personnel in the State of Jharkhand for the period of 2016-17. Altogether four Nationalized Insurance Companies participated in the said tender process and one broker namely M/s Microsec Brokers Pvt. Ltd. also submitted its quotation. The said broker however participated in the tender without the express written mandate of the Director General of Police, Jharkhand (the respondent no.2) as was required in compliance of the Gazette of India, Extraordinary, No. 230 dated 17.10.2002 of the Insurance Regulatory and Development Authority of India (IRDAI). The petitioner’s corporate office situated at Kolkata discovered misrepresentation on the part of the said broker and accordingly withdrew its reference of quotation given to the broker by mentioning that as per information furnished to them by the broker in regard to the proposal for Gr.P.A. Policy based on which the petitioner’s corporate office situated at Kolkata had quoted the Capital Sum Insured for the risk, was not correct and the same was duly communicated to the office of the respondent no. 5 vide letter dated 27.03.2017. The order of withdrawal of the quote was also communicated to the office of the respondent no. 5 by the petitioner company vide its letter dated 28.03.2017. However, the respondent no. 5, by reasons of its Office Order contained in memo no. 598 dated 11.04.2017, blacklisted the petitioner-company permanently from participating in any future bid of the respondents alleging that the respondents have suffered inconvenience due to withdrawal of the bid by the petitioner. 4. 5 by the petitioner company vide its letter dated 28.03.2017. However, the respondent no. 5, by reasons of its Office Order contained in memo no. 598 dated 11.04.2017, blacklisted the petitioner-company permanently from participating in any future bid of the respondents alleging that the respondents have suffered inconvenience due to withdrawal of the bid by the petitioner. 4. The learned counsel for the petitioner submits that by way of several representations, the petitioner’s Divisional Office, Kolkata tried to convince the respondents that it had not participated in the bid and it was the broker who had misrepresented it in getting reference of quotation without the express written mandate of the person/body seeking Insurance Coverage and also got permission to participate in the said tender process, but the respondents never acted on the same. It is further submitted that several representations bringing the correct facts have been filed before the respondent authorities, but they are bent upon not to allow the petitioner company to participate in the future tender process for the reasons best known to them. The decision of the respondent no. 5 in not allowing the petitioner company to participate in the future tender process for indefinite period is not justified as no tenderer can be blacklisted forever. Moreover, no opportunity of hearing was given to the petitioner prior to passing of the impugned order. The action of the respondent no. 5 in blacklisting/debarring the petitioner company for an indefinite period is arbitrarty, illegal and not at all justified either in eyes of law or in view of the facts and circumstances of the case. 5. Learned AC to Senior S.C.III appearing on behalf of the respondents submits that United India Insurance Company Limited Kolkata Branch and United India Insurance Company Limited, Ranchi Branch participated in the said invitation of tender in which Ranchi Branch had quoted Rs.22,50,000/- as capital sum insured whereas Kolkata Branch had quoted Rs.31,00,000/- as the capital sum insured and on the basis of the highest bid, the work was allotted to Kolkata Branch of United India Insurance Company Limited. However, the Kolkata Branch withdrew its quotation and due to the said withdrawal, the police headquarter faced lot of inconveniences. However, the Kolkata Branch withdrew its quotation and due to the said withdrawal, the police headquarter faced lot of inconveniences. Resultantly, re-tender was called and the Group Insurance of the police personnel of the State of Jharkhand could not be done in time and therefore the petitioner has been put under blacklist and debarred from participating in any future tender to be issued by the respondent authorities. 6. The petitioner has challenged the order of blacklisting on the ground that the same has been passed in violation of the principles of natural justice. The respondents, in their counter affidavit have also not stated that before passing the order of blacklisting, any show-cause notice was issued to the petitioner. 7. In the case of “Kulja Industries Ltd. Vs. Chief General Manager, Western Telecom Project BSNL and another” reported in (2014) 14 SCC 731 , the Hon’ble Supreme Court has held as under:- “17. That apart, the power to blacklist a contractor whether the contract be for supply of material or equipment or for the execution of any other work whatsoever is in our opinion inherent in the party allotting the contract. There is no need for any such power being specifically conferred by statute or reserved by contractor. That is because “blacklisting” simply signifies a business decision by which the party affected by the breach decides not to enter into any contractual relationship with the party committing the breach. Between two private parties the right to take any such decision is absolute and untrammelled by any constraints whatsoever. 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. 18. 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. 18. 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. 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: (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. 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.” Subsequent decisions of this Court in Southern Painters v. Fertilizers & Chemicals Travancore Ltd.; Patel Engg. Ltd. v. Union of India; B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd.; Joseph Vilangandan v. Executive Engineer (PWD) among others have followed the ratio of that decision and applied the principle of audi alteram partem to the process that may eventually culminate in the blacklisting of a contractor. 19. Even the second facet of the scrutiny which the blacklisting order must suffer is no longer res integra. The decisions of this Court in Radha Krishna Agarwal v. State of Bihar; E.P. Royappa v. State of T.N.; Maneka Gandhi v. Union of India; Ajay Hasia v. Khalid Mujib Sehravardi; Ramana Dayaram Shetty v. International Airport Authority of India and Dwarka Das Marfatia and Sons v. Port of Bombay have ruled against arbitrariness and discrimination in every matter that is subject to judicial review before a writ court exercising powers under Article 226 or Article 32 of the Constitution. 20. 20. It is also well settled that even though the right of the writ petitioner is in the nature of a contractual right, the manner, the method and the motive behind the decision of the authority whether or not to enter into a contract is subject to judicial review on the touchstone of fairness, relevance, natural justice, non-discrimination, equality and proportionality. All these considerations that go to determine whether the action is sustainable in law have been sanctified by judicial pronouncements of this Court and are of seminal importance in a system that is committed to the rule of law. We do not consider it necessary to burden this judgment by a copious reference to the decisions on the subject. A reference to the following passage from the decision of this Court in Mahabir Auto Stores v. Indian Oil Corpn. should, in our view, suffice: (SCC pp. 760-61, para 12) “12. It is well settled that every action of the State or an instrumentality of the State in exercise of its executive power, must be informed by reason. In appropriate cases, actions uninformed by reason may be questioned as arbitrary in proceedings under Article 226 or Article 32 of the Constitution. Reliance in this connection may be placed on the observations of this Court in Radha Krishna Agarwal v. State of Bihar. … In case any right conferred on the citizens which is sought to be interfered, such action is subject to Article 14 of the Constitution, and must be reasonable and can be taken only upon lawful and relevant grounds of public interest. Where there is arbitrariness in State action of this type of entering or not entering into contracts, Article 14 springs up and judicial review strikes such an action down. Every action of the State executive authority must be subject to rule of law and must be informed by reason. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. So, whatever be the activity of the public authority, in such monopoly or semi-monopoly dealings, it should meet the test of Article 14 of the Constitution. If a governmental action even in the matters of entering or not entering into contracts, fails to satisfy the test of reasonableness, the same would be unreasonable. … It appears to us that rule of reason and rule against arbitrariness and discrimination, rules of fair play and natural justice are part of the rule of law applicable in situation or action by State instrumentality in dealing with citizens in a situation like the present one. Even though the rights of the citizens are in the nature of contractual rights, the manner, the method and motive of a decision of entering or not entering into a contract, are subject to judicial review on the touchstone of relevance and reasonableness, fair play, natural justice, equality and non-discrimination in the type of the transactions and nature of the dealing as in the present case.” 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.” 8. In the case of “Gorkha Security Services Vs. Govt. (NCT of Delhi) and another”, reported in (2014) 9 SCC 105 , the Hon’ble Supreme Court has held as under :- “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. 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. 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. 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. 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. 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 therefor. 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. 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. 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 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. 9. In the aforesaid judgments, 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, in a situation where an order of blacklisting has been passed by the State or any of its instrumentalities, such order 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. However, in a situation where an order of blacklisting has been passed by the State or any of its instrumentalities, such order 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/government agencies 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. Issuance of show cause notice must not be mere formality, rather the same should specifically mention the grounds on which the department necessitates the action and also the proposed action so that the person aggrieved may explain the circumstances in his defence properly. 10. On perusal of the impugned order contained in Memo No. 598 dated 11.04.2017, it appears that the order of blacklisting has been passed suo motu without providing any opportunity of hearing to the petitioner. Though the respondents tried to justify the said order, yet have failed to deny/controvert the specific averment of the petitioner that the impugned order has been passed without serving any show cause notice to it. It is settled position of law that before passing the order of blacklisting, it is sine-qua-non to hear the alleged delinquent so as to satisfy whether the default was intentional or was caused under the situation beyond one’s control. In the present case, the respondent no. 5 has not called upon the petitioner to explain the alleged conduct. The State or its instrumentality while dealing with any entity is required to exercise the said discretion in fair and equitable manner. Moreover, the impugned order of blacklisting has been passed without specifying any duration and thus appears to be permanent which is in violation of the law laid down in the case of Kulja Industries Limited (supra.). 11. For the aforesaid reason, I am of the view that the order dated 11.04.2017 passed by the respondent no. Moreover, the impugned order of blacklisting has been passed without specifying any duration and thus appears to be permanent which is in violation of the law laid down in the case of Kulja Industries Limited (supra.). 11. For the aforesaid reason, I am of the view that the order dated 11.04.2017 passed by the respondent no. 5 in blacklisting the petitioner vitiates in law as the same has been passed in violation of the principles of natural justice i.e., without affording any opportunity to the petitioner to explain the allegations levelled against it. 12. In view of the aforesaid factual and legal position, the impugned order dated 11.04.2017 contained in memo no. 598 issued under the signature of the respondent no. 5 to the extent of blacklisting the petitioner for an indefinite period is hereby quashed. However, The respondent authorities will be at liberty to proceed afresh against the petitioner for its blacklisting and in such eventuality, they are required to pass a reasoned order in accordance with law after providing due opportunity of hearing to the representative of the petitioner to explain its case. Since the petitioner has not pressed rest of the prayers challenging the other actions taken against it by the respondent authorities in terms with the agreement, there is no need to make any comment on the same. The parties are also at liberty to approach the appropriate court of law for redressal of their other grievances. 13. The writ petition is disposed of with the aforesaid observations. 14. I.A. No. 4326 of 2019 also stands disposed of accordingly.