ORDER : 1. Though the matter comes up on misc. application filed by the petitioner for seeking interim relief of participating in tender process, however, this Court with the consent of learned counsel for the parties, dispose of the present writ petition finally. 2. The instant writ petition has been filed by the petitioner-firm challenging the order dated 24.04.2012 (Annex.16), whereby, the respondents have passed an order of (i) blacklisting the petitioner-firm for a term of three years, (ii) The petitioner-firm has been banned from entering into any business of the respondents, and (iii) The earnest money of the petitioner-firm has been forfeited. 3. Brief facts, as narrated, in the present writ petition are that the petitioner-firm had participated in the tender process for supply of packing/processing material and other consumable items on Rate Contract basis for the respondents in pursuance of tender floated by the respondents on 21.05.2010. 4. The petitioner is said to be a successful bidder in the tender process and it was awarded the contract. The petitioner has pleaded that after fulfilling tender conditions and supplying all materials to the respondents, due payment was made to the petitioner-firm and further security amount was also refunded. 5. The petitioner alleged that a show cause notice dated 16.01.2012 was issued to the petitioner-firm, whereby the respondents had informed the petitioner-firm that Jute Bags with 40 Kg. capacity supplied to the respondents, had failed in the test report and the respondents-Corporation on supply of below specified sub-standard goods, which resulted into substantial loss and as such the petitioner-firm was given a show cause notice, as why the petitioner-firm may not be blacklisted. 6. The petitioner has pleaded that after receipt of said show cause notice, reply was submitted on 21.03.2021, where request was made to supply test report and any complaint received by the respondents against the petitioner. 7. The petitioner has pleaded that the respondents vide letter dated 21.01.2012, supplied the test reports to the petitioner-firm and after the test reports were perused by the petitioner-firm, it was revealed that the tender documents which had given specifications about the Jute Bags to be supplied, have not met the prescribed standard quality of the product supplied by the petitioner and as such on assumption and presumption, a show cause notice was given to the petitioner-firm. 8. 8. The petitioner has pleaded that the respondents after entering into some correspondence finally passed the impugned order. 10. Learned counsel for the petitioner has submitted that the entire genesis of issuing the show cause notice was on account of involvement of the petitioner-firm in litigation, wherein the petitioner-firm was questioning the liability of another bidder, who was found successful in the subsequent tender and as such the petitioner firm had also filed Writ Petition No.11977/2011 before this Court and the respondents felt annoyed with the action taken by the petitioner-firm and accordingly passed the arbitrary order. 11. Learned counsel for the petitioner has made following submissions:- 1. The impugned order dated 24.04.2012 has been passed against the principal of natural justice as the petitioner-firm was not specifically informed about the permanent debarment and further there was no notice specifying the reason of debarring the petitioner-firm permanently. 2. The action of the respondents by forfeiting the earnest money was not warranted as none of the tender document/conditions prescribed that such order of forfeiting the earnest money could be passed by the respondents. 3. The General Terms & Conditions of the Contract provided that security deposit was to be made by the successful bidder and security deposit was to be refunded after successful completion of contract period and the petitioner-firm was released its security deposit and thereafter the only clause available with the respondents was imposing penalty and as such the respondents have acted contrary to the conditions of the tender documents. 4. The tender conditions specifically provided in Clause 14 about Terms of Payment and as per sub-clause (5) of Clause 14, the term of payment in respect of the petitioner-firm was fully complied with as the full payment was already made and thereafter the respondents could not have imposed any penalty on the petitioner-firm. 5. The principal of natural justice has been violated as the respondents have acted in arbitrary manner and the very basis of passing the impugned order was never communicated to the petitioner and the petitioner was not confronted with the material on which the respondents placed reliance:- Learned counsel for the petitioner has placed reliance on a judgment passed by the Apex Court in Civil Appeal No.9417/2019 (M/s. Daffodills Pharmaceuticals Ltd. & Anr. Vs. State of U.P. & Anr.) reported in 2020 (1) SCJ 780 12. Vs. State of U.P. & Anr.) reported in 2020 (1) SCJ 780 12. Learned counsel on the strength of the said judgment submitted that if the permanent ban or banning a firm permanently is imposed by the State Authorities, the same has to be termed as disproportionate and further the Courts have frowned upon such arbitrary action of the State Authorities. 13. Per contra learned counsel for the respondents submitted that the respondents have not committed any illegality in passing the order. 14. Learned counsel for the respondents Mr.Dinesh Yadav submitted that the petitioner-firm was found lacking in performance of its contract, sub-standard material was supplied and as such after giving proper show cause notice, the respondents took action of black-listing the petitioner-firm. 15. Learned counsel for the respondents further submitted that as per the General Financial and Accounting Rules and in particular Rule 72 provides provisions for “Standardized Copy for Suppliers” and as per Appendix 3, the conditions were considered by the respondents before taking action of black-listing the petitioner-firm. 16. Learned counsel for the respondents, on the strength of clause contained in Appendix 3 of General Financial and Accounting Rules, submitted that the Authorities were within its domain to ban the petitioner-firm permanently as performance of the petitioner-firm was not up to mark as per terms and conditions. 17. Learned counsel for the respondents submitted that the ban which has been imposed on the petitioner-firm was due to carelessness committed by the petitioner-firm in performing its duty and as such no error has been committed by the Authorities while taking decision of black-listing the petitioner-firm and further depriving it on a permanent basis. 18. Learned counsel for the respondents has placed reliance on a judgment of the Apex Court in the case of Grosons Pharmaceuticals (P) Ltd. and Anr. Vs. State of U.P. and Ors. reported in (2001) 8 SCC 604 . 19. I have heard the submissions made by learned counsel for the parties and perused the material available on record. 20. This Court is primarily concerned with the issue of passing the impugned order without considering the relevant facts and communicating the same to the petitioner-firm and further whether the Authorities was within its domain to pass an order of permanent ban on the petitioner-firm. 21. 20. This Court is primarily concerned with the issue of passing the impugned order without considering the relevant facts and communicating the same to the petitioner-firm and further whether the Authorities was within its domain to pass an order of permanent ban on the petitioner-firm. 21. This Court finds that the show cause notice, which was issued to the petitioner-firm, had only mentioned about blacklisting the petitioner-firm for a term of three years on account of allegedly supplying sub-standard material. 22. This Court finds that there is no show cause notice or any notice to the petitioner, whereby, the petitioner has been communicated that the respondents intended to ban the petitioner-firm for indefinite period. 23. This Court finds that if the respondents had intended to ban the petitioner-firm for indefinite period, assuming the said power be available with them, however, notice to the same effect was required to be given to the petitioner-firm. 24. This Court finds that the respondents while issuing the show cause notice had only object for black-listing the petitioner-firm for a term of 3 years and later on while passing the impugned order, they decided that the petitioner-firm should be banned for all times to come, the said action of the respondents cannot be inconsonance with law. 25. This Court further finds that the tender documents which had been issued by the respondents, nowhere provided that blacklisting can be done by the respondents even if any of the clauses of the General Financial and Accounting Rules was violated. 26. This Court finds that the power of black-listing if has to be exercised, requirement of law is to communicate the party concerned about the lapses which have been committed or violation of tender condition in a particular manner and thereafter action of black-listing can be taken by the Authorities. 27. This Court is nowhere holding that power of black-listing cannot be exercised by any public authority, however, the safeguards which have been provided, must be made available to defaulting party and thereafter, the Authorities can take action of the black-listing. 28. This Court has also seen the conditions, which have been imposed by the respondents on the petitioner-firm that it should be banned for all times to come and such practice of the respondents has been found contrary to law by the Apex Court as well as by the High Courts. 29. 28. This Court has also seen the conditions, which have been imposed by the respondents on the petitioner-firm that it should be banned for all times to come and such practice of the respondents has been found contrary to law by the Apex Court as well as by the High Courts. 29. This Court finds that the Apex Court in the case of UMC Technologies Private Limited Vs. Food Corporation of India and Anr. reported in AIR 2021 SCC 166 has reiterated the law that if the notice is completely silent about blacklisting then such action is bad in eye of law. 30. The reliance placed by learned counsel for the respondents-Mr.Dinesh Yadav in the case of Grosons Pharmaceuticals P Ltd. and Another Vs. State of U.P. and Ors. (supra), this Court finds that the issue before the Apex Court was with respect to non-supply of material which formed the basis of charges contained in the show cause notice and the Apex Court found that there was no violation of principal of natural justice, if the material was not supplied to the contractor concerned. 31. This Court finds that the said judgment is of little assistance to the learned counsel for the respondents as in the present facts of the case, the petitioner has not been demanding the material on what basis the Authorities have reached to the conclusion. 32. This Court finds that the Apex Court in the case of M/s. Daffodills Pharmaceuticals Ltd. & Anr. Vs. State of U.P. & Anr. (supra) has reiterated the principle of black-listing the firm and further it has been found that if the black-listing is for indefinite duration, the said condition is far more disproportionate than a black-listing order. 33. This Court also finds that the Apex Court recently in the case of State of Odisha and Ors. Vs. Panda Infraproject Limited reported in 2022 (4) SCC 393 has reiterated the principle of law that the black-listing permanently is too harsh a punishment and as such the Apex Court has quashed the order of the permanent ban or black-listing the firm. 34. This Court, considering the law laid down by the Apex Court and present facts of the case, finds that the Authorities were not justified in issuing the impugned order. 35. 34. This Court, considering the law laid down by the Apex Court and present facts of the case, finds that the Authorities were not justified in issuing the impugned order. 35. The submission of learned counsel for the respondents Mr.Dinesh Yadav submitted that General Financial and Accounting Rules and in particular Rule 72 provides provisions for “Standardized Copy for Suppliers” and accordingly appendix 3 provides banning of a firm for a specific period and even for indefinite term, if required, this Court finds that that even if General Financial and Accounting Rules gives power to a procuring entity to ban the petitioner-firm for a permanent period, the said clause runs contrary to the law laid down by this Court as well as by the Apex Court and as such this Court finds that only by taking recourse to the General Financial and Accounting Rules, the respondents cannot justify its action that they were within their domain to pass an order of banning the petitioner-firm on a permanent basis. 36. The submission of learned counsel for the respondents that the petitioner-firm was very well aware about the General Financial and Accounting Rules and they themselves have pleaded in their writ petition about applicability of these rules, suffice it to say by this Court that the law which has been propounded by the Apex Court is required to be followed and any circular or Rules, will not have any force and the Courts would be required to consider whether the Authorities have acted as per law and whether their action is arbitrary or not. 37. This Court finds that the order is not sustainable in the eye of law and the same is accordingly quashed and set aside. 38. Accordingly, the writ petition stands allowed.