JUDGMENT : 1. The present writ petition has been filed for quashing the letter dated 27.07.2021 as contained in Ref. No. ECL/GM/MA/CE/21/592 issued under the signature of the Area Engineer (Civil), Mugma Area, Dhanbad-respondent No.4, whereby the petitioner has been banned for two years from being eligible to submit bids in Coal India Limited (in short ‘CIL’) and its subsidiaries as well as its account has been blocked in CIL’s e-tendering portal. 2. Learned counsel for the petitioner submits that the respondent no.4 issued e-tender notice being NIT No.ECL/GM/MA/CE/2021/1502 dated 04.03.2021 for construction work of Hume Pipe Culvert for haul road under Kapasara O.C.P. (hereinafter referred as the said work) and the petitioner submitted its bid for the said work. However, during the tender process, the respondent No.4 issued impugned letter dated 27.07.2021 banning the petitioner for two years from submitting its bids in C.I.L. and its subsidiaries. Earlier the petitioner was awarded the work of civil construction i.e. repair of main drain from Adarsh Colony to culvert including P.C.C. Block Nos.19 to 23 NH(D/S) and ‘B’ type & ‘C’ type quarters at Adarsh Colony under Chapapur after completion of which the job completion certificate dated 8.02.2019 was issued by the respondent no.4. The petitioner submitted the said certificate as well as another credential certificate issued by the Sr. Divisional Engineer (Civil), Maithon Division, D.V.C., Maithon regarding repair of road from Kalipahar More to Sanjay Chowk under CSD, D.V.C., Maithon along with its bid and, therefore, it fulfilled the eligibility criteria as provided under clause 8(A) of the said N.Í.T. Since the petitioner had submitted experience certificates in terms with clause 8(A) of N.I.T., the impugned letter dated 27.07.2021 issued by the respondent No.4 is highly illegal, arbitrary and unconstitutional. 3. It is further submitted that neither show cause notice was issued to the petitioner nor any opportunity of hearing was given to its proprietor prior to imposing punishment of banning it for two years from being eligible to submit bids in CIL and its subsidiaries due to which the petitioner has been put to serious prejudice. It is a settled principle of law that even if there is existence of clause in bid document which mentions the action of blacklisting on failure of compliance of conditions of contract, there is mandatory requirement of issuing prior show cause notice clearly specifying the proposed action to be taken. 4. It is a settled principle of law that even if there is existence of clause in bid document which mentions the action of blacklisting on failure of compliance of conditions of contract, there is mandatory requirement of issuing prior show cause notice clearly specifying the proposed action to be taken. 4. On the contrary, learned counsel for the respondents submits that the petitioner participated in the said bid process and offered bid along with the required documents. Since e-Tender Notice was issued during COVID-19 pandemic period, there was no provision for depositing earnest money or the application money. In view of Clause8(A) of the e-Tender notice, the intending bidder was mandatorily required to have similar work experience as a prime contractor within last 07 (seven) years of the tender notice and should have possessed any of the following (i) one similar completed work costing not less than the amount equal to 80% of the tender value or (ii) two similar completed works each having cost not less than the amount equal to 50% of the tender value or (iii) three similar completed works each having cost not less than the amount equal to 40% of the tender value. The petitioner submitted the aforesaid "Repairing Works Certificate" in support of its "Work Experience Certificate" which was not as per Clause 8(A) of e-Tender Notice. The petitioner was declared L-1 bidder, however, while evaluating its documents by the tender committee, it was seen that the ‘Work Experience Certificates’ submitted by the petitioner failed to fulfil the tender norms. Hence its bid was rejected and it was banned for two years from being eligible to submit bids in CIL and its subsidiaries as per the provision of Clause-13 (e) of e-Tender Notice No.1502 dated 04.03.2021 issued by the respondent no.4. 5. It is also submitted that though the petitioner had full knowledge of Clause-13(e) of the e-Tender notice, it participated in the aforesaid e-Tender Process and, therefore, it cannot raise the issue that opportunity of hearing was not provided prior to issuance of impugned letter dated 27th July, 2021 banning it for two years from being eligible to submit bids in CIL and its Subsidiaries. 6. 6. It is further submitted that Clause-13(e) was incorporated in the NIT to restrict ineligible bidders from participating in the tender process and to accelerate the finalization of tender process as well as for fast completion of the work as per the requirement. The ‘Credential Certificate’ was issued to the petitioner for road repairing work and on verification from the issuing authority i.e. Sr. Divisional Engineer [Civil], Maithon Division, DVC, Maithon, it was reported that the said work did not involve “Construction of Culvert/Hume Pipe Culvert” and hence the same was not considered for the purpose of eligibility of the bidder. While evaluation of another ‘Job Completion Certificate’ submitted by the petitioner, it was also found that the work did not include ‘Construction of Culvert/Hume Pipe Culvert’ rather the same was related to repair of main drain from Adarsh Colony, Chapapur to “culvert”. It would be evident from the bid submission confirmation of the petitioner that only two works experience certificates were furnished in support of its eligibility for the said tender which were of different nature in comparison with the required work experience eligibility criteria as per Clause 8A of the NIT and hence it was rejected and penal action in terms with Clause 13(e) of the e-Tender Notice was taken against the petitioner. 7. Heard learned counsel for the parties and perused the materials available on record. The petitioner is aggrieved with the impugned letter dated 27.07.2021 issued by the respondent no.4 banning it for two years from being eligible to submit bid in CIL and its subsidiaries and blocking its account in CIL e-tendering portal. 8. Thrust of the argument of the learned counsel for the petitioner is that the impugned letter has been issued without serving any show cause notice to the petitioner and without providing any opportunity of hearing to explain the allegation made against it and thus the same suffers from violation of the principles of natural justice and on this score alone the impugned letter is liable to be set aside. 9. Per contra, contention of learned counsel for the respondents is that since the petitioner had full knowledge about Clause-13(e) of the e-Tender Notice, there was no need of issuing any show cause notice before passing the order of banning it for two years from being eligible to submit bids in CIL and its subsidiaries. 10. 9. Per contra, contention of learned counsel for the respondents is that since the petitioner had full knowledge about Clause-13(e) of the e-Tender Notice, there was no need of issuing any show cause notice before passing the order of banning it for two years from being eligible to submit bids in CIL and its subsidiaries. 10. In the case of Kulja Industries Limited Vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited & Others, reported in (2014) 14 SCC 731 , the Hon’ble Supreme Court has held that 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. The freedom to contract or not to contract is unqualified in the case of private parties. However, 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 is 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. Moreover, whether the order itself is reasonable, fair and proportionate to the gravity of the offence, is similarly examinable by a writ court. 11. In the case of Erusian Equipment & Chemicals Ltd. v. State of West Bengal & Another, reported in (1975) 1 SCC 70 , the Hon’ble Supreme Court has held that blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government/its agencies for the purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is required to have an objective satisfaction. Fundamentals of fair play demands that the person concerned should be given an opportunity to represent his case before he is put on the blacklist. 12. In the case of Gorkha Security Services Vs. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is required to have an objective satisfaction. Fundamentals of fair play demands that the person concerned should be given an opportunity to represent his case before he is put on the blacklist. 12. In the case of Gorkha Security Services Vs. Government (NCT of Delhi) & Others, reported (2014) 9 SCC 105 , the Hon’ble Supreme Court has held that the necessity of compliance with the principles of natural justice by giving an opportunity to the person against whom action of blacklisting is sought to be taken, has a valid and solid rationale behind it. Many civil and/or evil consequences follow the order of blacklisting. 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 precludes him from the award of government contracts. 13. It would also be appropriate to refer the judgment rendered by the Hon’ble Supreme Court in the case of UMC Technologies Private Limited Vs. Food Corporation of India and Another, reported in (2021) 2 SCC 551 , para 25 of which reads thus:- “25. The mere existence of a clause in the bid document, which mentions blacklisting as a bar against eligibility, cannot satisfy the mandatory requirement of a clear mention of the proposed action in the show-cause notice. The Corporation's notice is completely silent about blacklisting and as such, it could not have led the appellant to infer that such an action could be taken by the Corporation in pursuance of this notice. Had the Corporation expressed its mind in the show-cause notice to blacklist, the appellant could have filed a suitable reply for the same. Therefore, we are of the opinion that the showcause notice dated 10-4-2018 does not fulfil the requirements of a valid show-cause notice for blacklisting. In our view, the order of blacklisting the appellant clearly traversed beyond the bounds of the show-cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 9-1-2019 cannot be sustained.” 14. Thus, it is now well settled that the power to blacklist is inherent in the party allotting the contract which is unqualified. In our view, the order of blacklisting the appellant clearly traversed beyond the bounds of the show-cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 9-1-2019 cannot be sustained.” 14. Thus, it is now well settled that the power to blacklist is inherent in the party allotting the contract which is unqualified. There is no need for any such power being specifically conferred by the statute or by the terms of contract as the blacklisting is merely a business decision not to enter into contractual relationship with the party committing the breach. However, such decision taken by the Government/its agencies is open to scrutiny on the touchstone of fairness, relevance, natural justice, non-discrimination, equality, reasonableness and proportionality. Serving of show cause notice specifying the grounds on which the action is proposed to be taken is a mandatory requirement so as to enable the noticee to put forth his response before the order of blacklisting/banning is passed, since the blacklisting has not only long lasting civil consequence but it also tarnishes the repute of the blacklisted persons. The issuance of show cause notice cannot be escaped merely on the ground that there is a stipulation of blacklisting in the bid document on violation of any of the terms and conditions of the tender. 15. In the present case, the contention of the petitioner is that no show cause notice was ever served to it prior to issuance of the impugned letter dated 27.7.2021 and the same has not been controverted by the respondents. Thus, in the light of the proposition laid down in the aforesaid judgments, this Court is of the view that the impugned letter dated 27.07.2021 banning the petitioner is vitiated in law on the ground of violation of the principles of natural justice. 16. Learned counsel for the petitioner has also contended that the petitioner had submitted the repairing work certificates in support of its work experience which were in terms with clause 8(A) of the e-Tender notice and as such the respondents have wrongly cancelled the petitioner’s bid as well as have passed the impugned order of its banning for two years. 16. Learned counsel for the petitioner has also contended that the petitioner had submitted the repairing work certificates in support of its work experience which were in terms with clause 8(A) of the e-Tender notice and as such the respondents have wrongly cancelled the petitioner’s bid as well as have passed the impugned order of its banning for two years. This Court is of the view that since the impugned letter dated 27.7.2021 banning the petitioner has failed to satisfy the primary requirement of serving show cause notice prior to issuance of the impugned letter, there is no need to enter into said contention. 17. Considering the aforesaid facts and circumstances, the impugned letter as contained in Ref. No. ECL/GM/MA/CE/21/592 dated 27.07.2021 issued under the signature of the respondent No.4 is hereby quashed. 18. The writ petition is, accordingly, allowed.