JUDGMENT : Sujit Narayan Prasad, J. Prayer 1. This writ petition is under Article 226 of the Constitution of India seeking therein the following reliefs:- “(a) For issuance of an appropriate writ(s) and/or order(s) and/or direction(s) holding and declaring that the impugned Letter Ref. No. ECL/GM/SPM/2025/1-6/144 dated 20/22- 06-2025 (Annexure-27) issued by Respondent No.4 debarring the Petitioner from participating in future tenders of the Respondent No.1 for a period of one year, is illegal, arbitrary and bad in law. (b) For issuance of an appropriate writ(s) and/or order(s) and/or direction(s) directing the Respondents to withdraw and/or revoke and/or cancel the impugned Letter Ref. No. ECL/GM/SPM/2025/1-6/144 dated 20/22-06-2025. (c) For issuance of an appropriate writ(s) and/or order(s) and/or direction(s) to the Respondents, more particularly the Respondent No. 2, 3 and 4 to not to give effect to and/or further effect to the impugned Letter Ref. No. ECL/GM/SPM/2025/1-6/144 dated 20/22-06-2025. (d) For issuance of an ad interim order of injunction restraining the Respondents from giving effect and/or further effect to the impugned Letter Ref. No. ECL/GM/SPM/2025/1-6/144 dated 20/22-06-2025, till the disposal of this writ petition by this Hon'ble Court.” Factual Matrix 2. The brief facts of the case as per the pleading made in the writ petition, which are required to be enumerated, read as under :- It is the case of the petitioner that the Respondent No.3 invited e-tender bearing No. ECL/HQ/CMC/ Transport/NIT/SPM II/2024/5308 dated 04-01-2024 for Loading of Coal by CPL, Crushing of Coal by mobile crusher and transportation of coal by 10 wheelers Tipper of 2.10 M.Te of crushed coal within lead slab of 21-22 km from Coal Depot No.11 of Chitra East OCP to Jamtara Railway Siding, loading of by contractor's pay loader into Railway Wagon etc. for a period of 3 years of the estimated contract value of Rs.66.77 Cr. (including GST @18%). 3. The Petitioner participated in the said Tender by submitting its bid and was declared successful bidder. In accordance with the contract conditions, the Respondent No.5 handed-over site to the Petitioner for installation of 400 TPH Mobile Crusher. 4. for a period of 3 years of the estimated contract value of Rs.66.77 Cr. (including GST @18%). 3. The Petitioner participated in the said Tender by submitting its bid and was declared successful bidder. In accordance with the contract conditions, the Respondent No.5 handed-over site to the Petitioner for installation of 400 TPH Mobile Crusher. 4. Thereafter, the Petitioner vide letter dated 22.04.2024 informed the Respondent No.5 that within 20- meter radius of the site handed over, there is a School building and a Majar, which are creating hindrances in the installation work of the Crusher as per contract conditions and requested the Respondent No.5 to provide them clear site for installation of Mobile Crusher free from any obstruction. The Petitioner, therefore, requested the Respondent No.5 to shift the said infrastructure or provide an alternate site free from such obstructions. 5. The Respondent No.4, thereupon, issued Work Order No. ECL/SPM/GM/W.O./SPM11/1-32/03 Dated 20.04.2024 to the Petitioner for a period of 1095 days (3 years). 6. The Petitioner vide their Letter dated 12.06.2024 bearing No. STA/2024-25/76 inter alia requested the Respondent No. 5 to immediately provide Electricity connection for installation of crusher as per the agreed terms of the contract. 7. The Petitioner again vide letter dated 08.08.2024 and Letter dated 22.08.2024, informed the Respondent No.5 that due to aforesaid hindrances on the site, the installation work of the 400 TPH Crusher could not be installed by them and requested the Respondent No. 5 to provide them clear site free of any hinderance. 8. Considering the genuine hindrance faced by the Petitioner in the installation of the 400 TPH Mobile Crusher, the Respondent No.5 handed over a new site on 18.01.2025 for the installation of the Crusher, which is evident from Letter dated 18.01.2025 by the Respondent No.5. 9. The Petitioner after handing-over of the new site at Damgora, immediately started preparatory work for construction of infrastructure for installation of 400 TPH Crusher by deploying necessary manpower and material at site and accordingly informed the Respondent No. 5 vide Letter dated 14.02.2025. 10. The Petitioner further informed the Respondent No.4 about hindrances in the route provided by the Respondent No. 1 for transporting Coal from Coal Depot No.11 to Jamtara Railway Siding. 11. The Respondent No. 4, accepting hindrances in the route issued a "Supplementary Work Order dated 26.01.2025. The Work Order value is accordingly revised to Rs. 74.97 Cr. 10. The Petitioner further informed the Respondent No.4 about hindrances in the route provided by the Respondent No. 1 for transporting Coal from Coal Depot No.11 to Jamtara Railway Siding. 11. The Respondent No. 4, accepting hindrances in the route issued a "Supplementary Work Order dated 26.01.2025. The Work Order value is accordingly revised to Rs. 74.97 Cr. in place of original value of Rs. 65.95 Cr. 12. The Respondent No. 5 vide letter dated 11.02.2025, requested Petitioner to complete the preliminary work for installation of Crusher. 13. The Respondent No.4 vide Letter dated 26.03.2025 informed the Petitioner that installation of Crusher has not yet been started by the Petitioner which may invite termination of contract and banning of business & imposition of penalty. The said Letter was followed by Letter dated 28.03.2025 by the Respondent No.4 for immediate start of installation of Crusher by the Petitioner. The Respondent No.4 issued yet another Letter dated 30.03.2025 to the Petitioner stating that the Petitioner has not yet completed work of installation of Crusher and has not yet started transportation of Coal. 14. It is the further case of the petitioner that when the process of providing electricity connection was in process by the Respondents, the Respondent No.5 vide Notice dated 08.04.2025 referring to the 2 nd Paragraph of Original Work Order No. No.ECL/SPM/GM/WO/SPM11/1-32/03 dated 20.04.2024 notified the Petitioner that the Work is awarded for a period of 1095 days and the Agency (the Petitioner herein) should have capacity to start work within 90 days from the issued of LOA (LOA dated 29-03-2024 issued prior supplementary work Order dated 26-01-2025) and reach 100% of daily awarded average quantity from the 91 st day of issue of LOA. 15. It was informed to the petitioner that after handing over new site on 18.01.2025 and issuance of supplementary work order on dated 26.01.2025, even after expiry of 80 days from the date of handing over site on 18.01.2025, the work has not been started by the Petitioner. The Petitioner is further notified that for such failure to start work, the Petitioner may be liable for banning of business under Clause 4 "Guidelines of Debarment of firm from Bidding" 16. The Petitioner is further notified that for such failure to start work, the Petitioner may be liable for banning of business under Clause 4 "Guidelines of Debarment of firm from Bidding" 16. To their utter surprise, the Petitioner received the Notice of personal hearing/Show Cause Notice bearing No. ECL/SPM/GM/1-6/22 dated 12.04.2025 from the Respondent No.4 informing the Petitioner that as per the Original Work Order dated 20.04.2024 and Supplementary Work Order dated 26.01.2025, the Petitioner has purportedly not started work till dated i.e. 12.04.2025 which is treated as failure to start work by the petitioner and the Petitioner is liable for banning of business under Clause 4. 17. On 16.04.2025, the Respondent No.4 issued 2nd Notice of Personal Hearing on same grounds. 18. On 18.04.2025, the Petitioner attended Personal Hearing before the Respondent No.4 and inter alia submitted that as per the agreed terms of the contract, for the crushing work, the Respondent is obliged to provide electricity free of cost. The Respondent has not yet supplied Electricity for crusher installation work and/or for running and operation of the crusher for which 440 Volt power supply is required, and hence, there is failure on the part of the Respondent to fulfill first of their reciprocal promises and that there is no failure on the part of the Petitioner and hence, the action of debarring is arbitrary and unwarranted on the facts and in the circumstances of the case. 19. After completion of the Crusher installation work, the petitioner vide its letter dated 16.05.2025 requested the Respondent No. 5 to provide Electric connection for start of crusher which is fully installed and ready for operation. 20. The Respondent No.5 vide letter dated 16.05.2025, informed the Petitioner that one electric transformer is already provided at the site. 21. Upon receipt of letter dated 16.05.2025, the petitioner vide Letter dated 26.05.2025 informed the Respondent No.5 that upon inspection it is found that the installed transformer is 220 Volt which cannot take load for operation of 400 TPH Crusher. For 400 TPH Crusher 440 Volt transformer is required. The Petitioner accordingly requested the Respondent No.5 for installation of 440 Volt transformer and supply of power connection to the Petitioner so that the Petitioner can immediately start the Crusher for crushing of Coal and transportation thereof. 22. For 400 TPH Crusher 440 Volt transformer is required. The Petitioner accordingly requested the Respondent No.5 for installation of 440 Volt transformer and supply of power connection to the Petitioner so that the Petitioner can immediately start the Crusher for crushing of Coal and transportation thereof. 22. The Petitioner vide email dated 28.05.2025 again wrote to the Respondent No. 3 with a copy marked to the Respondent No.5 that for running and operation of 400 TPH Crusher, 440 Volt connection is to be provided by the Respondent. The Petitioner requested the Respondent No.3 to provide requisite electric connection sufficient for running 400 TPH Crusher so that commencement of crushing and transportation work can done within May, 2025 without further delay. 23. The Respondent No.5 vide Letter dated 28.05.2025 informed that the transformer provided at the site was of 440 Volt/440 KVA which was communicated vide Letter No. ECL/SPM/AGT/2025/2391 dated 16.05.2025 but the said 440 Volt Transformer was shifted to Murgabani Village. The Respondent No.5 by the said letter assured the Petitioner that proper transformer with sufficient capacity and voltage will be provided before the actual date of start of crusher. 24. The Respondent No.5 vide letter dated 04.06.2025 informed the Petitioner that the 300 KVA/440 Volt transformer has been installed at the crusher site on 29.05.2025 and the power supply as required has been made available at the location. 25. Thereafter, the Respondent No.5 by the impugned Letter dated 20/22.06.2025 bearing No.ECL/GM/ SPM/2025/1-6/144 arbitrarily held that the Petitioner has purportedly failed to install the Crusher even after lapse of 131 days for reasons of which purportedly substantial quantity of ROM Coal stacked in the Coal Depot, leading to operational bottleneck and significant financial loss to ECL. The responses of the Petitioner to various letter to start Crusher installation work purportedly shows no earnest effort was made by the Petitioner to install the Crusher and without dealing with the contention of the Petitioner by a cryptic and non-speaking Order, arbitrarily debarred the Petitioner from participating in any future tender of the Respondent No.1 for a period of one year from the date of issuance of the said letter. 26. The said Letter dated 20/22.06.2025 bearing No.ECL/GM/ SPM/2025/1-6/144 has been challenged by filing the instant writ petition. 27. 26. The said Letter dated 20/22.06.2025 bearing No.ECL/GM/ SPM/2025/1-6/144 has been challenged by filing the instant writ petition. 27. It is evident from the factual aspect that the Respondent No.5 by the impugned Letter dated 20/22-06- 2025 bearing No.ECL/GM/SPM/2025/1-6/144 debarred the Petitioner from participating in any future tender of the Respondent No.1 purportedly as per Clause 4(iii) and Clause 7 of "Guidelines on debarment of firms from bidding" of e-Tender dated 04-01-2024 (NIT) for a period of one year from the date of issuance of the said letter. 28. The Respondent No.5 by the impugned letter held that the representation during the hearing did not provide any satisfactory justification for prolonged delay. As per the petitioner, the Respondents failed to fulfill the first of their reciprocal promises as they failed to provide electrical connection to the Petitioner in time which led to delay in starting installation and operation of the Crusher and production and transportation of Coal. 29. As per the agreed terms, the Respondents are obliged to provide electricity connection to the Petitioner free of cost for installation and operation of the 400 TPH Crusher installed by the Petitioner. It is evident from Letter dated 16.05.2025 bearing No. ECL/SPM/AGT/2025/2391 of the Respondent No.5 that till 16.05.2025 electricity connection was provided from 350 KVA/220 Volt Transformer only for Primary Work/installation work of Crusher. 30. It is further evident from the Letter No. ECL/SPM/AGT/2025/2423 Dated 04.06.2025 of the Respondent No.5 that the electricity connection from 440 Volt Transformer was provided to the Petitioner for the first time on dated 04.06.2025 while the Petitioner is debarred/black listed vide impugned Letter dated 20/22.06.2025 i.e just after 18 days whereas as per agreed Clause 1.03 of Section III of the e-Tender, the installation and operation of Crusher is to be started from 91 st day. 31. Hence, This Writ Petition. Submission of the learned counsel appearing for the petitioners: 32. Learned counsel appearing for the petitioner has submitted that the impugned order dated 20/22.06.2025 (Annexure-27) debarring the petitioner from participating in future tenders for one year is highly arbitrary and illegal and has been passed without application of mind since even though there is no fault lies at the end of the petitioner in not starting the work, as is being alleged, rather, it is the latches on the part of the respondent but even then the impugned order has been passed. 33. 33. It has been contended that the site although has been made available but as per the contract the electricity supply is also to be provided said to be the proper supply for the purpose of starting the work. But it is the admitted case of the respondent as is evident from the counter affidavit that the electricity which has been supplied for the purpose of starting the work has been admitted to be not proper and that is the reason the proper supply of electricity has been assured to be made available only on 04/6/2025 which itself speaks that the latches lies on the part of the respondent ECL but even then the impugned order has been passed jeopardizing the writ petitioner and by virtue of that the writ petitioner is not in a position to participate in the future tenders. 34. It has been contended that even while issuing the impugned order no show cause notice has been issued as to on what ground the debarment order from participating in the tender process has been passed so as to explain the reason in defence. 35. Learned counsel appearing for the writ petitioner based upon the aforesaid grounds has submitted that it is a fit case where the impugned order needs interference. Submission made by the learned counsel for the Respondent 36. Per contra, Mr. Rajesh Lala, learned counsel for the respondents, has submitted that it is incorrect on the part of the writ petitioner that there is no latches on the part of the writ petitioner, rather, the petitioner has failed to start the work as per the condition stipulated in the contract wherein the work was to be started immediately after providing land and the electricity. 37. It has been contended that the electricity supply was to be provided after the installation of the infrastructure on the site but the installation of the infrastructure has not been made and due to that reason the electricity supply has not been provided. 38. It has been contended that the moment the infrastructure has been created over the site, the electricity supply has been provided. Hence it cannot be said that the respondents are at fault. 39. 38. It has been contended that the moment the infrastructure has been created over the site, the electricity supply has been provided. Hence it cannot be said that the respondents are at fault. 39. Learned counsel appearing for the respondents, in view of the aforesaid, has submitted that it is a case where no interference is required due to the reason that when the writ petitioner has failed to commence the work it is the violation of the terms and conditions of the contract and in consequence thereof if the debarment order has been passed debarring the writ petitioner from participating in the future tender, if floated by the ECL, it cannot be said to suffer from an error. Analysis 40. We have heard learned counsel for the parties and gone through the pleadings made in the writ petition as also the counter affidavit. 41. The issues which require consideration are two folds– (i) Whether the writ petitioner can be said to be at fault in not commencing the work in time if the respondents have admitted of no proper electricity supply as per the communication dated 28.05.2025? (ii) Whether the debarment order can be said to be sustainable due to want of an opportunity of hearing having not been provided to the writ petitioner? Issue No. (i) 42. The law is well settled that in the contractual matter if the latches lies on the part of the contractor, there should be least interference by the High Court in exercise of power conferred under article 226 of the constitution of India. But, it is equally settled that if the action of the respondent is arbitrary hitting the principle as contained under Article 14 of the Constitution of India then certainly the writ court is competent enough to exercise the jurisdiction conferred to it under Article 226 of the Constitution of India, reference in this regard be made to the judgment rendered by Hon’ble Apex Court in the case of Sterling Computers Ltd. v. M&N Publications Ltd. [ (1993) 1 SCC 445 ] wherein it was held by the Hon’ble Apex Court that in matter of contracts the courts can certainly examine whether “decision-making process” was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution and on these account interference may be made. The relevant paragraph of the aforesaid Judgment is being quoted as under:- “18. The relevant paragraph of the aforesaid Judgment is being quoted as under:- “18. While exercising the power of judicial review, in respect of contracts entered into on behalf of the State, the Court is concerned primarily as to whether there has been any infirmity in the “decision making process”. … By way of judicial review the court cannot examine the details of the terms of the contract which have been entered into by the public bodies or the State. Courts have inherent limitations on the scope of any such enquiry. But at the same time … the courts can certainly examine whether “decision-making process” was reasonable, rational, not arbitrary and violative of Article 14 of the Constitution. 19. If the contract has been entered into without ignoring the procedure which can be said to be basic in nature and after an objective consideration of different options available taking into account the interest of the State and the public, then court cannot act as an appellate authority by substituting its opinion in respect of selection made for entering into such contract.” 43. Further in the case of Directorate of Education and Others v. Educomp Data Matics Ltd. and others reported in ( 2004) 4 SCC 19, the Hon’ble Apex Court has held that the courts would not interfere with the terms of the tender notice unless it was shown to be either arbitrary or discriminatory or actuated by malice. 44. Similarly in Master Marine Services (P) Ltd. v. Metcalfe & Hodgkinson (P) Ltd., (2005) 6 SCC 138 the Hon’ble Apex Court has observed that while exercising power of judicial review in respect of contracts, the court should concern itself primarily with the question, whether there has been any infirmity in the decision-making process. 45. In the case of Jagdish Mandal Vrs. State of Orissa & Ors. [ (2007) 14 SCC 517 ] , it has been laid down by the Hon’ble Apex Court that the power of judicial review in the contractual matters is permissible only if, (I) the process adopted or decision made is mala fide or intended to favour someone or the same is so arbitrary and irrational that the court can say: „the decision is such that no responsible authority acting reasonably and in accordance with law could have reached.? (II) public interest is affected. (II) public interest is affected. For ready reference, the relevant paragraph of the aforesaid judgment is being quoted as under:- “22. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias and mala fides. Its purpose is to check whether choice or decision is made “lawfully” and not to check whether choice or decision is “sound”. When the power of judicial review is invoked in matters relating to tenders or award of contracts, certain special features should be borne in mind. A contract is a commercial transaction. Evaluating tenders and awarding contracts are essentially commercial functions. Principles of equity and natural justice stay at a distance. If the decision relating to award of contract is bona fide and is in public interest, courts will not, in exercise of power of judicial review, interfere even if a procedural aberration or error in assessment or prejudice to a tenderer, is made out. The power of judicial review will not be permitted to be invoked to protect private interest at the cost of public interest, or to decide contractual disputes. The tenderer or contractor with a grievance can always seek damages in a civil court. Attempts by unsuccessful tenderers with imaginary grievances, wounded pride and business rivalry, to make mountains out of molehills of some technical/procedural violation or some prejudice to self, and persuade courts to interfere by exercising power of judicial review, should be resisted. Such interferences, either interim or final, may hold up public works for years, or delay relief and succour to thousands and millions and may increase the project cost manifold.” 46. Thus, there is no dispute about the fact that the scope of judicial review by the High Court under the aforesaid provision is very limited with can be exercised if there is any error in the decision making process and certainly if there is any error in the decision making process basis upon which any decision has been taken, the same will be amenable under the power of judicial review under Article 226 of the Constitution of India. 47. This Court is now proceeding to examine as to whether action of the writ petitioner is in violation to the terms and conditions of the contract or it is the respondents who have not adhered to the terms and conditions of the contract. 48. 47. This Court is now proceeding to examine as to whether action of the writ petitioner is in violation to the terms and conditions of the contract or it is the respondents who have not adhered to the terms and conditions of the contract. 48. It is evident from the Annexure-D as available in the counter affidavit which is letter dated 18.01.2025 that the respondent ECL itself has admitted that the site which was provided on earlier occasion was not suitable and as such the location of site was changed twice and at the third instance the site has been considered to be suitable by both the parties. 49. It is further evident from the annexures as appended to the writ petition wherefrom it is evident that the writ petitioner is making regular correspondences for supply of electricity. The relevant annexures are Annexure-18, 20, 22 and 23 to the paper book. 50. We have considered the annexures appended to the counter affidavit particularly the communication dated 28.05.2025 issued by the respondent ECL wherefrom it is evident that the power supply initially was 300 KVA but it has been considered to be not adequate, hence, the respondent ECL has accepted to supply 440 KVA of power supply to the site. 51. The content of the letter dated 28.05.2025 is self- explanatory wherein power supply of 300 KVA has not been considered to be sufficient and that is the reason the capacity of the power supply has been enhanced to 440 KVA. 52. This Court, therefore, is of the view that when the ECL itself has admitted the fact that power supply of 300 KVA is not sufficient and that is the reason enhanced to 440 KVA then it is not available for the ECL to put blame upon the writ petitioner. 53. Further, the said communication has been issued by the ECL on the frequent communications made on behalf of the petitioners, as would be evident from annexure-Y dated 16.05.2025 and Annexure-Z/1 dated 26.05.2025 respectively to the counter affidavit. 54. This Court, on the basis of the aforesaid factual aspects, is of the view that in such circumstances, putting blame upon the writ petitioner by the respondent ECL cannot be said to be just and proper and in that count it cannot be said that the latches has been committed on behalf of the petitioner. 55. 54. This Court, on the basis of the aforesaid factual aspects, is of the view that in such circumstances, putting blame upon the writ petitioner by the respondent ECL cannot be said to be just and proper and in that count it cannot be said that the latches has been committed on behalf of the petitioner. 55. This Court is further of the view that in the aforesaid circumstances the work since has not been alleged to be commenced by the writ petitioner which allowed the respondent ECL to come out with the debarment order which cannot be said to be proper exercise by the respondents, rather, it is in the teeth of Article 14 of the Constitution of India. 56. Accordingly, the Issue No.(i) is being answered in favour of the writ petitioner. Issue No.(ii) 57. The debarment from participating in the future tender is certainly snatching away the fundamental right as guaranteed under Article 19(1)(g) of the Constitution of India. 58. The debarment since leads to civil consequence and, as such, prior to proceeding to debar, the bare requirement of principle of natural justice is to be followed. Even though in the contract there is no reference of following the principle of natural justice, but even then the cardinal principle of natural justice is to be followed, reference in this regard be made to the judgment rendered by Hon’ble Apex Court in the case of Maneka Gandhi vs. Union of India and Anr. , (1978) 1 SCC 248 . The relevant paragraph is being reproduced hereinbelow :- “221. It is well established that even where there is no specific provision in a statute or rules made thereunder for showing cause against action proposed to be taken against an individual, which affects the rights of that individual, the duty to give reasonable opportunity to be heard will be implied from the nature of the function to be performed by the authority which has the power to take punitive or damaging action. This principle was laid down by this Court in the State of Orissa v. Dr (Miss) Binapani Dei [ AIR 1967 SC 1269 , 1271] in the following words: “The rule that a party to whose prejudice an order is intended to be passed is entitled to a hearing applies alike to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its officers. Duty to act judicially would, therefore arise from the very nature of the function intended to be performed: it need not be shown to be superadded. If there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power. If the essentials of justice be ignored and an order to the prejudice of a person is made, the order is a nullity. That is a basic concept of the rule of law and importance thereof transcends the significance of a decision in any particular case.” 59. The consequence of debarment is also the blacklisting and this issue has been dealt with by Hon’ble Apex Court, in Gorkha Security Services vs. Govt. (NCT of Delhi) and Ors., (2014) 9 SCC 105 relying upon the judgments rendered in Eurasian Equipment & Chemical Ltd. vs. State of West Bengal, (1975) 1 SCC 70 ; Raghunath Thakur vs. State of Bihar , (1989) 1 SCC 229 and Patel Engineering Ltd. vs. Union of India , (2012) 11 SCC 257 , wherein it has been observed that the principles of natural justice be followed as would appear from paragraph nos.16, 17, 18 & 19. The said paragraphs are being quoted hereinbelow:- “Necessity of serving show -cause notice as a requisite of the principles of natural justice 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. [Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 ] , 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 [(1989) 1 SCC 229] 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 [Patel Engg. Ltd. v. Union of India, (2012) 11 SCC 257 : (2013) 1 SCC (Civ) 445] speaking through one of us (Jasti 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. [Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 ] 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 [ “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. 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.”(Erusian Equipment case [Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 ], [ (1975) 1 SCC 70 ], SCC p. 74, para 12)] and took note of the constitutional provision (Article 298) [“ 298.Power to carry on trade, etc .—The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose:Provided that—(a) the said executive power of the Union shall, insofar as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and(b) the said executive power of each State shall, insofar as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.”] , 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. 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. [ “17. The Government is a Government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. The privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore,there should be fairness and equality. The State need not enter into any contract with any one but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person's character and personality. Blacklisting tarnishes one's reputation.”(Erusian Equipment case [Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 ] , [ (1975) 1 SCC 70 ], SCC p. 75, para 17)]] 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 [Erusian Equipment & Chemicals Ltd. v. State of W.B., (1975) 1 SCC 70 ] 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 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.” 60. The admitted position herein is that the principle of natural justice has not been followed, as no notice has been issued, rather, it is evident from the impugned order that in view of the condition stipulated in Clause 4(iii) and Clause 7 of the Guidelines on Debarment of Firms from Bidding, the debarment order has been passed. 61. We have gone through the guidelines of Debarment of Firms from Bidding, as available at Page 104 of the paper book which starts from the word “observance of Principle of Natural Justice before debarment of firm from Bidding. The bidder/contractor shall not be debarred unless such bidder/contractor has been given a reasonable opportunity to represent against such department (including personal hearing if requested by the bidder/contractor). 62. The bidder/contractor shall not be debarred unless such bidder/contractor has been given a reasonable opportunity to represent against such department (including personal hearing if requested by the bidder/contractor). 62. It is evident from the pleading made in the writ petition wherein specific statement has been made at paragraph-24 making reference of notice of personal hearing/show cause notice bearing No.ECL/SPM/GM/1- 6/22 dated 12.04.2025 informing the writ petitioner that as per the Original Work Order dated 20.04.2024 and Supplementary Work Order dated 26.01.2025, the second paragraph of the Original Work Order dated 20.04.2024 provides that the work is awarded for 1095 days and the Agency should have capacity to start work within 90 days from the date of LOA, i.e., dated 29.03.2024, and reach 100% production of awarded average quantity from 91 st day of issue of LOA but after expiry of 85 days from the date of site handed over vide letter dated 18.01.2025 the petitioner has purportedly not started work till dated, i.e., 12.04.2025 which is treated as failure to start work by the petitioner and the petitioner is liable for banning of business under Clause 4. 63. The said notice has been issued on the issue of banning of business but it cannot be confused with the banning of business and debarment to participate in the future tender are two different aspects of the matter. Debarment to participate in the future bid is having a serious consequence while banning of business will restrict only to the particular contract. 64. Therefore, the admitted case of the respondents even if show cause notice dated 12.04.2025 and 16.04.2025 will be taken into consideration, the same since has been issued for banning of business under Clause 4 of the Guidelines on Debarment of Firms from Bidding but Clause 4 speaks about debarment from bidding. 65. Therefore, this Court is of the view that while issuing show cause notice in view of Clause 4 of the Guidelines on Debarment of Firms from Bidding has not properly been construed by the respondent ECL and, as such, specific show cause notice ought to have been issued by the respondent ECL by reflecting therein that as to why the writ petitioner be not debarred by referring the reasons thereof. 66. 66. We are conscious and it is settled that issuance of show cause notice is not a mere formality, rather, it is an effective right of a party against whom the decision is to be taken leading to the civil consequence. Therefore, it is the bounden duty of the party to the contract, in a case of taking adverse decision against the second party to come out with specific show cause notice before taking any decision on debarment or on specific punitive action which is proposed to be taken, but the same is lacking herein. 67. Accordingly, the Issue No.(ii) is answered in favour of the petitioner. 68. In the result, the writ petition stands allowed. 69. Allowing the writ petition does not construe that the work which has been assigned in favour of the writ petitioner is to be delayed, rather, since the same pertains to the public utility service, as such, the petitioner is directed to complete the work as per the terms and conditions of the contract failing which the respondent ECL will be at liberty to take appropriate decision, in accordance with law. 70. The instant writ petition is accordingly disposed of. I agree (Tarlok Singh Chauhan, C.J.)