Summary
The Court quashed FCI’s five-year blacklisting of a recruitment agency because its show-cause notice neither proposed blacklisting nor clearly conveyed that intention. General reference to contractual remedies and tender clauses did not supply meaningful notice of that severe consequence. The appeal concerned blacklisting alone; contract termination was not challenged, and the Court declined to remit the blacklisting issue for fresh consideration.
Issues
- Whether the notice adequately disclosed the proposed blacklisting and afforded a meaningful opportunity to contest it.
Held
- Given blacklisting’s serious reputational and commercial consequences, the notice must identify the grounds and proposed action. Blacklisting must be expressly proposed or clearly and safely inferable from the notice, so that the affected party can address both the alleged defaults and that proposed consequence. (¶¶ 13, 14, 15, 16, 17, 18, 19, 20, 21)
- The notice alleged contractual breaches but only stated vaguely that an appropriate decision would follow under the contract. It neither mentioned blacklisting nor referred to the clause relied on for that action. Stating that the listed clauses were non-exhaustive did not remedy the omission. (¶¶ 22, 23, 24, 25)
- The existence of a tender disqualification clause mentioning blacklisting could not replace proper notice. The blacklisting order exceeded the notice’s bounds and violated natural justice. Other challenges, including the disputed contractual power to blacklist, did not require decision; no remand was ordered in the particular circumstances. (¶¶ 9, 24, 25, 26)
Result
Appeal allowed; High Court order set aside and FCI’s order quashed only insofar as it imposed blacklisting. No remand for fresh consideration; parties to bear their own costs. Pending applications disposed of.