M/S Gdx Facility And Management Private ... vs The State Of Jharkhand Through The ...
2025 Latest Caselaw 6384 Jhar

Jharkhand High Court

M/S Gdx Facility And Management Private ... vs The State Of Jharkhand Through The ... on 13 October, 2025

Author: Rajesh Shankar

Bench: Rajesh Shankar

                                                 2025:JHHC:31456-DB




IN THE HIGH COURT OF JHARKHAND AT RANCHI
             W.P. (C) No. 6944 of 2023
M/s GDX Facility and Management Private Limited, having its
Corporate Office at 19-20, Jask Tower, 1st Floor, Sector-125, Noida-
201301 (Uttar Pradesh) and Branch Office at House No. LS-94, Near
Matri Veg Food, Kartik Oraon Chowk, Housing Colony, Harmu, PO &
PS - Argora, Ranchi-834002 (Jharkhand), through its Assistant
Manager and Authorized Representative Rahul Kumar Singh aged
about 38 years, son of Ram Eqbal Singh, resident of 23, near Durga
Mandir,    Pani    tanki,    Jayrampur       Colliery,     Jagugura,     P.O.-
Khassjeenagora, P.S.-Tisra, District-Dhanbad (Jharkhand).
                                                ...    ...    Petitioner
                          Versus
1.     The State of Jharkhand through the Secretary, Department of
Excise and Prohibition having its office at Utpad Bhawan, 2nd Floor,
Excise Building, Kanke Road, Near Naveen Police Kendra, P.O.
Gonda, P.S. Gonda, District Ranchi.
2. Jharkhand State Beverages Corporation Limited, through its
Managing Director, having its office at Utpad Bhawan, Ground Floor,
P.O. Gonda, P.S. Gonda, Near Naveen Police Kendra, Kanke Road,
District Ranchi-834008.
3. Managing Director, Jharkhand State Beverages Corporation Limited,
having its office at Utpad Bhawan, Ground Floor, P.O. Gonda, P.S.
Gonda, Near Naveen Police Kendra, Kanke Road, District Ranchi-
834008.
4. General Manager (Operations and Finance), Jharkhand State
Beverage Corporation Limited, having its office at Utpad Bhawan,
Ground Floor, P.O. Gonda, P.S. Gonda, Near Naveen Police Kendra,
Kanke Road, District Ranchi-834008.
5. Excise Superintendent, Garhwa, having its office at the Office of the
Deputy Commissioner, PO & PS-Garhwa, District - Garhwa.
                                         ...    Respondents
                          ---------
CORAM: HON'BLE THE CHIEF JUSTICE
             HON'BLE MR. JUSTICE RAJESH SHANKAR
                          ---------
For the Petitioner                : Mr. Indrajit Sinha, Advocate
For the State                     : Mr. Piyush Chitresh, A.C. to A.G.
For the Resp. Nos.2, 3 & 4        : Mr. Raunak Sahay, Advocate.
                          ---------
C.A.V. On: 08.10.2025                    Pronounced On: 13.10.2025
Per Tarlok Singh Chauhan, C.J.

1. Heard the parties.

2. The instant writ petition has been filed for grant of the following

substantive reliefs:-

"a. Quashing and setting aside the office order as contained in Memo no. 2095 dated 30.11.2023 (Annexure-10) by which the

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petitioner's services as Placement Agency has been terminated, the security deposit forfeited and further the petitioner company has been blacklisted for a period of three years;

AND b. Quashing and setting aside the office order as contained in Memo no. 2096 dated 30.11.2023 (Annexure-11) by which the petitioner has been directed to hand over of retail liquor shops for its operation to another placement agency;

AND c. Consequent to setting aside of the office order as contained in Memo no. 2095 dated 30.11.2023 and Memo no. 2096 dated 30.11.2023, reinstate the petitioner company's services as Placement Agency supplying manpower to Zone 3 (Ramgarh and Bokaro) and Zone 6 (Palamu, Garhwa and Latehar)."

3. During pendency of the writ petition, the petitioner filed I.A.

No.5850 of 2025 confining its claim only to the extent of challenge to

the blacklisting order passed by the respondents. It shall be apposite

to extract the order in its entirety, which reads as under:-

"

¼>kj[k.M ljdkj dk miØe½ dkWiksZjsV igpku la0& U51228JH2010SGC014519, TIN No.-20520108277

E-mail: [email protected]

i=kad&13 jkaph] fnuakd 30-11-2023 &% %& mRikn ,oa e| fu"ks/k foHkkx ds i=kad&2255 fnuakd 20-09-2023 ds }kjk xfBr foHkkxh; tkap lfefr ds tkap izfrosnu esa izfrosfnr fcØh ,oa tek vUrj jkf'k :0 2]59]31]911@&¼nks djksM+ mulB yk[k ,drhl gtkj ukS lkS X;kjg :i;s ek=½ dks tek djus gsrq M/s GDX Facility & Management Services Pvt. Ltd. ekuo iznkrk ,tsUlh dks foHkkx ,oa fuxe ds fofHkUu i=kadksa }kjk funs'k fn;k x;kA ijUrq okafNr izfrosfnr jkf'k dks iwjh rjg tek ugha fd;k x;k tks foÙkh; vfu;ferrk ,oa ,djkjukek ds 'kÙkksZa dk mYya?ku gSA lkFk&gh&lkFk ,tsUlh ds dk;Z i)fr ds ckjs esa yxkrkj f'kdk;rsa feyrh jgh gS tks fd tkap ny ds }kjk Hkh izfrosfnr fd;k x;k gSA dbZ funsZ'kksa ds ckotwn buds dk;Z i)fr esa dksbZ lq/kkj ifjyf{kr ugha gqvkA vr% foÙkh; vfu;ferrk ,oa ,djkjukek ds 'kÙkksZa ds mYya?ku ds fy, bUgsa ekuo iznkrk ,tsUlh ds dk;Z ls rRdky izHkko ls dk;ZeqDr fd;k tkrk gS rFkk buds }kjk tek lqjf{kr jkf'k dks tIr djrs gq, mRikn foHkkx esa ekuo iznkrk ,tsUlh ds dk;Z ls rhu o"kksZa ds fy, dkyh lwph esa ntZ fd;k tkrk gSA mi;qZDr ij l{ke izkf/kdkj dk vuqeksnu izkIr gSA

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                                                     2025:JHHC:31456-DB




                                            >kj[k.M jkT; fcojstst dkWjiksjs'ku fy0]
                                                       >kj[k.M] jkaphA

Kkikad&                                                  jkaph] fnuakd 30-11-2023

izfrfyfi%& M/s GDX Facility & Management Services Pvt. Ltd. dks lwpukFkZ izfs "krA

>kj[k.M jkT; fcojstst dkWjiksjs'ku fy0] >kj[k.M] jkaphA

Kkikad& jkaph] fnuakd 30-11-2023 izfrfyfi%& lacaf/kr lgk;d vk;qDr mRikn@v/kh{kd mRikn dks lwpukFkZ ,oa vko';d dk;kZFkZ izsf"krA

>kj[k.M jkT; fcojstst dkWjiksjs'ku fy0] >kj[k.M] jkaphA

Kkikad& jkaph] fnuakd 30-11-2023 izfrfyfi%& vk;qDr mRikn] >kj[k.M] jkaph@lfpo mRikn&lg&v/;{k >k0jk0fc0dkW0fy0] jkaph dks lknj lwpukFkZ lefiZrA

>kj[k.M jkT; fcojstst dkWjiksjs'ku fy0]"

4. The minimal facts, as necessary for the adjudication of the

instant case are that the Jharkhand State Beverage Corporation

Limited ("JSBCL") had floated an electronic tender for empanelment

of a placement agency in terms of the Jharkhand Excise (Operation

of Retail Excise Shops by the Jharkhand State Beverage Corporation

Limited) Rules, 2022 (hereinafter to be referred as the "Retail Rules,

2022").

5. In the said e-tender process, the petitioner participated and

was declared successful for two zones, being zone No. 3, comprising

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of districts of Ramgarh and Bokaro and zone No. 6, comprising of

districts of Palamau, Garhwa and Latehar.

6. On being declared successful, a Letter of Intent was issued by

the JSBCL vide letter No. 1731 dated 18.11.2022 and pursuant

thereto, the petitioner deposited the requisite amount of bank

guarantee as was mentioned in the letter dated 18.11.2022.

7. Thereafter, two agreements were executed by the JSBCL in

favour of the petitioner for the above two zones. So far as zone No. 6

is concerned an agreement was executed on 24.02.2023 and

whereas for zone No. 3, an agreement was executed on 31.07.2023.

8. After the petitioner had taken over the above two zones, the

excise officers of the district had handed over a list of the employees,

who were already employed by the former placement agency to

continue the same men.

9. It is averred by the petitioner that it started performing the

duties and discharging its obligations under the agreement without

any complaint whatsoever, even though the condition related to

Minimum Guaranteed Revenue caused an impediment in discharge

of its function effectively. However, the Department of Excise

purportedly on the basis of certain Newspaper items published on

18.09.2023 alleging financial irregularities in the District of Garhwa

constituted a team of 5 members vide a memo No. 2255 dated

20.09.2023 headed by the Assistant Deputy Commissioner, Excise

(Headquarter) as also the Excise Superintendent, EIB (Headquarter),

Sub inspector, Excise, Lohardaga, representative of the

Departmental Internal Auditors and Upper Division Clerk as its

members, which carried out a surprise inspection of 54 retail excise

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shops in the District-Garhwa from 21.09.2023 to 23.09.2023.

Thereafter, this Committee submitted its report to the Excise

Commissioner, Jharkhand under the cover of a letter dated

29.09.2023 and in its report, the Committee had concluded that the

petitioner had not handed over a sum of Rs.2,59,31,911/- collected

from the sale of liquor to the cash collection agency and therefore,

had misappropriated/diverted/caused financial irregularities. The

report further indicted the Excise Superintendent of Garhwa and the

internal auditors of the District of Garhwa.

10. It has been specifically averred in the petition that the

respondents without even serving a copy of the said report to the

petitioner vide letter dated 24.09.2023 addressed a letter to the

authorized representative of the petitioner at Garhwa calling upon it

to deposit the alleged defalcated amount of Rs.2,50,00,000/- without

any delay failing which the amount would be recovered in accordance

with law. The petitioner responded to the said letter vide letter dated

26.09.2023, wherein, it was requested that the shop wise details be

provided to it, so that the guilty employee can be identified and steps

can be taken to recover the money from them.

11. The Excise Commissioner cum Managing Director, JSBCL,

vide letter dated 06.10.2023 enclosed a copy of the enquiry report

and directed the petitioner to file its written response within three

working days. Accordingly, the petitioner vide its letter dated

10.10.2023 responded to the Inquiry report and in the said letter

indicated that the petitioner had also independently carried out

reconciliation of its account relating to 2 out of 54 shops inspected by

the committee and found that the shortfall of the amount indicated in

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the report of the committee was on a higher side than the amount,

which the petitioner on enquiry had found out and accordingly,

requested the respondents to re-enquire into the matter.

12. The petitioner also annexed daily stock statements of the two

shops in which the petitioner had carried out its investigation.

However, in response to the said letter, the Excise Superintendent,

Garhwa sent a reminder to the petitioner asking it to deposit an

amount of Rs.2,59,31,911/- followed by another letter. Thereafter, the

petitioner received another letter, bearing No. 2028, dated

14.11.2023 from the General Manager (Operations and Finance),

JSBCL indicating that proof of only an amount of Rs.23,50,000/- had

been deposited out of the total amount of Rs.2,59,31,911/- and the

petitioner was directed to deposit the remaining amount within three

days, failing which it was indicated that coercive action would be

taken against the petitioner. The petitioner vide letter dated

07.11.2023 and further vide letters dated 16.11.2023, 22.11.2023 and

28.11.2023 sent in response to the letter bearing No. 2028 dated

14.11.2023 received from the General Manager (Operations and

Finance), JSBCL, with proof of deposit of money recovered from the

guilty and defaulted employees. The petitioner also informed that

sincere efforts are being made for recovery of the amount from the

employees responsible for the defalcation and the said were being

deposited. However, the General Manager (Operations and Finance),

JSBCL, issued an Office Order bearing memo No. 2095 dated

30.11.2023 informed the petitioner that since it had failed to deposit

an amount of Rs.2,59,31,911/-, despite various reminders, the

petitioner was considered to have violated the terms and conditions

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of the agreement consequent to which the services of the petitioner

would be terminated with immediate effect and security deposit was

ordered to be forfeited and the petitioner was recorded as one being

blacklisted for a period of three years. In response to the aforesaid

memo, the petitioner addressed a letter dated 01.12.2023 to the

Commissioner-cum-Managing Director, JSBCL, stating that the

requested reconciliation of the amount calculation and the total

amount of Rs.2,59,31,911/- had been completely recovered from the

employees. A date wise break-up of the phase-wise deposit of the

total sum of Rs.2,59,31,911/- was attached and a request was made

to remove the petitioner from blacklisting. However, since the

respondents had failed to remove the same, hence, this petition.

13. It has been vehemently argued by Mr. Indrajit Sinha, learned

counsel for the petitioner that no adequate and meaningful

opportunity has been provided to the petitioner by way of show cause

notice against the blacklisting and therefore, such direction on the

part of the respondents is not sustainable in the eyes of law.

14. On the other hand, Mr. Raunak Sahay, learned counsel for

Respondent Nos. 2 to 4 has vehemently contended that once the

petitioner has been issued a notice clearly bringing to its notice that the

respondents were contemplating certain coercive action, in case the

amount in question is not deposited, then the petitioner cannot take any

exception to the action of the respondents in blacklisting because

coercive action would obviously include the action like blacklisting.

15. We have heard the learned counsel for the parties and have

gone through the materials placed on record.

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16. It is more than settled that the fundamental purpose behind the

serving of show cause notice is to make the noticee understand the

precise case set up against him which he has to meet. Therefore, this not

only requires the statement of imputations detailing out the alleged

breaches and defaults one has committed, so that he gets an opportunity

to rebut the same, but another requirement is the nature of the action,

which is proposed to be taken for such a breach, that has to be clearly set

out so that the noticee is able to point out that proposed action is not

warranted in the given case, even if the defaults/ breaches complained of

are not satisfactory. When it comes to black listing, this requirement

becomes all the more imperative, having regard to the fact that it is

harshest possible action.

17. In Gorkha Security Services v. Government (NCT of Delhi)

and Others, (2014) 9 SCC 105, the Hon'ble Supreme Court

observed that it was incumbent upon the petitioner to issue show-

cause notice and also afford an opportunity of hearing to the

petitioner prior to taking debarment action. The relevant paragraphs

are reproduced hereunder-

"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

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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

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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.

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

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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. 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, (2012)

11 SCC 257 speaking through one of us (Jasti Chelameswar,

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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

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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."

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18. Similar reiteration of law can be found in the judgment

rendered by the Hon'ble Supreme Court in Vetindia

Pharmaceuticals Ltd. v. State of Uttar Pradesh and Another,

(2021) 1 SCC 804, wherein the Hon'ble Supreme Court held that it

was incumbent on the part of the Department to state in the show-

cause notice that the competent authority intended to impose such a

penalty of blacklisting so as to provide adequate and meaningful

opportunity to the appellant to show cause against the same. The

Hon'ble Supreme Court held that there must be a clear inference

from show-cause notice that blacklisting action is proposed.

19. Yet again, similar reiteration of law can be found in another

judgment of the Hon'ble Supreme Court in UMC Technologies (P)

Ltd. v. Food Corporation of India and Another, (2021) 2 SCC

551, wherein the Hon'ble Supreme Court reiterated that for show-

cause notice to constitute the valid basis of a blacklisting order, such

notice must spell out clearly, or its contents be such that it can be

clearly inferred therefrom that there is intention on the part of the

issuer of the notice to blacklist the noticee. The Hon'ble Supreme

Court further held that 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. Lastly, it was held that requirement of a

valid, particularized and unambiguous show-cause notice is

particularly crucial due to the severe consequences of blacklisting

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and the stigmatization that accrues to the person/entity being

blacklisted.

20. Earlier to this, the Hon'ble Supreme Court in Daffodills

Pharmaceuticals Ltd. v. State of Uttar Pradesh and Another,

(2020) 18 SCC 550, held that blacklisting has the effect of

preventing a person from privilege and advantage of entering into

lawful relationship with the Government for purposes of gain. 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

blacklist.

21. Merely because the Government has a right to enter into

contract with anyone of its choice does not give the Government the

power to arbitrarily blacklist a party without affording it a fair hearing

as blacklisting involves material damage of losing the prospect of

entering into contracts with the Government in future.

22. The effect of blacklisting, needless to observe, is quite drastic.

It prevents a person from the privilege and the advantage of entering

into lawful relationship with the Government, PSUs for the purposes

of gain. Apart from reducing the person's prospects of making

profits, it leads to loss of credibility and goodwill, a decline in

business, and clients, besides causing financial hardship. It virtually

acts as a libel to the person if unjustifiably done.

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23. This is precisely the reason why the courts of law have, time

and again, established certain principles before blacklisting a person

which include (a) Principles of natural justice and (b) Doctrine of

proportionality. The 'doctrine of proportionality' here would

essentially have to be understood as, maintaining a proper balance

between the adverse effects which the administrative order may

have on the rights, persons, keeping in mind the purpose for which

they intend to serve.

24. Reverting back to the facts of the instant case, since the

petitioner has not been issued any show cause notice or afforded an

opportunity of personal hearing and straightway being blacklisted, the

action of blacklisting vide the impugned letter No. 2095, dated

30.11.2023 cannot stand to judicial scrutiny and the said letter is

accordingly, quashed and set aside. The writ petition is accordingly,

allowed. However, this order shall not come in the way of the

respondents, in case they chose to further proceed in the matter by

issuing a show cause notice to the petitioner, (if they still intent to

blacklist the petitioner) and thereafter proceed in accordance with law

by affording an opportunity of hearing to the petitioner.

25. Pending application(s), if any, shall also stand disposed of.

(Tarlok Singh Chauhan, C.J.)

(Rajesh Shankar, J.) 13.10.2025 A.F.R. APK

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