The Bombay High Court set aside a municipal corporation’s one-year blacklisting of a private contractor, holding that the authority must issue a specific show-cause notice before imposing such a severe penalty, thereby reaffirming the principles of natural justice in public procurement.
Background & Facts
The Dispute
The petitioner, Yashraj Global Infracon LLP, a Pune-based construction firm, participated in Tender No. 54 of 2025 issued by the Superintending Engineer and the Municipal Commissioner of Pune Municipal Corporation for the remaining works at the Exhibition Centre (Phase-3), Kothrud (Survey Nos. 69 and 70). After being declared the lowest-priced bidder, the petitioner was later blacklisted for one year without a show-cause notice.
Key Facts
- 7 August 2025: Tender No. 54 of 2025 was floated by Respondent Nos. 1 and 2.
- 11 December 2025: Bids were opened; the petitioner emerged as the “L1” bidder.
- 15 December 2025: Model Code of Conduct came into force for Maharashtra municipal elections and remained operative till 19 January 2026.
- 17 December 2025: Respondent No. 1 requested the petitioner to deposit an additional security deposit within eight days, warning of action under the tender conditions for non-compliance.
- 19 December 2025: The petitioner informed Respondent No. 1 that, due to the Model Code of Conduct, the contract could not be awarded during the prohibited period.
- 21 January 2026: Respondent No. 1 issued a notice stating that further action would be taken for failure to furnish the additional security deposit and other documents.
- 29 January 2026: The petitioner communicated its inability to perform the works because of increased costs and requested cancellation of the tender.
- 20 March 2026: Respondent No. 1 issued a circular blacklisting the petitioner for one year, rendering it ineligible to undertake works of Respondent No. 2.
- 3 August 2026: The High Court delivered its judgment.
Procedural History
- 20 March 2026: Respondent No. 1 issued the blacklisting circular.
- (Date of filing not specified): The petitioner filed the present writ petition challenging the circular.
- 3 August 2026: The Bombay High Court delivered the judgment quashing the circular.
Parties' Positions
- Petitioner: Argues that the blacklisting was imposed without a specific show-cause notice, violating the principles of natural justice. Relies on Gorkha Security Services v. Government (NCT of Delhi) & Ors..
- Respondents: contend that the petitioner breached tender conditions by failing to furnish the additional security deposit and that Clause 15 of the tender conditions permits blacklisting without a separate notice. Reliance placed on Grosons Pharmaceuticals (P) Ltd. v. State of U.P. & Ors..
Relief Sought
The petitioner seeks a writ of mandamus directing the respondents to set aside the circular dated 20 March 2026 and to restore its eligibility to participate in future municipal contracts.
