New Delhi, November 17, 2020: The Supreme Court held that FCI has no power to blacklist the company, in the absence of a valid show-cause notice clearly mentions clause and intent and consequent blacklisting order cannot be sustained.

The Supreme Court Bench comprising of Justices S. Abdul Nazeer and B. R. Gavai observed in an appeal by UMC Technologies Pvt. Ltd against the order of the Madhya Pradesh High Court, that "If a show-cause notice intends to blacklist the recipient of the notice in case of an unsatisfactory reply, this stipulation must be clearly mentioned in the notice."

The Supreme Court Bench, while explaining what constitutes a valid show-cause notice, observed: “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.”

The appellant argued before the bench of Justices S. Abdul Nazeer and B. R. Gavai that the FCI had no power to blacklist the company. Moreover, in the absence of a valid show-cause notice, the consequent blacklisting order cannot be sustained.

The Madhya Pradesh High Court had upheld the order of the Food Corporation of India (FCI) which terminated a contract with the appellant and also blacklisted the company from participating in any tenders of the corporation for 5 years.

News Courtesy:PIB | Hindu| DC | LE | LI | LO | IE | LL | PTI |ht | ET | UNI | DNA | FP | Jurist |IndToday|

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