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Legal Case Shots

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Arbitration & Commercial LawSupreme Court of India

M/S Techno Prints v. Chhattisgarh Textbook Corporation

Civil Appeal · 2025 INSC 236Decided 12 Feb 2025
C.A. No.-002362-002362 - 2025 (arising out of SLP(C) No.10042/2023)
Justice J.B. Pardiwala · Justice R. Mahadevan

Background

Techno Prints, a printing firm registered as one of thirty approved vendors with the Chhattisgarh Text Book Corporation, was declared the lowest bidder (L-1) in a tender for printing school textbooks. The Corporation issued a show cause notice alleging the firm breached the tender agreement's supply-timeline clauses, and proposed to blacklist it for three years and forfeit its Rs. 5,00,000 earnest money deposit (EMD). The firm's writ petition challenging the notice was dismissed by a Single Judge and then by a Division Bench of the Chhattisgarh High Court, prompting this appeal to the Supreme Court.

Decision Breakdown

The Supreme Court held that blacklisting is an extreme, business-ending punishment that can only follow conduct that is genuinely deviant or aberrant: a mere allegation of contractual breach, without more, is not enough. The Court observed that a show cause notice in blacklisting proceedings is often issued after the authority has effectively already made up its mind, making the "opportunity to respond" an empty formality in practice. On the facts, it found the alleged lapses did not meet the high threshold required for blacklisting. The Court quashed only the blacklisting portion of the show cause notice, while permitting the Corporation to forfeit the EMD and leaving the remaining parts of the notice untouched.

Lesson Learnt

Blacklisting a contractor or vendor is not an automatic consequence of an alleged contract breach. Courts require the government body to show conduct serious enough to justify what amounts to a business death penalty, and a bidder facing such a notice can challenge it even before a final order is passed if the process looks like a foregone conclusion.

M/S Techno Prints v. Chhattisgarh Textbook Corporation – Legal Case Shots | LegalAware