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M/S Sai Engineering, v. Steel Authority of India Limited

Chhattisgarh HC3 Dec 2025WPC/1003/2025

Case brief

AI extract

What is this about?

Blacklisting/debarment by SAIL and Bhilai Steel Plant (Standing Banning Committee) of two interconnected bidder firms for three years; Chhattisgarh HC (Bilaspur), WPC Nos. 1003 & 1004 of 2025, common order 04.12.2025, Per Ramesh Sinha, Chief Justice (with Bibhu Datta Guru, Judge): ban orders dated 20.12.2024 set aside for breach of natural justice - no pre-ban notice to Sai Engineering; judicial review limited to decision-making process; orders causing civil consequences require notice and hearing; precedent relied on: Prakash Ratan Sinha v. State of Bihar, (2009) 14 SCC 690.

What did the court decide?

Both writ petitions allowed to the extent sought: the impugned banning orders dated 20.12.2024 are set aside, enabling the petitioners to participate in bids/quotations/tenders floated by the respondents. ¶48

M/S Sai Engineering, Vs Steel Authority of India Limited — Chhattisgarh HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the impugned order dated 20/12/2024 banning business dealings with the petitioners for three years was passed in violation of the principles of natural justice - notice having been issued to Sai DK Engineering but not to Sai Engineering - and is therefore liable to be set aside. +1 more

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Court's answer

No order causing civil consequences can be passed without observing the rules of natural justice; fair play in action warrants that an order imposing civil consequences be passed only after putting the concerned person to notice and giving him a hearing.

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Ratio / Principle

Judicial review of a banning/blacklisting decision is confined primarily to the decision-making process; if that process suffers gross procedural infirmities, judicial review will step in and the order will have to be struck down.

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Key takeaways

Banning/blacklisting is a serious matter affecting commercial credibility in the business world and has been described as a civil death.obiter¶36
Notice was issued to Sai DK Engineering before its banning, but no notice was issued to Sai Engineering; the banning of business dealings with the petitioners, already taken, appears unfair, and the non-issuance of notice to Sai Engineering is contrary to the principles of natural justice.ratio¶40
Applying the well-settled principles of law to the facts of the case, the impugned orders dated 20.12.2024 - No. CGM(CC-W)/2024/5133 (Annexure P-1 of WPC No.1003/2025) and No. CGM(CCW)/2024/5134 (Annexure P-1 of WPC No.1004/2025) - are liable to be and are hereby set aside.

Detailed headnote1 paragraphs

Chhattisgarh High Court, Bilaspur - WPC Nos. 1003 & 1004 of 2025, common order dated 04.12.2025 (Per Ramesh Sinha, Chief Justice; Bench incl. Bibhu Datta Guru, Judge). Two interconnected firms (M/s Sai Engineering; M/s Sai DK Engineering and Projects Pvt. Ltd.) challenged orders dated 20.12.2024 (Nos. CGM(CC-W)/2024/5133 and CGM(CCW)/2024/5134) of SAIL/Bhilai Steel Plant banning business dealings with them for three years (effective upto 28/06/2027) after their bid documents on 'sale agreement of business as a working concern' were found faulty. Held: judicial review of blacklisting is confined primarily to the decision-making process and steps in where that process suffers gross procedural infirmities; banning entails civil consequences ('civil death') and no such order can be passed without observing natural justice; although a show cause notice (23.07.2024) and SBC hearings (04.09.2024, 10.09.2024) preceded the ban on Sai DK Engineering, no notice was issued to Sai Engineering, rendering the ban unfair and contrary to natural justice; accordingly both impugned orders were set aside and both writ petitions allowed. Relied on: Prakash Ratan Sinha v. State of Bihar, (2009) 14 SCC 690.

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AMARDEEP CHOUBEY

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Digitally signed by AMARDEEP CHOUBEY Date: 2025.12.06 12:27:32 +0530

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2025:CGHC:58834-DB

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 1003 of 2025

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M/s Sai Engineering, Through Its Partner Satish Singh, S/o Daya Shankar Singh, Aged About 52 Years, R/o 701, Orchid Residency, Road No. 7 Extension, Kagal Nagar, Sonari, Jamshedpur, Jharkhand, 831011

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--- Petitioner

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versus

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1 - Steel Authority Of India Limited, Ispat Bhawan, Lodhi Road, New Delhi 110003

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2 - Bhilai Steel Plant Through Chief General Manager, (Contract Cell Works), Bhilai Steel Plant, Bhilai, District Durg, Chhattisgarh

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--- Respondents

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WPC No. 1004 of 2025

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M/s Sai Dk Engineering And Projects Private Limited Through Its Director Satish Singh, S/o Daya Shankar Singh, Aged About 52 Years, R/o 701, Orchid Residency, Road No. 7 Extension, Kagal Nagar, Sonari, Jamshedpur, Jharkhand, 831011.

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--- Petitioner

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Versus

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1 - Steel Authority of India Limited, Ispat Bhawan, Lodhi Road, New Delhi, 110003.

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2 - Bhilai Steel Plant Through Chief General Manager, (Contract Cell Works), Bhilai Steel Plant, Bhilai, District Durg, C.G.

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--- Respondents

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For Petitioners : Mr. Shikhar Bakhtiyar, Advocate For Respondent/SAIL : Mr. Nikhil Agrawal, Advocate

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Hon'ble Shri Ramesh Sinha, Chief Justice

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Hon'ble Shri Bibhu Datta Guru, Judge

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Judgment on Board

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Per Ramesh Sinha, Chief Justice

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04.12.2025

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Since both the petitions involve similar issue, they are being considered and decided by this common order.

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By the present writ petitions, the petitioners are challenging the order dated 20/12/2024 (Annexure-P/1) passed by the respondent No.2, whereby, the petitioners have been banned for a period of 3 years, which shall be effective upto 28/06/2027. For which, the petitioners are seeking following reliefs:-

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“10.1 That this Hon'ble Court may kindly be pleased to set aside the impugned order dated 20/12/2024 and direct the respondent authority to allow the petitioner to participate in the bid/quotation/tenders if any floated.

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10.2 That any other relief which this Hon'ble Court deems fit and proper may also be granted in favor of the petitioner safeguarding his interest.”

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(A) Learned counsel for the petitioners would submit that the impugned order has been passed based on an alleged interconnection between Sai Engineering and Sai DK Engineering. Learned counsel would submit that the impugned order has been passed in an illegal and arbitrary manner that too without following the basic principles of natural justice. Even the respondents failed to appreciate the explanation offered by the petitioners. He would submit that on account of the impugned action on the part of the authorities, the image and reputation of the petitioner firm is ruined.

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Learned counsel appearing for the respondent/SAIL, per contra, would oppose the arguments advanced by the petitioners. He would submit the petitioners were called upon by the Respondents to show cause within 15 days, vide notice dated 23.07.2024, before the Standing Banning Committee, why business dealings with the Petitioners Firm should not be banned. However, Petitioners did not submit reply within the stipulated period of time. He further submit that after issuance of show cause notice, petitioner was again given opportunity to present its case before the Standing Banning Committee (SBC) on 04.09.2024 & 10.09.2024 and one Mr. Ramesh Singh appeared before the SBC as representative of the Petitioner. No submission made on behalf of the Petitioner, except commitment to submit reply and documents, which was also not fulfilled. Thereafter SBC proceeded with the case and recommended to competent authority for action against the Petitioner based on available records and, as such, it cannot be said that no opportunity of hearing was afforded to the petitioner before passing impugned warranting no interference of this Court.

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We have heard learned counsel for the parties, perused the pleadings and documents.

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Banning/Blacklisting is a serious matter affecting commercial credibility in the business world. It has been described as a civil death also. The jurisdiction of the Court in judicial review is

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primarily confined to the decision making process. If there are no infirmities in the decision making process, the writ court will ordinarily refrain from going into the matter further except where there may may be compelling circumstances. But if the decision making process before banning the petitioners suffers from gross procedural infirmities, judicial review will step in and the order will have to be struck down.

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In the cases at hand, it is not in dispute that at the time of submission of bid, the petitioners have submitted certain documents regarding ‘sale agreement of business as a working concern’, but it was found that the said information given by Sai DK Engineering was found faulty and as such, the Committee recommended for banning of business dealing with the Sai DK Engineering including its interconnected firm i.e. Sai Engineering for a period of three years.

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From bare perusal of the material available on record, it is apparent that notice was issued to Sai DK Engineering before its banning whereas in the case of Sai Engineering, no notice was issued. However, looking to the facts narrated by the parties and considering the facts that banning the business dealings with the petitioners has already been taken. The same appears to be unfair and even non-issuance of notice to Sai Engineering is also contrary to the principles of natural justice.

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The Supreme Court in the matter of Prakash Ratan Sinha Vs. State of Bihar and Others reported in 2009 14 SCC 690 held

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thus:-

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“15. the adherence to principles of natural justice as recognized by all civilized states is of supreme importance or when a quasi judicial body embarks on determining dispute between the parties, or any administrative action involving civil consequences is in issue. Even an administrative order, which involves civil consequence must be consisted with the rules of natural justice.”

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It is the well settled proposition of law that no orders causing civil consequences can be passed, without observing rules of natural justice. Fair play in action warrants that no such order which has the effect of an individual suffering civil consequences should be passed without putting the concerned to notice and giving him a hearing in the matter. It is also trite laws that if any of its actions or administrative decisions result in civil consequences, the actions or decisions could be judicially reviewed or tested on the anvil principles of natural justice.

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Applying the well settled principles of law to the facts of the present case and for the reasons mentioned herein above, the impugned order dated 20.12.2024 bearing No. CGM(CC-W)/2024/5133 (Annexure P-1 of WPC No.1003/2025) and impugned order dated 20.12.2024 bearing No. CGM (CCW)/2024/5134 (Annexure P-1 of WPC No.1004/2025) are liable to be and are hereby set aside.

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