M/S Sai Dk Engineering and Projects Private Limited Vs Steel Authority of India Limited

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1

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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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2

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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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3

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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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Accordingly, both the writ petitions are allowed to the

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above extent.

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Sd/Sd/-

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(Bibhu Datta Guru) (Ramesh Sinha) Judge Chief Justice

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Gowri/Amardeep

M/S Sai Dk Engineering and Projects Private Limited v. Steel Authority of India Limited

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M/S Sai Dk Engineering and Projects Private Limited v. Steel Authority of India Limited

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