Allowed¶39

M/S Swabhiman Commercial Pvt. Ltd. v. National Seeds Corporation Limited & Ors.

Delhi HC6 Jul 2026W.P.(C)/12500/2025

Case brief

AI extract

What is this about?

Blacklisting; show cause notice silent on consequence of blacklisting; natural justice; GeM purchase order default; non-supply of jute bags; bank guarantee and indemnity bond; National Seeds Corporation Limited; Gorkha Security Services AIR 2014 SC 3371 relied on; Delhi High Court sets aside one-year blacklisting order as illegal; writ petition allowed and disposed of.

What did the court decide?

Impugned blacklisting order dated 05.08.2025 set aside as illegal; writ petition disposed of. ¶39

M/S Swabhiman Commercial Pvt. Ltd. Vs National Seeds Corporation Limited & Ors. — Delhi HC (2026) — LawSathi Research

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$~17

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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- W.P.(C) 12500/2025 & CM APPL. 51000/2025

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M/S SWABHIMAN COMMERCIAL PVT LTD .....Petitioner

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Through: Mr. Rajesh Yadav, Sr. Adv. with Mr. Sharan Mehta, Mr. Asutosh Lohia, Ms. Shraddha Bhargava, Ms. Rishika Jain, Advs.

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versus

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NATIONAL SEEDS CORPORATION LIMITED & ORS.

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.....Respondents Through: Mr. Sanjay Kumar Shandilya, Adv for R-1 Mr. Nishant Gautam CGSC with Ms. Kavya Shukla, Mr. Vineet Negi, Mr. Vibhav V. Nath, Advs. Ms Shweta Bharti and Mr Nayan Mittal, Advs. for R-3

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CORAM: HON'BLE MR. JUSTICE V. KAMESWAR RAO HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 06.07.2026

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This petition has been filed challenging the order dated 05.08.2025, whereby the petitioner has been blacklisted from participating in any future tender or procurements of National Seeds Corporation Limited for a period of one year from the said date.

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One of the grounds of challenge by the petitioner as contended by the Mr. Rajesh Yadav is that the respondents though have issued a showcause notice to the petitioner but without stating the effect or the consequence on

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This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/07/2026 at 12:01:17

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the same. In other words, the show cause notice does not state it may entail black listing.

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He has drawn our attention to notice dated 23.07.2025. The translated

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copy of the same read as under:

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“NSC/MM/2/CB-167-GeM-SCPL/Rabi-25/2025-26/671

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Date: 23.07.2025 Via Email (Very Important)

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M/S SWABHIMAN COMMERCIAL PVT. LTD., 43, Gopal Bhavan, Kailash Bose Street, Manik Talla, Kolkata, West Bengal 700006 Email - [email protected]

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Subject: Regarding Jute Bags of 40 Kg capacity to be supplied under GEMC-511687709855068/20.06.2025.

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Sir

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Refer to the previous letters, emails and telephone conversations of this office related to the above subject, and in this regard, you are again informed that the Corporation had ordered your firm Swabhiman Commercial Pvt. Ltd. Kolkata to supply a total of 269700 pieces of 40 kg capacity jute bags against GeM purchase order number: GEMC- 511687709855068/20.06.2025 and it was also informed that as per the terms and conditions of GeM, ensure to submit bank guarantee and indemnity bond within the stipulated time limit, but till today dated 23.07.2025 (after about 33 days) no action has been taken by you in this regard and no approval has been taken from the Corporation regarding the design of the said bags.

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Considering all the above facts, it appears that M/s Swabhiman Commercial Limited, Kolkata is not willing to supply the said bags and the instructions given earlier are being deliberately disregarded, due to non-supply of the said bags on time, there is a possibility of the packing of seeds of the corporation being affected, which can also cause financial loss. Therefore, give your clarification in this regard within 2 days (by date: 25.07.2025). If no reply is received from you

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/07/2026 at 12:01:17

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in this regard within two days, then it will be assumed that you will not supply the said bags. Thereafter, necessary action will be taken against M/s Swabhiman Commercial Pvt. Ltd., Kolkata as per the terms and conditions of GeM.

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Sincerely

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Signed in hindi by Gulbir on 23/7/2025 Gurbir Singh Panwar Deputy General Manager & Head (Department Material Management)”

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Suffice to state, notice only states that if no reply is received from the petitioner; necessary legal action will be taken against the petitioner as per the terms and conditions of GeM.

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At this stage we may state the learned counsel for the respondentCorporation concedes that the consequence of the action is not mentioned in the notice.

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If that be so, one of the grounds urged by Mr. Yadav is required to be accepted in view of settled position of law in Gorkha Security Services

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vs. Govt. of NCT of Delhi & Ors. AIR 2014 SC 3371 , wherein the Supreme Court in paragraphs 27, 28 and 29 has held as under:

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“27) In the instant case, no doubt show cause notice dated 6.2.2013 was served upon the appellant. Relevant portion thereof has already been extracted above. This show cause notice is conspicuously silent about the blacklisting action. On the contrary, after stating in detail the nature of alleged defaults and breaches of the agreement committed by the appellant the notice specifically mentions that because of the said defaults the appellant was “as such liable to be levied the cost accordingly”. It further says “why the action as mentioned above may not be taken against the firm, besides other action as deemed fit by the competent authority”. It follows from the above that main action which the respondents wanted to take was to levy the cost. No doubt, notice further mentions that

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/07/2026 at 12:01:17

¶36

competent authority could take other actions as deemed fit. However, that may not fulfil the requirement of putting the defaulter to the notice that action of blacklisting was also in the mind of the competent authority. Mere existence of Clause 27 in the agreement entered into between the parties, would not suffice the aforesaid mandatory requirement by vaguely mentioning other “actions as deemed fit”.

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As already pointed out above in so far as penalty of black listing and forfeiture of earnest money/ security deposit is concerned it can be imposed only, “if so warranted”. Therefore, without any specific stipulation in this behalf, respondent could not have imposed the penalty of black listing.

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No doubt, rules of natural justice are not embodied rules nor can they be lifted to the position of fundamental rights. However, their aim is to secure justice and to prevent miscarriage of justice. It is now well established proposition of law that unless a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice, in exercise of power prejudicially affecting another must be in conformity with the rules of natural justice.”

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In view of settled position of law, we set aside the order dated 05.08.2025 as being illegal.

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The writ petition stands disposed of.

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V. KAMESWAR RAO, J

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MANMEET PRITAM SINGH ARORA, J

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JULY 6, 2026/ hp

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/07/2026 at 12:01:17

M/S Swabhiman Commercial Pvt. Ltd. v. National Seeds Corporation Limited & Ors.

Case brief

What is this about?

What did the court decide?

M/S Swabhiman Commercial Pvt. Ltd. v. National Seeds Corporation Limited & Ors.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

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