The case concerns a petition filed by SRSC Infra Pvt. Ltd. against the Union of India, arising out of the withdrawal of a Letter of Award (LOA) dated 14 February 2023. The LOA had been issued pursuant to a tender by the Ministry of Road Transport and Highways (MoRTH) for widening and strengthening a section of NH-330D in Uttar Pradesh. SRSC Infra was declared as the lowest bidder after due evaluation of both technical and financial bids.

However, even before the contract could be executed, the company was served with a show cause notice in October 2022 alleging violation of the Integrity Pact, based on a CBI case against its employee. SRSC Infra responded by denying the allegations, asserting that mere registration of an FIR did not justify punitive action. The company also attended a personal hearing before MoRTH. Despite this, a debarment order dated 7 February 2023 was issued against it, though this order was never communicated to the petitioner.

Due to an oversight, the LOA was still issued on 14 February 2023. Subsequently, in March 2023, MoRTH informed that SRSC Infra had been debarred for three months. Based on this, the LOA was cancelled on 10 April 2023. This prompted the petitioner to challenge both the cancellation and the debarment.

The court examined the record and found serious procedural lapses. The debarment order was never served on the petitioner, which meant that the company had no knowledge of the adverse action until it was cited in official filings. Further, the order did not deal with the detailed defence submitted by SRSC Infra. The court emphasized that principles of natural justice require not only a show cause notice but also a reasoned order that considers the defence of the affected party. The absence of communication itself made the debarment unsustainable in law.

Referring to earlier Supreme Court and High Court precedents, the court observed that blacklisting or debarment has grave consequences and cannot be imposed in an arbitrary or mechanical manner. Since the order was neither communicated nor reasoned, it stood vitiated. Accordingly, both the debarment order of 7 February 2023 and the cancellation of the LOA dated 10 April 2023 were quashed.

The court noted that the LOA had been issued more than two years after the tender was floated, and that the contract agreement had not yet been executed due to the intervening events. Therefore, while directing that the execution of the agreement with SRSC Infra may proceed, the court left open the option for the government to scrap the tender altogether and re-issue it if it considered the project commercially unviable due to the passage of time. The court clarified that in such an event, SRSC Infra would still be free to participate in the fresh tender process.

Finally, the court also safeguarded the petitioner’s right to claim damages or monetary relief for losses suffered due to the wrongful cancellation of the LOA. The petition was thus disposed of with these directions.