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Judgment
PURUSHAINDRA KUMAR KAURAV, J. (ORAL)
These petitions are for setting aside the common letter dated 07.04.2026, issued by respondent no. 1-Bureau of Energy Efficiency (Bureau), whereby the petitioners have been debarred from participation in all schemes of the Bureau and its efficiency-related activities for a period of three years, and the letter of award dated 07.12.2024 issued to them has been cancelled.
The petitioner in W.P. (C) 5335/2026, M/s Development Enviroenergy Services Private Limited (company), was empanelled with the Bureau as an ‘accredited energy auditor firm for PAT M & V’ vide letter dated 07.04.2014. It was awarded three contracts for ‘Baseline Data Collection and Process Verification Audit of Sugar Sector for inclusion in PAT Scheme' vide three letters of award, all dated 07.12.2024, by the Bureau. The petitioner in W.P. (C) 5339/2026, Mr. Dipanjan Roy, is an employee of the company. He was also granted accreditation as an energy auditor by the Bureau vide certificate dated 01.17.2016.
Owing to disagreements between the parties with respect to completion of the awarded work within the stipulated timeline, the Bureau issued show cause notice dated 01.09.2025 to the company seeking its response on why action under Rule 9(7)(a) and (c) of the Energy Conservation (Energy Consumption Norms and Standards for Designated Consumers, Form, Time within which, and Manner of Preparation and Implementaion of Scheme, Procedure for Issue of Energy Savings Certificate and Value of Per Metric Tonne of Oil Equivalent of Energy Consumed) Rules, 2012 should not be taken. However, no show cause notice was issued to Mr. Dipanjan Roy prior to his debarment.
These two writ petitions were called out for hearing on 21.04.2026. The Court had taken note of the primary grievance raised in W.P.(C) 5335/2026 regarding non-consideration of the petitioner’s reply and in W.P.(C) 5339/2026 regarding non-issuance of the show cause notice.
The Court, on 21.04.2026, when the matters were listed for the first time, was of the prima facie opinion that the impugned action is impermissible in law, considering the aforesaid circumstances and the legal position as enunciated by the Supreme Court in Kulja Industries Ltd vs. Chief General Manager W.T. Proj. Bsnl & Ors.1 Further, the respondents were queried whether they were open to reconsidering the case after affording an opportunity of hearing to the petitioners. The Bureau was also directed not to take further coercive steps and to maintain status quo as was existing on the said date. On 23.04.2026, the operation of the impugned order was stayed.
The Bureau has since, filed its counter affidavit, and taken the stand that the question for consideration in these petitions is only whether the petitioners had notice of the allegations, the proposed actions, and been given adequate opportunity to respond, and not whether the impugned decision is in line with the company’s reply to the show cause notice. Further, various averments have been made to justify the decision which was ultimately taken in the impugned order.
The Court, however, finds that the Bureau has dealt with the reply of the company in a single line, as follows:
“Upon careful examination of the submissions and records, the Committee concluded that the agency has failed to comply with the aforesaid provisions and has committed violations.”
It is trite law that State actions are to be supplemented by reasons to be specified in the order itself, so as to enable Courts to test their legal soundness when exercising its powers of judicial review. These reasons cannot later be supplied by way of affidavits in order to justify the action, once the aggrieved party approaches the Court. Reference in this regard, may be made to the oft cited decision of the Supreme Court in Mohinder Singh Gill v. Chief Election Commissioner.2
“8.The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought out. We may here draw attention to the observations of Bose, J. in Gordhandas Bhanji,3:
“Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself.”
Orders are not like old wine becoming better as they grow older.”
Therefore, it was incumbent upon the Bureau to record the reasons for its decision in the impugned itself, and the impugned order is vitiated by the absence of the same.
Insofar as the debarment of Mr. Dipanjan Roy is concerned, the impugned order is liable to be set aside for an additional reason. He was not served with any show cause notice prior to his debarment.
The Supreme Court, in Kulja Industries Ltd. has held that, considering the effects of blacklisting on the aggrieved party, it ought to be given a fair prior opportunity to present its case against the same. Reference may be made to the following extract from the said decision:
“18.The legal position on the subject is settled by a long line of decisions rendered by this Court starting with Erusian Equipment & Chemicals Ltd. v. State of W.B.4 where this Court declared that blacklisting has the effect of preventing a person from entering into lawful relationship with the Government for purposes of gains and that the authority passing any such order was required to give a fair hearing before passing an order blacklisting a certain entity. This Court observed:
“20.Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.”
Subsequent decisions of this Court in Southern Painters v. Fertilizers & Chemicals Travancore Ltd.; 5 Patel Engg. Ltd. v. Union of India;6 B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd.;7 Joseph Vilangandan v. Executive Engineer (PWD),8 among others have followed the ratio of that decision and applied the principle of audi alteram partem to the process that may eventually culminate in the blacklisting of a contractor.”
The necessity of a show cause notice prior to any debarment action has been reiterated by the Supreme Court in Gorkha Security Services v. Govt. of (NCT of Delhi),9 as follows:
“Necessity of serving show-cause notice as a requisite of the
principles of natural justice
16.It is a common case of the parties that the blacklisting has to be preceded by a show-cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as “civil death” of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in government tenders which means precluding him from the award of government contracts.“
Accordingly, the impugned order dated 07.04.2026 is hereby set aside. Considering the circumstances, liberty is granted to the Bureau to issue a show cause notice to Mr. Dipanjan Roy and to take an appropriate decision after affording an opportunity of hearing. Insofar as the company is concerned, since it has already been served with a show cause notice, the Bureau is granted liberty to rehear the petitioner, and pass a reasoned order dealing with its submissions.
Petitions stand disposed of, accordingly.
Needless to state that all rights and contentions are left open.