M/S. AEROGRAPHICS PAPERS PVT LTDversusINDIA SECURITY PRESS THRU G M AND ORS

       IN THE HIGH COURT OF JUDICATURE AT BOMBAY
              CIVIL APPELLATE JURISDICTION

                       WRIT PETITION NO.6968 OF 2026
M/s. Aerographics Papers Private Limited,               ]
A company incorporated under the Companies              ]
Act, 1956, having its registered office and             ]
factory at E-40, MIDC, Hingna Road, Nagpur,             ]
Maharashtra – 440 028                                   ]
Through its authorized signatory:                       ]
Shri. Hemant Shashikant Singhal,                        ]
aged about 63 years, resident of Plot 44,               ]
Himalaya Sunshine, Vayusena Nagar,                      ]
Dhaba, Nagpur, Maharashtra.                             ] .. Petitioner
                       Versus
1. India Security Press,                                ]
   A Unit of Security Printing and Minting              ]
   Corporation of India Limited,                        ]
   Nashik Road, Nashik – 422 101, Maharashtra           ]
   Through its Joint General Manager (Purchase)         ]
2. Security Printing and Minting Corporation of         ]
   India Limited, a Government of India Enterprise,     ]
   having its Corporate Office at 3rd Floor, Tower-G,   ]
   World Trade Centre, Nauroji Nagar,                   ]
   New Delhi – 110 029.                                 ]
   Through its Chairman & Managing Director             ]
3. Union of India,                                      ]
   Through the Secretary,                               ]
   Ministry of Finance, Department of Economic          ]
   Affairs, North Block, New Delhi – 110 001.           ] .. Respondents


Mr. Ritesh Kalra with Mr. Anish Khandekar, Mr. Sagar Thakkar and
Ms. Uroosa Shaikh, Advocates for the Petitioner.
Ms. Riya Jariwala (through V.C.), Advocate for Respondent Nos.1 and
2.
Mrs. Shehnaz V. Bharucha, Advocate for Respondent No.3.


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                       CORAM        : RAVINDRA V. GHUGE, ACJ. &
                                      GAUTAM A. ANKHAD, J.

                       DATE         :   19th August, 2026.


JUDGMENT (Per Gautam A Ankhad, J)


1.               Rule. Rule is made returnable forthwith and the matter is

heard finally with the consent of the parties.



2.               The Petitioner is aggrieved by the Debarment Order dated

13th May 2026 passed by Respondent No.1, whereby the Petitioner has

been debarred for a period of twelve months from participating in any

tender issued by Respondent No.1. Though the Petitioner has also

challenged the termination of an existing contract and encashment of the

performance security in this petition, Mr. Kalra, learned counsel for the

Petitioner, states that the Petition is confined to the challenge to the

debarment.



3.               The facts, in brief, are that the Petitioner was awarded a

Tender by the Respondents for supply of paper. The Petitioner

admittedly performed part of the contract but failed to complete the

supplies in accordance with the Tender. Consequently, on 12th March

2026, Respondent No.1 issued a show cause notice setting out the

alleged defaults. Paragraph 7 of the notice states:
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      “7. In view of above lapses, your explanation is required that
          why ISP Nashik should not initiate administrative action
          against your Firm”.


The Petitioner submitted its response by e-mail on the same day.

Thereafter, on 13th May 2026, Respondent No.1 passed the impugned

Debarment Order inter alia holding as follows:-


      “3.3       Based on the above clause, following action has been
                 taken against M/s. Aerographic Private Limited;
                 a) The GeM Contract No.GEMC-511687703137192
                    dated 27.12.2025 placed for Procurement of 30 MT
                    Maplitho Paper in reels, 45 cms. width 70 GSM has
                    been terminated and performance security
                    submitted by M/s. Aerographic Papers Pvt. Ltd. of
                    amounting     Rs.77,616/-    (Rs.    Seventy-Seven
                    Thousand Six Hundred Sixteen only) in the form of
                    Bank Guarantee No.102GT02253320001 dated
                    28.11.2025, with maturity date 06.07.2026 issued
                    by HDFC Bank will be encashed and the same will
                    be deposited in the Account of India Security Press
                    a Unit of SPMCIL.
                 b) Further, M/s. Aerographic Papers Pvt. Ltd. has
                    been debarred for 12 months from the date issue
                    of this debarment order i.e. upto 12.05.2027 to
                    participate in any Tender of India Security Press,
                    Nashik Road and also raised the incident of GeM
                    Portal.”


4.               Mr. Kalra submits that the challenge in the present Petition

is confined to the debarment. He submits that the Petitioner was not

given a notice that Respondent No.1 proposed to debar or blacklist it for


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twelve months and was consequently denied an opportunity to show

cause specifically against such action. Debarment cannot fall under “ad-

ministrative action” as there are serious consequences due to the debar-

ment order. The impugned order, according to him, therefore violates the

principles of natural justice and Articles 14 and 19(1)(g) of the Constitu-

tion.



5.               On the other hand, Ms. Jariwala, learned counsel appearing

for Respondent Nos.1 and 2, submits that the show cause notice

expressly contemplated administrative action against the Petitioner and

this is wide enough to include debarment. She, therefore, submits that

there was no denial of natural justice.



6.               Having considered the rival submissions, we are unable to

accept the Respondents' contention. Debarment or blacklisting has

serious civil consequences. It has the effect of excluding an entity from

participating in future public procurement and directly impacts its ability

to carry on its business with the State. It is settled law as held by the

Hon’ble Supreme Court in Gorkha Security Services vs. Government

(NCT of Delhi) ((2014) 9 SCC 105) and UMC Technologies Private

Limited vs. Food Corporation of India ((2021) 2 SCC 551) that the

affected party must be made aware of the precise action proposed against

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it so that it can meet the case against it. The notice dated 12 th March

2026 issued to the Petitioner does not satisfy this requirement. It sets out

the alleged contractual defaults and calls upon the Petitioner to explain

why ‘administrative action’ should not be initiated for the alleged lapses.

It does not state that Respondent No.1 proposes to debar or blacklist the

Petitioner, much less for twelve months. As held by the Hon’ble

Supreme Court, natural justice requires a specific notice of proposed

debarment and not a general notice of administrative action that the

authority may ultimately invoke. We accordingly hold that the impugned

debarment is vitiated for breach of the principles of natural justice. The

impugned order violates the Petitioner’s fundamental rights under

Articles 14 and 19(1)(g) of the Constitution of India and cannot be

sustained.


7.               For the above reasons, this Writ Petition is partly allowed.

Paragraph 3.3(b) of the Debarment Order is quashed and set aside.


8.               We clarify that we have expressed no opinion on the validity

of the termination of the contract or the encashment of the performance

security. The Petitioner is at liberty to adopt appropriate proceedings to

challenge the said actions.




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                      9.               Rule is made partly absolute. There shall be no order as to

                      costs.




                      [ GAUTAM A. ANKHAD, J. ]                    [ ACTING CHIEF JUSTICE ]




        Digitally
        signed by
SNEHA   SNEHA
        ABHAY DIXIT
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ABHAY   Date:         923-WP-6968-2026.odt                                                     Dixit
DIXIT   2026.08.20
        17:20:50
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