Chattisgarh High Court
Rakshak Securitas Private Limited vs State Of Chhattisgarh on 2 April, 2026
Author: Ramesh Sinha
Bench: Ramesh Sinha
1
2026:CGHC:15293-DB
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
WPC No. 1010 of 2026
Rakshak Securitas Private Limited Through Its State Head, Pankaj Kumar
Chauhan, Aged- 40 Years S/o Akshayawat Singh Reg. Office-T 5, Plot No. 12,
Manish Plaza Iii, Sector-10, Dwarka New Delhi 110075
... Petitioner
versus
1 - State Of Chhattisgarh Through- Secretary Cum Commissioner Commercial
Tax (Excise) Department Chhattisgarh, North Block, Sector-19 Commercial Tax
And Gst Bhawan Nava Raipur Atal Nagar (Cg)
2 - Chhattisgarh State Marketing Corporation Limited (CSMCL) Through Its
Managing Director, Aabkari Bhawan, Near Chokra Nala Labhandi District
Raipur (Cg)
3 - Deputy General Manager Chhattisgarh State Marketing Corporation Limited
(CSMCL) Aabkari Bhawan, Near Chokra Nala Labhandi District Raipur (Cg)
4 - Saturn Transmovers Private Limited Through Its Director, Akash Agrawal,
Aged About 40 Years, S/o Madan Agrawal Reg. Office- Shop No. 215, Edge
Commercial Complex, Raipur,492001,(Cg)
... Respondents
(Cause title taken from Case Information System) For Petitioner : Mr. Prafull N. Bharat, Senior Advocate along with Mr. Mateen Siddiqui, Advocate For Respondent No.1/State : Mr. Shashank Thakur, Addl. A.G. VED PRAKASH DEWANGAN For Respondents No. 2 & 3 : Mr. Malay Shrivastava, Advocate Digitally signed by VED PRAKASH DEWANGAN Date: 2026.04.09 18:25:23 +0530 2 Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Ravindra Kumar Agrawal, Judge Order on Board Per Ramesh Sinha, Chief Justice 02/04/2026
1. The present writ petition has been filed under Article 226 of the Constitution of India calling in question the legality, validity and propriety of the impugned order dated 18.02.2026 passed by the Managing Director, Chhattisgarh State Marketing Corporation Limited (CSMCL), whereby the work order awarded in favour of the petitioner has been cancelled, the bank guarantee amounting to ₹2,56,63,421/- has been forfeited, and the petitioner has been blacklisted from participating in any tender of CSMCL for a period of one year. The petitioner has also sought consequential reliefs for permitting it to participate in ongoing and future tenders issued by the respondent Corporation.
2. The present petition has been filed by the petitioner seeking the following reliefs:-
"10.1 That this Hon'ble Court may kindly be pleased to quash and set aside the impugned order dated 18.02.2026 (Annexure P/1), issued by the Respondent Managing Director, CSMCL, Raipur.
10.2 That this Hon'ble Court may kindly be pleased to direct the Respondent authorities to not debar the petitioner firm from participating based on the findings in Annexure P/1 in "Tender for Empanelment of Placement Agency for Supply of Manpower to Chhattisgarh State Marketing 3 Corporation Ltd." bearing Tender No. CSMCL/Tender/2026-27/1 issued by CSMCL dated 30.01.2026 and "Tender for Empanelment of Security Agency For Supply of Security Guards to Chhattisgarh State Marketing Corporation Ltd."
bearing Tender No. CSMCL/Tender/2026-27/3 issued by CSMCL dated 04.02.2026.
10.3 That this Hon'ble Court may kindly be pleased to direct the Respondent authorities to not debar the petitioner firm from participating based on the findings in Annexure P/1 in any other future tender issued by respondent authorities.
10.4 That, this Hon'ble Court may graciously be pleased to pass such further orders or directions as may be deemed fit and proper in the facts and circumstances of the case."
3. The facts of the case as emerges from the pleadings of the petition are that, the petitioner is a placement agency engaged in providing manpower services and was awarded a contract pursuant to Tender No. CSMCL/Tender/2024-25/2 dated 19.02.2024 issued by CSMCL. After being declared successful, a work order dated 31.03.2024 was issued in its favour and the petitioner commenced execution of the contractual work. During the subsistence of the contract, a complaint dated 26.09.2025 was made by respondent No.4 alleging that the petitioner had sub-let the work in violation of the tender conditions and had entered into a Memorandum of Understanding (MoU) with the said respondent.
4******* Pursuant to the complaint, the petitioner was called upon to submit its explanation, to which it submitted a detailed reply denying all allegations and asserting that the alleged financial transaction between the parties was purely a personal arrangement and had no nexus with the contractual work. It was also the stand of the petitioner that the alleged MoU relied upon by the complainant was forged, unreliable and inherently contradictory, inasmuch as it was undated, notarized prior to its alleged execution and signed by a person who was at the relevant time an employee of the petitioner itself.
******* Despite the said explanation, the respondent authority passed the impugned order dated 18.02.2026 terminating the contract, forfeiting the bank guarantee and blacklisting the petitioner for one year. It is the case of the petitioner that the impugned order has been passed without issuance of a proper show cause notice indicating the proposed action of blacklisting and without affording an adequate opportunity of hearing. It is further contended that the order was communicated belatedly on 28.02.2026, after the petitioner had already participated in a fresh tender process, thereby rendering the action arbitrary and violative of principles of natural justice.
4. Mr. Prafull N. Bharat, learned Senior Advocate appearing for the petitioner would submit that the impugned action is wholly arbitrary, disproportionate and violative of principles of natural justice, inasmuch as no specific show cause notice indicating the proposed penalty of blacklisting was ever issued to the petitioner. Placing reliance on the judgments of the Hon'ble Supreme Court in UMC Technologies Pvt. 5 Ltd. v. Food Corporation of India, (2021) 2 SCC 551 and Gorkha Security Services v. Govt. (NCT of Delhi), (2014) 9 SCC 105 it is contended that a valid and specific show cause notice is a sine qua non before passing any order of blacklisting, failing which the order stands vitiated.
******* It is further submitted that the entire action is founded on a disputed and allegedly forged MoU, which suffers from inherent contradictions and cannot be relied upon. The petitioner has denied execution of the said document and has also demonstrated that there were no financial transactions indicative of sub-letting of work. It is contended that the complaint itself was motivated, having been filed after an inordinate delay and arising out of personal animosity. Learned counsel would argue that in absence of cogent and independent material, the drastic action of blacklisting and forfeiture of bank guarantee is unsustainable in law.
5. Per contra, Mr. Shashank Thakur, learned Additional Advocate General would support the impugned order and submit that the petitioner was found to have violated the terms and conditions of the contract, particularly the prohibition against sub-letting of work. It is contended that the respondent authority, upon consideration of the complaint, documents placed on record and the reply submitted by the petitioner, arrived at a conscious decision to terminate the contract and impose consequential penalties. It is further submitted that the scope of interference under Article 226 of the Constitution of India in contractual 6 matters is limited, and in absence of any patent illegality or procedural irregularity, the impugned order does not warrant interference.
6. Mr. Malay Shrivastava, learned counsel appearing for respondents No. 2 and 3 would vehemently oppose the writ petition and submit that the impugned order has been passed strictly in accordance with the terms and conditions of the tender as well as after following the principles of natural justice. It is contended that the petitioner was issued a show cause notice dated 30.09.2025 and thereafter was afforded multiple opportunities of personal hearing on various dates, wherein the petitioner was duly represented through its authorized representatives and counsel. Despite sufficient opportunities, the petitioner failed to produce any cogent material to disprove the allegations of sub-letting. It is further submitted that the proceedings clearly demonstrate due application of mind by the competent authority and the impugned order has been passed only after considering all relevant materials including the complaint, reply of the petitioner, and documents produced during the course of hearing.
******* It is further submitted that the allegation of sub-letting stood prima facie established on the basis of the Memorandum of Understanding dated 30.04.2024, verification of e-stamp showing its purchase by the petitioner, and admitted financial transactions between the petitioner and respondent No. 4, which closely correspond to the amount of bank guarantee furnished by the petitioner. Learned counsel would argue that such conduct clearly amounts to breach of Clauses 4 and 13 of the tender conditions, which strictly prohibit sub-letting. It is also contended 7 that in matters arising out of contractual obligations, especially where an arbitration clause exists, the writ petition is not maintainable. Placing reliance on the judgment of the Hon'ble Supreme Court in Blue Dreamz Advertising Pvt. Ltd. v. Kolkata Municipal Corporation, (2024) 15 SCC 264, it is submitted that blacklisting is a necessary tool to safeguard public interest where the conduct of the contractor lacks integrity and reliability.
7. We have heard learned counsel for the parties and considered their rival submissions made herein above and also gone through the entire records of the case with utmost circumspection.
8. From the material available on record, it is evident that the petitioner was issued a show cause notice and was thereafter granted multiple opportunities of personal hearing on different dates. The proceedings clearly indicate that the petitioner was represented through its counsel and was afforded adequate opportunity to present its case. Thus, the contention of the petitioner regarding violation of principles of natural justice does not merit acceptance. The Hon'ble Supreme Court in Patel Engineering Ltd. v. Union of India, (2012) 11 SCC 257, has held that where adequate opportunity of hearing is provided, the action of blacklisting cannot be interfered with merely on technical grounds.
9. A perusal of the record further reveals that the respondent authorities had duly initiated proceedings against the petitioner by issuing a show cause notice dated 30.09.2025 along with the complaint dated 26.09.2025 and relevant annexures submitted by respondent No. 4. 8 Thereafter, the petitioner was afforded multiple opportunities of hearing, and notices/intimations for personal appearance were issued on various dates including 29.10.2025, 12.11.2025, 28.11.2025, 10.12.2025 and 29.12.2025, along with the documents forming the basis of the allegations, including the alleged Memorandum of Understanding and supporting material. The record indicates that the petitioner had full knowledge of the allegations and the material relied upon by the respondents, and participated in the proceedings through its representatives and counsel. Thus, it cannot be said that the petitioner was taken by surprise or was denied adequate opportunity to respond to the case set up against it.
10. It is also pertinent to take note of the relevant conditions of the tender governing the field, which categorically prohibit sub-letting of the contract work. Clause 4 of Section-III (General Commercial Conditions of the Contract) provides that "The Placement Agency shall not assign, sub contract or sublet the whole or any part of the works covered by the contract, under any circumstances." Further, Clause 13 stipulates that "The Contractor shall not assign, sublet or subcontract any part of the Contract at any time during contract period. Further, any Assignment/Subletting/Subcontracting, as above shall be void ab initio and the Corporation shall have right to terminate the work of concerned agency in case of violation of this clause." A conjoint reading of the aforesaid clauses makes it abundantly clear that sub-letting of the contract is absolutely prohibited and any such act, if established, entails serious consequences including termination of contract.
9
11. From the material available on record, it prima facie appears that the petitioner had entered into an arrangement with respondent No. 4 - Saturn Transmovers Private Limited, in relation to the execution of the work awarded under the tender. The correspondence placed on record, particularly the letter dated 02.07.2025 issued by respondent No. 4, clearly indicates that a substantial amount of ₹2,56,65,000/- was advanced to the petitioner specifically for facilitating its obligations under the manpower supply contract with the respondent Corporation. Such financial arrangement, having a direct nexus with the execution of contractual obligations, coupled with other attendant circumstances brought on record during the proceedings, clearly supports the conclusion that the petitioner had entered into an arrangement amounting to sub-letting or parting with its contractual responsibilities. In view of the express prohibition contained in Clauses 4 and 13 of the General Commercial Conditions of the Contract, which categorically bar any assignment, sub-letting or subcontracting of the work at any time during the contract period, the petitioner has rendered itself liable for action including termination of contract and consequential penalties. The relevant portion of the letter dated 02.07.2025, which reflects the nature of the arrangement between the petitioner and respondent No. 4, is reproduced hereinbelow:
Date: 02.07.2025 To, The Director Rakshak Securitas Private Limited T-5, Manish Plaza III, Plot No. 12 Sector-10, 10 Dwarka, New Delhi, Delhi - 110075 Subject: Demand for Repayment of Financial Debt - ₹2,56,65,000/- along with Contractual Interest Dear Sir, We refer to the financial arrangement between our company, Saturn Transmovers Private Limited, and Rakshak Securitas Private Limited, whereby an amount of ₹2,56,65,000/- (Rupees Two Crore Fifty-Six Lakh Sixty- Five Thousand only) was disbursed as an unsecured loan to your company for the specific purpose of facilitating your obligations under the manpower supply engagement with Chhattisgarh State Marketing Corporation Ltd.
The said amount was transferred to your ICICI Bank account (A/c No. 037851000004, IFSC: ICIC0000378) on 16 April 2024, via RTGS, UTR No. IDFBR52024041600432810.
It was mutually agreed that the said loan would carry interest at the rate of 2% per month (24% per annum), and would be repayable along with such interest, regardless of the outcome of the business.
Despite repeated follow-ups, neither the principal amount nor any part of the agreed interest has been paid till date. There has also been no communication from your end for resolution.
We hereby call upon you to:
(1) Repay the principal loan amount of ₹2,56,65,000/-, and (2) Interest at 2% per month from 16 April 2024 until actual date of payment, (3) Within 15 (fifteen) days from the date of receipt this notice.
In case of failure to make the payment within the stipulated time, we shall be free to initiate appropriate proceedings under:
a) The Insolvency and Bankruptcy Code, 2016, 11
b) Other applicable civil and/or criminal laws, without further reference.
This notice is issued without prejudice to our rights under any applicable law, equity, or contract.
We trust you will treat this matter with urgency and respond accordingly.
Yours faithfully, For Saturn Transmovers Private Limited Sd/-
Akash Agrawal (Director/Authorised Person)
12. Further, the material on record, including the Memorandum of Understanding, verification of e-stamp and admitted financial transactions between the petitioner and respondent No. 4, constitute sufficient basis for the respondent authority to form a bona fide opinion regarding breach of tender conditions. The scope of judicial review in contractual matters is limited. The Hon'ble Supreme Court in Tata Cellular v. Union of India, (1994) 6 SCC 651, and Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216, has consistently held that this Court does not sit as an appellate authority over administrative decisions and interference is warranted only in cases of arbitrariness, mala fides or perversity, none of which are made out in the present case. Even otherwise, disputed questions of fact arising out of contractual relationships are not amenable to writ jurisdiction.
13. So far as the contention regarding blacklisting is concerned, the Hon'ble Supreme Court in Kulja Industries Ltd. v. Chief General Manager, W.T. Project, BSNL, (2014) 14 SCC 731, and Blue Dreamz 12 Advertising Pvt. Ltd. v. Kolkata Municipal Corporation, (2024) 15 SCC 264, has held that blacklisting is within the domain of the executive authority and can be resorted to in order to protect public interest and ensure integrity in contractual dealings. In the present case, the decision to blacklist the petitioner for a limited period of one year cannot be said to be disproportionate or arbitrary, particularly in view of the nature of allegations and material available on record.
14. So far as the forfeiture of the bank guarantee amounting to ₹2,56,63,421/- is concerned, it is evident that the contract between the parties contains an arbitration clause under Clause 16 of the General Commercial Conditions of the Contract. Clause 16 provides that the parties shall first attempt to resolve disputes amicably and, in the event of failure, any dispute arising from or in connection with the contract shall be referred to arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996, with the seat and venue at Raipur, Chhattisgarh. In view of the existence of such an efficacious alternative remedy, this Court is not inclined to examine the issue relating to forfeiture of bank guarantee in exercise of its writ jurisdiction. The petitioner is, however, at liberty to avail appropriate remedy as available to it in law, including invocation of the arbitration clause, if so advised.
15. Accordingly, in view of the foregoing analysis, this Court is of the considered opinion that the impugned order dated 18.02.2026 does not suffer from any illegality, arbitrariness or violation of principles of natural justice warranting interference under Article 226 of the Constitution of 13 India. The writ petition, being devoid of merit and substance, deserves to be and is hereby dismissed.
16. However, it is made clear that the petitioner shall be at liberty to avail such remedy as may be available to it in law, including recourse to arbitration in terms of Clause 16 of the contract, if so advised.
17. No order as to costs.
Sd/- Sd/-
(Ravindra Kumar Agrawal) (Ramesh Sinha)
Judge Chief Justice
padma/ved