In Brief
UMC Technologies challenged the Food Corporation of India's blacklisting order, which prevented it from participating in government tenders. While not disputing contract termination, the appellant contested the blacklisting decision. The Supreme Court held that blacklisting, being a severe and stigmatizing action, requires an explicit, clear, and particularized show cause notice mentioning the proposed blacklisting penalty beforehand. A mere reference to contractual clauses or bid documents cannot substitute for such explicit notice. Since the show cause notice was silent about blacklisting, the order violated natural justice principles. The appeal was allowed and the blacklisting order was set aside.
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