The Rajasthan High Court struck down a blacklisting order that barred an insurance company from future government tenders. The court ruled that the order overstepped the issues raised in the show-cause notice, violated natural justice, and undermined the company’s business rights.

The case involved a Third-Party Administrator (TPA) appointed under the Rajasthan Government Health Scheme from 2022 to 2025. After completing its contract, the TPA received a show-cause notice. The government then blacklisted it from new tenders for three years. The company challenged the ban, arguing that the punishment exceeded the allegations in the notice.

By imposing a disproportionate punishment, the government denied the company its fundamental right to carry on business. Thus, causing civil and business harm. The Court set aside the blacklisting order and permitted the state to issue a new, focused show-cause notice.

Why It Matters

This ruling matters because it reinforces that governments cannot punish businesses beyond the scope of a proper show-cause notice. Blacklisting can destroy a company’s reputation and block its future work. So it must follow due process and fair hearing principles. The decision protects the fundamental right to carry on business under Article 19(1)(g). It upholds the rule of law by ensuring that penalties are proportionate, transparent, and legally justified. For any specific query call at ‪+91 – 8569843472‬