Surya Alloy Industries Limited & Anr. v. Union of India & Ors.

#2. Mr. Majumdar, learned Senior Advocate appearing for the petitioners submits that the RDSO has issued the show cause notice dated November 20, 2025 without any authority and the show cause notice is vague. He submits that after the show cause notice the RDSO again issued an order dated February 5, 2026 wherein the petitioners have been temporarily delisted w.e.f. July 23, 2025 from the list of approved vendors. He submits that in the delisting order the RDSO has 2 referred the show cause notice dated January 20, 2025 but no show cause notice was issued on January 20,

#2025. He further refers the other show cause notices dated August 22, 2025 and October 16, 2025, mentioned in the impugned order but the said show cause notices were not served to the petitioners. In the impugned order, is also mentioned that the competent authority has decided to temporary delist the petitioners from the list of the approved vendor but is the contention of the petitioners that no opportunity of hearing was given to the petitioner. He submits that the alleged defective materials have not been collected in presence of the petitioners or with the consent of the petitioners sent to the testing agency.

#3. Learned counsel for the petitioners further submits that the penal action has been prescribed in 4.2.2 of the delisting guidelines but the delisting order issued against the petitioners is not covered any of the clauses as mentioned in Clause 4.2.2.

#4. Learned counsel for the respondents has drawn the attention of this Court to the RDSO guideline of testing of samples from the lots already passed by inspecting official/agency at the vendor premises/consignee end/field and defect classification and relied upon P.1.1 wherein, it is mentioned that the representative of RDSO, Zonal Railway, Railway Board or Railway investigating agency shall pick up samples jointly with 3 the field unit’s representative, in case the sample is picked up from the field units/consignee end, and with the firm’s representative in the case the sample is picked up at the firm’s premises.

#5. He further submits that in terms of the said guideline, the authorities have collected the samples on September 18, 2025 and October 10, 20205. After collection of the said samples it was sent to the testing agency with the consent of the representative of the petitioners and on receipt of the report from the testing agency, it is found that the tensile strength is not up to the specified values and accordingly the show cause notice was issued to the petitioners but in spite of receipt of the show cause notice, the petitioners have neither sent any reply or has come forward for personal hearing. Accordingly, the authorities have issued the delisting order.

#6. Heard the learned counsel for the respective parties and perused the materials on record. The only grievance of the petitioners before this Court is that it is the allegation of the respondent authorities that after supply of the materials within two months the authorities have found that the materials are defective. The authorities have sent materials to the third party agency for testing and on receipt of the testing report, the impugned order was passed. 4

#7. Learned counsel for the petitioners submits that the materials have not been collected either in presence of the representative of the petitioners or in presence of the petitioners or with the consent of the petitioners. Mr. Majumdar, learned senior counsel further submits that before supply of the materials, it has been inspected by the concerned testing agency and after being accepted the quality supplied by the petitioners, the same has been received by the authorities and thus there is no chance of supply of defective materials by the petitioners.

#8. Considering the above, this Court finds that the only grievance of the petitioners that the authorities have sent the alleged defective materials to the third party agency without collecting materials in presence of the petitioner. On the basis of which, the show cause notice was issued and the delisting order is passed.

#9. In the show cause notice, three notices have been mentioned but admittedly, all three notices are not connected with the petitioner. The alleged defective samples were also not collected in presence of the petitioners.

#10. In view of the above, the show cause notice and the delisting order is set aside and quashed. The authorities are at liberty to take the defective samples in presence of the petitioners or its representative and to send the same to the agency for its testing. 5

#11. It is made clear that after getting the report from the testing agency if the authorities find that the materials supplied by the petitioners are not up to the specified values, the respondent authorities are at liberty to take appropriate steps against the petitioners in accordance with law. It is further made clear that as this Court has set aside the show cause notice and the delisting order, the authorities cannot debar the petitioners to participate in the future tender if the petitioners are otherwise eligible.

#12. WPA 4762 of 2026 is disposed of.

#13. All parties shall act on the server copy of this order duly downloaded from the official website of this Court.

#14. Urgent Photostat certified copy, if applied for, be given to the parties upon compliance with all formalities. (Krishna Rao, J.)