Facts: The appellant, a registered contractor, was awarded a contract by the Jharkhand Water and Sanitation Department for constructing an Elevated Service Reservoir. During the project, the reservoir's top dome collapsed. Despite the appellant's offer to reconstruct it at their own cost, the Department issued a show-cause notice regarding negligence and poor work quality. Following internal enquiries and technical reports from various IITs confirming negligence, the Department issued a "termination cum blacklisting" order on August 23, 2024. This order terminated all subsisting contracts, confiscated security deposits, and blacklisted the appellant for five years. The appellant challenged this before the High Court, which dismissed the writ and review petitions, leading to the present appeals.Procedural Posture: The case reached the Supreme Court via Special Leave Petitions (converted to Civil Appeals) against the judgment and review order of the High Court of Jharkhand, which had upheld the State's decision to terminate and blacklist the appellant.Issue: Whether the order of blacklisting was legally valid, especially considering it was issued via a common notice and order that also addressed contract termination, and whether it complied with the principles of natural justice.Holding: The Supreme Court upheld the termination of the contract but set aside the blacklisting order. It held that the blacklisting was illegal as it lacked a specific show-cause notice and failed to demonstrate independent application of mind.Reasoning: The Court reasoned that termination and blacklisting are distinct legal actions with different gravities. While termination is governed by the General Conditions of Contract (GCC) and pertains to a specific breach, blacklisting is governed by the Contractor Registration Rules, 2012, and has "stigmatic and exclusionary" consequences affecting future business prospects. The Court emphasized that blacklisting is not an automatic or logical consequence of termination. Under Rule 10.5 of the 2012 Rules and established precedents like "UMC Technologies", a valid blacklisting must be preceded by a specific notice clearly stating the intent to blacklist. The 2024 notice was vague, merely asking why "action" should not be taken, which is insufficient for such a "drastic step". Given that the appellant had already served over eighteen months of the five-year ban, the Court moulded the relief by directing the blacklisting to cease immediately rather than remanding for a fresh notice.