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The Meghalaya High Court has observed that allegations of fraud cannot be relied upon to take adverse licensing action against an entity without first communicating the allegations and providing it an opportunity to respond.

The Court held that the allegation of fraud had cast a stigma on the petitioner and directed the authorities to consider its fresh trading licence application and representation against the allegation in accordance with law.

"A pertinent fact however, that this Court notices is that, in the consideration by the respondents, the rejection by the Licensing Officer, KHADC and the declaration that the petitioner had committed a fraud on the institution was never communicated, nor the petitioner afforded any opportunity to represent against the same, or to show under what circumstances, no fresh application had been made."

The petitioner, a private security agency, was awarded a contract by NIT Meghalaya following a tender dated June 30, 2025. Although the tender required a valid trading licence issued by the KHADC, the petitioner sought to include the new work order in its existing licence instead of applying for a fresh one.

The KHADC rejected the request and subsequently alleged fraud, while also initiating proceedings to cancel its existing licence. Aggrieved, the petitioner approached the Meghalaya High Court seeking permission to apply afresh for the trading licence.

The Court held that the petitioner was required to obtain a fresh trading licence for the new work order under Sections 3A and 6 of the 1954 Regulation, rather than seeking its inclusion in the existing licence.

However, the Court observed that the KHADC had neither communicated its rejection nor given the petitioner an opportunity to respond to the allegation of fraud, which had cast a stigma on the company.

Referring to Section 8, the Court also questioned the action initiated to cancel the previously granted licence. It directed the authorities to consider a fresh licence application and the petitioner's representation against the fraud allegation in accordance with law.

Date of Decision: 11.11.2026

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