Kaveri Infrastructure Pvt Ltd., vs Delhi Jal Board, Through Its Chief Executive Officer,

* IN THE HIGH COURT OF DELHI AT NEW DELHI
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Judgment reserved on: 27 April, 2026
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Judgment pronounced on: 2 July, 2026
+ W.P.(C) 16962/2022 & CM APPL. 53749/2022
KAVERI INFRASTRUCTURE PVT LTD., .....Petitioner
Through: Mr. Satvik Varma, Senior Advocate
with Mr. Udit Chauhan, Mr. Shantanu
Parmar, Mr. Yash Agarwal & Mr.
Balram, Advocates.
versus
DELHI JAL BOARD, THROUGH ITS CHIEF EXECUTIVE
OFFICER, .....Respondent
Through: Mr. Karunesh Tandon, Mr. Sarthak
Mittal and Mr. Prabin Mohan,
Advocates.
CORAM:
HON'BLE MR. JUSTICE AMIT BANSAL
JUDGMENT
AMIT BANSAL, J.
1. The present writ petition has been filed seeking quashing of the
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speaking order dated 22 July, 2022 passed by the respondent/Delhi Jal
Board (‘DJB’), by which the petitioner has been blacklisted/debarred from
participating in the tendering process of the respondent.
ACTUAL ACKGROUND
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2. Brief facts relevant for deciding the present writ petition are set out
below.
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3. The petitioner is a company engaged in field of installation of water
supply and sewerage rehabilitation works, tube well installation and deep
bore hand pump projects.
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4. On 9 September, 2004, the respondent issued a Notice Inviting
Tender for renovation of old pipelines. The petitioner applied for the said
tender and the work was awarded to the petitioner.
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5. The Central Bureau of Investigation (‘CBI’) registered an FIR on 23
April, 2007 alleging that the petitioner had secured a ₹35.84 crore contract
through corrupt and extraneous considerations involving its then Managing
Director and the respondent’s CEO. Pursuant thereto, the respondent
debarred the petitioner from participating in future tenders vide its circular
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dated 25 June, 2007.
6. The petitioner filed a writ petition, W.P.(C) 5398/2007, seeking
quashing of the aforesaid circular issued by the respondent. This Court vide
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its judgment dated 14 September, 2007 quashed the debarment circular
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dated 25 June, 2007, while granting liberty to the respondent to issue a
fresh notice outlining allegations against the petitioner and affording an
opportunity to the petitioner to refute the same.
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7. On 10 October, 2007, the respondent issued a fresh show cause
notice pursuant to the aforesaid judgment. The petitioner filed its reply to the
said show cause notice.
8. In the meanwhile, the respondent challenged the judgment passed by
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this Court on 14 September, 2007 before the Supreme Court by filing a
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Special Leave Petition (‘SLP’). On 12 November, 2007, the said SLP was
withdrawn with liberty to file a Letters Patent Appeal (‘LPA’) before this
Court. Pursuant thereto, LPA 1351/2007 was filed by the respondent.
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9. The petitioner filed another writ petition, W.P.(C) 1128/2008, as the
respondent refused to issue tender to the petitioner for work of rehabilitation
of trunk sewage from Jhilmil Colony to Jagriti, SPS, Shahdara. The Division
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Bench of this Court vide interim order dated 18 February, 2008, permitted
the petitioner to participate in the tender process, holding that till the time
the proceedings initiated by CBI are finalized, there is no stigma cast on the
petitioner.
10. The respondent filed two Special Leave Petitions, SLP (C) 5447/2008
and SLP(C) 5449/2008 against the interim order passed by the Division
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Bench of this Court on 18 February, 2008. The Supreme Court, vide its
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order dated 14 March, 2008, did not interfere with the order passed by the
Division Bench, while directing the respondent to accord a personal hearing
to the petitioner.
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11. On 28 March, 2008, the respondent decided the show cause notice
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dated 10 October, 2007, holding that the petitioner shall not be allowed to
participate in the tender process till such time the outcome of the
investigation being carried out by CBI is made available to the respondent. It
was further held that the competent authority, i.e. the respondent, shall
review the decision immediately after receiving the report of the CBI
investigation.
12. In light of the aforesaid blacklisting order passed by the respondent,
the LPA 1351/2007and W.P.(C) 1128/2008 were disposed of by the Division
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Bench as infructuous vide order dated 12 May, 2008.
13. The petitioner challenged the blacklisting order passed by the
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respondent on 28 March, 2008 by filing another writ petition being W.P.(C)
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5704/2008. An interim order was passed in the said writ petition on 20
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August, 2008, staying the aforesaid blacklisting order. The respondent
preferred an appeal against the said order being LPA 524/2008, which was
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allowed by the Division Bench and the interim order passed on 20 August,
2008 was set aside. The petitioner filed an SLP being SLP(C) 23889/2008.
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The Supreme Court disposed of the said SLP vide order dated 15 October,
2008, directing the CBI to expeditiously complete the investigation in the
matter.
14. The W.P.(C) 5704/2008 filed by the petitioner was dismissed by a
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Coordinate Bench of this Court via judgment dated 12 August, 2009. The
said order was challenged by the petitioner by way of an LPA being LPA
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488/2009, which was dismissed as withdrawn on 9 August, 2011 in view of
the fact that charges had been framed in the criminal case.
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15. The CBI Court vide judgment dated 29 October, 2013 convicted the
petitioner company and its Managing Director of offences under the Indian
Penal Code, 1960 (‘IPC’) and Prevention of Corruption Act, 1988.
16. Another writ petition, W.P.(C) 2073/2017 was filed by the petitioner
challenging the decision of the respondent not to award a fresh tender in
st
favour of the petitioner. The said petition was dismissed as withdrawn on 1
November, 2019.
17. The petitioner was once again constrained to approach this Court by
filing W.P.(C) 6748/2022 as the petitioner was denied further tender
documents for fresh tenders floated by the respondent. The said writ petition
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was disposed of by this Court vide order dated 28 April, 2022 by stating
that the writ petition be treated as a representation by the respondent.
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18. Pursuant to the said order, the impugned speaking order dated 22
July, 2022 was passed by the respondent, stating that the petitioner will not
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be allowed to participate in the tender process till the outcome of
investigation being carried out by the CBI.
19. The said order was challenged by the petitioner by filing an
application being CM APPL. 44654 in the earlier disposed of writ petition
W.P.(C) 6748/2022. However, the said application was withdrawn by the
petitioner with liberty to file a comprehensive writ petition challenging the
aforesaid order.
20. Hence, the present writ petition has been filed.
UBMISSIONS ON BEHALF OF PARTIES
S
21. Mr. Satvik Verma, senior counsel appearing on behalf of the
petitioner, has made the following submissions:
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i. The impugned order dated 22 July, 2022 is arbitrary as it does not
provide a period of debarment, which is against the respondent/DJB’s
own guidelines and guidelines issued by Central Public Works
Department (‘CPWD’). As per the said guidelines, a maximum period of
debarment is provided and debarment cannot be for an unlimited period
of time.
ii. The impugned order is arbitrary as it does not lay down the period of
debarment and therefore, is not in conformity with the judgments passed
by the Supreme Court in this regard. Reliance is placed on the judgment
1
in Kulja Industries Ltd. v. Chief General Manager (‘ Kulja Industries ’).
iii. The impugned order to the extent it keeps debarment of the petitioner
active till the conclusion of the CBI case (including appeals) is unlawful
1
(2014) 14 SCC 731.
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and arbitrary. Reliance is placed on the judgment in Sabharwal Medicos
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Pvt Ltd. v. Union of India (‘ Sabharwal Medicos ’).
iv. The impugned order merely reiterates that contents of the earlier
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debarment/blacklisting order passed by the respondent on 28 March,
2008. Therefore, it is submitted that the debarring/blacklisting of the
petitioner was premeditated and the impugned order has been passed
mechanically.
22. Mr. Karunesh Tandon, counsel appearing on behalf of the respondent,
has made the following submissions:
i. The issue with regard to debarment/blacklisting of the petitioner for
indefinite period of time has already been affirmed in the judgment passed
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by this Court on 12 August, 2009 in the earlier writ petition filed by the
petitioner being W.P.(C) 5704/2008. Therefore, the said issue could not
have been re-opened by the petitioner by filing a fresh writ petition and
obtaining a direction that the representation of the petitioner be decided
afresh by the respondent. The impugned order passed by the respondent
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on 22 July, 2022 is a mere reiteration of the previous blacklisting order
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passed on 28 March, 2008, which has been upheld by this Court.
ii. This Court in exercise of the jurisdiction under Article 226 of the
Constitution of India cannot examine the policy decision taken by the
respondent to blacklist the petitioner for an unlimited period on the
ground of misconduct. In the proceedings initiated by CBI, the CBI Court
convicted the Managing Director of the petitioner for misconduct,
amounting to preparing forged documents to get the tender. It is the
2
2013 SCC OnLine Del 3839.
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exclusive right of the State to decide who the State should trade with and
the Court cannot interfere with the same.
iii. The present writ petition is barred by limitation. The order
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blacklisting the petitioner for an unlimited period was passed on 22
March, 2008 and the petitioner remained silent for a period of 11 years.
Therefore, under the garb of challenging the impugned order passed on
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22 July, 2022, the petitioner is seeking to challenge the blacklisting
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order of 28 March, 2008, which has already been upheld by this Court.
NALYSIS AND INDINGS
A F
23. I have heard the counsel for the parties and perused the material
placed on record.
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24. The impugned order dated 22 July, 2022 (Annexure P-1 to the writ
petition) states that the petitioner “ shall not be allowed to participate in the
tendering process till the outcome of the investigation carried out by the
CBI/finalization of the Court proceedings/finalization of the appeal, if any
filed, in the CBI cases before the Hon’ble High Court/Supreme Court is
made known to the DJB ”. No specific time period has been provided for the
debarment of the petitioner. The various contingencies mentioned in the
impugned order are open-ended and cannot be limited to a particular
timeframe. Notably, the impugned order is quite similar to the earlier
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blacklisting order passed by the respondent on 28 March, 2008 (Annexure
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P-12 to the writ petition). The relevant extract from the order dated 28
March, 2008 passed by the respondent is set out below:
“ And now after carefully considering the circumstances leading to the
issuance to the issue of show-cause notice and reply and submission
made by M/s Kaveri Infrastructure Pvt. Ltd., the Competent Authority has
taken a decision that M/s Kaveri Infrastructure Pvt. Ltd., shall not be
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allowed to participate in the tendering process till such time the
outcome of the investigations being carried out by CBI is made known
to Delhi Jal Board. It has also been decided by the Competent Authority
that Delhi Jal Board would review the aforesaid decision immediately
after the report of CBI investigations is made available. ”
[emphasis supplied]
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25. Since the aforesaid order was passed by the respondent on 28 March,
2008, the petitioner and its Managing Director have been held guilty of
offences under Sections 120B and 420 of the IPC and Sections 13(1)(d) and
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13(2) of the Prevention of Corruption Act, 1988 vide judgment dated 29
October, 2013 (Annexure P-20 to the writ petition).
26. It is stated that the petitioner and its Managing Director have filed
appeals against the said conviction which are pending before this Court.
27. Pertinently, the impugned order does not take note of the conviction
of the petitioner and its Managing Director. It does not even mention as to
which criminal case is pending against the petitioner and its Managing
Director. The impugned order is a mere reiteration of the earlier blacklisting
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order passed on 28 March, 2008 and has been passed in a mechanical
manner with a predetermined mindset of blacklisting the petitioner. At the
very least, the impugned order could have taken note of the subsequent
events such as the conviction of the petitioner and its Managing Director.
28. As per the Rules for Enlistment of Contractors in Delhi Jal Board
2023, the maximum period of blacklisting prescribed is for two years.
Relevant extract from the said Rule is set out below:
“ … 13.0 Disciplinary Action
13.1… Where the contractor has made himself liable for disciplinary
action, the Enlistment Authority shall have the right to demote him to a
lower class, or to suspend business with him or debar the defaulting
contractor from participating in tender process for a period minimum 6
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months and not exceeding two years or to cancel enlistment of the
contractor based on the recommendations of the Debarment
Committee... ”
[emphasis supplied]
29. Similarly, in the Rules for Enlistment of Contractors in CPWD, 2022,
the maximum period of blacklisting has been stipulated as two
years. Relevant extract from the said Rule is set out below:
“ … 13.0 Disciplinary Action
*
13.5 Consequent to imposition of any penalty under Rule 13.6, the
contractor shall be debarred from any enlistment with CPWD for a
period not exceeding two years. ”
30. In terms of the impugned order passed in the present case, the
debarment of petitioner is open ended. The impugned order does not provide
any specific time period for debarment and is therefore ex facie not in
conformity with the Rules of the respondent/DJB as referred to above.
31. It is submitted on behalf of petitioner that even the legal position with
regard to blacklisting of contractor has evolved since the judgment dated
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12 August, 2009 passed by this Court in W.P.(C) 5704/2008, and that a
contractor can no longer be blacklisted for an indefinite period.
32. In this backdrop, it may be apposite to refer to some of the recent
rulings with regard to permanent blacklisting of contractors.
33. In Kulja Industries (supra), the Supreme Court was dealing with a
case where the contractor had been blacklisted on account of drawing excess
amounts from BSNL by submitting fake and duplicate bills. A case was
registered by the CBI against the officials of the petitioner therein alleging
offences under Section 120B read with Section 420 of the IPC and Section
13 of the Prevention of Corruption Act, 1988 and a chargesheet was filed. In
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these circumstances, the blacklisting order was passed permanently banning
the petitioner therein from having any business dealings with BSNL/the
respondent therein. The Bombay High Court dismissed the writ petition filed
by the petitioner therein, and the petitioner challenged said order before the
Supreme Court.
34. The Supreme Court quashed the order permanently blacklisting the
petitioner therein by holding that debarment can never be permanent. The
Supreme Court also laid down the guidelines in respect of factors that may
be considered while blacklisting a Contractor. The relevant extracts from the
said judgment are set out below:
“22. The guidelines also stipulate the factors that may influence the
debarring official’s decision which include the following:
(a)The actual or potential harm or impact that results or may result
from the wrongdoing.
(b)The frequency of incidents and/or duration of the wrongdoing.
(c) Whether there is a pattern or prior history of wrongdoing.
(d)Whether the contractor has been excluded or disqualified by an
agency of the Federal Government or has not been allowed to
participate in State or local contracts or assistance agreements on
the basis of conduct similar to one or more of the causes for
debarment specified in this part.
(e) Whether and to what extent did the contractor plan, initiate or
carry out the wrongdoing.
(f) Whether the contractor has accepted responsibility for the
wrongdoing and recognized the seriousness of the misconduct.
(g)Whether the contractor has paid or agreed to pay all criminal,
civil and administrative liabilities for the improper activity, including
any investigative or administrative costs incurred by the
Government, and has made or agreed to make full restitution.
(h)Whether the contractor has cooperated fully with the government
agencies during the investigation and any court or administrative
action.
(i) Whether the wrongdoing was pervasive within the contractor's
organization.
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(j) The kind of positions held by the individuals involved in the
wrongdoing.
(k) Whether the contractor has taken appropriate corrective action or
remedial measures, such as establishing ethics training and
implementing programs to prevent recurrence.
(l) Whether the contractor fully investigated the circumstances
surrounding the cause for debarment and, if so, made the result of
the investigation available to the debarring official.
23. As regards the period for which the order of debarment will remain
effective, the guidelines state that the same would depend upon the
seriousness of the case leading to such debarment .
24. Similarly in England, Wales and Northern Ireland, there are statutory
provisions that make operators ineligible on several grounds including
fraud, fraudulent trading or conspiracy to defraud, bribery, etc.
25. Suffice it to say that “debarment” is recognised and often used as an
effective method for disciplining deviant suppliers/contractors who may
have committed acts of omission and commission or frauds including
misrepresentations, falsification of records and other breaches of the
regulations under which such contracts were allotted. What is notable is
that the “debarment” is never permanent and the period of debarment
would invariably depend upon the nature of the offence committed by the
erring contractor. ”
26 . In the case at hand according to the respondent BSNL, the appellant
had fraudulently withdrawn a huge amount of money which was not due
to it in collusion and conspiracy with the officials of the respondent
Corporation. Even so permanent debarment from future contracts for all
times to come may sound too harsh and heavy a punishment to be
considered reasonable especially when (a) the appellant is supplying bulk
of its manufactured products to the respondent BSNL, and (b) the excess
amount received by it has already been paid back. ”
[emphasis supplied]
35. In Kulja Industries (supra), even though there was a serious charge of
fraud against the contractor/petitioner therein in collusion with the officials
of respondent therein, yet the Supreme Court held that there cannot be
permanent debarment of the contractor.
36. The judgment in Kulja Industries (supra) was followed by a
Coordinate Bench of this Court in Coastal Marine Construction and
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3
Engineering Limited v. Indian Oil Corporation Limited (‘ Coastal Marine
Construction ’). The relevant observations made in the said judgment are set
out below:
“58. It is apparent from the above that the measure of blacklisting is
imposed on a deviant supplier. However, the object is not to commercially
eliminate the contractor. Thus, it is essential that the punition imposed on
the concerned person is commensurate with his actions. In its guidelines,
IOCL had also provided that ordinarily the period of blacklisting
should not exceed three years except in extraordinary circumstances.
Thus, three years has been provided as an indicative upper limit of the
blacklisting period .
59 . In terms of paragraph 5 of the Blacklisting Guidelines, the
maximum period of blacklisting should be maximum period of three
years. In the present case, IOCL has awarded the maximum period of
debarment that could be ordinarily imposed. If one examines this period
of debarment with reference to the grounds as listed in paragraph 2.1 of
the Blacklisting Guidelines, it would be apparent that the action taken is
wholly disproportionate to the allegation made against the petitioner.
The punitive measure of blacklisting a contractor for a period of three
years, would be imposed in cases of malpractices such as bribery,
corruption, fraud and pilferage, bid rigging/price rigging [paragraph
2.1(a)]
60 . Such measure would also be imposed in cases where fake, false or
forged documents/certificates have been issued by a contractor
[paragraph 2.1(c)] or where a contractor has deliberately indulged in
construction and erection of defective works or supply of defective
materials [paragraph 2.1(g)]. Keeping the gravity of such offences in
mind it is at once clear that blacklisting the petitioner for the maximum
permissible period on account of an alleged breach of contract and
where there is a real controversy as to the allegation, is ex facie arbitrary
and disproportionate.”
[emphasis supplied]
37. In Costal Marine Construction (supra), the Court noted that the
applicable Blacklisting Guidelines prescribed three years as the maximum
3
2019 SCC OnLine Del 6542.
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period of blacklisting and held that such maximum period is intended for
grave misconduct, including fraud, corruption, forgery and bid rigging. The
Court, therefore, held that blacklisting must remain within the framework of
the Rules/Guidelines and has to be proportionate to the nature of the alleged
misconduct.
38. Similarly, in Sabharwal Medicos (supra), the petitioner therein was
facing charges for use of forged tender documents for supplying medicines
to the respondents therein, which resulted in an FIR by CBI under Sections
420, 468, 471 read with Section 120 of the IPC. In these circumstances, a
blacklisting order was passed against the petitioner therein which was open-
ended and did not provide any duration of blacklisting. A Coordinate Bench
of this Court set aside the blacklisting order holding that blacklisting cannot
be for an indefinite period of time. The relevant observations in this regard
are set out below:
“ 17. A perusal of the impugned order dated 26.9.2011 would show that
no duration of the blacklisting/debarring has been fixed in the said order,
meaning thereby that the impugned order has the effect of permanent
blacklisting/debarring of the petitioners before this Court.
In Vinay Construction Co. v. Municipal Corporation of Delhi 116 (2005)
DLT 14, this Court rejected the contention that there can be indefinite
period of blacklisting, holding that since blacklisting carries a very
severe consequence and needs to be for a prescribed period.
In Writ Petition No. 17517 of 2002 titled A. Rajendran v. The General
Manager decided on 16.10.2003, the Madras High Court, noticing that
the order of blacklisting the petitioner did not specify the period of
blacklisting, quashed the said order, thereby upholding the contention
that blacklisting could not be for an indefinite period.
Conceding that blacklisting/debarring cannot be for an indefinite period,
the learned Additional Solicitor General stated, on instructions, that the
impugned order would remain in force only during the pendency of the
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criminal prosecution pending against Mr. Jitender Sabharwal/Mr.
Sanjeev Wasan. The concession given by the learned Additional Solicitor
General, to my mind, is not sufficient since it is not possible to say as to
how much time the trial against these two persons will take to conclude.
An order blacklisting/debarring a person during the pendency of the
criminal prosecution against him is in the nature of
blacklisting/debarring for an indefinite period. An order of this nature
must necessarily indicate a definite time period after which the
blacklisting/debarring is to come to an end. In these circumstances it
becomes imperative for the Court to suitably modify the impugned
order so as to restrict the blacklisting/debarring to a definite period.
18. In my view, considering the facts & circumstances of the case, the
period of debarring/blacklisting of the petitioners before this court
should be restricted to five (5) years from 26.9.2012, with a rider that if
Mr. Jitender Sabharwal is discharged or acquitted of all the charges
against him before expiry of the aforesaid term of five (5) years, the
debarring/blacklisting would also come to an end from the date of his
discharge/acquittal. Similarly, if Mr. Sanjeev Wasan is discharged or
acquitted of all the charges against him, debarring/blacklisting of M/s.
Janak Medicos, which is stated to be a proprietorship concern of Mr.
Kulbhushan Wasan, will also come to an end from the date of his
discharge/acquittal. The impugned orders are modified accordingly.
The writ petitions are dismissed except to the extent the impugned order
dated 26.09.2011 is modified hereinbefore. There shall be no order as to
costs. ”
[emphasis supplied]
39. In Sabharwal Medicos (supra), even in respect of offence such as
forgery, the Court held that blacklisting cannot be imposed for an indefinite
period and must necessarily be restricted to a definite term. Applying this
principle, the Court limited the period of blacklisting to five years.
Significantly, even though the criminal proceedings were still pending and
could have culminated in conviction, the Court did not permit the
blacklisting to continue indefinitely and considered a period of five years to
be an appropriate outer limit in the facts of the case.
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40. The ratio of the said judgments is fully applicable in the facts and
circumstances of the present case.
41. In the present case, the impugned order blacklists the petitioner for an
indefinite period of time based on the pendency of the criminal investigation
against the petitioner. The impugned order does not disclose which criminal
investigation is pending against the petitioner. As noted earlier, the petitioner
and its Managing Director were convicted as far back as in the year 2013.
The petitioner and its Managing Director have filed appeals against the
conviction, which are still pending. Needless to state, the petitioner and its
Managing Director would be liable to face consequences based on the
findings in the criminal proceedings. However, the aforesaid conviction
cannot be the basis for a continuous or permanent blacklisting of the
petitioner. To be noted, the petitioner has been blacklisted since 2008.
42. The respondents have placed reliance on the earlier judgment of this
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Court passed on 12 August, 2009 in W.P.(C) 5704/2008, in the petitioner’s
own case. The LPA filed by the petitioner against the said judgment was
dismissed as withdrawn. It is submitted on behalf of the respondent that in
light of the aforesaid judgment, the petitioner could not have re-opened the
blacklisting issue and the present petition is barred by limitation.
43. I am unable to accept the aforesaid submission made on behalf of the
respondent. The fact of the matter is that continued blacklisting of the
petitioner is a recurring cause of action and therefore, a right would vest in
the petitioner to challenge the same. Notably, the legal position has
significantly changed since the aforesaid judgment was passed by this Court
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on 12 August, 2009.The Supreme Court in Kulja Industries (supra) has
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categorically held that there cannot be any permanent blacklisting of a
contractor.
44. The earlier writ petition, W.P.(C) 6748/2022, filed by the petitioner
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was disposed of by this Court vide order dated 20 April, 2022 directing that
the respondent shall decide the representation of the petitioner. Pursuant to
the said order, the respondent did in fact decide the representation of the
petitioner by passing the impugned order. Therefore, the petitioner was
entitled to file the present writ petition as it gave rise to a fresh cause of
action.
ONCLUSION
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45. In view of the discussion above, it is held that the impugned order
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dated 22 July, 2022 passed by the respondent is completely arbitrary and
unlawful and the same is hereby quashed.
46. In terms of the judgment in Kulja Industries (supra), this Court would
have ordinarily remanded the matter back to the respondent to pass a fresh
speaking order determining the period of blacklisting. However, taking into
account that the petitioner has been continuously blacklisted since 2008, i.e.
a period of 18 years, this Court is of the view that the blacklisting of the
petitioner cannot continue any further. Accordingly, it is directed that the
petitioner would be entitled to participate in all future tenders of the
respondent/DJB, subject to fulfilment of eligibility norms.
47. The writ petition stands disposed of in the aforesaid terms.
AMIT BANSAL
(JUDGE)
JULY 2, 2026/ at
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