M/s R.S. Construction vs The State of Bihar
- Court
- Patna High Court
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.19706 of 2025
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M/s R.S. Construction having its Registered Office at Kali Asthan Chowk,
Begusarai, Bihar, through its authorised signatory, Deepak Kumar, Aged
about 52, S/o Sri Rameshwar Prasad Singh, Resident of Village- Sihma, Post
Office- Sihma, Police Station Matihani District- Begusarai, Bihar, Pin-
851101.
... ... Petitioner
Versus
1. The State of Bihar through the Principal Secretary, Food and Consumer
Protection Department, Government of Bihar, Patna.
2. The Managing Director, Bihar State Food and Civil Supplies Corporation
Ltd. Daroga Rai Path, R Block, Road No. 2, Patna - 800001.
3. The Chief General Manager (Technical), Bihar State Food and Civil
Supplies Corporation Ltd., Corporate Headquarters, Patna.
4. General Manager (Technical), Bihar State Food and Civil Supplies
Corporation Ltd., Corporate Headquarters, Patna.
5. Deputy General Manager (Finance), Bihar State Food and Civil Supplies
Corporation Ltd., Corporate Headquarters, Patna.
6. The Executive Engineer, South Bihar Works Division, Bihar State Food and
Civil Supplies Corporation Ltd., Multipurpose Building, Atal Path, Patna.
7. Gyan Prakash, At and PO- Tejbigha, PS- Bhelwar, Dist-Jehanabad, (Bihar),
Pin-804420.
... ... Respondents
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Appearance :
For the Petitioner : Mr. Kumar Anjaneya Shanu, Advocate
Mr. Ranvir Pratap Singh, Advocate
For the Corporation : Mr. Nirmal Kumar, Advocate
For the State : Mr. Dharmendra Kumar, AC to GP-5
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CORAM: HONOURABLE THE ACTING CHIEF JUSTICE
and
HONOURABLE MR. JUSTICE RAJESH KUMAR VERMA
ORAL JUDGMENT
(Per: HONOURABLE THE ACTING CHIEF JUSTICE)
Date : 14-07-2026
Heard learned counsel for the parties.
2. The brief facts of the present case are that the
petitioner earlier was awarded the work of construction of a 5000
MT capacity godown at Sikarvira, Jhajha, in the district of Jamui
Patna High Court CWJC No.19706 of 2025 dt.14-07-2026
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under the Bihar State Food and Civil Supplies Corporation Ltd.
The said work could not be completed within the stipulated period
on account of delay in execution. Consequently, the Executive
Engineer, South Bihar Works Division, Patna, by order dated
29.03.2025, debarred the petitioner from participating in the
immediately succeeding tender.
3. Thereafter, the petitioner completed the aforesaid
work to the satisfaction of the respondent authorities. Upon
completion of the work, the competent authority issued a work
experience certificate dated 17.07.2025 acknowledging successful
execution of the project. Following completion of the work, the
petitioner submitted representations before the concerned
Executive Engineer as well as the Corporation Headquarters
seeking revocation of the debarment on the ground that the work,
on account of which the debarment had been imposed, had already
been completed and accepted by the department.
4. Subsequently, the respondent authorities issued NIT
No. 01/SBD/2025-26 dated 28.08.2025 inviting bids for
construction of a Prefab Composite Godown of 1000 MT storage
capacity at Karian, Block Shivajinagar, District Samastipur. The
petitioner participated in the tender process by submitting its
technical bid. However, the Technical Bid Evaluation Committee,
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in its meeting held on 25.09.2025, rejected the petitioner’s
technical bid vide Letter No. 4176 dated 25.09.2025, inter alia,
relying upon the debarment order dated 29.03.2025. The petitioner
thereafter submitted a representation dated 29.09.2025 requesting
reconsideration of the decision. The said representation, however,
did not find favour with the authorities and, by Letter No. 4312
dated 03.10.2025, the rejection of the petitioner’s technical bid
was reaffirmed. Thereafter, the financial bids were opened on
06.10.2025 and the work was awarded to Respondent No. 7 by
issuance of the Letter of Intent and execution of the agreement on
the same date.
5. Aggrieved thereby, the petitioner instituted the present
writ petition challenging, inter alia, the rejection of its technical
bid, the consequential award of the work in favour of Respondent
No. 7, and the debarment order dated 29.03.2025. During the
pendency of the writ petition, the tender process stood concluded
and the contract was awarded and acted upon, rendering the
challenge to the tender process infructuous. Consequently, by
order dated 30.06.2026, this Court recorded that the petitioner was
confining the relief in the present writ petition only to Relief No.
1(vi), which reads as under:
“1(vi) Issuance of an appropriate writ/s, order/s
or direction/s, particularly in the nature of writ of
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Mandamus to declare that the alleged debarment
dated 29.03.2025 is no longer operative following
the completion of the concerned work dated
17.05.2025 and issuance of the work experience
certificate vide Letter No. 721 dated 17.07.2025
under the signature of Executive Engineer, South
Bihar Works Division BSFCSCL, Patna.”
6. Learned counsel for the petitioner submits that the
debarment order dated 29.03.2025 has outlived its purpose since
the work, on account of which the petitioner was debarred, has
been completed to the satisfaction of the respondent authorities
and a work experience certificate dated 17.07.2025 has also been
issued by the competent authority. Despite completion and
acceptance of the work, the respondent authorities have neither
revoked the debarment nor considered the petitioner’s repeated
representations seeking withdrawal of the said order.
7. It is further submitted that the continued operation of
the debarment order is arbitrary and contrary to law, as an order of
debarment cannot continue indefinitely after the purpose for which
it was imposed has ceased to exist. In support of the said
contention, reliance is placed on the decisions of the Hon’ble
Supreme Court in Kulja Industries Ltd. v. Chief General
Manager, Western Telecom Project, BSNL, reported in (2014) 14
SCC 731 , to submit that debarment must be proportionate and for
Patna High Court CWJC No.19706 of 2025 dt.14-07-2026
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a definite period. It is, accordingly, prayed that the debarment
order dated 29.03.2025 be quashed.
8. Learned counsel appearing for the respondents
submits that the debarment order dated 29.03.2025 was validly
passed on account of the petitioner’s failure to complete the earlier
work within the stipulated period. It is submitted that the
debarment was imposed in accordance with the terms governing
the contract and cannot be rendered invalid merely because the
petitioner subsequently completed the work. The respondents
further submitted that completion of the work at a later stage does
not obliterate the earlier contractual default on the basis of which
the debarment was imposed.
9. It is further submitted that the petitioner was debarred
only from participating in the immediately succeeding tender and,
therefore, the debarment cannot be said to be indefinite or
arbitrary. According to the respondents, the impugned order does
not warrant interference as it was passed in accordance with the
applicable contractual conditions and administrative requirements.
10. The limited issue which arises for consideration
before this Court is as to whether the continued operation of the
debarment order dated 29.03.2025, despite completion and
acceptance of the work and issuance of the work experience
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certificate, amounts to an indefinite debarment and, if so, whether
such continued debarment is legally sustainable.
11. The challenge in the present writ petition is confined
to the continued operation of the debarment order dated
29.03.2025. A perusal of the said order reveals that the petitioner
was debarred on account of delay in completion of the earlier work
relating to construction of a 5000 MT capacity godown. The order
further records that if the petitioner failed to complete the work by
31.01.2025, it would not be permitted to participate in the next
tender (" (debar) ").
अगलल ननिनविदद म भदग लेनिले सले विवंनचित नकियद जदतद ह
Significantly, the order neither specifies any definite period for
which the debarment would continue nor prescribes the
circumstances in which the debarment would cease to operate.
Thus, while the debarment was ostensibly linked to participation in
the next tender, the order is conspicuously silent as to its cessation
upon subsequent completion of the work or issuance of the
completion certificate.
12. It is an admitted position that after passing of the
debarment order, the petitioner completed the work and the
competent authority issued a work experience certificate dated
17.07.2025 acknowledging successful execution of the project.
The petitioner also submitted representations seeking revocation of
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the debarment. Despite these subsequent developments, the
respondent authorities continued to rely upon the debarment while
rejecting the petitioner’s technical bid in the subsequent tender
process, without passing any order clarifying whether the
debarment had exhausted its purpose or continued to remain in
force.
13. The law governing debarment is no longer res
integra. In Kulja Industries Ltd. v. Chief General Manager,
Western Telecom Project, BSNL, reported in (2014) 14 SCC 731 ,
the Hon’ble Supreme Court held that while the power to blacklist
or debar is inherent in every authority awarding contracts, such
power is not unbridled and must be exercised fairly, reasonably
and proportionately. The Court observed that debarment cannot be
permanent or for an indefinite period, and the period of debarment
must bear a reasonable nexus with the gravity of the default. In
paragraphs 17, 18 and 25, the Supreme Court emphasized that an
order of blacklisting visits a contractor with serious civil
consequences and, therefore, cannot continue indefinitely or
arbitrarily. The relevant part of the said order reads as follows:
“17. That apart, the power to blacklist a contractor
whether the contract be for supply of material or
equipment or for the execution of any other work
whatsoever is in our opinion inherent in the party
allotting the contract. There is no need for any such
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power being specifically conferred by statute or reserved
by contractor. That is because “blacklisting” simply
signifies a business decision by which the party affected
by the breach decides not to enter into any contractual
relationship with the party committing the breach.
Between two private parties the right to take any such
decision is absolute and untrammelled by any constraints
whatsoever. The freedom to contract or not to contract is
unqualified in the case of private parties. But any such
decision is subject to judicial review when the same is
taken by the State or any of its instrumentalities. This
implies that any such decision will be open to scrutiny
not only on the touchstone of the principles of natural
justice but also on the doctrine of proportionality. A fair
hearing to the party being blacklisted thus becomes an
essential precondition for a proper exercise of the power
and a valid order of blacklisting made pursuant thereto.
The order itself being reasonable, fair and proportionate
to the gravity of the offence is similarly examinable by a
writ court.
18. The legal position on the subject is settled by a long
line of decisions rendered by this Court starting with
Erusian Equipment & Chemicals Ltd. v. State of W.B.
where this Court declared that blacklisting has the effect
of preventing a person from entering into lawful
relationship with the Government for purposes of gains
and that the authority passing any such order was
required to give a fair hearing before passing an order
blacklisting a certain entity.
..
Subsequent decisions of this Court in Southern Painters
v. Fertilizers & Chemicals Travancore Ltd.; Patel Engg.
Patna High Court CWJC No.19706 of 2025 dt.14-07-2026
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Ltd. v. Union of India ; B.S.N. Joshi & Sons Ltd. v. Nair
Coal Services Ltd. ; Joseph Vilangandan v. Executive
Engineer (PWD) among others have followed the ratio of
that decision and applied the principle of audi alteram
partem to the process that may eventually culminate in
the blacklisting of a contractor.
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.”
14. Applying the aforesaid principles to the facts of the
present case, this Court finds that although the respondents were
justified in imposing the debarment on account of delay in
execution of the work, the continued operation of the said
debarment even after the petitioner completed the work and the
department itself acknowledged such completion by issuing the
work completion/experience certificate is unsustainable. Once the
contractual obligations stood fulfilled and the work was accepted
by the respondents, the very basis on which the petitioner had been
debarred ceased to survive. In the absence of any fresh order
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extending the debarment or assigning reasons for its continuance,
the impugned debarment, in effect, assumed the character of an
indefinite debarment, which is impermissible in law.
15. In view of the aforesaid, this Court is of the view
that the debarment order dated 29.03.2025 cannot be permitted to
operate any further after completion and acceptance of the work
and issuance of the work experience certificate (Annexure- P/3).
Therefore, the issue framed is answered in favour of the petitioner.
16. Accordingly, the debarment order dated 29.03.2025
(Annexure- P/6) is set aside.
17. The writ petition is, accordingly, allowed to the
aforesaid extent.
(Sudhir Singh, ACJ)
(Rajesh Kumar Verma, J.)
Gaurav Kumar/-
AFR/NAFR A.F.R
CAV DATE N.A.
Uploading Date 22.07.2026
Transmission Date N.A.