NAND KISHORE PATHAK vs GOVT. OF INDIA

WP(C)/23620/2023
ODHC010575942023
2023:OHC:1-DB

IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.23620 of 2023

CNR No. ODHC010575942023


Nand Kishore Pathak …. Petitioner
Mr. S. Mishra, Advocate

-Versus-


Govt. of India and others …. Opp. Parties
Mr. D. Nayak, Advocate
(Opp. Party Nos. 2 & 3)


CORAM:
HON ’ BLE THE CHIEF JUSTICE
AND
HON ’ BLE MR. JUSTICE CHITTARANJAN DASH
Date of Hearing & Date of Judgment: 28.10.2026
C HITTARANJAN D ASH , J.
1. Heard learned counsel for the Parties.
2. The Petitioner has filed the present writ application
challenging the order dated 09.03.2023 passed by the Opposite
Party No.2 – Food Corporation of India, whereby he has been
debarred from participating in future tenders of the Corporation
for a period of three years. The Petitioner also seeks refund of
Rs.1,67,500/- deposited towards security deposit, along with the
Earnest Money Deposit (EMD) furnished during the tender
process.
3. The principal contention of learned counsel for the
Petitioner is that the Petitioner had participated in the tender
W.P.(C) No.23620 of 2023 Page 1 of 6

process under the experienced category by submitting the
requisite experience certificate. However, despite having applied
under the said category, he was subsequently declared the lowest
bidder under the inexperienced category and was called upon to
furnish the security deposit and bank guarantees applicable to
that category. It is contended that, if the Petitioner did not satisfy
the eligibility requirements under the experienced category, his
bid ought to have been dealt with accordingly, rather than
treating him as a successful bidder under an altogether different
category and subsequently penalising him for his inability to
comply with the financial requirements attached thereto. In
support of his submissions, has also relied upon the decisions of
the Hon’ble Supreme Court to contend that the power of
blacklisting, having serious civil and commercial consequences,
must be exercised in a fair, reasonable and proportionate
manner, consistent with the principles of natural justice and non-
arbitrariness.
4. Per contra, learned counsel for the Opposite Parties
submits that the Petitioner was granted extensions of time to
furnish the requisite security and bank guarantees and was also
afforded an opportunity of personal hearing. Since he failed to
comply with the tender conditions within the stipulated period,
the Opposite Parties contend that the action taken under the
relevant clauses of the Model Tender Form was justified.
W.P.(C) No.23620 of 2023 Page 2 of 6

5. Having considered the rival submissions and examined the
materials available on record, this Court finds that the
controversy is not confined merely to the Petitioner s failure to
’
furnish the requisite security within the stipulated time. The
circumstances leading to such failure, particularly the manner in
which his tender was considered under a category different from
the one in which he had participated, are equally material. If the
Petitioner was found ineligible under the experienced category,
the appropriate course was to deal with his bid in accordance
with the tender conditions applicable thereto. The authority
could not, without a proper basis in the tender conditions, treat
him as a successful bidder under the inexperienced category and
thereafter visit him with the consequences arising from non-
compliance with the financial obligations attached to such
category.
6. It is well settled that blacklisting is a serious measure
carrying adverse civil and commercial consequences, affecting
not merely the existing contractual relationship but also the
future business prospects and commercial reputation of the
affected party. The exercise of such power, therefore, must
conform to the principles of fairness, reasonableness and
proportionality. In M/s. Kulja Industries Ltd. v. Chief General
Manager, W.T. Project, BSNL & Ors. , reported in (2014) 14
SCC 731 , the Hon ’ ble Supreme Court has elaborated upon the
nature of the power of blacklisting and the requirement that its
W.P.(C) No.23620 of 2023 Page 3 of 6

exercise must be proportionate to the gravity of the misconduct
alleged. The relevant paragraph is herein reproduced below:
“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 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 pre-condition 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. 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 West Bengal and Anr. (1975) 1 SCC 70 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. This
Court observed:
“20. Blacklisting has the effect of preventing a person
from the privilege and advantage of entering into lawful
relationship with the Government for purposes of gains.
The fact that a disability is created by the order of
blacklisting indicates that the relevant authority is to
have an objective satisfaction. Fundamentals of fair play
require that the person concerned should be given an
W.P.(C) No.23620 of 2023 Page 4 of 6

opportunity to represent his case before he is put on the
blacklist.””
7. The aforesaid principles have also been reiterated by the
Hon ble Supreme Court in UMC Technologies Pvt. Ltd. v. Food
’
Corporation of India , reported in (2021) 2 SCC 551 , wherein it
has been held that an order of blacklisting entails serious
consequences and must be preceded by a fair and meaningful
opportunity of hearing. This Court, in Artatran Bhuyan v. State
of Odisha and Others , in W.P.(C) No.37383 of 2021 , decided
on 24.07.2025 , wherein one of us (Hon ’ ble the Chief Justice
Harish Tandon, J.), was a member, has also considered the legal
position governing blacklisting in the light of the aforesaid
decision of the Hon ’ ble Supreme Court. The same principles
M/s. Konark
were subsequently applied by this Bench in
Ayurvedic Pharmacy, Khurda v. State of Odisha W.P.(C)
in
No.10170 of 2026 , decided on 12.08.2026 .
8. Applying the aforesaid principles to the facts of the present
case, this Court finds that the Petitioner s failure to furnish the
’
requisite security and bank guarantees cannot be considered in
isolation from the manner in which his bid was treated by the
Opposite Parties. Merely because the Petitioner was afforded an
opportunity of hearing, the ultimate decision does not become
immune from scrutiny on the touchstone of fairness and
proportionality. The very basis on which the Petitioner was
treated as a successful bidder under the inexperienced category,
despite his participation under the experienced category, requires
W.P.(C) No.23620 of 2023 Page 5 of 6

consideration. In such circumstances, the consequential
imposition of a three-year debarment, without due consideration
of the aforesaid distinction and the circumstances leading to the
alleged default, cannot be sustained. The impugned order dated
09.03.2023, to the extent it blacklists the Petitioner and debars
him from participating in future tenders for three years, is
accordingly liable to be quashed.
9. Insofar as the prayer for refund is concerned, in view of
the conclusion arrived at hereinabove, the Opposite Parties
cannot retain the amount deposited by the Petitioner towards
security deposit and EMD on the basis of the impugned action.
Accordingly, the Opposite Parties are directed to refund the sum
of Rs.1,67,500/- deposited by the Petitioner towards security
deposit, along with the EMD furnished during the tender
process, within a period of eight weeks from the date of
communication or production of a certified copy of this order.
10. Accordingly, the writ application is allowed. The
impugned order dated 09.03.2023, insofar as it relates to
blacklisting/debarment of the Petitioner for a period of three
years, is hereby quashed. The Opposite Parties are directed to
comply with the direction for refund as indicated above.

(Harish Tandon) (Chittaranjan Dash)
Chief Justice Judge



AKPradhan/Sarbani
Signature Not Verified
W.P.(C) No.23620 of 2023 Page 6 of 6

Digitally Signed
Signed by: SARBANI DASH
Reason: Authentication
Location: HIGH COURT OF ORISSA, CUTTACK
Date: 31-Oct-2026 15:10:58