M/S Digital Weighing Systems Pvt. Ltd vs Northern Coalfields Limited (Ncl)

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
1 WP-39941-2024
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR

BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA,
ACTING CHIEF JUSTICE
&
HON'BLE SHRI JUSTICE PRADEEP MITTAL
rd
ON THE 23 OF JUNE, 2026
WRIT PETITION No. 39941 of 2024
M/S DIGITAL WEIGHING SYSTEMS PVT. LTD
Versus
NORTHERN COALFIELDS LIMITED (NCL) AND OTHERS
Appearance:
Shri Aditya Adhikari-Senior Advocate with Ms. Prachi Tiwari- Advocate
for the petitioner.
Shri Greeshm Jain- Advocate with Ms. Shraddha Pandey, Ms. Sana Khan-
Advocate and Shri Pankaj Bhatt- Advocate for respondents.
WITH
WRIT PETITION No. 8356 of 2024
M/S DIGITAL WEIGHING SYSTEMS PVT. LTD.
Versus
NORTHERN COALFIELDS LIMITED (NCL) AND OTHERS
Appearance:
Shri Aditya Adhikari-Senior Advocate with Ms. Prachi Tiwari- Advocate
for the petitioner.
Shri Greeshm Jain- Advocate with Ms. Shraddha Pandey, Ms. Sana
Khan- Advocate and Shri Pankaj Bhatt- Advocate for respondents
ORDER
Per: Vivek Rusia, Acting Chief Justice
For the sake of convenience, both Writ Petition No. 39941/2024 and
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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WP 8356/2024 are decided by this common order and facts are taken from

Writ Petition 39941/2024.
The Writ Petition no.39941 of 2024 is filed under Article 226 of the
Constitution of India challenging the order dated 28.11.2024 (Annexure P-1)
whereby the petitioner has been blacklisted for the period of three years
minus the ban already served.
FACTS OF THE CASE
1. The petitioner, M/s Digital Weighing Systems Pvt. Ltd., has filed the
present writ petition under Article 226 of the Constitution of India
challenging the order dated 28.11.2024 (Annexure P-1) passed by
Respondent No.2, whereby the petitioner has been banned from participating
in future tenders of Northern Coalfields Limited (herein after referred as
NCL in short) for a period of three years (after giving credit for the period
already undergone) and its security deposit amounting to ₹ 23,23,956/- has
been forfeited. The petitioner has also challenged the subsequent order dated
15.05.2025 (Annexure P-11) passed by Respondent No.3 affirming the
impugned action.
2. The petitioner is engaged in the business of installation, operation
and maintenance of electronic weighbridges. In pursuance of Notice Inviting
Tender (NIT) No. NCL/SGR/E&M/TENDER/18/190 dated 14.03.2018, the
petitioner was awarded the contract for operation and maintenance of the
weighbridge at Amlori Road. Consequent thereto, a Letter of Intent dated
30.05.2018 (Annexure P-15), Letter of Acceptance dated 21.11.2018
(Annexure P-16) and Agreement No. NCL/SGR/E&M/TENDER/2018/190
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
3 WP-39941-2024
dated 29.12.2018 (Annexure P-17) were executed between the parties.

3. According to the petitioner, the contract was duly performed and
stood fully executed upon expiry of its contractual tenure. The final payments
under the contract were released on 05.10.2021 without any protest,
reservation or objection from the respondents, thereby signifying complete
satisfaction of the contractual obligations.
4. Subsequently, after the expiry of the contract, the respondents
issued a show cause notice alleging certain irregularities and initiated
proceedings culminating in the impugned order dated 28.11.2024 (Annexure
P-1) blacklisting the petitioner for three years and forfeiting the security
deposit. During the pendency of the proceedings, Respondent No.3 also
passed the order dated 15.05.2025 (Annexure P-11), which has been assailed
by way of amendment in the present writ petition.
5. Aggrieved by the impugned orders, the petitioner has approached
this Court contending that the respondents have exercised powers, which
were no longer available after the contract had come to an end and that the
impugned orders are arbitrary, illegal, without jurisdiction and violative of
the principles of natural justice.
SUBMISSIONS ON BEHALF OF THE PETITIONER
6. Learned Senior Advocate for the petitioner submitted that the entire
proceedings initiated by the respondents are without jurisdiction, as the
agreement had admittedly expired after it's completion of contract and no
clause of the contract authorized the respondents to invoke penal provisions
after the contractual relationship had come to an end.
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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7. It is submitted that the contract stood fully discharged and final

payment was released on 05.10.2021 without any reservation or protest. Once
the contract had been completely performed, none of its clauses could be
invoked to initiate punitive proceedings unless there existed an express
covenant extending such rights beyond the contractual period.
8. Learned Senior Counsel submitted that the show cause notice itself
was issued long after expiry of the contract and more than one year after
release of the final payment. Therefore, the respondents could not rely upon
the exhausted clauses of an executed contract to justify subsequent penal
action.
9. It was further contended that the impugned blacklisting order
amounts to a second punishment on the basis of allegations, which are
already the subject matter of separate proceedings. Such action amounts to
double jeopardy and is manifestly arbitrary.
10. Learned Senior Counsel further argued that blacklisting has severe
civil consequences and virtually results in civil death of a contractor by
depriving it of the opportunity to participate in public tenders. Such drastic
action can be sustained only upon strict adherence to the statutory provisions
and contractual terms, which is absent in the present case.
11. It is also submitted that the respondents have illegally forfeited the
petitioner's security deposit of ₹ 23,23,956/- without any legal authority.
Since the contract stood fully performed and accepted, the respondents are
liable to refund the said amount together with appropriate interest.
12. Learned Senior counsel further submitted that the petitioner had
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

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already undergone more than six months of blacklisting pursuant to an earlier

order, which was subsequently quashed by this Court vide order dated
14.11.2024 (Annexure P-9). Despite the earlier order of this Court, the
respondents have once again imposed substantially the same punishment on
identical allegations, which is impermissible in law.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS
13. Learned counsel appearing for the respondents opposed the writ
petition and supported the impugned orders. It was submitted that the
petitioner had committed serious breaches of the contractual conditions
during execution of the work, which entitled the respondents to initiate
disciplinary action in accordance with the terms of the contract.
14. Learned counsel contended that the relevant clauses of the
agreement empowered the respondents to take action against the contractor
even after completion of the work in cases where irregularities or misconduct
were subsequently discovered. The impugned proceedings, therefore, were
within the contractual framework and cannot be said to be without
jurisdiction.
15. Learned counsel for respondents further submits that the petitioner
was issued a detailed show cause notice and was afforded adequate
opportunity to submit its explanation before passing the impugned orders.
Thus, the principles of natural justice have been duly complied with.
16. Learned counsel argued that blacklisting is an administrative
measure intended to protect public interest and maintain integrity in public
procurement. Where a contractor is found guilty of serious contractual
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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violations, the employer is fully justified in debarring such contractor from

future participation in tenders. It was also submitted that forfeiture of the
security deposit is a contractual consequence flowing from the petitioner's
breach of contractual obligations and does not suffer from any legal
infirmity. Accordingly, it is prayed that the writ petition, being devoid of
merit, deserves to be dismissed.
Appreciation & Conclusions
17. We have heard learned counsel for the parties and perused the
record.
18. The tender notice dated 14.03.2018 was published by the NCL for
awarding work of maintenance contract for a total 35 Nos. weighbridges
(Rail 11 nos. and Road 24 nos.) at different projects of NCL for a period of
three years for Amlori Project. The petitioner participated in the said tender,
and a letter of Intent was issued on 30.05.2018 (Annexure P-15) followed by
an agreement between the parties. The work was awarded on 21.11.2018
(Annexure P-16) to the petitioner for a total value of sum of Rs.1,70,38,728/-
with certain terms and conditions. The contract was concluded by submitting
the final bill on 01.10.2021.
19. Likewise, another tender notice for Annual Maintenance Contract
(AMC) for 45 weighbridges (34 nos. Road Weighbridge and 11 nos. Rail
Weighbridge) of different projects of NCL for the period of 3 years for Bina
Project was published on 26.02.2021 (Annexure P-2). Again, the petitioner
became the successful bidder and the contract was awarded on 09.07.2021
(Annexure P-3) for a total sum of Rs.1,41,08,866.70/-. Thereafter, the
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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agreement was executed for an effective period of commencement and

completion of contract as on 08.06.2021 to 06.06.2024.
20. On 25/26-12-2019, the tampering in the weighbridge in Amlori
Project was discovered, which was reported by NCL project official to the
representative of the petitioner that a resistive chip was found in the load Cell
circuit by way of tampering in the weighbridge. It was also found that
tampering was done on 09.12.2019 and the next weekly visit was due on
16.12.2019, but the said visit was done on 25.12.2019 on a call made by the
NCL. Therefore, as per the opinion of the respondent/NCL, had the visit been
done on the due date i.e 16.12.2019, the resistive chip would have been found
or discovered. In the Bina Project also the same resistive chip was found in
the weighbridge, and the matter was reported to the GM of the NCL.
21. Thereafter, the matter was thoroughly investigated by the
Department as well as CVC, where the petitioner's representatives were
called; therefore, during the currency of both the contracts, the similar
resistive chip was found in the weighbridge given to the petitioner for
maintenance by way of contract. The CVO of NCL, after receipt of 1st stage
advice from CVC, Delhi, prima facie found involvement of the officials of
NCL as well as involvement of the petitioner and also advised for initiation
of penal action against all of them, including the AMC vendor. Vide Office
Memorandum dated 11.10.2022 (Annexure R-3), the Deputy Secretary of
CVC recommended for disciplinary action against as many as 15 officers and
employees for imposing major penalty.
22. As per Vigilance Report (Annexure R-2), the external element
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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(Electronic Chip) in the circuit is not desired as per standard circuit layout

and this could be a malafide attempt to vary the load to extend undue benefit
to some of the consumers or in general or in particular in connivance with
officials or of AMC vendor. The Vigilance Team of NCL experimented by
inserting a similar E-chip in the circuit of a load cell which can be controlled
remotely from a distance of 50 meters at the weighbridge. The different
analysis which was done on the Coal-Net-Data of weighbridge dispatch of
DO holders (Road-sale) for the period of 01.01.2021 to 31.12.2021 explicitly
shows that the trucks carried abnormally low weight despite having the
balance DO quantity found variation of 1.5 Ton to 3 Ton in tare weight on
the same weighbridge where the chip was found. Similarly, a variation of
more than 5 Tons in net weight of coal-carrying vehicles was also observed.
Therefore, during the contract period of the petitioner, a chip was found in
two weighbridges in two different projects , which shows negligence on part
of this petitioner/vendor, whose employees either inserted or failed to detect
such chip, which has caused loss to the NCL. However, such loss could not
have been quantified. Therefore, the contention of Shri Adhikari that such
malfunction was done by ex-employee of the petitioner on the other side's
company cannot be accepted firstly on the ground that no document has
been filed to show that such person had already been removed or terminated,
and the regular employees who were deputed to maintain the weighbridge
failed to detect the chip in the weighbridge.
23. The sole contention of learned Senior Advocate for petitioner
challenging the impugned action of blacklisting that such action has been
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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taken after completion of the contract. Once the contract gets completed

successfully, no penal action could have been taken against the
petitioner. We do not find substance in the aforesaid submission because, as
per Clause 15.5.3 of the contract agreement executed between the petitioner
and respondent, there is a provision of the Banning of Business in certain
condition. The relevant provision is reproduced below:-
"15.5.3 Banning of Business- Banning of Business shall be
considered in the following cases:
i) If the Directors, Proprietors, Employees. Partners of any
Representative of the contractor is/are found guilty of offences
involving any security consideration including loyalty to the
State, in connection with business dealings with CIL or its
Subsidiaries.
ii) If the Director, Proprietor or Partner, Manager or any
Representative of the contractor is convicted by a court of law
for offences in relation to its business dealing with any
State Government/Central Government or any Public Sector
Undertaking.
iii) If there are strong reasons to believe that the Director,
Proprietor or Partner, Manager or any Representative of the
contractor has/have been guilty of malpractices such as bribery,
corruption, fraud, substitution of tenders, interpolation, etc.
iv) Willful suppression of facts or furnishing or wrong
information or manipulated or forged documents by the
contractor or using any other illegal/unfair means.
v) Drawing double payment or submitting invoice for double
payment for the supply of same materials or carrying out the
same job/work.
vi) Failure to execute the work as per good Engineering
practice or rectify it even after notice. Also failure to adhere to
specification.
vil) Supplying defective materials/works and failure to replace
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

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the defective materials/works even after reasonable extension is
given to the contractor for rectification/replacement of the
defective materials or carrying out defective/poor quality job,
not conforming to specifications of the contract and failure
to rectify it within stipulated time.
viii) Failure to pay legitimate dues to NCL companies
including dues arising out of Risk Purchase/work and when
CIL and/or its subsidiary companies are satisfied that this is not
due to any reasonable dispute which would attract proceedings
in arbitration or a Court of Law.
ix) Commission of economic offence like evasion of Excise
Duty, sales tax, Customs Duty, or any other legitimate taxes,
levies, duties, etc. imposed by the Government or local
authorities etc.
x) Continued and repeated failure to meei contractual
obligations.
xi) Revision of price and terms of offer within the validity
period of the tender on a habitual basis, in order to undermine
the decision making process
xii) Canvassing and lobbying to get undue favour from the
company.
xiii) Formation of price cartels with other contractors with a
view to artificially hiking the prices.
xiv) Any other misdeed, which may cause financial loss or
commercial disadvantage to the company."

24. As per above sub-clause (xiv), the NCL Company reserves the right to
ban an entity/contractor in future for any misdeed causing it financial loss or
commercial disadvantage during the contract period but discovered later on.
Banning is inherently a prospective penal action after evaluating the conduct
of the contractor during the contract period.
Notably, certain violations may come to light only after the completion of the
contract. These include:
Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12

NEUTRAL CITATION NO. 2026:MPHC-JBP:46958
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Failure to discharge legitimate dues to NCL;

Supply of defective material/workmanship or failure to replace the
same;
Commission of economic offences (e.g., evasion of excise duty, sales
tax, or customs duty);
Canvassing or lobbying to secure undue favors; and
Obtaining the contract through willful suppression of facts, forgery,
document manipulation, or fraudulent double-invoicing.
Since business banning can validly be sustained on the basis of contractual
violations discovered post-completion, we find no jurisdictional error in the
decision impugned by the respondent.
Accordingly, these petitions are dismissed.
(VIVEK RUSIA)
ACTING CHIEF JUSTICE
(PRADEEP MITTAL)
JUDGE
RM

Signature Not Verified
Signed by: TARUN KUMAR
SALUNKE
Signing time: 03-07-2026
17:13:12