### Administrative Penalty for Alleged Non-Disclosure Invalid Absent Mandatory Disclosure Clause and Intentional Suppression

The Petitioner, a registered Class "A" contractor with the PWD, was issued a show cause notice on 08.05.2025 for allegedly failing to disclose "sublet work in hand" in tenders for the Water Resources Department.

The Petitioner argued that the tender format only introduced this requirement on 16.04.2025 (after their submission), but the Engineer-in-Chief directed a non-renewal of registration for two years on 25.11.2025.

On appeal, the Appellate Authority passed an order on 30.03.2026 which, despite finding the non-disclosure was a "human error" without intent to conceal, downgraded the Petitioner from Class "A" to Class "B" for one year.

The Petitioner challenged this order as arbitrary and disproportionate.

1. Whether the penalty of downgrading the Petitioner’s registration was sustainable when the alleged lapse was categorized as a "human error" without mens rea.

2. Whether a contractor can be penalized for non-compliance with a disclosure requirement that was introduced via amendment subsequent to the submission of the tender.

The Court applied the principles of Natural Justice and the doctrine of proportionality in administrative actions.

Administrative requirements or conditions cannot be applied retrospectively to penalize a party for a condition that did not exist at the time of the act.

In the absence of mens rea (guilty mind) or deliberate misrepresentation, the imposition of severe civil consequences affecting business reputation is legally unjustified.

The Court observed that the "sublet work in hand" disclosure requirement was only introduced on 16.04.2025, whereas the Petitioner’s tenders were submitted earlier under a format that lacked such a mandate; consequently, the Petitioner could not be faulted for failing to comply with a non-existent condition.

The Court highlighted an "inherent contradiction" in the Appellate Authority’s order: the Authority explicitly found the lapse to be an unintentional "human error" yet proceeded to impose a punitive downgrade.

The Court reasoned that once a finding of no intent to suppress information is reached, the basis for penalty is "substantially diluted".

The Court noted procedural irregularities, specifically the absence of the concerned department during appellate hearings, which deprived the Petitioner of a fair hearing.

The High Court quashed and set aside the order dated 30.03.2026 and directed the Respondents to forthwith restore the Petitioner’s status as a Class "A" contractor with all consequential benefits.