### Blacklisting Without Conclusive Determination of Intentional Fraud or Deliberate Misrepresentation Is Arbitrary and Disproportionate Summary of Ruling: The High Court of Chhattisgarh partially allowed a batch of writ petitions challenging the blacklisting of contractors. While the Court upheld the State’s authority to terminate contracts obtained via doubtful experience certificates to maintain the sanctity of the tender process, it quashed the three-year blacklisting orders. The Court ruled that blacklisting—being "civil death"—requires a definitive finding of *mens rea* or conscious misrepresentation. In the absence of proof that the petitioners knowingly submitted forged documents (as opposed to relying on third-party certificates later found defective), the penalty was deemed disproportionate and legally unsustainable. Disputes regarding work measurements and payments were relegated to the contractual dispute resolution mechanism.

The petitioners were successful bidders for several water supply projects under the "Jal Jeevan Mission".

Following the execution of agreements and commencement of work, respondent authorities received verification from the Municipal Council, Karad, indicating that a technical experience certificate submitted by the petitioners (purportedly issued to Respondent No. 6, a joint venture partner) was fake.

Based on this, the respondents issued show-cause notices and subsequently passed a decision on 20.12.2024 to cancel the tenders and blacklist the petitioners for three years.

This decision was initially challenged and quashed by the High Court in an earlier round of litigation (WPC No. 1263/2025) due to pre-determination, with liberty granted to the State to take a fresh, unbiased decision.

Upon reconsideration in a meeting dated 02.12.2025, the Apex Committee maintained the cancellation of the contracts and the three-year blacklisting.

The petitioners challenged this fresh decision, claiming the certificates were genuine and they had completed substantial work (approx. 70%).

1. Whether the respondent authorities were justified in terminating the contracts and initiating re-tendering at the risk and cost of the petitioners due to the submission of doubtful experience certificates.

2. Whether the imposition of a three-year blacklisting was proportionate and legally sustainable in the absence of a conclusive finding of deliberate fraud or mens rea by the petitioners.

3. Whether the court should adjudicate contractual disputes regarding measurements and payments under Article 226.

The Court primarily applied the principles of administrative law regarding fairness and proportionality in government contracts.

It relied on Gorkha Security Services v. Government (NCT of Delhi) (2014) 9 SCC 105, which establishes that blacklisting is equivalent to "civil death" and must be preceded by a specific show-cause notice and founded on clear culpability.

It relied on UMC Technologies Pvt. Ltd. v. Food Corporation of India (2021) 2 SCC 551, which establishes that blacklisting is equivalent to "civil death" and must be preceded by a specific show-cause notice and founded on clear culpability.

The Court also applied the doctrine that fraud or misrepresentation in securing a tender vitiates the contract at its inception, justifying termination.

Finally, the Court noted the limitation of writ jurisdiction under Article 226 of the Constitution of India in matters involving complex factual and contractual disputes where an alternative remedy (arbitration/civil suit) exists.

The Court reasoned that while the respondents provided an opportunity for hearing, the decision-making process fell into two distinct categories: the termination of the contract and the act of blacklisting.

Regarding termination, the Court found that since the petitioners secured technical qualification based on a document the issuing authority denied issuing, the sanctity of the public procurement process was compromised, justifying the cancellation of the contract regardless of the petitioners' claims of bona fides.

However, regarding blacklisting, the Court observed that the respondents failed to record a definitive finding of mens rea—specifically, whether the petitioners knowingly fabricated the document or merely relied on a defective one provided by a partner.

Applying the test of proportionality, the Court held that termination was sufficient to neutralize the unfair advantage, and blacklisting for three years without proved intentional fraud was excessive and disproportionate.

It upheld the respondents' right to annul the contracts and proceed with re-tendering at the petitioners' risk and cost due to the doubtful eligibility documents.

However, it quashed and set aside the order of blacklisting/debarring the petitioners for three years, finding it disproportionate and lacking a conclusive finding of deliberate fraud.

Regarding claims for balance payments and work valuation, the Court declined to interfere, granting the petitioners liberty to approach a Civil Court or invoke the arbitration mechanism provided in the agreement.