Blacklisting without conclusive finding of intentional fraud is disproportionate and legally unsustainable.

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

After work orders were issued, the Respondent authorities alleged that the petitioners had submitted a fake technical experience certificate purportedly issued by Respondent No. 6 (M/s Vijay V. Salunkhe via Municipal Council, Karad) to satisfy eligibility criteria

Following a previous round of litigation where show-cause notices were quashed due to pre-determination, the State’s Apex Committee conducted a fresh hearing on 02.12.2025

The Committee maintained its decision to terminate the contracts and further blacklisted the petitioners for three years from all future works

The petitioners challenged these orders, contending they relied on the certificate in good faith and that criminal proceedings regarding the certificate's genuineness were still pending

Whether the termination of the contracts by the respondent authorities was legally sustainable due to the alleged submission of a fraudulent experience certificate

Whether the imposition of a three-year blacklisting period was proportionate and valid in the absence of a conclusive finding of deliberate fraud or mens rea by the petitioners

Whether the High Court should adjudicate remaining contractual disputes regarding measurements and payments under Article 226

The Court applied the principle that submission of false information in tender processes vitiates the contract from its inception, as the sanctity of public procurement is paramount

It relied on the Supreme Court precedents of Gorkha Security Services v. Government (NCT of Delhi) (2014) and UMC Technologies Pvt. Ltd. v. Food Corporation of India (2021), which establish that blacklisting is equivalent to "civil death" and must satisfy the tests of fairness and proportionality

The Court also observed the distinction between the standard of proof required for administrative/contractual actions versus criminal culpability

The Court reasoned that since the petitioners secured technical qualification based on a document verified as non-genuine by the purported issuing authority (Municipal Council, Karad), the respondents were justified in terminating the contracts to protect the integrity of the bidding process

However, regarding blacklisting, the Court found the penalty disproportionate. It noted that the petitioners claimed they received the certificate from a third party (Respondent 6) and the Apex Committee failed to record a definitive finding of intentional fabrication or mens rea directly attributable to the petitioners

Furthermore, the ongoing criminal investigation meant that culpability had not yet attained finality

The Court held that while termination neutralized the unfair advantage, blacklisting for three years without established "conscious misrepresentation" was excessive and lacked proportionality

It upheld the termination of the contracts and the respondents' right to re-tender the work at the petitioners' risk and cost

However, it quashed and set aside the order blacklisting the petitioners for three years, finding it disproportionate under the circumstances

Regarding disputes over pending payments, measurements, and 70% vs 2.5% work completion, the Court declined to interfere under Article 226, granting the petitioners liberty to approach the Civil Court or invoke the arbitration mechanism provided in the agreement