### Blacklisting Without Conclusive Finding of Intentional Fraud or Conscious Misrepresentation is Legally Unsustainable and Disproportionate

The petitioners were successful bidders for water supply projects under the Jal Jeevan Mission and executed agreements with the Public Health Engineering Department

Subsequent to the work order, the State authorities alleged that the technical experience certificate submitted by the petitioners (purportedly issued by the Municipal Council, Karad) was fake

Following a previous round of litigation (WPC No. 1263/2025) where show-cause notices were quashed for pre-determination, the Apex Committee of the State Water and Sanitation Mission held a fresh meeting on 02.12.2025

The Committee decided to maintain the cancellation of the contracts and blacklisted the petitioners for three years

The petitioners challenged this decision, claiming they had completed significant portions of the work (approx. 50-70%) and that they relied on the certificate in good faith

1. Whether the termination of the contracts and the invitation of fresh tenders at the "risk and cost" of the petitioners was legally sustainable due to the submission of allegedly fake experience certificates.

2. Whether the order of blacklisting for a period of three years was proportionate and fair in the absence of a conclusive finding of deliberate fraud by the petitioners.

The Court primarily relied on the principles of administrative law governing government contracts and the doctrine of proportionality.

It cited *Gorkha Security Services v. Government (NCT of Delhi)* (2014) 9 SCC 105, which characterizes blacklisting as "civil death" due to its stigmatic nature and exclusion from future public tenders

It further applied *UMC Technologies Pvt. Ltd. v. Food Corporation of India* (2021) 2 SCC 551, emphasizing the requirement for a particularized show-cause notice and the severe civil consequences of blacklisting

The Court also upheld the principle that submission of forged documents in a tender process strikes at the root of the bidding process, vitiating the contract ab initio

The Court observed that while the State verified with the Karad Municipal Council that the certificate was not genuine, the petitioners claimed they received it via a third party (Respondent No. 6) and lacked mens rea

The Court reasoned that in public procurement, the employer is justified in canceling a contract if technical eligibility was secured through misrepresentation, regardless of the petitioner’s claims of good faith

However, regarding blacklisting, the Court found the State's action disproportionate.

The Apex Committee failed to record an independent finding that the petitioners knowingly fabricated the document

Since the cancellation of the contract already neutralized any unfair advantage gained, and because the culpability was still a subject of pending criminal investigation, the "extreme measure" of a three-year debarment lacked a definitive foundation of fraud or conscious misrepresentation

It upheld the State’s decision to annul the contracts and proceed with re-tendering at the petitioners' risk and cost, noting that such contractual disputes (valuation/dues) should be resolved via the provided arbitration/dispute resolution mechanism

However, the Court set aside the order of blacklisting for three years, holding it to be disproportionate and lacking a conclusive finding of deliberate fraud

The parties were granted liberty to approach the civil court or arbitration for remaining monetary and contractual grievances