Blacklisting without conclusive proof of deliberate fraud or intentional misrepresentation is disproportionate and legally unsustainable.

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

After work orders were issued, Respondent authorities alleged that the petitioners had submitted a fake technical experience certificate purportedly issued by the Municipal Council, Karad (Maharashtra).

Following a previous round of litigation where earlier show-cause notices were quashed for pre-determination, the Apex Committee afforded the petitioners a personal hearing on November 28, 2025.

The State subsequently maintained its decision to terminate the contracts and issued an order on December 2, 2025, blacklisting 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 substantial work (approx. 70%) was already completed, while the State contended only 2.5% was done.

1. Whether the termination of the contracts was legally valid given the allegation of submitting a fabricated experience certificate.

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

The Court primarily applied Article 226 of the Constitution of India regarding the scope of judicial review in contractual matters.

It relied on the principle that submission of false information or forged documents in a tender process strikes at the root of the bidding process and justifies cancellation.

Regarding the severity of blacklisting, the Court applied the "civil death" doctrine and the requirement of proportionality as established in *Gorkha Security Services v. Government (NCT of Delhi)* (2014) 9 SCC 105 and *UMC Technologies Pvt. Ltd. v. Food Corporation of India* (2021) 2 SCC 551.

These precedents mandate that blacklisting must satisfy the tests of fairness, proportionality, and a reasoned finding of culpability.

The Court reasoned that while the petitioners alleged the certificate might be genuine based on conflicting information in criminal proceedings, the contemporaneous verification from the Karad Municipal Council (denying issuance) was sufficient for the employer to lose confidence in the tender's integrity.

Consequently, the termination of the contract was upheld as the eligibility was secured through misrepresentation.

However, regarding the blacklisting, the Court found that the Respondents failed to distinguish between a bidder who intentionally forges a document and one who relies on a third-party document later found to be defective.

The Court noted the absence of a definitive administrative finding of *mens rea* or deliberate fraud specifically attributable to the petitioners.

Therefore, the three-year debarment was deemed disproportionate as the termination of the contract had already neutralized the advantage gained.

It upheld the termination of the contracts and the State's right to re-tender the balance work at the petitioners' risk and cost.

However, it quashed and set aside the order blacklisting the petitioners for three years, holding it to be disproportionate in the absence of a conclusive finding of intentional fraud.

For disputes regarding measurements and payments, the petitioners were granted liberty to approach the Civil Court or invoke the arbitration mechanism provided in the agreement.