### Debarment Orders Passed by Incompetent Authorities or for Indefinite Periods are Legally Unsustainable and Violate Natural Justice.

The petitioner, a registered Class I contractor, was awarded a contract for the "Mukhya Mantri Peyjal Nischay Yojana" in Banka district for fluoride removal and maintenance.

Following the completion of the work, the Executive Engineer (Respondent No. 4) issued a directive on 17.12.2025 for the payment of electricity bills, warning of debarment for non-compliance.

On 29.12.2025, Respondent No. 4 issued Office Order No. 174, debarring the petitioner firm indefinitely.

The petitioner challenged this order on the grounds of lack of jurisdiction and the illegality of permanent debarment.

1. Whether an order of debarment can be passed for an indefinite period?

2. Whether the Executive Engineer (Respondent No. 4) was the competent authority to issue the debarment order under the Bihar Contractors Registration Rules, 2007?

The Court applied Rule 11(d) of the Bihar Contractors Registration Rules, 2007, which mandates that blacklisting/suspension orders must be passed by the officer competent to register the contractor or their superior.

It relied on the precedent of Kuljha Industries Limited v. Chief General Manager, BSNL (2014) 14 SCC 731, established that "debarment" is never permanent and its duration must be proportionate to the nature of the offense.

the court emphasized the principles of natural justice, requiring a valid show-cause notice from a competent authority before punitive action.

The Court found the impugned order legally flawed on two primary jurisdictional grounds. First, under Rule 11(d), the Registering Authority was the Chief Engineer (Respondent No. 3), not the Executive Engineer (Respondent No. 4); thus, the latter lacked the legal competence to issue show-cause notices or debarment orders.

The Court reasoned that a debarment order issued without a valid notice from the competent authority violates natural justice.

The Court observed that the petitioner was debarred indefinitely, which directly contradicts the Apex Court's ruling in Kuljha Industries, where it was held that permanent debarment violates the doctrine of proportionality and the fundamental right to carry on trade.

The High Court quashed the Office Order dated 29.12.2025 and remanded the matter to the Respondent No. 3 (Chief Engineer), directing him to issue a fresh show-cause notice and pass a reasoned order in accordance with law and the agreement.

The writ petition was allowed.