Patna HC Upholds 10-Year Blacklisting Of Contractor For Submitting Forged Payment Certificate With Tender Bid

The petitioner, a registered contractor, participated in a tender for construction of a bridge and maintenance work.

The tender authorities alleged that the petitioner had submitted a forged payment certificate with its bid.

After issuing a show-cause notice proposing blacklisting under the Bihar Contractors Registration Rules, 2007, the Engineer-in-Chief blacklisted the petitioner for ten years.

The petitioner’s reply stated that the certificate had been given to its employee by a departmental employee and that the amount was consistent with its tax records.

The petitioner challenged the notice and blacklisting order, including on the grounds that the reply had not been properly considered and that the ten-year period exceeded the remaining validity of its registration.

The petitioner also challenged the legality of a departmental letter prescribing a ten-year punishment in separate proceedings; the High Court left that issue open in this case.

Rule 11 of the Bihar Contractors Registration Rules, 2007 provides for blacklisting in specified circumstances, including submission of forged documents.

The Court also referred to Kulja Industries Ltd. v. Chief General Manager, Western Telecom Project, BSNL, (2014) 14 SCC 731, which recognises the State’s power to blacklist, subject to judicial review for compliance with natural justice and proportionality; a fair hearing is essential, and the order must be reasonable and proportionate to the gravity of the conduct.

The Court accepted the general principle, reflected in the authorities cited by the petitioner, that administrative or quasi-judicial decisions must state reasons.

The Court found that the certificate had been verified with the relevant Executive Engineer, who stated that it did not bear his signature and was not recorded as having been issued by his office.

The petitioner’s explanation—that the certificate had been obtained through a departmental employee and that its figures were consistent with tax records—did not displace that verification; the Court held that the authority had considered and rejected the reply.

Given the serious allegation of using a forged document to obtain a tender, and its finding that the impugned order contained reasons, the Court found no basis to interfere with the blacklisting order.

It did not decide the challenge to the departmental letter’s legality, which was raised separately.

The challenge to the departmental letter prescribing the punishment was left open for consideration in the separate proceeding.