Debarment And Blacklisting Are Distinct; Cannot Blacklist Bidder Where NIT Only Provided For Debarment: Patna High Court
The Patna High Court has held that a tendering authority cannot blacklist a bidder where the Notice Inviting Tender (NIT) only provides for debarment. It held that blacklisting carries wider civil consequences and cannot be substituted for a contractual debarment merely because a bidder failed to execute the agreement.
The Division Bench of Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Verma was hearing a plea by a contractor selected for transportation of foodgrains in Nalanda district.
After being selected, the petitioner informed the Bihar State Food and Civil Supplies Corporation Limited (BSFCSCL) that the negotiated L-1 rate was commercially unviable because of loading, unloading and transportation costs. She requested permission to execute the work at a higher rate or, alternatively, refund of her earnest money deposit. Instead, the District Transport Committee forfeited her earnest money deposit and blacklisted her for five years.
Before the High Court, the petitioner argued that the NIT did not authorise blacklisting. Accepting the contention, the Bench examined Clause 12(c) of the tender conditions and found that it prescribed only three consequences if a selected bidder failed to execute the agreement: termination of the contract, forfeiture of the security deposit and debarment from future BSFCSCL tenders for five years.
The Court held:
“The terms 'debarment' and 'blacklisting' are not synonymous. While debarment under a tender condition is a contractual consequence restricting participation in future tenders of the concerned procuring entity for the specified period, blacklisting is a stigmatic administrative action having wider civil and commercial consequences.”
The Bench held that once the tender itself prescribed debarment, the Corporation could not impose the “more onerous consequence” of blacklisting.
While observing that the authorities were free to impose the consequences expressly contemplated under Clause 12(c), including forfeiture of the earnest money deposit and debarment, the Court set aside the blacklisting order and remitted the matter to the authorities to pass a fresh order in accordance with the tender conditions.
Case Title: Kumari Sneha v. State of Bihar and Ors.
Case Number: Civil Writ Jurisdiction Case No. 20887 of 2025
Appearance: Mr. Hansraj for the Petitioner. Mr. Hansraj for the State. Mr. Shailendra Kumar Singh for BSFC.