Debarment Can't Continue After Contractor Completes Work Accepted By Department: Patna High Court

The Patna High Court has held that a contractor's debarment cannot continue after the work for which the debarment was imposed has been completed and accepted by the department. The Court observed that in the absence of a fresh order extending the debarment or assigning reasons for its continuance, such debarment assumes the character of an impermissible indefinite debarment.A Division Bench of Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Verma passed the ruling while allowing a writ petition filed by a contractor whose technical bid for a subsequent tender had been rejected on the basis of an earlier debarment order.The petitioner had earlier been awarded the work of constructing a 5,000 MT capacity godown in Jamui for the Bihar State Food and Civil Supplies Corporation Ltd. As the work was not completed within the stipulated period, the Executive Engineer debarred the petitioner on March 29, 2025 from participating in the immediately succeeding tender. Thereafter, the petitioner completed the work to the satisfaction of the respondent authorities, following which a work experience certificate dated July 17, 2025 was issued acknowledging successful execution of the project. The petitioner also submitted representations seeking revocation of the debarment.Subsequently, the respondent authorities floated a fresh tender for construction of a prefab composite godown in Samastipur. Although the petitioner participated in the tender process, its technical bid was rejected by relying upon the earlier debarment order. The petitioner's request for reconsideration was also rejected, and the contract was awarded to another bidder.The petitioner contended that the debarment had outlived its purpose once the work had been completed and accepted by the department. It argued that the continued operation of the debarment, despite issuance of a work experience certificate, was arbitrary and amounted to an indefinite debarment.The respondents submitted that the debarment had been validly imposed for failure to complete the earlier work within the stipulated time and that subsequent completion of the work did not erase the contractual default.The High Court identified the central issue as whether the continued operation of the debarment, despite completion and acceptance of the work, amounted to an indefinite debarment and was legally sustainable.The Bench noted that the debarment order neither specified any definite period for which it would remain in force nor prescribed the circumstances in which it would cease to operate. It further observed that although the petitioner had subsequently completed the work and obtained a work experience certificate, the authorities continued to rely on the debarment while rejecting the petitioner's technical bid without clarifying whether the debarment had exhausted its purpose.Referring to the Supreme Court's decision in Kulja Industries Ltd. v. Chief General Manager, Western Telecom Project, BSNL, the Court reiterated that while the power to debar or blacklist is inherent, it must be exercised fairly, reasonably and proportionately, and cannot result in permanent or indefinite debarment.Applying those principles, the Bench held that while the initial debarment was justified owing to delay in execution of the work, its continued operation after the department itself acknowledged successful completion of the project was unsustainable. The Court observed that once the contractual obligations had been fulfilled and the work accepted, the very basis for the debarment ceased to exist. In the absence of any fresh order extending the debarment or assigning reasons for its continuance, the debarment effectively became an indefinite one, which is impermissible in law.Accordingly, the Court held that the debarment order dated March 29, 2025 could not be permitted to operate any further after completion and acceptance of the work and issuance of the work experience certificate.Case Title: M/s R.S. Construction v. State of Bihar and Ors.Case Number: Civil Writ Jurisdiction Case No. 19706 of 2025Appearance: Mr. Kumar Anjaneya Shanu and Mr. Ranvir Pratap Singh appeared for the Petitioner. Mr. Nirmal Kumar appeared for the Corporation. Mr. Dharmendra Kumar appeared for the State.Click Here To Read/Download Order

Debarment Can't Continue After Contractor Completes Work Accepted By Department: Patna High Court

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Debarment Can't Continue After Contractor Completes Work Accepted By Department: Patna High Court

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