Patna HC Quashes Indefinite Debarment Of Contractor Passed Without Hearing, Says Blacklisting Has Serious Civil Consequences

The Patna High Court has quashed an order debarring a contractor from participating in government tenders, holding that blacklisting or debarment cannot be imposed mechanically, without notice, hearing, or specification of a definite period. A Division Bench of Justice Sudhir Singh and Justice Shailendra Singh was hearing a writ petition filed by a registered contractor challenging an order dated 09.12.2024 debarring him from participation in tenders. The petitioner had sought quashing of Letter No. 3016 dated 09.12.2024 issued by the respondent authorities, as well as consequential orders passed thereafter.According to the petitioner, he was implicated in Gandhi Maidan P.S. Case No. 726 of 2024, following which the Senior Superintendent of Police, Patna cancelled his character certificate vide Letter No. 11562 dated 09.12.2024. On the very same day, the respondent authorities issued the impugned debarment order preventing him from participating in tenders.Counsel for the petitioner argued that the debarment order had been passed solely on the basis of cancellation of the character certificate, without issuance of any show cause notice or opportunity of hearing, thereby violating principles of natural justice.It was further argued that mere pendency of a criminal case could not justify debarment in absence of adjudication by a competent court. The petitioner also contended that the impugned order did not specify any duration of debarment and therefore effectively operated indefinitely.Opposing the plea, the State submitted that the petitioner had deliberately concealed the lodging of the FIR dated 06.12.2024 and that submission of a valid character certificate was an essential requirement in the tender process to ensure that persons with criminal antecedents are not awarded government contracts.The State further contended that since the cancellation of the character certificate itself had neither been challenged nor the concerned authority impleaded, the consequential debarment order could not be faulted.The Court framed the limited issue as:“Whether the respondent authorities could have legally imposed a debarment upon the petitioner without specifying any definite period for which such debarment would remain operative.”Upon examining the record, the Court found that the debarment order had been passed immediately after cancellation of the character certificate and without initiation of any independent proceeding by the tendering authority. The Court noted that no show cause notice had been issued and no opportunity of hearing had been granted to the petitioner. The Bench observed:“It is trite law that an order of blacklisting or debarment carries serious civil consequences inasmuch as it deprives him of the opportunity to participate in public contracts and affects his business prospects and reputation. Such an order, therefore, cannot be passed in a mechanical manner or merely on the basis of a communication issued by another authority.”The Court further held:“Even where the authority possesses the power to blacklist or debar a contractor, such power has necessarily to be exercised fairly, reasonably and in consonance with the principles of natural justice.”Relying upon Erusian Equipment & Chemicals Ltd. v. State of West Bengal (1975) 1 SCC 70, the Court reiterated that blacklisting prevents a person from entering into lawful relations with the Government and therefore requires adherence to fair procedure. The Court further found that the impugned order did not prescribe any fixed duration for the debarment. It observed:“An order of debarment, which does not indicate any specific period, effectively results in exclusion of the contractor for an indefinite period.”The Court also noted that the impugned order neither reflected any consideration of proportionality nor disclosed any independent satisfaction recorded by the authority. Holding the action unsustainable, the Court observed:“The order appears to have been passed solely on account of cancellation of the character certificate and that too without granting any opportunity to the petitioner to explain his stand. Such action, in the considered opinion of this Court, cannot withstand judicial scrutiny.”Accordingly, the Court quashed the debarment order dated 09.12.2024 and remitted the matter back to the competent authority to pass a fresh reasoned and speaking order in accordance with law, specifically indicating the period of debarment if such action is considered necessary. Case Title: Rakesh Kumar Singh v. State of Bihar and Ors.Case No.: Civil Writ Jurisdiction Case No. 6309 of 2025Appearance: Mr. Abhinav Kumar Singh and Mr. Ankur Apurv Singh for the Petitioners. Mr. Sajid Salim Khan for the Respondents.Click Here To Read/Download Order

Patna HC Quashes Indefinite Debarment Of Contractor Passed Without Hearing, Says Blacklisting Has Serious Civil Consequences

Rushil Batra

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Patna HC Quashes Indefinite Debarment Of Contractor Passed Without Hearing, Says Blacklisting Has Serious Civil Consequences

Rushil Batra

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