In Sindhuja Engineer and Contractor having its Principal Place of Business at village Mow, P.S. Tekari, District Gaya, Bihar through its Authorized Signatory, Sushil Kumar vs. The State of Bihar through the Principal Secretary, Public Health and Engineering Department, Government of Bihar & Ors. (2026), Patna High Court's Division Bench Patna of Justices Mohit Kumar Shah and Raj Kumar allowed the writ petition. The 7-page long judgement dated July 9, 206 was authored by Justice Shah. He concluded:"...we deem it fit and proper to quash the impugned Office Order dated 09.01.2026 and remand the matter back to the respondent No. 3 who shall issue fresh show cause notice to the petitioner and after inviting his objections shall pass a reasoned and a speaking order, in accordance with law and the agreement entered into between the parties."
The judgement was delivered upon hearing a writ petition filed for quashing of an Office Order dated January 9, 2026, whereby and whereunder the Executive Engineer, Public Health Division, Banka, i.e. the respondent No.4 had debarred the petitioner firm. The petitioner had also prayed for quashing of the letter dated January 14, 2026, issued by the respondent No.4 whereby the petitioner had been directed to make payment of the electricity bills within 24 hours, failing which process shall be initiated for debarment/rescindment of the contract.
The case was that the petitioner was a registered Class I contractor under the provisions of the Bihar Contractors Registration Rules, 2007. The petitioner was granted certificate of registration dated August 26, 2020, as a Contractor of Public Health Engineering Department by the Chief Engineer (Urban), Public Health Engineering Department, Government of Bihar, Patna, i.e. the respondent No.3 for a period of five years. The petitioner participated in a tender process relating to Mukhya Mantri Peyjal Nischay Yojana for the District of Banka relating to the work of management of safe and pure drinking water for the areas which were affected by High Floride content in the water by establishing/construction of Floride Removal / Treatment Unit along with five years operation and maintenance. The tender was awarded to the petitioner, leading to execution of an Agreement in between the petitioner and the respondent No.4 as also issuance of work order. The petitioner completed the work. It was also the case of the petitioner that subsequently the respondent No. 4, by Office Order dated December 29, 2025 had directed the petitioner to pay the up to date electricity bills by means of receipt failing which it was contemplated that the bills would be paid from the amount payable to the petitioner from the concerned work division and further action for debarment/blacklisting/ rescindment of agreement etc. shall be taken in terms of the agreement and in accordance with law. Thereafter, the respondent No.4 had issued the impugned Office Order dated January 9, 2026, debarring the petitioner indefinitely.
The counsel for the petitioner submitted that the debarment cannot be for an indefinite period in view of the law laid down by the Supreme Court in Khulja Industries Limited vs. Chief General Manager, Western
Telecom Project Bharat Sanchar Nigam Limited and Others, reported in (2014) 14 SCC 731. The paragraph No.25 of the judgement reads: “25. Suffice it to say that “debarment” is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the “debarment” is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor.”
It was submitted that the impugned order dated January 9, 2026 had been issued by an incompetent authority inasmuch as the respondent No.4 was not the authority who had registered the firm of the petitioner. It was thus submitted that only the respondent No.3 could have either issued the show cause notice to the petitioner or the order of debarment/ blacklisting qua the petitioner. In this regard, reference was made to Rule 11 (d) of the Rules, 2007. Rule 11 (d) reads: "The order of blacklisting/suspension shall be passed by the officer who is competent to register the contractor or by the officer under whom the registering officer works.” Thus, it was submitted that since the respondent No.3 i.e. the Chief Engineer (Urban)-cum-Registering Authority, Public Health and Engineering Department, Government of Bihar, Patna was the registering authority of the firm of the petitioner, he was only authorized to either issue show cause notice to the petitioner or pass any order of debarment/blacklisting.
The counsel for the respondent-State submitted that the respondent No.4 had issued show cause notices dated November 5, 2025, November 6, 2025 and November 19, 2025, apart from other notices before passing the impugned order dated January 9, 2026, hence the principles of natural justice had been complied with before passing of the impugned order dated January 9, 2026.
In his judgement, Justice Shah recorded that the counsel for the respondent-State could not show from the records or from the Rules, 2007 that the respondent No.4 was the competent authority to either issue show cause notice to the petitioner, prior to passing of the order for debarment/ blacklisting or pass an order of debarment/ blacklisting itself.
The judgement reads: "We find from the records that the show cause notices as also the order of debarment of the petitioner firm have been issued by the respondent No.4, who is not the registering authority in the present case inasmuch as a bare perusal of the certificate of registration,....would show that the registering authority is the respondent No.3, i.e. the Chief Engineer (Urban)-cum-Registering Authority, Public Health and Engineering Department, Govt. of Bihar, Patna, hence it is only the respondent No.3 who is/was authorized to issue show cause notice for debarment/ blacklisting as also pass an order of debarment/ blacklisting. Thus, a debarment or blacklisting order passed without a valid show cause notice is not only invalid but also violates the principles of natural justice, hence is liable to be quashed on this ground alone."
Justice Shah observed: "8. We further find that it is a well settled law that an order of debarment/blacklisting passed for an indefinite period is legally unsustainable, as it violates the principles of natural justice, the doctrine of proportionality, and the fundamental right to carry on trade. In the present case, by the impugned order dated 09.01.2026, the petitioner firm has been debarred for an indefinite period. The law in this regard is no longer res integra inasmuch as the Hon’ble Apex Court in the case of Khulja Industries Limited (supra) has held that debarment can never be permanent. Thus, on this score as well the impugned order dated 09..01.2026 is unsustainable in the eyes of law."
