Saj Infracon Project INDIA Limited vs. The State Of Bihar

Facts

The petitioner, Saj Infracon Project India Limited, was the successful bidder for a road construction work. The Executive Engineer, Road Construction Department, Gopalganj, issued an order (Office Order No. 04 of 2019 read with letter No. 279 Gopalganj dated 11.02.2019) debarring the petitioner from participating in future tenders for an indefinite period due to alleged non-execution of the work timely. The petitioner sought to quash this debarment order, claiming it was arbitrary, violated principles of natural justice, and was without jurisdiction. Additionally, the petitioner prayed for payment of the 8th Running Account bill and for GST to be provided in the contract, along with a refund of excess royalty paid.

Held

The Court held that the debarment order dated 11.02.2019 was passed without following the due process of law, specifically by failing to issue a show-cause notice and obtain a reply from the petitioner. The Court also noted that the debarment for an indefinite period was problematic, as the Apex Court has repeatedly held that show-cause notices for debarment or blacklisting must be specific and include a period. Consequently, the Court found the impugned order of debarment to be without application of mind. The debarment order (Annexure P-8 dated 11.02.2019) was set aside. The competent authority was granted liberty to take fresh steps, adhering to judicial pronouncements like UMC Technologies Pvt. Ltd. vs. Food Corporation of India and Anr., and Isolators and Isolators vs. Madhya Pradesh Madhya Khestra Vidyut Vitran Co. Ltd. and Anr., within four months. For prayers related to the 8th Running Account bill and GST/royalty refund, the petitioner was granted liberty to invoke appropriate remedies before the jurisdictional forum.

Key Issues

1. Whether the debarment order dated 11.02.2019, issued by the Executive Engineer, is liable to be quashed for being arbitrary, in violation of the principles of natural justice, and without jurisdiction? (Question of law and fact, turning on principles of natural justice and administrative law). Petitioner's Arguments: The petitioner contended that the debarment order was passed arbitrarily and in violation of the principles of natural justice, as no show-cause notice was issued to them, nor was their reply obtained before imposing the indefinite debarment. They argued that the debarment for an indefinite period was also unsustainable. Revenue's Arguments: The judgment does not record any specific arguments made by the respondents regarding the debarment order. However, the respondents are the authorities who passed the order being challenged.