As per case facts, Binodini Infrastructure Pvt. Ltd. was blacklisted for six years by the Chief Engineer, Bridges (WBP), Odisha, for failing to complete two bridge construction projects within the ...
W.P.(C) No.8589 of 2024 Page 1 of 89
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.8589 of 2024
In the matter of an Application under Articles 226 & 227
of the Constitution of India, 1950.
***
Binodini Infrastructure Pvt. Ltd.
Registered Office
At: Bahadurbagichapada
Bhawanipatna
District: Kalahandi, Odisha
Represented through
Managing Director
(Being authorized by Board of Directors)
Sri Pradipta Kumar Singh
Aged about 48 years
Son of Late Nrusingha Charan Singh
At: Bahadurbagichapada
P.O./P.S.: Bhawanipatna
District: Kalahandi, Odisha. … Petitioner
-VERSUS-
1. State of Odisha
Represented through
Commissioner-cum- Secretary
Work Department, State Secretariat
Bhubaneswar, District: Khurda.
2. F.A.-cum-Special Secretary to Government
Works Department, Government of Odisha
State Secretariat, Bhubaneswar.
W.P.(C) No.8589 of 2024 Page 2 of 89
3. Engineer-in-Chief (Civil), Odisha
Bhubaneswar, District: Khordha.
4. Chief Engineer
Bridge World Bank Project, Odisha
Bhubaneswar, District: Khordha.
5. Chief Engineer, (DPI & Roads)
Works Department, Odisha
Bhubaneswar, District: Khordha.
6. Chief Construction Engineer
Jeypore (R & B ) Circle, Jeypore
7. Superintending Engineer
Malkanagiri (R & B) Division
Malkangiri. … Opposite Parties.
Advocates appeared in this case:
For the Petitioner : M/s. Prabodha Chandra Nayak,
S.K. Sahoo, Advocates
For the Opposite Parties : Mr. Saswat Das,
Additional Government Advocate
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDON
AND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMAN
Date of Hearing : 06.05.2026 :: Date of Judgment : 20.05.2026
JUDGMENT
W.P.(C) No.8589 of 2024 Page 3 of 89
MURAHARI SRI RAMAN, J.—
The petitioner, craving to question the propriety and
legality of order dated 30.03.2024 passed by the Chief
Engineer, Bridges (WBP), Odisha, blacklisting the
company for six years for having failed to achieve the
desired milestones as per agreement and complete the
works entrusted within period stipulated in terms of
conditions of contract, beseeches exercise of power
conferred on this Court under the provisions of Articles
226 and 227 of the Constitution of India for grant of
following relief(s):
“It is therefore prayed that this Hon‟ble Court may be
graciously pleased to issue rule NISI in the nature of any
appropriate writ/writs and/or any other writ/writs
and/or order/orders and/or direction/directions calling
upon the opposite parties to show cause as to why:
(i) The impugned order No.14974, dated 30.03.2024
under Annexure-1, passed by the opposite party
No.4 in blacklisting and debarring the petitioner to
participate in any tender for six years without
following due procedure shall not be declared illegal,
arbitrary and same shall not be quashed.
(ii) The action and decision of the opposite party No.4
under Annexure-1 in blacklisting the petitioner shall
not be declared illegal, arbitrary, unreasonable and
violative of Article 14 and 19(1)(g) of the Constitution
of India;
W.P.(C) No.8589 of 2024 Page 4 of 89
And may pass such other order(s)/direction(s) as this
Hon‟ble Court deems just and proper;
And for this act of kindness, the petitioner shall as in duty
bound ever pray.”
Facts:
2. The present case emanates from two work orders,
namely:
i. “Construction of H.L. Bridge over river Saberi, at
16/000 km of Mathili-Kaliguda road in Malkangiri
district” with stipulation to commence on
27.12.2017 and complete on 26.06.2019 vide
Agreement No.45P-1/2017-18 (hereinafter be
referred to as “Work No.1”).
ii. Bid identification No.58/2016-17 for the work
“Construction of H.L. Bridge over river Satpadhara,
at km 2/000 of Govindapalli-Kamalapadar-
Gajaguda road in Malkangiri district under State
Plan” with stipulation to commence on 28.11.2017
and complete on 27.02.2019 vide Agreement
No.33P-1/2017-18 (hereinafter be referred to as
“Work No.2”).
2.1. Due to unforeseen circumstances, the petitioner could
not complete the Work No.2 in time and upon
consideration of request, extension of time was allowed
up to 30.06.2020. Yet no substantial work being shown
W.P.(C) No.8589 of 2024 Page 5 of 89
to have been progressed, vide Letter No.3079, dated
25.06.2021 issued by the Executive Engineer,
Malkangiri (R&B) Division while granting period to
complete the work by 31.03.2022, the petitioner was
instructed to show cause failing which action would be
initiated for rescission of the agreement.
2.2. After furnishing replies eliciting the difficulties faced by
the petitioner and it is brought to the notice of the Chief
Engineer (World Bank Projects), Bhubaneswar by Letter
dated 10.05.2023 that though super structure drawing
was approved in Directorate of Design on 30.11.2022,
the same was not communicated to the petitioner. In the
said letter the authority was requested to allow the
petitioner to execute the balance work and release the
escalation cost up to 30.06.2020. Notwithstanding such
reply, the Works Department intimated the Chief
Engineer, World Bank Projects regarding approval of
rescission proposal of contract in terms of Clause 2(b)(i)
1
of Agreement No.33P1 of 2017-18. Consequent upon
such communication, an Office Order dated 23.08.2023
was issued by the Superintending Engineer, Malkangiri
(R&B) Division which reads as follows:
“The contract bearing No.33P1/2017-18 for the work
„Construction of HL Bridge over river Saptadhara at km
1
“To rescind the contract (of which rescission notice in writing to the contractor
under the hand of the Executive Engineer shall be conclusive evidence) 20% of the
value of left-over work will be realized from the contractor as penalty.”
W.P.(C) No.8589 of 2024 Page 6 of 89
2/0 of Govindapalli-Kamalapadar-Gajiaguda road in
Malkangiri District under State Plan‟ has been rescinded
under Clause 2b(i) of the said P1 Agreement executed by
Binodini Infrastructure Pvt. Ltd. „Super‟ Class Contractor
vide Letter No.33086, dated 10.08.2023 of Chief Engineer
(World Bank Projects), Odisha, Bhubaneswar.”
2.3. Assailing such order of rescission of contract with
respect to Work No.2, the petitioner approached this
Court by way of filing an application registered as
W.P.(C) No.31693 of 2023, wherein vide order dated
29.09.2023 notice was issued and the matter was
directed to be listed along with W.P.(C) No.29863 of 2023
which related to Work No.1.
2.4. While the matter was sub judice, two show cause notices
on 18.10.2023 were issued with respect to above both
the works.
2.5. Show Cause Notice vide Letter No.C-II-MLK-05/2016—
44375, dated 18.10.2023 with respect to Work No.1 was
issued indicating as follows:
“Please take notice that you have been entrusted with the
work „Construction of H.L Bridge over river Saberi at
16.000 Km. of Mathili-Kaliaguda road in the district of
Malkangiri under state plan vide Agreement No.45-P1 of
2017-18 of the Executive Engineer, Malkangiri (R&B)
Division, Malkangiri with the date of commencement as
27.12.2017 and stipulated date of completion as
26.06.2019. You have not completed the said work till
W.P.(C) No.8589 of 2024 Page 7 of 89
rescission of contract by the Government in Works
Department vide Letter No.13148, dated 08.08.2023.
***
Further on the final notice of the Superintending Engineer,
Malkangiri (R&B) Division vide Letter No.3139, dated
30.06.2021 where he has stated that on his inspection to
bridge site, no men and machineries were found in
execution of the bridge project and he has again
requested you to gear up the work in a war footing basis
by engaging sufficient men and machineries with
maximum working hour to complete back log quantities of
the work by 31.03.2022 otherwise suitable action as per
relevant clauses of the agreement will be initiated for
rescission of the agreement. But no such initiative was
found to be taken by you. Hence, it is apprehended that
due to your such type of apathetic attitude and deliberate
negligence the above work couldn‟t have been completed
till date and could not be put to use of General Public.
In view of the above factual matrix, you are hereby
directed to submit your explanation within 15 days from
the date of issue of this show cause notice why suitable
action shall not be taken by the undersigned under
Appendix-XXXIV of Odisha Public Works Department
Code, Volume-II and under Clause No.121 of the DTCN,
failing which it is to be deemed that you have nothing to
reply against this show cause and accordingly the action
as deemed proper will be processed against you without
any further intimation.”
2.6. Show Cause Notice vide Letter No.C-II-MLK-05/2016—
44374, dated 18.10.2023 with respect to Work No.2 was
issued indicating as follows:
W.P.(C) No.8589 of 2024 Page 8 of 89
“Please take notice that you have been entrusted with the
work „Construction of HL Bridge over river Saptadhara at
2.00km of Govindapalli-Kamalapadar-Gujiaguda road in
the district of Malkangiri under State plan vide Agreement
No.33P1 of 2017-18 executed by the Executive Engineer,
Malkangiri (R&B) Division, Malkangiri with the date of
commencement as 28.11.2017 and stipulated date of
completion as 27.02.2019. You have not completed the
said work till rescission of contract by the Government in
Works Department vide Letter No.13147, dated
08.08.2023.
***
Though you have been allowed with the extension of time
up to 30.06.2020 vide Government in Works Department
Letter No.6805, dated 03.06.2020, the bridge work could
not be completed within the extended period also. The
Superintending Engineer, Malkangiri (R&B) Division vide
Letter No.3842, dated 26.08.2020 issued another show
cause notice to you regarding slow progress of work.
Neither you have expedited the work nor you have
applied for further extension of time to complete the said
work.
***
The Superintending Engineer, Malkanglri (R&B) Division
issued final notice vide Letter No.357, dated 25.01.2021
to you with a request to execute the back log quantities of
the work by engaging sufficient men and machineries
with maximum working hours as well as to achieve the
target for completion of the above project otherwise
suitable action as per relevant clauses of the agreement
will be initiated for rescission of the agreement. It proves
that due to your lack of interest and deliberate negligence
W.P.(C) No.8589 of 2024 Page 9 of 89
the above work couldn‟t be completed till date and could
not be put to use of General Public.
In view of the above factual matrix, you are hereby
directed to submit your explanation within 15 days from
the date of issue of this show cause notice why suitable
action shall not be taken by the undersigned under
Appendix-XXXIV of Odisha Public Works Department
Code, Volume-II and under Clause No.121 of the DTCN,
failing which it is to be deemed that you have nothing to
reply against this show cause and accordingly the action
as deemed proper will be processed against you without
any further intimation.”
2.7. Imposing penalty of Rs.74,96,518/- with respect to Work
No.2 a demand has been raised vide Letter No.4815,
dated 26.10.2023 by the Superintending Engineer,
Malkangiri (R&B) Division with instruction to deposit
balance penalty to the tune of Rs.10,52,210/- after
adjustment of amounts due on account of earnest
money deposit, initial security deposit, security deposit,
withheld for extension of time and value of work
executed as per final/joint measurement for payment.
2.8. By Letter Nos.BIPL/283/2023-24 (Work No.1) and
BIPL/282/2023-24 (Work No.2), dated 23.10.2023 citing
pendency of writ petitions being W.P.(C) No.29863 of
2023 and W.P.(C) No.31693 of 2023 the petitioner
objected to steps taken for blacklisting/debarring
exercising power under Appendix-XXXIV of the Odisha
Public Works Department Code, Volume-II (“OPWD
W.P.(C) No.8589 of 2024 Page 10 of 89
Code”, for brevity) read with Clause No.121 of the DTCN.
An affidavit dated 29.01.2024 was filed in W.P.(C)
No.31693 of 2023 before this Court with the following
undertaking:
“That the petitioner files this affidavit with undertaking to
complete the balance work, i.e., Construction of HL Bridge
over river Saptadhara at km 2/000 of Govindpalli-
Kamalapadar-Gajiaguda road in Malkangiri district under
State plan within a period of 8 months from the date of
order in terms of agreement and will not claim escalation
for the said period.”
2.9. The writ petition being W.P.(C) No.29863 of 2023
(relating to Work No.1) came to be disposed of on
01.03.2024 with the following observation:
“4. In the additional affidavit filed by the petitioner
dated 02.02.2024, at paragraph-3 the petitioner has
stated as follows:
„3. That, the petitioner files this present Affidavit
with an undertaking to complete the remaining
portion of the work “Construction of H.L. Bridge
over river Saberi at 16/000 of Mathili-Kaliguda
Road in Malkangiri district under State Plan”
within a stipulated period of eight (8) months
from the date of order in terms of agreement
and hence shall not claim escalation for the
said period.
***
6. In view of the above, this writ petition stands
disposed of directing the opposite parties to
W.P.(C) No.8589 of 2024 Page 11 of 89
permit the petitioner to complete the work
within the period of eight months as indicated
in paragraph-3 of the affidavit dated
02.02.2024.”
2.10. Assailing the order dated 01.03.2024, the State of
Odisha moved the Hon’ble Supreme Court of India in
S.L.P.(Civil) No.14142 of 2024 [Civil Appeal No.7085 of
2025], wherein the following order was passed on
14.05.2025:
“Leave granted.
The issue involved in the present appeal is covered by the
decision in State of Odisha & Ors. Vrs. Binodini
Infrastructure Pvt. Ltd.-[Civil Appeal No.5228 of 2025]
2
dated 15.04.2025, wherein the following order was
passed:
„After hearing learned counsel appearing for the parties,
we find that the directions as contained in paragraph 3 of
the impugned order could not possibly have been issued
by the High Court as the same would fall in the domain of
re-writing the terms of contract. The challenge before the
High Court in the Writ Petition was to an order vide which
the contract granted to the respondent was rescinded.
The High Court had travelled beyond the prayer made in
the Writ Petition. Instead of going through the validity of
the order impugned, the High Court granted further time
to the respondent to complete the contract, which was not
2
Vide Special Leave to Appeal (C) No(s). 1479 of 2025 [Arising out of order dated
12.01.2024 in WP(C) No.37679 of 2023 passed by the High Court of Orissa at
Cuttack in the case of Binodini Infrastructre Pvt. Ltd., Kalahandi Vrs. State of
Odisha].
W.P.(C) No.8589 of 2024 Page 12 of 89
within the domain of the High Court in exercise of the
power under Article 226 of the Constitution of India.
For the reasons mentioned above, the impugned order
passed by the High Court is set aside. However, the legal
issues raised by the appellant in the Writ Petition having
not been gone into by the High Court, we remit the matter
to the High Court for examination thereof. All the
arguments by both the parties are left open.‟
In view of the above order, the impugned order stands set
aside and the matter stands remitted to the High Court,
for examination of the issues therein.
The appeal stands allowed accordingly.”
2.11. So far as writ petition being W.P.(C) No.31693 of 2023
relating to Work No.2 is concerned, counter affidavit has
been filed by the opposite parties, copy of which was
served on the counsel for the petitioner on 11.03.2024.
2.12. Thus, both the writ petitions are now pending before this
Court.
2.13. It is submitted by the petitioner that the blacklisting
order dated 30.03.2024 for six years is arbitrary and
contrary to the Codal Provisions contained in sub-rule
(c) of Rule A of Appendix-XXXIV of the OPWD Code read
with Works Department Office Memorandum
No.16131/W, dated 26.11.2021. While the writ petition,
being W.P.(C) No.31693 of 2023 relating to Work No.2 is
pending, the opposite parties in the counter affidavit
filed therein took a stand that the petitioner had not
W.P.(C) No.8589 of 2024 Page 13 of 89
assured nor applied for extension of time seeking to
complete the balance work of the bridge. Without taking
cognizance of the fact that the petitioner did furnish
affidavit before this Court showing its inclination to
complete the Work No.2 “within eight months from the
date of order in terms of the agreement”, such stand is
not in consonance with the order dated 02.02.2024
passed by this Court in the said writ petition, which
reads as follows:
“2. An additional affidavit dated 29.01.2024 has been
filed by the petitioner undertaking to complete the
work in question within a period of eight months
from the date of order in terms of the agreement. To
that effect, Mr. P.P. Mohanty, learned Additional
Government Advocate for the State-Opposite Parties
seeks time to obtain instructions.”
2.14. Further submission is made by the petitioner that
though this Court by order dated 01.03.2024 passed in
W.P.(C) No.29863 of 2023 relating to Work No.1 taking
similar affidavit furnished in the said case into
consideration directed the opposite parties to permit the
petitioner to complete the work within the period
mentioned therein.
2.15. Objecting to continuance of blacklisting order, it is
submitted that in view of order dated 02.02.2024 passed
by this Court in the writ petition being W.P.(C) No.31693
of 2023 relating to Work No.2 the impugned order vide
W.P.(C) No.8589 of 2024 Page 14 of 89
Annexure-1 is liable to be quashed being arbitrary and
illegal.
Counter affidavit of the opposite parties:
3. The Superintending Engineer having issued notices on
very many occasions requested the petitioner to
complete the work and thereby given opportunities to
complete the work within the period extended. On
inspection of the site by the authority as no men and
machineries were found, steps were taken.
3.1. Perceiving poor performance of the petitioner, who
showed indifference to complete the works, the authority
rescinded the contracts, and on receiving instruction
from the Chief Construction Engineer, Jeypore (R&B)
Circle in Letter No.5368, dated 13.10.2023, the Chief
Engineer (WBP) issued Show Cause Notice Nos.44374
and 44375, dated 18.10.2023 (Annexure-11 enclosed
with the writ petition) contemplating action as per
Clause 121 of the DTCN in terms of Appendix-XXXIV of
the OPWD Code.
3.2. It is highlighted that challenging the decision to rescind
the contracts with respect to Work Nos.1 and 2, the
petitioner filed writ petitions being W.P.(C) Nos.29863 of
2023 and 31693 of 2023 and requested the authority
concerned not to take step with respect to blacklisting.
Nonetheless, questioning the legality of order dated
W.P.(C) No.8589 of 2024 Page 15 of 89
01.03.2024 passed in W.P.(C) No.29863 of 2023, the
opposite parties approached the Hon’ble Supreme Court
of India in SLP(C) No.14142 of 2024, wherein by order
dated 15.07.2024 stay of operation of said order of this
Court was granted. Nevertheless, in W.P.(C) No.31693 of
2023 counter affidavit has been filed by the opposite
parties.
3.3. With technical details, it is submitted by the opposite
parties that the petitioner could have completed the
work within the extended period as allowed by the
authority and thereby the ground citing non-completion
of works within the period stipulated, as sought to be
extended by the petitioner, has been denied. Referring to
many Show Cause Notices issued to the petitioner
granting liberty to accomplish the works, it is asserted
that the petitioner remained indolent and recalcitrant. It
is pertinent to quote the following reply found place in
the counter affidavit:
“12. That in reply to the averments made in Paragraph
Nos. 07 and 08 of the writ petition, it is humbly
submitted that due to abnormal delay in progress,
the petitioner had been requested from time to time
to expedite the progress of work. As on 09.07.2019,
the petitioner had left the approach road work in
haphazard position in which it was causing
inconvenience to the public. So, the petitioner had
been asked in written to complete the approach road
work. The petitioner could have completed the work
W.P.(C) No.8589 of 2024 Page 16 of 89
by 27.02.2019. The petitioner failed to submit the
testing report of test pile within stipulated period of
completion for which further drawing could not be
obtained from the authority concerned and also, the
petitioner had not deployed sufficient manpower
and machineries as required for the bridge work,
show-cause notices were issued to the Petitioner as
to why penal action as per Clause 2(b)(i) shall not be
initiated against it. In spite of the Show Cause
notices, as to why the contracts in question shall not
be terminated for causing the delay in completing
the work, the petitioner had neither attended at
work site of bridge properly nor responded to the
communication made by the Executive Engineer vide
his Letter dated 09.07.2019 and 15.07.2019 and
failed to complete the bridge work.
***
16. That the averments made in Paragraph No.12 of the
writ petition are disputed and denied. It is humbly
submitted that the original time period was 15
months (01 year 03 months) to complete the total
bridge work. Basing on Letter dated 14.12.2021 of
the petitioner, the petitioner had already lost more
than 04 years since date of commencement of bridge
work i.e. 28.11.2017, but pile integrity test and pile
dynamic test over the river had not attended to
complete it, in which other drawings could not be
obtained from the authority concerned in absence of
above report. After lapses of maximum time period,
the petitioner had able to submit the Dynamic Test
Report in 02 (two) phases i.e on 21.12.2021 for
Abutment and 23.03.2022 for Piers. Basing on
above report, the final drawing and design dated
W.P.(C) No.8589 of 2024 Page 17 of 89
30.11.2022 was provided to the site engineer of the
petitioner for execution of work. Still then the
petitioner had not started that work. From time to
time the petitioner had been reminded to start the
work otherwise suitable action will be initiated for
rescission of the agreement.”
3.4. The opposite parties stuck to the action taken by the
opposite parties and sought for dismissal of the writ
petition.
Hearing:
4. As the blacklisting order poses “civil death” of the
petitioner’s business activities and the same debars it
from participating in tenders, urgency in the matter
being shown, the matter is taken up for hearing.
4.1. The pleadings being completed, heard Sri Prabodha
Chandra Nayak, learned Advocate for the petitioner; Sri
Saswat Das, learned Additional Government Advocate
for the opposite parties. Written note of submissions has
been filed by the counsel for respective parties on
06.05.2026.
4.2. Being directed to list the matter for “orders”, the matter
being listed, the Judgment is pronounced.
Rival contentions and submissions with written note of
submissions:
W.P.(C) No.8589 of 2024 Page 18 of 89
5. With the above background of factual scenario, though
the matters challenging propriety of decision taken for
rescinding the works in question are pending
adjudication, Sri Prabodha Chandra Nayak, learned
Advocate, insisted for hearing of the matter relating to
debarring the petitioner from participating in tenders by
contending that where certain things are required to be
done in certain way, the same must be done in that
manner, but not otherwise as other methods are
necessarily forbidden inasmuch as the authorities have
not adhered to the Codal Provisions in proper
perspective. He relied on following dictum in Avtar Singh
Vrs. State of Punjab, (2023) 18 SCC 717:
“15. It is a settled law that where a power is given to do
a certain thing in a certain way, the thing must be
done in that way or not at all. Other methods are
necessarily forbidden. Reference can be made to
Dharani Sugars & Chemicals Ltd. Vrs. Union of
India, (2019) 5 SCC 480.”
5.1. It is with vehemence argued that the reasons ascribed
for the conclusion arrived at by the Chief Engineer,
Bridges (WBP), Odisha, vide order dated 30.03.2024 to
blacklist the petitioner are vague and incoherent with
the grounds enshrined in Rule A of Appendix-XXXIV to
the OPWD Code.
5.2. It is canvassed before this Court that mere rescission of
contracts does not contemplate step to be taken for
W.P.(C) No.8589 of 2024 Page 19 of 89
debarment/blacklisting the contractor under the said
Code. The authority prior to taking a decision to
blacklist the petitioner ought to have conducted enquiry
and ought to make specific fact-finding that the
ground(s) existed warranting order to be passed for
blacklisting. Without granting reasonable, fair and
meaningful opportunity of hearing to the petitioner the
impugned order vide Annexure-1, being illegal,
whimsical and arbitrary, is liable to be quashed”.
5.3. The learned Advocate for the petitioner referred to and
relied on the following decisions to countenance his
argument that the authority prior to action proposed
should mention specifically and unambiguously the
grounds:
i. Erusian Equipment and Chemicals Ltd. Vrs. State of
West Bengal, (1975) 1 SCC 70, wherein it has been
observed as follows:
“12. Under Article 298 of the Constitution the
executive power of the Union and the State
shall extend to the carrying on of any trade
and to the acquisition, holding and disposal of
property and the making of contracts for any
purpose. The State can carry on executive
function by making a law or without making a
law. The exercise of such powers and functions
in trade by the State is subject to Part III of the
Constitution. Article 14 speaks of equality
W.P.(C) No.8589 of 2024 Page 20 of 89
before the law and equal protection of the
laws. Equality of opportunity should apply to
matters of public contracts. The State has the
right to trade. The State has there the duty to
observe equality. An ordinary individual can
choose not to deal with any person. The
Government cannot choose to exclude persons
by discrimination. The order of blacklisting
has the effect of depriving a person of
equality of opportunity in the matter of
public contract. A person who is on the
approved list is unable to enter into
advantageous relations with the Government
because of the order of blacklisting. A person
who has been dealing with the Government in
the matter of sale and purchase of materials
has a legitimate interest or expectation. When
the State acts to the prejudice of a person
it has to be supported by legality.
***
15. The blacklisting order does not pertain to any
particular contract. The blacklisting order
involves civil consequences. It casts a slur.
It creates a barrier between the persons
blacklisted and the Government in the
matter of transactions. The blacklists are
“instruments of coercion”.
16. In passing an order of blacklisting the
government department acts under what is
described as a standardised Code. This is a
code for internal instruction.
***
W.P.(C) No.8589 of 2024 Page 21 of 89
19. Where the State is dealing with individuals in
transactions of sales and purchase of goods,
the two important factors are that an individual
is entitled to trade with the Government and an
individual is entitled to a fair and equal
treatment with others. A duty to act fairly
can be interpreted as meaning a duty to
observe certain aspects of rules of natural
justice. A body may be under a duty to give
fair consideration to the facts and to consider
the representations but not to disclose to those
persons details of information in its
possession. Sometimes duty to act fairly can
also be sustained without providing
opportunity for an oral hearing. It will depend
upon the nature of the interest to be affected,
the circumstances in which a power is
exercised and the nature of sanctions involved
therein.
***
20. Blacklisting has the effect of preventing a
person from the privilege and advantage
of entering into lawful relationship with
the Government for purposes of gains. The
fact that a disability is created by the order of
blacklisting indicates that the relevant
authority is to have an objective satisfaction.
Fundamentals of fair play require that the
person concerned should be given an
opportunity to represent his case before
he is put on the blacklist.”
W.P.(C) No.8589 of 2024 Page 22 of 89
ii. UMC Technologies Private Limited Vrs. Food
Corporation of India, (2021) 2 SCC 551, wherein the
following is the observation:
“13. At the outset, it must be noted that it is
the first principle of civilised
jurisprudence that a person against whom
any action is sought to be taken or whose
right or interests are being affected
should be given a reasonable opportunity
to defend himself. The basic principle of
natural justice is that before adjudication
starts, the authority concerned should
give to the affected party a notice of the
case against him so that he can defend
himself. Such notice should be adequate
and the grounds necessitating action and
the penalty/action proposed should be
mentioned specifically and
unambiguously. An order travelling
beyond the bounds of notice is
impermissible and without jurisdiction to
that extent. This Court in Nasir Ahmad Vrs.
Custodian General, Evacuee Property, (1980) 3
SCC 1 has held that it is essential for the
notice to specify the particular grounds on the
basis of which an action is proposed to be
taken so as to enable the noticee to answer the
case against him. If these conditions are not
satisfied, the person cannot be said to have
been granted any reasonable opportunity of
being heard.
W.P.(C) No.8589 of 2024 Page 23 of 89
14. Specifically, in the context of blacklisting
of a person or an entity by the State or a
State Corporation, the requirement of a
valid, particularised and unambiguous
show-cause notice is particularly crucial
due to the severe consequences of
blacklisting and the stigmatisation that
accrues to the person/entity being
blacklisted. Here, it may be gainful to
describe the concept of blacklisting and the
graveness of the consequences occasioned by
it. Blacklisting has the effect of denying a
person or an entity the privileged opportunity of
entering into Government contracts. This
privilege arises because it is the State who is
the counterparty in Government contracts and
as such, every eligible person is to be afforded
an equal opportunity to participate in such
contracts, without arbitrariness and
discrimination. Not only does blacklisting
take away this privilege, it also tarnishes
the blacklisted person’s reputation and
brings the person ’s character into
question. Blacklisting also has long-
lasting civil consequences for the future
business prospects of the blacklisted
person.
15. In the present case as well, the appellant has
submitted that serious prejudice has been
caused to it due to the Corporation's order of
blacklisting as several other government
corporations have now terminated their
contracts with the appellant and/or prevented
the appellant from participating in future
W.P.(C) No.8589 of 2024 Page 24 of 89
tenders even though the impugned blacklisting
order was, in fact, limited to the Corporation's
Madhya Pradesh regional office. This domino
effect, which can effectively lead to the
civil death of a person, shows that the
consequences of blacklisting travel far
beyond the dealings of the blacklisted
person with one particular Government
Corporation and in view thereof, this
Court has consistently prescribed strict
adherence to principles of natural justice
whenever an entity is sought to be
blacklisted.
***
21. Thus, from the above discussion, a clear legal
position emerges that for a Show-Cause
Notice to constitute the valid basis of a
blacklisting order, such notice must spell
out clearly, or its contents be such that it
can be clearly inferred therefrom, that
there is intention on the part of the issuer
of the notice to blacklist the noticee. Such
a clear notice is essential for ensuring that the
person against whom the penalty of
blacklisting is intended to be imposed, has an
adequate, informed and meaningful
opportunity to show cause against his possible
blacklisting.”
5.4. Advancing further his argument, Sri Prabodha Chandra
Nayak, learned counsel would submit that the Codal
Provisions for blacklisting contractors in sub-rule (c) of
Rule A of Appendix-XXXIV appended to the OPWD Code
W.P.(C) No.8589 of 2024 Page 25 of 89
envisages two aspects, namely (i) Constant non-
achievement of milestones on insufficient and imaginary
grounds; and (ii) non-adherence to quality specifications
despite being pointed out conjoined. Both the aspects
together would form part of one ground. In the present
case, only first two being pointed out by the authority
concerned, the decision taken by the Chief Engineer,
World Bank Projects, Odisha pursuant to Show Cause
Notices dated 18.10.2023 (Annexure-11) is inconsistent
with the Codal Provision; as such, the same suffers vice
of arbitrariness, caprice and fancies of the authority;
and the decision thereon is tainted with mechanical
application of mind. To buttress his argument that these
circumstances as envisaged in sub-rule (c) of Rule A of
Appendix-XXXIV do constitute single whole, he referred
to Sk. Ahmed Vrs. State of Telangana, (2021) 9 SCC 59,
wherein it was held that,
“19. This Court held that when the provisos (i) and (ii) are
separated by conjunctive word “and”, they have to
be read conjointly. The requirement of both the
proviso has to be satisfied to avail the benefit. Para
8 [in Hyderabad Asbestos Cement Products Vrs.
Union of India, (2000) 1 SCC 426] is as follows:
„8. The language of the rule is plain and simple. It
does not admit of any doubt in interpretation.
Provisos (i) and (ii) are separated by the use of
the conjunction “and”. They have to be read
conjointly. The requirement of both the provisos
W.P.(C) No.8589 of 2024 Page 26 of 89
has to be satisfied to avail the benefit. Clauses
(a) and (b) of proviso (ii) are separated by the
use of an “or” and there the availability of one
of the two alternatives would suffice. Inasmuch
as cement and asbestos fibre used by the
appellants in the manufacture of their finished
excisable goods are liable to duty under
different tariff items, the benefit of pro forma
credit extended by Rule 56-A cannot be availed
of by the appellants and has been rightly
denied by the authorities of the Department.‟
***”
5.5. Sri Prabodha Chandra Nayak, learned Advocate
arduously submitted that mere allegation of breach of
contractual obligations without anything more, per se,
does not invite such punitive action. He referred to
following observation of the Hon’ble Supreme Court of
India made in Techno Prints Vrs. Chhattisgarh Textbook
Corporation, (2025) 3 SCR 208:
“34. Plainly, if a contractor is to be visited with the
punitive measure of blacklisting on account of an
allegation that he has committed a breach of a
contract, the nature of his conduct must be so
deviant or aberrant so as to warrant such a punitive
measure. A mere allegation of breach of
contractual obligations without anything more,
per se, does not invite any such punitive
action.
35. Usually, while participating in a tender, the bidder is
required to furnish a statement undertaking that it
has not been blacklisted by any institution so far
W.P.(C) No.8589 of 2024 Page 27 of 89
and, if that is not the case, provide information of
such blacklisting. This serves as a record of the
bidder‟s previous experience which gives the
purchaser a fair picture of the bidder and the
conduct expected from it. Therefore, while the
debarment itself may not be permanent and
may only remain effective for a limited, pre-
determined period, its negative effect continues
to plague the business of the debarred entity
for a long period of time. As a result, it is
viewed as a punishment so grave, that it must
follow in the wake of an action that is equally
grave.
36. In the overall view of the matter more particularly in
the peculiar facts of the case, we have reached the
conclusion that asking the appellant herein to file his
reply to the show cause notice and then await the
final order which may perhaps go against him,
leaving him with no option but to challenge the same
before the jurisdictional High Court will be nothing
but an empty formality. Even otherwise, issuing
of show cause notice if not always then at
least most of the times is just an empty
formality because at the very point of time the
show cause notice is issued the Authority has
made up its mind to ultimately pass the final
order blacklisting the Contractor. In other
words, the show cause notice in most of the
cases is issued with a pre-determined mind. It
has got to be issued because this Court has said
that without giving an opportunity of hearing there
cannot be any order of blacklisting. To meet with
this just a formality is completed by the Authority of
issuing a show cause notice.
W.P.(C) No.8589 of 2024 Page 28 of 89
5.6. It is submitted that since the petitioner pursuing his
remedy bona fide and the propriety and legality of
rescission of contracts being sub judice before this Court
for adjudication in W.P.(C) Nos.29863 of 2023 and
31693 of 2023, the authority should not have shown
haste in taking recourse of banning the petitioner for six
years from participating in any of the tenders
undertaken by the Government of Odisha and
transacting business with the Government of Odisha,
directly or indirectly.
5.7. Stemming on the observations made in Blue Dreamz
Advertising (P) Ltd. Vrs. Kolkata Municipal Corporation,
(2024) 15 SCC 264, the Codal Provisions specifying
modalities for blacklisting/debarment requires strict
interpretation, and non-fulfilment of any of the
conditions thereof would render the decision of the
authority vitiated. It is, thus, asserted that the ban order
dated 30.03.2024 can be regarded as “civil death”
3, for
such a decision tends to “blacklisting” the petitioner
preventing it to eke out livelihood.
5.8. Hence, it is urged fervently for showing indulgence in the
matter.
6. Sri Saswat Das, learned Additional Government
Advocate dispelling controversial contentions raised by
3
See, Shri Artatran Bhuyan Vrs. State of Odisha, 2025 (II) ILR-CUT 104 2 as
followed in Rinabala Sethi Vrs. State of Odisha, 2025 SCC OnLine Ori 4785.
W.P.(C) No.8589 of 2024 Page 29 of 89
the petitioner submitted that the petitioner prior to
passing order banning it from participating in the
bidding process for the work undertaken by the
Government of Odisha and entering into transactions of
business with the Government of Odisha, issued Show
Cause Notices and the reply of the petitioner was found
not to have been specific or cogent. Referring to written
note dated 21.07.2025 submitted by the opposite
parties, he emphasised that in view of State of Odisha
Vrs. Panda Infraproject Limited, (2022) 4 SCC 393, having
adhered to principles of natural justice prior to taking
decision to debar/ban, no flaw in the order dated
30.03.2024 of the Chief Engineer, Bridges (WBP) can be
imputed so as to warrant this Court to interfere with. He
would submit that banning the contractor like the
petitioner who defied to complete the works entrusted
within the period stipulated is an effective measure to
discipline the defiant.
6.1. Explaining further he strenuously contended that the
petitioner even though was granted sufficient
opportunity and extension of period to complete the
works in question, he remained dormant and filed
affidavit before this Court for a direction to the opposite
parties to extend the period so expired knowing fully well
that such a recourse is not open for it to approach by
W.P.(C) No.8589 of 2024 Page 30 of 89
invoking provisions of Articles 226 and 227 of the
Constitution of India.
6.2. In counter reply to the interpretation of use of the word
“and” in sub-rule (c) of Rule A of the Appendix-XXXIV,
Sri Saswat Das, learned Additional Government
Advocate made suave submission that the aspects
contained therein are to be read disjunctively, but not
conjunctively. It is one thing to hold the petitioner
having committed offence of “Constant non-achievement
of milestones on insufficient and imaginary grounds”
and nevertheless, it is another to say “non-adherence to
quality specifications despite being pointed out”. It is
vociferously submitted that two independent aspects
cannot be construed to be one ground. Since the Show
Cause Notices indicated one aspect i.e., “Constant non-
achievement of milestones on insufficient and imaginary
grounds” out of the two aspects in the ground vide sub-
rule (c) of Rule A of Appendix-XXXIV read with Clause
121 of the DTCN, and the reply thereto by the petitioner
being not found favour with, ban order debarring the
petitioner from participating in tenders vide order dated
30.03.2024 has been passed. Valiant attempt was made
by the learned Additional Government Advocate to
construe the word “and” joining two situations /
circumstances enjoined in sub-rule (c) of Rule A of
Appendix-XXXIV to the OPWD Code to be disjunctive.
W.P.(C) No.8589 of 2024 Page 31 of 89
6.3. Referring to Venkataraman Krishnamurthy Vrs. Lodha
Crown Buildmart Pvt. Ltd., (2024) 4 SCC 230 , it is
submitted that the explicit terms contained in Clause
2(b)(i)
4 read with Clause 121 of the DTCN should be
treated to be final word with regard to the intention of
the parties. On the specious plea of regulatory or
adjudicatory forum the petitioner should be discouraged
to insist for judicial review after participation in the
tender and being awarded with the works to accomplish
within the periods stipulated in the guise of seeking
equity or fairness. Such a course to draw sympathy of
this Court is anathema to judicial approach and to insist
for rewriting the contractual framework or superimpose
obligations alien to the agreement.
6.4. He, thus, prayed not to meddle with the order of
debarment vide Annexure-1 and dismiss the writ
petition.
Analysis and discussion:
7. Before this Court the rescission of contracts with respect
to two different works awarded has been under
challenge in W.P.(C) Nos.29863 and 31693 of 2023. In
both the cases the petitioner filed affidavit undertaking
that given extension of further period, it would be in a
4
“To rescind the contract (of which rescission notice in writing to the contractor
under the hand of the Executive Engineer shall be conclusive evidence) 20% of the
value of left-over work will be realized from the Contractor as penalty.”
W.P.(C) No.8589 of 2024 Page 32 of 89
position to complete the works. While in respect of one of
the works, being Work No.1, this Court having directed
the opposite parties to allow the petitioner to complete
the work in W.P.(C) No. 29863 of 2023 vide order dated
01.03.2024, the Hon’ble Supreme Court in the case of
State of Odisha Vrs. Binodini Infrastructure Pvt. Ltd., Civil
Appeal No.7085 of 2025 [Arising out of S.L.P.(C) No.14142
of 2024] vide order dated 14.05.2025 set aside the
matter by holding that this Court could not have issued
such direction inasmuch as such consideration would
fall in the domain of rewriting the terms of contract. In
the other matter being W.P.(C) No.31693 of 2023 the
opposite parties have filed counter refuting the
averments and contentions of the petitioner. Both the
matters are now sub judice before this Court. Rescission
of contracts being questioned in the said writ petitions,
in the present the concern is for ban order clamped
against the petitioner from participating in tenders and
transacting business with the Government.
8. Be that as it may, the order banning/debarring the
petitioner has come to be passed by the Chief Engineer,
Bridges (WBP), Odisha on 30.03.2024 which is subject
matter of challenge in this writ petition.
9. Perusal of Show Cause Notice dated 18.10.2023 with
respect to Work No.1, it transpired that several requests
were made by the authority concerned by issue of
W.P.(C) No.8589 of 2024 Page 33 of 89
notices to the petitioner to complete the works, which
turned out to be futile and went unheeded. Upon
inspection being conducted by the Superintending
Engineer, Malkangiri (R&B) to the spot, it was found
that there were no men or machineries at the site. Such
negligence on the part of the petitioner invited issue of
such notice with the caveat that failure to act with
promptitude would invite action in terms of Clause 121
of the DTCN read with provisions of Appendix-XXXIV of
OPWD Code, Volume-II.
9.1. Perusal of Show Cause Notice dated 18.10.2023 with
respect to Work No.2 (Annexure-11) it is manifest that
notwithstanding several notices issued to the petitioner,
it remained indifferent and failed to complete the work
within the period stipulated, as extended. Even a notice
in Letter No.357 dated 25.01.2021 was issued with
request to complete the balance work with warning that
failure to resume work would entail step under Clause
121 of DTCN read with relevant provisions of Appendix-
XXXIV of OPWD Code, Volume-II.
9.2. Separate replies dated 23.10.2023 were submitted to the
Chief Engineer, World Bank Projects with copies to other
authorities making them aware that the tenability of
decision to rescind the contracts has been pending
before this Court.
W.P.(C) No.8589 of 2024 Page 34 of 89
9.3. Perusal of record further revealed the fact that the
petitioner has been imposed with penalty vide Letter
dated 26.10.2023 issued by the Superintending
Engineer (R&B) Division, Malkangiri (Annexure-12).
9.4. When the material with respect to pendency of cases
relating to the works in question was made known to the
authority concerned, without issuing further notice
contemplating to take drastic step against the petitioner
and/or hearing it the order of ban/debarment has been
passed, which is recognized akin to “blacklisting”,
thereby affecting the fundamental right to carry
business under Article 19(1)(g) of the Constitution of
India. As it emanates ex facie from the reply dated
23.10.2023, the petitioner merely made aware the
authorities regarding pendency of cases before this
Court as against rescission of contracts; but the reply
does not indicate that the petitioner has disclosed the
reasons for non-completion of the works within the
periods stipulated.
9.5. It cannot be gainsaid that in order to impose stringent
condition, like ban/debarment/blacklisting which would
have effect of impinging upon constitutional right of the
contractor, the authority exercising such power must be
more circumspect and such recourse preventing the
contractor from carrying on business would have
unreasonable restriction on the right flowing from Article
W.P.(C) No.8589 of 2024 Page 35 of 89
19(1)(g). Article 14 of the Constitution of India
safeguards such persons being contemned without
affording opportunity of hearing. Such is the facet is
audi alteram partem.
9.6. This Court in Sumitra Sethy Vrs. The Indian Railways,
W.P.(C) No.6182 of 2025, vide Judgment dated
06.05.2026 observed thus:
“7. It is no gainsaying that the blacklisting or
debarment has an effect of eliminating a person
from participating in any contract with the
Government nor will have any such privilege and
advantage of entering into the contract with the
Government agencies. It is, in effect, deprived a
person from having any commercial
relationship with the Government or its
agencies and has an impact on the right to
trade or profession as provided under Article
19(1)(g) of the Constitution of India. Such
fundamental right is always subject to the
established procedure of law and in the event
it is found that the person has committed a
gross error or violated the terms and
conditions of the contract, there is no fetter in
debarring such person to participate in any
tender, nor will be entitled to establish a
contractual relationship with the public
authority. In such sense, it is time and again
regarded as a “civil death” and therefore, it is
a paramount duty of the authorities to adhere
the principles of natural justice before it
W.P.(C) No.8589 of 2024 Page 36 of 89
proceeds to inflict an order of debarment
and/or blacklisting on the person.
8. The aforesaid concept/notion is further fortified in
the judgment rendered by the Apex Court in case of
Raghunath Thakur Vrs. State of Bihar; (1989) 1 SCC
229 in the following:
„4. Indisputably, no notice had been given to the
appellant of the proposal of blacklisting the
appellant. It was contended on behalf of the
State Government that there was no
requirement in the rule of giving any prior
notice before blacklisting any person. Insofar
as the contention that there is no requirement
specifically of giving any notice is concerned,
the respondent is right. But it is an implied
principle of the rule of law that any order
having civil consequence should be passed
only after following the principles of natural
justice. It has to be realised that blacklisting
any person in respect of business ventures has
civil consequence for the future business of the
person concerned in any event. Even if the
rules do not express so, it is an elementary
principle of natural justice that parties affected
by any order should have right of being heard
and making representations against the order.
In that view of the matter, the last portion of
the order insofar as it directs blacklisting of the
appellant in respect of future contracts, cannot
be sustained in law. In the premises, that
portion of the order directing that the appellant
be placed in the blacklist in respect of future
contracts under the Collector is set aside. So
W.P.(C) No.8589 of 2024 Page 37 of 89
far as the cancellation of the bid of the
appellant is concerned, that is not affected.
This order will, however, not prevent the State
Government or the appropriate authorities from
taking any future steps for blacklisting the
appellant if the Government is so entitled to do
in accordance with law i.e. after giving the
appellant due notice and an opportunity of
making representation. After hearing the
appellant, the State Government will be at
liberty to pass any order in accordance with
law indicating the reasons therefor. We,
however, make it quite clear that we are not
expressing any opinion on the correctness or
otherwise of the allegations made against the
appellant. The appeal is thus disposed of.‟
***
10. It is manifest from the ratio of law enunciated in the
above report that the order of blacklisting and/or
debarment not only prevents and/or excludes a
person from participating in any contractual
relationship with the Government or its agencies but
is also deprived of his livelihood as a stigma would
be attached to him which cannot be inflicted without
giving ample opportunity to defend. Even if the terms
and conditions embodied in the tender document
does not contain an express provision relating to
issuance of a show cause preceding the order of
blacklisting, yet the rule of natural justice being
paramount cannot be abridged and/or whittled
down which is one of the ethos of the constitutional
rights guaranteed in the Constitution of India. The
maxim audi alteram partem is ingrained and
W.P.(C) No.8589 of 2024 Page 38 of 89
inhered into the legal system and even a
person cannot be penalised and/or condemned
without giving an opportunity of hearing. As
indicated hereinabove the debarment/blacklisting
has the blend of a civil death, such order cannot be
passed without affording an opportunity to defend
and for such reason the issuance of show cause
becomes inevitable.
11. In a recent judgment rendered by the Hon‟ble
Supreme Court in M/s. A.K.G. Construction and
Developers Pvt. Ltd. Vrs. State of Jharkhand and
others; (2026) 4 SCR 331, the Apex Court was
considering a case where a show cause notice was
issued to the contractor with regard to the
termination of a contract for the reasons reflected in
the said show cause notice but the authorities while
terminating the contract proceeded to pass an order
of blacklisting and/or debarment. The Apex Court
did not interfere with the order of termination
of a contract but set aside the order of the
debarment as both the circumstances relating
to a termination of a contract and imposition
of a blacklisting and/or debarment are
distinct, different and separate. It is held that
the show cause notice which was restricted to a
termination of contract cannot be stretched to mean
that it is also for the debarment in the following:
„3. Upon careful consideration of the impugned
State action, which terminates the contract and
blacklists the appellant without meaningful
distinction, we hold that the termination order
is substantiated and justified. However, the
blacklisting order suffers from patent
W.P.(C) No.8589 of 2024 Page 39 of 89
infirmities: it evinces no application of
mind, disregards the mandatory precept
of audi alteram partem, and fails to
precede with a show-cause notice
requiring the contractor to demonstrate
why such drastic action should not be
taken. Blacklisting, being stigmatic and
exclusionary in nature, cannot be imposed
mechanistically but must comport with
principles of natural justice and
reasonableness.
***
22. Returning to the facts of the present case, at
the outset, it is apparent that the show cause
notice dated 04.06.2024 does not purport to be
a show cause notice for blacklisting at all. It
perhaps expects the contractor to assume that
it is for termination as well as for blacklisting.
Even if we accept the submissions of Mr.
Kumar Anurag Singh that, as there is no
provision for prior notice before termination,
this show cause notice must be taken to be for
blacklisting, we are of the opinion that it still
falls short of the requirement of a proper show
cause notice for blacklisting. This is for the
reason that as the decision to blacklist is
independent of the decision to terminate, the
Department must demonstrate application of
mind before it takes the next step of
blacklisting the contractor, over an order of
termination. Upon taking such a decision, it
must also issue a show cause notice calling
upon the contractor to explain why a
W.P.(C) No.8589 of 2024 Page 40 of 89
consequential order of blacklisting should also
not be passed. The letter must be indicative of
the proposed decision to blacklist and the
requirement of the contractor to respond to it.
The show cause notice dated 04.06.2024 falls
short of these requirements. Similarly, the final
order of blacklisting, dated 23.08.2024, also
does not list the reasons as to why an order of
blacklisting has become necessary.‟ ***”
9.7. There is no cavil that the order of banning/blacklisting/
debarment would be akin to “civil death”, this Court in
Kwick Soft Solutions Pvt. Ltd., Tamilnadu Vrs. State of
Odisha, W.P.(C) No.24026 of 2024 vide order dated
21.08.2025
5 observed as follows:
“3. It is no doubt true that the debarment or blacklisting
of any individual or an entity to participate in a
tender process is akin to a “civil death” as a person
is deprived of entering into any commercial
relationship with the public or the Government. Any
order of debarment or blacklisting is always
regarded as a stigma attached to the commercial
dealing with the Government and in effect debars
from a person to have the award of the Government
contracts. The debarment or blacklisting has an
effect of bringing a person from the privilege
and advantage of entering into a lawful
relationship with the Government or its
instrumentalities and above all impacts the
livelihood. In effect such debarment has a far-
reaching consequence in public contracts and,
5
Referred to in Rinabala Sethi Vrs. State of Odisha, W.P.(C) No.21309 of 2024,
vide Judgment dated 22.12.2025.
W.P.(C) No.8589 of 2024 Page 41 of 89
therefore, the authority must view the misconduct
more scrupulously before taking a decision of
debarment/blacklisting. The misdeed must be of
such magnitude which in ordinary sense is not
expected from a reasonable man. It may at times
should be judged on the parameter of unfair means
or illegal gain. The minimal or accidental omission or
mistake, which was subsequently rectified, if it does
not, cause any prejudice or hinders in its invocation
as the Bank remain committed to the person, in
whose favour the Bank Guarantee is issued to
honour the same, the authority must view the
mistake in such perspective. Mere non-incorporation
of UIN of the Odisha Police and incorporation of the
PAN number of one of the Directors of the petitioner-
Company mistakenly neither invalidates the said
Bank Guarantee nor put any invasion into its
invocation by the Odisha Police in the event the
same is warranted from the conduct of the
petitioner. Apart from the same, the said ministerial
mistake was rectified by the Bank issuing the Bank
Guarantee, which does not in our view invites the
civil death as held by the Apex Court in the case of
Gorkha Security Services Vrs. Government (NCT of
Delhi) and others, (2014) 9 SCC 105 in the following:
„16. It is a common case of the parties that the
blacklisting has to be preceded by a show-
cause notice. Law in this regard is firmly
grounded and does not even demand much
amplification. The necessity of compliance with
the principles of natural justice by giving the
opportunity to the person against whom action
of blacklisting is sought to be taken has a valid
and solid rationale behind it. With
W.P.(C) No.8589 of 2024 Page 42 of 89
blacklisting, many civil and/or evil
consequences follow. It is described as
“civil death” of a person who is foisted
with the order of blacklisting. Such an
order is stigmatic in nature and debars
such a person from participating in
government tenders which means
precluding him from the award of
government contracts.‟ ***”
9.8. At this juncture careful reading of Show Cause Notices
dated 18.10.2023 would depict that except for slow pace
of work being flagged, nothing is emanated with specific
terms with regard to the grounds on which the action for
banning was contemplated.
9.9. It may be necessary to have regard to Clause 121 of the
DTCN, which is reproduced hereunder [ vide Counter
affidavit, paragraph 6]:
“121.A contractor may be blacklisted as per amendment
made to Appendix XXXIV to OPWD Code, Volume-II
on rules for blacklisting of contractors vide Letter No.
3365 dated 01.03.2007 of Works Department,
Odisha.
(a) Misbehavior/threatening of departmental
supervisory officers during work/tendeiing
process,
(b) Involvement in any sort of tender fixing,
(c) Constant non-achievement of milestones
insufficient and imaginary grounds and non-
W.P.(C) No.8589 of 2024 Page 43 of 89
adherence to quality specifications despite
being pointed out.
(d) Persistent and intentional violation of important
conditions of contract.
(e) Security consideration of the State, i.e., any
action that jeopardizes the security of the
State.
(f) Submission of false/fabricated/forged
documents for consideration of a tender.”
9.10. Relevant portion of Appendix XXXIV is quoted
hereunder:
“Appendix-XXXIV
Codal provisions for blacklisting
Contractors
A. The Chief Engineer of a department may blacklist a
contractor with the approval of concerned
Administrative Department on the following grounds:
(a) Misbehaviour/threatening of departmental and
supervisory officers during execution of
work/tendering process.
(b) Involvement in any sort of tender fixing.
(c) Constant non-achievement of milestones
on insufficient and imaginary grounds
and non-adherence to quality
specifications despite being pointed out.
(d) Persistent and intentional violation of important
conditions of contract.
W.P.(C) No.8589 of 2024 Page 44 of 89
(e) Security consideration of the State i.e., any
action that jeopardizes the security of the
State.
(f) Submission of false/fabricated/forged
documents for consideration of a tender.
(g) Non submission of Additional Performance
Security (APS) within stipulated period
inpursuance to Works Department Office
memorandum No 14299/W, dated 03.10.2017.
The Divisional Officer shall report to the Chief
Engineer if in his opinion any of the above wrong
has/have been committed by any contractor. On
receipt of such a report from the Divisional Officer
the Chief Engineer shall make due enquiry and if
considered necessary, issue show cause notice to
the concerned contractor who in turn shall furnish
his reply, if any, within a fortnight from the date of
receipt of the show cause notice. Therefore, if the
Chief Engineer is satisfied that there is sufficient
ground, he shall blacklist the concerned contractor
with the approval of the Administrative Department.
After issue of the order of blacklisting of the said
contractor, the Chief Engineer shall intimate to all
Chief Engineers of other Administrative
Departments, the Registering Authority as provided
under Rule 4 of PWD Contractor‟s Registration
Rules, 1967 and Department of Information &
Technology for publication in web site of State
Government.
B. The registration certificate of blacklisted contractor
shall remain automatically suspended while
allowing him to complete all his ongoing work(s)
W.P.(C) No.8589 of 2024 Page 45 of 89
unless otherwise rescinded by the competent
authority on grounds of breach of conditions of
agreement.
C. The name(s) of partners and allied concerns of the
blacklisted contractors shall also be communicated
to all concerned. Care shall be taken to see that the
contractor blacklisted and his partners do not
transact any business with Government under a
different name or title.
D. Once the blacklisting order is issued it shall not be
revoked ordinarily unless:
(i) On review in later date, the Chief Engineer is of
the opinion that there is sufficient justification
to revoke the order of blacklisting, or
(ii) In respect of the same offense, the accused has
been honourably acquitted by court of law.
The concerned Chief Engineer will obtain order from
the concerned Administrative Department before
revoking the order of blacklisting. The order of
revocation shall also be communicated to all
concerned.
6[The blacklisting period per offence shall be limited
to 03 (three) years subject to an overall maximum
6
This clause has been introduced by virtue of Office Memorandum File
No.07180200982020/16131/W, dated 26.11.2021:
“Sub.: Codal provisions for blacklisting of contractor
Government after careful consideration have been pleased to make the
following provision under Rule-D of Appendix-XXXIV of OPWD Code,
Volume-II:
„The blacklisting period per offence shall be limited to 03 (three) years
subject to an overall maximum cumulative period of 10 (ten) years for
multiple offences‟.
This shall form a part of the Appendix-XXXIV of OPWD Code, Volume- II.”
W.P.(C) No.8589 of 2024 Page 46 of 89
cumulative period of 10 (ten) years for multiple
offences.]
E. The Chief Engineer and Administrative Department
shall maintain a list of blacklisted contractor.
Updated list of blacklisted contractors shall be
communicated to all concerned by the Chief
Engineers on a quarterly basis.
F. Checklist as per Annexure-I, shall be furnished by
the concerned Chief Engineer for blacklisting the
contractor.
G. Checklist as per Annexure-II, shall be furnished by
the concerned Chief Engineer for revoking
blacklisting order.
Explanation:
(i) Action taken under this rule shall be in
addition to any action taken under Rule 11 of
PWD Contractor‟s Registration Rules,1967
(Appendix-VIII of OPWD Code, Vol.-II). On
revocation of order of blacklisting, registration
certificate of the contractor shall valid
automatically, if not otherwise become invalid
which shall be recorded in the registration
certificate by the revoking authority.
(ii) The ground mentioned above for blacklisting of
contractor shall be deemed to be deleted from
the grounds for cancellation/suspension of
registration certificate under Rule 11(a) of PWD
Contractor‟s Registration Rules, 1967
(AppendixVIII of OPWD Code, Vol.-II).”
W.P.(C) No.8589 of 2024 Page 47 of 89
9.11. Ground on which the authority concerned proceeded to
ban the petitioner is sub-rule (c) of Rule A of the
Appendix-XXXIV. Having glance at the provisions as
referred to above read with order dated 30.03.2024
(Annexure-1), it emerges that “Even after several notices
and persuations, the contractor constantly failed to
achieve the desired milestones as per agreement and did
not complete the above works within the time stipulated
violating the conditions of contract and Codal
Provisions.”
9.12. It is apparent that the ground for jumping to conclusion
to debar the petitioner from participating in Government
tenders falls within the ambit of sub-rule (c) of Rule A of
Appendix-XXXIV. Rule A consists of seven grounds
stemming on which the competent authority can invoke
power to blacklist/debar a contractor. Minute reading of
the order impugned would suggest that the ground on
which the Chief Engineer, Bridges (WBP) proceeded was
sub-rule (c) thereof. As debarment is stated to be for “six
years”, it does not emanate from said order the reason
for invocation of introduced clause by virtue of Office
Memorandum dated 26.11.2021.
9.13. Sub-rule (c) of Rule A comprehends two aspects, namely:
i. Constant non-achievement of milestones on
insufficient and imaginary grounds; “and”
W.P.(C) No.8589 of 2024 Page 48 of 89
ii. non-adherence to quality specifications despite
being pointed out.
9.14. Both the situations are placed under one entry as a
composite ground. However, unless the deficiencies are
put to notice of the petitioner in specific terms with
respect to both the situations, it may not possibly
appropriate for the authority to jump to conclusion that
the contract invites stringent restriction.
9.15. At this stage Show Cause Notices vide Annexure-11 are
required to be taken into consideration. Meaningful
reading of the tenor and texture of such notices would
only indicate that notices were issued to the petitioner
requesting it to complete the balance work. However, it
does not emerge therefrom that the contemplated action
for blacklisting was intimated in specific terms and
ground(s) specified in sub-rule (c) of Rule A. It is only the
Show Cause Notices dated 18.10.2023 which depict that
failure to resume both the works would attract steps as
per Clause 121 of the DTCN read with Rule A of the
Appendix-XXXIV of the OPWD Code.
9.16. It is interesting to note that Show Cause Notices dated
18.10.2023 does not indicate whether there was any
“insufficient and imaginary ground” that led to “constant
non-achievement of milestones”. In the Show Cause
Notice dated 18.10.2023 with respect to Work No.2 it is
W.P.(C) No.8589 of 2024 Page 49 of 89
stated that “The Superintending Engineer, Malkangiri,
Malkangiri (R&B) Division again issued another show
cause notice vide Letter No.5823, dated 11.11.2020
where he has stated that even though you have
committed during contract management meeting held on
06.07.2020 in his office to start the bridge work by 2
nd
week of September, 2020, till November, 2020 you did
not taken any initiative.” It is further revealed therefrom
that “the Superintending Engineer, Malkangiri (R&B)
Division issued final notice vide Letter No.357, dated
25.01.2021 to you with a request to execute the backlog
quantities of the work by engaging sufficient me and
machineries with maximum working hours as well as
achieve the target for completion of the above project”.
Similar facts are also found place in Show Cause Notice
dated 18.10.2023 with respect to Work No.1.
9.17. Above recitals emanating from the Show Cause Notices
would indicate that the extensions granted for
completion of works were during the period of pandemic.
There is no iota of indication found in said Show Cause
Notices with respect to “non-adherence to quality
specifications”. Had the authority wanted real reason for
the delay and non-accomplishment of the works
entrusted to the petitioner, it should have issued notice
to submit explanation for the delay and affording
opportunity of hearing. Failure to give such an
W.P.(C) No.8589 of 2024 Page 50 of 89
opportunity would render the order legally fragile not on
the ground of lack of jurisdiction on the part of the
authority concerned but on the ground of violation of
principles of natural justice. There can be no dispute
that while the authority is free to exercise his
jurisdiction on consideration of all relevant facts, a full
opportunity to controvert the same and to explain the
circumstances surrounding such facts, as may be
considered relevant by the contractor, must be afforded
to him prior to the finalization of the decision. See,
Commissioner of Income Tax Vrs. Amitabh Bachchan,
(2016) 3 SCR 516.
9.18. In Oryx Fisheries Pvt. Ltd. Vrs. Union of India, (2010) 13
Addl. SCR 234 it has been stated thus:
“22. Relying on the underlined portions in the show
cause notice, learned counsel for the appellant urged
that even at the stage of the show cause notice the
third respondent has completely made up his mind
and reached definite conclusion about the alleged
guilt of the appellant. This has rendered the
subsequent proceedings an empty ritual and an idle
formality.
23. This Court finds that there is a lot of substance in
the aforesaid contention.
24. It is well settled that a quasi-judicial authority, while
acting in exercise of its statutory power must act
fairly and must act with an open mind while
initiating a show cause proceeding. A show cause
W.P.(C) No.8589 of 2024 Page 51 of 89
proceeding is meant to give the person·proceeded
against a reasonable opportunity of making his
objection against the proposed charges indicated in
the notice.
25. Expressions like „a reasonable opportunity of
making objection‟ or „a reasonable opportunity of
defence‟ have come up for consideration before this
Court in the context of several statutes.
26. A Constitution Bench of this Court in Khem Chand
Vrs. Union of India and others, reported in AIR 1958
SC 300, of course in the context of service
jurisprudence, reiterated certain principles which are
applicable in the present case also.
27. Chief Justice S.R. Das speaking for the unanimous
Constitution Bench in Khem Chand (supra) held that
the concept of „reasonable opportunity‟ includes
various safeguards and one of them, in the words of
the learned Chief Justice, is:
„(a) An opportunity to deny his guilt and
establish his innocence, which he can only
do if he is told what the charges leveled
against him are and the allegations on
which such charges are based;‟
28. It is no doubt true that at the stage of show cause,
the person proceeded against must be told the
charges against him so that he can take his defence
and prove his innocence. It is obvious that at that
stage the authority issuing the chargesheet, cannot,
instead of telling him the charges, confront him with
definite conclusions of his alleged guilt. If that is
done, as has been done in this instant case, the
W.P.(C) No.8589 of 2024 Page 52 of 89
entire proceeding initiated by the show cause notice
gets vitiated by unfairness and bias and the
subsequent proceeding become an idle ceremony.
29. Justice is rooted in confidence and justice is the goal
of a quasi-judicial proceeding also. If the functioning
of a quasi-judicial authority has to inspire
confidence in the minds of those subjected to its
jurisdiction, such authority must act with utmost
fairness. Its fairness is obviously to be manifested
by the language in which charges are couched and
conveyed to the person proceeded against. In the
instant case from the underlined portion of the show
cause notice it is clear that the third respondent has
demonstrated a totally close mind at the stage of
show cause notice itself. Such a close mind is
inconsistent with the scheme of Rule 43 which is set
out below. The aforesaid rule has been framed in
exercise of the power conferred under Section 33 of
The Marine Products Export Development Authority
Act, 1972 and as such that Rule is statutory in
nature.
***
31. It is of course true that the show cause notice cannot
be read hyper-technically and it is well settled that it
is to be read reasonably. But one thing is clear that
while reading a show-cause notice the person who
is subject to it must get an impression that he will
get an effective opportunity to rebut the allegations
contained in the show cause notice and prove his
innocence. If on a reasonable reading of a show-
cause notice a person of ordinary prudence gets the
feeling that his reply to the show cause notice will
be an empty ceremony and he will merely knock his
W.P.(C) No.8589 of 2024 Page 53 of 89
head against the impenetrable wall of prejudged
opinion, such a show cause notice does not
commence a fair procedure especially when it is
issued in a quasi-judicial proceeding under a
statutory regulation which promises to give the
person proceeded against a reasonable opportunity
of defence.
32. Therefore, while issuing a show-cause notice, the
authorities must take care to manifestly keep an
open mind as they are to act fairly in adjudging the
guilt or otherwise of the person proceeded against
and specially when he has the power to take a
punitive step against the person after giving him a
show cause notice.
33. The principle that justice must not only be
done but it must eminently appear to be done
as well is equally applicable to quasi judicial
proceeding if such a proceeding has to inspire
confidence in the mind of those who are subject
to it.
34. A somewhat similar observation was made by this
Court in the case of Kumaon Mandal Vikas Nigam
Limited Vrs. Girja Shankar Pant & others, (2001) 1
SCC 182. In that case, this court was dealing with a
show cause notice cum charge sheet issued to an
employee. While dealing with the same, this Court in
paragraph 25 (page 198 of the report) by referring to
the language in the show cause notice observed as
follows:
„25. Upon consideration of the language in the
show-cause notice-cum-charge-sheet, it has
been very strongly contended that it is clear
W.P.(C) No.8589 of 2024 Page 54 of 89
that the Officer concerned has a mindset even
at the stage of framing of charges and we also
do find some justification in such a submission
since the chain is otherwise complete.‟
35. After paragraph 25, this Court discussed in detail
the emerging law of bias in different jurisdictions
and ultimately held in paragraph 35 (page 201 of
the report), the true test of bias is:
„35. The test, therefore, is as to whether a mere
apprehension of bias or there being a real
danger of bias and it is on this score that the
surrounding circumstances must and ought to
be collated and necessary conclusion drawn
therefrom— in the event however the
conclusion is otherwise inescapable that there
is existing a real danger of bias, the
administrative action cannot be sustained.‟
36. Going by the aforesaid test any man of ordinary
prudence would come to a conclusion that in the
instant case the alleged guilt of the appellant has
been prejudged at the stage of show cause notice
itself.”
9.19. In Commissioner of Central Excise, Bhubaneswar Vrs.
Champdany Industries Limited, (2009) 14 (Addl.) SCR
211 it is unequivocally laid down as follows:
“50. Apart from that, the point on Rule 3 which has been
argued by the learned counsel for the Revenue was
not part of its case in the show-cause notice. It is
well settled that unless the foundation of the case is
made out in the show-cause notice, Revenue cannot
W.P.(C) No.8589 of 2024 Page 55 of 89
in Court argue a case not made out in its show-
cause notice. [See: Commissioner of Customs,
Mumbai Vrs. Toyo Engineering India Limited, (2006)
7 SCC 592, para 16].
51. Similar view was expressed by this Court in the
case of Commissioner of Central Excise, Nagpur Vrs.
Ballarpur Industries Ltd., (2007) 8 SCC 9. In
paragraph 27 of the said report, learned Judges
made it clear that if there is no invocation of the
concerned rules in the show-cause notice, it would
not be open to the, Commissioner to invoke the said
Rule.”
9.20. The Supreme Court in case of Commissioner of Customs,
Mumbai Vrs. Toyo Engineering India Limited, (2006)
Supp.5 SCR 657 noted that the Department cannot be
allowed travel beyond the show cause notice and,
therefore, it would be against the principles of natural
justice that a person who has not been confronted with
any ground is saddled with liability thereof. Since the
issue did not form the basis of the show cause notice
and was not even confronted to the order passed beyond
show cause notice is to be quashed. In the instant case,
the Show Cause Notices do not with specificity spelt out
with regard to twin conditions envisioned in sub-rule (c)
of Rule A of Appendix-XXXIV appended to the OPWD
Code. The Show Cause Notices dated 18.10.2023 and
the impugned order dated 30.03.2024 are silent about
the circumstances/aspects which led to construe that
W.P.(C) No.8589 of 2024 Page 56 of 89
the explanation of the petitioner was “insufficient and
imaginary grounds”. Neither the Show Cause Notices nor
did the order demonstrate that there was “non -
adherence to quality specifications despite being pointed
out”.
9.21. Numerous grounds are found mentioned in Rule A. Each
ground is placed separately as item (a) through (g). Had
both the aspects in Ground contained in sub-rule (c) of
Rule A “Constant non-achievement of milestones on
insufficient an imaginary grounds ” “and” “non-
adherence to quality specifications despite being pointed
out” were to be treated as separate grounds, then there
was no difficulty in formulating each of them in separate
items. Before analyzing the nuance of grounds found
enumerated under Rule A, OPWD Code, a doctrinaire
principle ingrained in noscitur-a-sociis may be referred to
as reflected in State Vrs. Hospital Mazdoor Sabha, (1960)
2 SCR 866 may be regarded as relevant for the present
purpose. The Hon’ble Supreme Court of India held,
“This rule, according to Maxwell, means that, when two or
more words which are susceptible of analogous meaning
are coupled together they are understood to be used in
their cognate sense. They take as it were their colour from
each other, that is, the more general is restricted to a
sense analogous to a less general.
The same rule is thus interpreted in “Words and Phrases”
(Vo. XIV, p. 207):
W.P.(C) No.8589 of 2024 Page 57 of 89
„Associated words take their meaning from one another
under the doctrine of noscitur-a-sociis, the philosophy of
which is that the meaning of a doubtful word may be
ascertained by reference to the meaning of words
associated with it; such doctrine is broader than the
maxim Ejusdem Generis.‟
In fact the latter maxim „is only an illustration or specific
application of the broader maxim noscuntur-a-sociis‟.”
9.22. In Parle Agro Private Limited Vrs. CCT, (2017) 7 SCC 540
it has been said that it must be borne in mind that
noscitur-a-sociis is merely a rule of construction and it
cannot prevail in cases where it is clear that the wider
words have been deliberately used in order to make the
scope of the defined word correspondingly wider. It is
only where the intention of the Legislature in associating
wider words with words of narrower significance is
doubtful, or otherwise not clear that the present rule of
construction can be usefully applied.
9.23. Rule A begins with expression— “The Chief Engineer of a
department may blacklist a contractor with the approval
of concerned Administrative Department on the following
grounds”. Said expression is followed by seven categories
of grounds enumerated in sub-rules (a) through (g). The
setting of said Rule inculcates in mind only one thing
that the Chief Engineer is empowered to take decision to
blacklist a contractor subject to approval of the
Administrative Department on the grounds mentioned in
W.P.(C) No.8589 of 2024 Page 58 of 89
sub-rules (a) to (g) on any one ground or combination of
grounds; nonetheless, each sub-rule is a ground to be
construed independently. Twin condition is specified in
sub-rule (c) of Rule A. The languages employed in Clause
121 of the DTCN and sub-rule (c) of Rule A of Appendix-
XXXIV appended to the OPWD Code, Volume-II are
identically worded. Rule A read as a whole indicates that
the blacklisting of the contractor can be done on the
grounds enumerated therein. Seven independent
grounds are reflected in said Rule A. As has already
been observed above each ground is separately
enumerated from sub-rule (a) to sub-rule (g). Sub-rule
(c) is one of the grounds contained in Rule A. Therefore,
the suggestion of the learned Additional Government
Advocate to read the word “and” between two
expressions, i.e., “Constant non-achievement of
milestones on insufficient an imaginary grounds” “and”
“non-adherence to quality specifications despite being
pointed out” disjunctively cannot be acceded to for the
simple reason that while enumerating different grounds
the OPWD Code specified separately each ground; then
there was no difficulty in placing two disjunctive
situations/aspects, as pleaded by the opposite parties
through the learned Additional Government Advocate, in
different segment. The intent of the Government to treat
both the conditions as one ground for the purpose of
W.P.(C) No.8589 of 2024 Page 59 of 89
taking step to blacklist a contractor is loud and clear
and no ambiguity can be imputed.
9.24. It is well-established principle of statutory interpretation
that the word “or” is normally disjunctive and the word
“and” is normally conjunctive. Both of them can be read
as vice-versa, but that interpretation is adopted only
where the intention of the legislature is manifest. See,
Central Council for Research in Ayurvedic Sciences Vrs.
Bikartan Das, (2023) 11 SCR 731.
9.25. In Bhavnagar University Vrs. Palitana Sugar Mill (P) Ltd.,
(2003) 2 SCC 111 it has been enunciated as follows:
“It is the basic principle of construction of statute that the
same should be read as a whole, then chapter by chapter,
section by section and words by words. Recourse to
construction or interpretation of statute is necessary when
there is ambiguity, obscurity, or inconsistency therein and
not otherwise. An effort must be made to give effect to all
parts of the statute and unless absolutely necessary, no
part thereof shall be rendered surplusage or redundant.”
9.26. In Renaissance Hotel Holdings Inc. Vrs. B. Vijaya Sai,
(2022) 5 SCC 1, it has been emphasized as follows:
“66. It is thus trite law that while interpreting the
provisions of a statute, it is necessary that the
textual interpretation should be matched with the
contextual one. The Act must be looked at as a
whole and it must be discovered what each section,
each clause, each phrase and each word is meant
W.P.(C) No.8589 of 2024 Page 60 of 89
and designed to say as to fit into the scheme of the
entire Act. No part of a statute and no word of a
statute can be construed in isolation. Statutes
have to be construed so that every word has a
place and everything is in its place. ***
67. Another principle that the High Court has failed to
notice is that a part of a section cannot be read in
isolation. This Court, speaking through A.P. Sen, J.,
in Balasinor Nagrik Coop. Bank Ltd. Vrs. Babubhai
Shankerlal Pandya, (1987) 1 SCC 606, observed
thus:
„4. *** It is an elementary rule that
construction of a section is to be made of
all parts together. It is not permissible to
omit any part of it. For, the principle that
the statute must be read as a whole is
equally applicable to different parts of the
same section.‟
This principle was reiterated by this Court in
Kalawatibai Vrs. Soiryabai, (1991) 3 SCC 410:
„6. *** It is well settled that a section has to
be read in its entirety as one composite
unit without bifurcating it or ignoring any
part of it.‟ ***”
9.27. On the basis of said principle, when Rule A of the
Appendix-XXXIV of the OPWD Code, Volume-II is
studied, it manifests that from sub-rules (a) to (g) of Rule
A contains independent ground mentioned in each sub-
rule. Each ground contained in each sub-rule is distinct
from one and the other. Sub-rules (a) to (g) comprehend
W.P.(C) No.8589 of 2024 Page 61 of 89
different identifiable circumstance/event/ground in each
sub-rule. In that sense, sub-rule (c) of Rule A is to be
read as one composite whole.
9.28. The Show Cause Notice and the order impugned do not
contain reason as to why the reply of the petitioner did
contain “insufficient and imaginary ground”. Cursory
glance at replies at Annexure-13 would show that the
petitioner has simply intimated the authority concerned
regarding challenge being made before this Court
against the rescission of contract; but such replies do
not reflect that the petitioner has proffered cause of
delay in completion of the works. If the authority
concerned decided to discard such replies and wished to
proceed with the matter on merit in the context of
blacklisting the petitioner, he should have shown
deference by issuing further intimation with more details
eliciting the circumstances that the petitioner was
required to explain as to its “constant non-achievement
of milestone on insufficient and imaginary ground and
non-adherence to quality specifications despite being
pointed out”. If the replies dated 23.10.2023 does not
reveal that the petitioner has offered specific explanation
indicating both the aspects on the ground vide sub-rule
(c) of Rule A of the Appendix-XXXIV, OPWD Code,
Volume-II, the authority should have shown alacrity by
issuing further notice by mentioning specific instance/
W.P.(C) No.8589 of 2024 Page 62 of 89
ground to which the petitioner was required to place his
defence/explanation.
9.29. In A.K.G. Construction and Developers Pvt. Ltd. Vrs. State
of Jharkhand, (2026) 4 SCR 331 it has been highlighted
as follows:
“23. The contractual relationship between the parties is
governed by two legal regimes. While GCC governs
termination, the 2012 Rules govern blacklisting.
Proceedings for termination should not be conflated
with proceedings for blacklisting. In the latter action,
what is at stake is the future of the contractor. A
blacklisting order assumes that the contractor is an
incorrigible entity, at least for some time to come, in
this case such an assumption was intended to
operate for five years. For giving effect to such a
premise, there has to be sufficient evidence, clear
application of mind and stronger adherence to
principles of natural justice
7. The blacklisting order
dated 23.08.2004 falls short of this requirement and
is liable to be set aside.”
9.30. Hence, the order dated 30.03.2024 passed by the Chief
Engineer, Bridges (WBP), Odisha cannot withstand
judicial scrutiny.
10. Reading of order dated 30.03.2024 of the Chief
Engineer, Bridges (WBP), Odisha debarring the
petitioner for six years manifests that he has invoked
7
Kulja Industries Ltd. Vrs. Chief General Manager, Western Telecom Project BSNL,
(2014) 14 SCC 731; Blue Dreamz Advertising (P) Ltd. Vrs. Kolkata Municipal
Corporation, (2024) 15 SCC 264, Techno Prints Vrs. Chhattisgarh Textbook
Corporation, (2025) 3 SCR 208.
W.P.(C) No.8589 of 2024 Page 63 of 89
Rule D of Appendix-XXXIV as amended by virtue of
Office Memorandum, dated 26.11.2021. As per such
amended provision, the blacklisting period per offence
shall be limited to three years subject to an overall
maximum cumulative period of ten years for multiple
offences. Neither Show Cause Notices nor does the order
impugned reveal that there was any proposition to
initiate proceeding to impose punishment for cumulative
period with respect to multiple “offences” attracting
Codal Provisions for banning/blacklisting contractor.
10.1. The term “offence” as found place in Rule D of Appendix-
XXXIV has not been defined in the OPWD Code. The
Hon’ble Supreme Court of India in the case of Standard
Chartered Bank Vrs. Directorate of Enforcement, (2006) 4
SCC 278 laid down the interpretation of “offence” in
absence of definition in the following manner:
“29. Both, Section 50 providing for imposition of penalty
and Section 56 providing for prosecution, speak of
contravention of the provisions of the Act.
Contravention is the basic element. The
contravention makes a person liable both for penalty
and for prosecution. Even though the heading to
Section 56 refers to offences and prosecutions, what
is made punishable by the section is the
contravention of the provisions of the Act and the
prosecution is without prejudice to any award of
penalty. The award of penalty is also based on the
same contravention. Section 63 confers the power of
W.P.(C) No.8589 of 2024 Page 64 of 89
confiscation of currency, security or any other money
or property in respect of which a contravention of the
provisions of the Act has taken place conferred
equally on the adjudicating authority and the court,
whether it be during an adjudication of the penalty
or during a prosecution. Whereas Section 64(1)
relating to preparation or attempt at contravention is
confined to Section 56, the provision for prosecution,
sub-section (2) of Section 64 makes the attempt to
contravene or abetment of contravention, itself a
contravention, for the purposes of the Act including
an adjudication of penalty under the Act. Section 68
relating to offences by companies, by sub-section (1)
introduces a deeming provision that the person who
was in charge of and was responsible to the
company for the conduct of the business of the
company, shall also be deemed to be guilty along
with the company of the contravention of the
provisions of the Act and liable to be proceeded
against and punished accordingly. The proviso, no
doubt, indicates that a person liable to punishment
could prove that the contravention took place without
his knowledge or that he exercised all due diligence
to prevent such contravention. Sub-section (2) again
speaks only of a contravention of the provisions of
the Act and the persons referred to in that sub-
section are also to be deemed to be guilty of the
contravention and liable to be proceeded against
and punished accordingly.
The word “offence” is not defined in the Act.
According to Concise Oxford English Dictionary, it
means, “an act or instance of offending”. Offend
means, “commit an illegal act” and illegal means,
“contrary to or forbidden by law”. According to New
W.P.(C) No.8589 of 2024 Page 65 of 89
Shorter Oxford English Dictionary, an offence is “a
breach of law, rules, duty, propriety, etiquette, an
illegal act, a transgression, sin, wrong,
misdemeanour, misdeed, fault”. Thus, an offence
only means the commission of an act contrary to or
forbidden by law. It is not confined to the
commission of a crime alone. It is an act committed
against law or omitted where the law requires it and
punishable by it. In its legal signification, an offence
is the transgression of a law; a breach of the laws
established for the protection of the public as
distinguished from an infringement of mere private
rights; a punishable violation of law, a crime, the
doing that which a penal law forbids to be done or
omitting to do what it commands (see P. Ramanatha
Aiyar‟s Advanced Law Lexicon, 3rd Edn., 2005, p.
3302).
This Court in Depot Manager, Andhra Pradesh State
Road Transport Corporation Vrs. Mohd. Yousuf
Miya, (1997) 2 SCC 699 stated that the word
“offence” generally implies infringement of a public
duty, as distinguished from mere private rights
punishable under criminal law.
In Brown Vrs. Allweather Mechanical Co., (1954) 2
QB 443 = (1953) 1 All ER 474 = (1953) 2 WLR 402
(DC) it was described as: (All ER p. 476 A-B)
A failure to do something prescribed by a statute
may be described as an offence, though no criminal
sanction is imposed but merely a pecuniary sanction
recoverable as a civil debt.
The expression “offence” as defined in Section 3(38)
of the General Clauses Act means an act or omission
W.P.(C) No.8589 of 2024 Page 66 of 89
made punishable by any law for the time being in
force.
“Punishable” as noticed by this Court in Sube Singh
Vrs. State of Haryana, (1989) 1 SCC 235 is
ordinarily defined as deserving of, or capable or
liable to punishment. According to Concise Oxford
English Dictionary, “punish” means, “inflict a
penalty on as retribution for an offence, inflict a
penalty on someone for (an offence)”.
In New Shorter Oxford English Dictionary (Vol. 2, 3rd
Edn., reprint 1993), the meaning of “punishment” is
given as, “infliction of a penalty in retribution for an
offence; penalty imposed to ensure application and
enforcement of a law”.
Going by Black ‟s Law Dictionary (8th Edn.) it is:
“A sanction— such as a fine, penalty, confinement,
or loss of property, right, or privilege— assessed
against a person who has violated the law.”
According to Jowitts Dictionary of English Law, Vol.
2, (2nd Edn. by John Burke), punishment is the
penalty for transgressing the law.
It is significant to notice that Section 68, both in sub-
section (1) and in sub-section (2) uses the
expression, shall be liable to be proceeded against
and punished accordingly. There does not appear to
be any reason to confine the operation of Section 68
only to a prosecution and to exclude its operation
from a penalty proceeding under Section 50 of the
Act, since the essential ingredient of both is the
contravention of the provisions of the Act. A
company is liable to be proceeded against under
W.P.(C) No.8589 of 2024 Page 67 of 89
both the provisions. Section 68 is only a provision
indicating who all in addition can be proceeded
against when the contravention is by a company or
who all should or could be roped in, in a
contravention by a company. Section 68 only
clarifies the nature and mode of proceeding when
the contravention of any of the provisions of the Act
is by a company, whether it be by way of
adjudication to impose a penalty or by way of
prosecution leading to imprisonment and a fine.”
10.2. In Black‟s Law Dictionary by Henry Campbel l Black,
Revised Fourth Edition [St. Paul, Minn., West Publishing
Co., 1968] the meaning of the terms “cumulative”,
“cumulative punishment” and “cumulative sentences”
have been described as follows:
“Cumulative.— Additional; heaping up; increasing;
forming an aggregate. The word signifies that two things
are to be added together, instead of one being a repetition
or in substitution of the other. People Vrs. Superior Court,
10 Wend., N.Y., 285; Regina Vrs. Eastern Archipelago,
Co., 18 Eng. Law & Eq. 183.
Cumulative punishment.—
An increased punishment inflicted for a second or third
conviction of the same offense, under the statutes relating
to habitual criminals. State Vrs. Hambly, 126 N.C. 1066,
35 S.E. 614.
Cumulative sentences.— Separate sentences (each
additional to the others) imposed upon a defendant who
has been convicted upon an indictment containing several
counts, each of such counts charging a distinct offense, or
W.P.(C) No.8589 of 2024 Page 68 of 89
who is under conviction at the same time for several
distinct offenses; one of such sentences being made to
begin at the expiration of another. Carter Vrs. Mc-
Claughry, 22 S.Ct. 181, 183 U.S. 365, 46 L.Ed. 236.”
10.3. Thus being conspectus of the terms “offence”,
“cumulative”, “cumulative offence”, and “cumulative
sentences”, there can be no confusion rests in mind that
there must first be a recording of finding that the
various offences are charged and proved/established by
clear evidence vis-à-vis explanation by the defender and
such offences warrants imposition of punishments/
penalties to be treated cumulatively. Ground contained
in sub-rule (c) of Rule A of Appendix-XXXIV of the OPWD
Code, Volume-II is clear indication that the twin
conditions enumerated therein are required to be
fulfilled before taking action for banning/blacklisting/
debarring for more than one offence contemplated in the
introduced provision by virtue of Office Memorandum
dated 26.11.2021.
10.4. It may be pertinent to have regard to the interpretation
of penal provisions as reiterated in Fuleshwar Gope Vrs.
Union of India, (2024) 10 SCR 315:
“31. It is well understood that penal statutes are statutes
to be interpreted strictly. This canon of construction
has been reiterated time and again. It is apposite
here to refer to certain authorities in this context.
W.P.(C) No.8589 of 2024 Page 69 of 89
31.1 Maxwell in The Interpretation of Statutes (11th Edn.)
has observed:
„The effect of the rule of strict construction might
almost be summed up in the remark that, where an
equivocal word or ambiguous sentence leaves a
reasonable doubt of its meaning which the cannons
of interpretation failed to solve, the benefit of the
doubt should be given to the subject and against the
legislature which has failed to explain itself. But it
yields to the paramount rule that every statute is to
be expounded according to its expressed or manifest
intention and that all cases within the mischief
aimed at our, if the language permits, to be held to
fall within its remedial influence‟
Observations in the twelfth edition, in this context,
are also educative:
„The strict construction of penal statutes seems
to manifest itself in four ways : In the
requirement of express language for the creation of
an offence; in interpreting strictly words setting out
the elements of an offence; in requiring the
fulfillment to the letter of statutory conditions
precedent to the infliction of punishment; and in
insisting on the strict observance of technical
provisions concerning criminal procedure and
jurisdiction.‟ ***”
10.5. Show Cause Notices dated 18.10.2023 (Annexure-11)
and consequent order dated 30.03.2024 (Annexure-1) do
not transpire that the authority has returned any finding
as to “offence” being committed by the petitioner and
there was scope in the circumstances to impose
W.P.(C) No.8589 of 2024 Page 70 of 89
penalties/punishments like debarment/blacklisting to
have cumulative effect. In absence of such finding being
recorded on the material available on record, this Court
is of the opinion that the circumstances did not exist
warranting the petitioner to ban “from participating or
bidding for any work to be undertaken by the
Government of Odisha” and “from transacting business
with the Government of Odisha directly, in the name of
proprietary bidder or indirectly under different name or
title” for a period of “six years”.
10.6. In absence of proper, clear, unequivocal and specific
charge being stated in the Show Cause Notices
(Annexure-11) as indicated in the foregoing paragraphs,
with reference to the Office Memorandum dated
26.11.2021 the Chief Engineer proceeded on an
erroneous approach as if the blacklisting could be
clamped consecutively for six years (limited to three
years per offence) at the drop of the hat. As is already
observed that the petitioner had had no opportunity to
justify the reasons for not being able to complete the
works within the period stipulated, the instruction to
complete the works by the authority concerned appears
to be during the pandemic, i.e., 2020-21 or 2021-22. The
reply dated 23.10.2023 cannot be construed to be
explanation on the merit; rather it is only intimation
regarding pendency of cases before this Court against
W.P.(C) No.8589 of 2024 Page 71 of 89
rescission of contract(s) by way of filing writ petitions. Be
that be. In view of A.K.G. Construction and Developers
Pvt. Ltd. Vrs. State of Jharkhand, (2026) 4 SCR 331 since
it is not forthcoming that the petitioner is incorrigible
entity upon analysis of sufficient evidence, clear
application of mind and stronger adherence to principles
of natural justice, it is entitled to the benefit of audi
alteram partem and right to reason with respect to
banning/blacklisting/debarment having impact on its
future transactions which in the considered view of this
Court falls within the connotation of “civil death” and
“civil consequences”.
10.7. In this respect the decision of the Hon’ble Supreme
Court of India rendered in ASP Traders Vrs. State of
Uttar Pradesh, (2025) 7 SCR 1462 may be pertinent to
derive guidelines for the administrative authorities to
proceed with the Show Cause Notice. The following
summation of principles as propounded in the said
reported case may be taken as guidelines in the present
matter:
“18. The principles of natural justice mandate that when
a taxpayer submits a response to a show cause
notice, the adjudicating authority is required to
consider such response and render a reasoned,
speaking order. This is not a mere procedural
formality, but a substantive safeguard ensuring
fairness in quasi-judicial proceedings. The right to
W.P.(C) No.8589 of 2024 Page 72 of 89
appeal under Section 107 of the CGST Act, 2017, is
predicated upon the existence of a formal
adjudication. An appeal can lie only against an
„order‟, and in the absence of a reasoned order
passed under Section 129(3) of the Act, the taxpayer
is effectively deprived of the statutory remedy of
appeal. Such a deprivation undermines the
foundational principles of fairness, due process, and
access to justice, rendering the right of appeal
illusory or nugatory. It is now settled law that failure
to issue a speaking order in response to a show
cause notice creates a legal vacuum. Any
consequential action including imposition of tax or
penalty, would then be unsupported by authority of
law, thereby potentially violating Article 265 of the
Constitution of India, which prohibits the levy or
collection of tax except by authority of law.
18.1. In this context, useful guidance may be drawn from
the decision in M/s. Kranti Associates (P) Ltd & Anr.
Vrs. Masood Ahmed Khan & Ors., (2010) 9 SCC 496,
wherein, this Court emphasized that fairness,
transparency, and accountability are inseparable
from the duty to provide reasons. The Court held
that failure to furnish reasons violates the principles
of natural justice and renders the right of appeal or
judicial review illusory. In paragraph 51 of the
judgment, the Court distilled the following key
principles:
„a. In India the judicial trend has always been to
record reasons, even in administrative
decisions, if such decisions affect anyone
prejudicially.
W.P.(C) No.8589 of 2024 Page 73 of 89
b. A quasi-judicial authority must record reasons
in support of its conclusions.
c. Insistence on recording of reasons is meant to
serve the wider principle of justice that justice
must not only be done it must also appear to be
done as well.
d. Recording of reasons also operates as a valid
restraint on any possible arbitrary exercise of
judicial and quasi-judicial or even
administrative power.
e. Reasons reassure that discretion has been
exercised by the decision maker on relevant
grounds and by disregarding extraneous
considerations.
f. Reasons have virtually become as
indispensable a component of a decision
making process as observing principles of
natural justice by judicial, quasi-judicial and
even by administrative bodies.
g. Reasons facilitate the process of judicial review
by superior Courts.
h. The ongoing judicial trend in all countries
committed to rule of law and constitutional
governance is in favour of reasoned decisions
based on relevant facts. This is virtually the life
blood of judicial decision making justifying the
principle that reason is the soul of justice.
i. Judicial or even quasi-judicial opinions these
days can be as different as the judges and
authorities who deliver them. All these
W.P.(C) No.8589 of 2024 Page 74 of 89
decisions serve one common purpose which is
to demonstrate by reason that the relevant
factors have been objectively considered. This
is important for sustaining the litigants‟ faith in
the justice delivery system.
j. Insistence on reason is a requirement for both
judicial accountability and transparency.
k. If a Judge or a quasi-judicial authority is not
candid enough about his/her decision making
process then it is impossible to know whether
the person deciding is faithful to the doctrine of
precedent or to principles of incrementalism.
l. Reasons in support of decisions must be
cogent, clear and succinct. A pretence of
reasons or „rubber-stamp reasons‟ is not to be
equated with a valid decision making process.
m. It cannot be doubted that transparency is the
sine qua non of restraint on abuse of judicial
powers. Transparency in decision making not
only makes the judges and decision makers
less prone to errors but also makes them
subject to broader scrutiny. (See David Shapiro
in Defence of Judicial Candor (1987) 100
Harward Law Review 731-737).
n. Since the requirement to record reasons
emanates from the broad doctrine of fairness in
decision making, the said requirement is now
virtually a component of human rights and was
considered part of Strasbourg Jurisprudence.
See (1994) 19 EHRR 553, at 562 para 29 and
Anya vs. University of Oxford, 2001 EWCA Civ
W.P.(C) No.8589 of 2024 Page 75 of 89
405, wherein the Court referred to Article 6 of
European Convention of Human Rights which
requires, “adequate and intelligent reasons
must be given for judicial decisions”.
o. In all common law jurisdictions judgments play
a vital role in setting up precedents for the
future. Therefore, for development of law,
requirement of giving reasons for the decision
is of the essence and is virtually a part of “Due
Process”.”
19. Therefore, even assuming that the payment was
made by the appellant, voluntarily or otherwise, the
proper officer could not be absolved of the statutory
obligation to pass a reasoned order in Form GST
MOV-09 and upload the corresponding summary in
Form GST DRC-07. Compliance with these
procedural requirements is essential not only for
ensuring transparency and accountability in tax
administration, but also for safeguarding the
taxpayer‟s appellate rights under the CGST Act,
2017. Such adherence is in consonance with the
constitutional mandate under Article 265 of the
Constitution of India.”
Conclusion:
11. As discussed supra neither the order dated 30.03.2024
(Annexure-1) nor the Show Cause Notices dated
18.10.2023 (Annexure-11) indicate the grounds for
blacklisting in terms of Rule A of Appendix-XXXIV of
OPWD Code in clear and unequivocal terms. The Show
Cause Notices are silent about existence of twin
W.P.(C) No.8589 of 2024 Page 76 of 89
conditions as a ground envisaged in sub-rule (a) of Rule
A for blacklisting nor is there any finding of fact
returned in the impugned order to show such ground
(twin conditions) established. Therefore, this matter
deserves intervention.
11.1. The ban/debarment/blacklisting is construed as “civil
death” having substantial impact on the fundamental
right to carry on business as envisioned under Article
19(1)(g) of the Constitution of India, and as such penal
action leads to civil or evil consequence, the provisions
vesting power on the authority to impose penalties are
required to be conceived strictly.
11.2. It is true that penal provisions must be strictly
construed; but having regard to the nature of the offence
involved, such strict construction may be refused to be
adopted. Looking to the gravity of offence, narrow and
pedantic, literal and lexical construction of penal
provisions can be eschewed. Reference may be had to
Murlidhar Meghraj Loya Vrs. State of Maharashtra, (1976)
3 SCC 684 and Kisan Trimbak Kothula Vrs. State of
Maharashtra, (1977) 1 SCC 300. Having regard to the
intent of the OPWD Code, harmonious construction may
be adhered to while invoking the provisions of Appendix-
XXXIV so as to strike a balance between the right of the
contractee-Government and the right of the contractor.
W.P.(C) No.8589 of 2024 Page 77 of 89
11.3. This apart, one must bear in mind that Codal Provisions
in Appendix-XXXVI is part of the OPWD Code, which are
executive instructions and mere procedures facilitating
smooth functioning of works entrusted to the
contractors. It is well settled that procedural laws must
be liberally construed to serve as handmaid of justice
and not as its mistress. [See, Sardar Amarjit Singh Kalra
Vrs. Pramod Gupta, (2003) 3 SCC 272, N. Balaji Vrs.
Virendra Singh, (2004) 8 SCC 312 and Kailash Vrs.
Nanhku, (2005) 4 SCC 480].
11.4. In G.J. Fernandez Vrs. State of Mysore, (1967) 3 SCR 636
= AIR 1967 SC 1753 it has been observed thus:
“12. Taking first the contention with respect to the Code
not being followed in the matter of tenders, the
question that arises is whether this Code consists of
statutory rules or not. The High Court has observed
that the so-called rules in the Code are not framed
either under any statutory enactment or under any
provision of the Constitution. They are merely in the
nature of administrative instructions for the
guidance of the department and have been issued
under the executive power of the State. Even after
having said so, the High Court has considered
whether the instructions in the Code were followed
in the present case or not. Before however we
consider the question whether instructions in the
Code have been followed or not, we have to decide
whether these instructions have any statutory force.
If they have no statutory force, they confer no right
on any body and a tenderer cannot claim any rights
W.P.(C) No.8589 of 2024 Page 78 of 89
on the basis of these administrative instructions. If
these are mere administrative instructions it may be
open to Government to take disciplinary action
against its servants who do not follow these
instructions but non-observance of such
administrative instructions does not in our opinion
confer any right on any member of the public like a
tenderer to ask for a writ against Government by a
petition under Article 226. The matter may be
different if the instructions contained in the Code are
statutory rules. Learned counsel for the appellant is
unable to point out any statute under which these
instructions in the Code were framed. He also
admits that they are administrative instructions by
Government to its servants relating to the Public
Works Department. But his contention is that they
are rules issued under Article 162 of the
Constitution. Now Article 162 provides that
“executive power of a State shall extend to the
matters with respect to which the legislature of the
State has power to make laws”. This Article in our
opinion merely indicates the scope of the executive
power of the State; it does not confer any power on
the State Government to issue rules thereunder. As
a matter of fact wherever the Constitution envisages
issue of rules it has so provided in specific terms.
We may for example, refer to Article 309, the proviso
to which lays down in specific terms that the
President or the Governor of a State may make rules
regulating the recruitment and the conditions of
service of persons appointed to services and posts
under the Union or the State. We are therefore of
opinion that Article 162 does not confer any power
on the State Government to frame rules and it only
indicates the scope of the executive power of the
W.P.(C) No.8589 of 2024 Page 79 of 89
State. Of course, under such executive power, the
State can give administrative instructions to its
servants how to act in certain circumstances; but
that will not make such instructions statutory rules
which are justiciable in certain circumstances. In
order that such executive instructions have the force
of statutory rules it must be shown that they have
been issued either under the authority conferred on
the State Government by some statute or under
some provision of the Constitution providing therefor.
It is not in dispute that there is no statute which
confers any authority on the State Government to
issue rules in matters with which the Code is
concerned; nor has any provision of the Constitution
been pointed out to us under which these
instructions can be issued as statutory rules except
Article 162. But as we have already indicated,
Article 162 does not confer any authority on the
State Government to issue statutory rules. It only
provides for the extent and scope of the executive
power of the State Government, and that coincides
with the legislative power of the State Legislature.
Thus under Article 162, the State Government can
take executive action in all matters in which the
legislature of the State can pass laws. But Article
162 itself does not confer any rule making power on
the State Government in that behalf. We are
therefore of opinion that instructions contained in the
Code are mere administrative instructions and are
not statutory rules. Therefore even if there has been
any breach of such executive instructions that does
not confer any right on the appellant to apply to the
court for quashing orders in breach of such
instructions. It is unnecessary for us to decide
whether there has been in fact a breach of any
W.P.(C) No.8589 of 2024 Page 80 of 89
instruction contained in the Code with respect to
tenders and we do not therefore so decide. But
assuming that there has been any breach that is a
matter between the State Government and its
servant, and the State Government may take
disciplinary action against the servant concerned
who disobeyed these instructions. But such
disobedience did not confer any right on a person
like the appellant, to come to court for any relief
based on the breach of these instructions. It is for
this reason that we are not referring to the Code,
though the High Court did consider whether there
was any breach of these administrative instructions
and came to the conclusion that there was no
breach. In the view we take it is unnecessary for us
to consider this, for we are of opinion that no claim
for any relief before a court of law can be founded
by a member of the public, like the appellant, on the
breach of mere administrative instructions.”
11.5. In P. Tulsi Das Vrs. Government of Andhra Pradesh,
(2002) Supp.3 SCR 306 it has been laid down as follows:
“On a careful consideration of the principles laid down in
the above decisions in the light of the fact situation in
these appeals we are of the view that they squarely apply
on all fours to the cases on hand in favour of the
appellants. The submissions on behalf of the respondent-
State that the rights derived and claimed by the
appellants must be under any statutory enactment or
Rules made under Article 309 of the Constitution of India
and that in other respects there could not be any
acquisition of rights validly, so as to disentitle the State to
enact the law of the nature under challenge to set right
serious anomalies which crept in and deserved to
W.P.(C) No.8589 of 2024 Page 81 of 89
undone, does not merit our acceptance. It is by now well
settled that in the absence of Rules under Article 309 of
the Constitution in respect of a particular area, aspect or
subject, it was permissible for the State to make
provisions in exercise of its executive powers under Article
162 which is co-extensive with its Legislative powers
laying conditions of service and rights accrued to or
acquired by a citizen would be as much rights acquired
under law and protected to that extent. The orders passed
by the Government, from time to time beginning from
February 1967 till 1985 and at any rate upto the passing
of the Act, to meet the administrative exigencies and cater
to the needs of public interest really and effectively
provided sufficient legal basis for the acquisition of rights
during the period when they were in full force and effect.
The orders of the High Court as well as the Tribunal also
recognised and upheld such rights and those orders
attained finality without being further challenged by the
Government, in the manner known to law. Such rights,
benefits and perquisites acquired by the Teachers
concerned cannot be said to be rights acquired otherwise
than in accordance with law or brushed aside and
trampled at the sweet will and pleasure of the
Government, with impunity. Consequently we are unable
to agree that the Legislature could have validly denied
those rights acquired by the appellants retrospectively,
not only depriving them of such rights but also enact a
provision to repay and restore the amounts paid to them
to State. The provisions of the Act, though can be valid in
its operation „in futuro‟ cannot be held valid in so far as it
purports to restore status quo ante for the past period
taking away the benefits already available, accrued and
acquired by them. For all the reasons stated above the
reasons assigned by the majority opinion of the Tribunal
could not be approved in our hands. The provisions of
W.P.(C) No.8589 of 2024 Page 82 of 89
Section 2 and 3(a) insofar as they purport to take away
the rights from 10.02.1967 and obligates those who had
them to repay or restore it back to the State is hereby
struck down as arbitrary, unreasonable and
expropriatory and as such is violative of Articles 14 and
16 of the Constitution of India. No exception could be
taken, in our view, to the prospective exercise of powers
thereunder without infringing the rights already acquired
by the appellants and the category of the persons
similarly situated whether approached courts or not
seeking relief individually. The provisions contained in
Section 2 have to be read down so as to make it only
prospective, to save the same from the unconstitutionality
arising out of its retrospective application.”
11.6. In the case of R. Sai Bharathi Vrs. J. Jayalalitha, (2003)
Supp.6 SCR 85, the Hon’ble Supreme Court held:
“Even if the Government order is traced to have been
issued under executive power of the State under
Article 162, such a Code will not be enforceable
when the language used is not in mandatory terms
and they are intended to be mere guidelines or
instructions to the concerned persons in authority.
Therefore, as long as such a Code of Conduct is not
enforceable in any court of law and does not even provide
what action could possibly be taken in case of breach by
the Chief Minister, the prohibition contained therein is
only having ethical or moral effect and any breach thereof
cannot be treated to be unlawful or even illegal within the
meaning of Section 43 IPC. To constitute a ground for civil
action under Section 43, there must be a right in a party
which can be enforced. It may be a breach of contract or a
claim for damages or some such similar right accruing
under any law. There is no law which debars the Chief
W.P.(C) No.8589 of 2024 Page 83 of 89
Minister from participating in a sale conducted by any
Department of the Government or any of the Corporations
or any public sector undertaking affording a cause for civil
action especially when no fraud or illegal gain .is
involved. Therefore, we are constrained to hold that the
offence under the aforesaid provision has not been
established. In fact, there is nothing in the charge to
indicate nor did the prosecution take a specific stand at
any stage of the trial that the purchase of T ANSI foundry
property by A-I from the Government would furnish a
ground for a particular civil action. The nature of civil
action that could be initiated cannot be left to the guess
work and the accused cannot be expected to meet such
case at this stage.”
11.7. Thus, with the above conspectus of legal position with
respect to executive instructions compiled in the form of
a Code (here OPWD Code), they are construed to be
guidelines to the authorities of the Departments of the
Government and the language of any of such
instructions is in the nature of mandatory character, the
authority is obligated to strictly adhere to the same.
While the provisions dealing with procedural aspect
conferring power to invoke authority and arrive at the
conclusion are procedural in nature which can be
construed liberally, the provision enabling the authority
to impose penalty like banning/blacklisting/debarring is
to be interpreted strictly as the same would involve civil
or evil consequence having restrictive impact on the
business of the contractor offending Article 14 read with
W.P.(C) No.8589 of 2024 Page 84 of 89
Article 19(1)(g) of the Constitution of India. Any decision
to blacklist/debar a contractor from participating in
tenders need to be taken strictly within the parameters
of law and has to comport with the principle of
proportionality.
11.8. Such view has explicitly been stated in Blue Dreamz
Advertising (P) Ltd. Vrs. Kolkata Municipal Corporation,
(2024) 15 SCC 264 with the following observations:
“24. What is significant is that while setting out the
guidelines prescribed in USA, the Court noticed that
comprehensive guidelines for debarment were
issued there for protecting public interest from those
contractors and recipients who are non-responsible,
lack business integrity or engage in dishonest or
illegal conduct or are otherwise unable to perform
satisfactorily. The illustrative cases set out also
demonstrate that debarment as a remedy is to be
invoked in cases where there is harm or potential
harm for public interest particularly in cases where
the person‟s conduct has demonstrated that
debarment as a penalty alone will protect public
interest and deter the person from repeating his
actions which have a tendency to put public interest
in jeopardy. In fact, it is common knowledge that in
notice inviting tenders, any person blacklisted is
rendered ineligible. Hence, blacklisting will not only
debar the person concerned from dealing with the
employer concerned, but because of the
disqualification, their dealings with other entities
also is proscribed. Even in the terms and conditions
of tender in the present case, one of the conditions of
W.P.(C) No.8589 of 2024 Page 85 of 89
eligibility is that the agency should not be
blacklisted from anywhere.
25. In other words, where the case is of an ordinary
breach of contract and the explanation offered by
the person concerned raises a bona fide dispute,
blacklisting/debarment as a penalty ought not to be
resorted to. Debarring a person albeit for a certain
number of years tantamounts to civil death
inasmuch as the said person is commercially
ostracised resulting in serious consequences for the
person and those who are employed by him.
26. Too readily invoking the debarment for ordinary
cases of breach of contract where there is a bona
fide dispute, is not permissible. Each case, no doubt,
would turn on the facts and circumstances thereto.
27. Examining the facts of this case from that
perspective, we find that the appellant, after the
award of the tender, has admittedly paid an amount
of Rs.3,71,96,265, though, according to the
Corporation, the outstanding amount as on the date
of the debarment was Rs.14,63,24,727. However,
as would be clear from the facts discussed
hereinabove, right from the inception there have
been issues between the appellant and the
Corporation with regard to the fulfilment of the
reciprocal obligations in the bid document. There has
been exchange of correspondence between the
parties with each side blaming the other for not
performing the reciprocal obligations. While the
appellant had a case with regard to the non-
issuance of work orders; non-receipt of formal format
of bank guarantee; refusal of no-objection certificate
for obtaining connection from Calcutta Electric
W.P.(C) No.8589 of 2024 Page 86 of 89
Supply Corporation Ltd.; existence of only 200 out of
250 allotted street hoardings and so on
demonstrating breach of obligations by the
Corporation, the Corporation had a case that bank
guarantee was not the mode of payment and as
such there was no reason to insist on bank
guarantee; that in the joint inspection the appellant's
men failed to cover all the areas and thereafter
when the appellant was asked to submit a list of
allotted location, the appellant failed to furnish the
same and further there was huge default on the part
of the appellant.
28. Even in the order dated 02.03.2016 by which the
appellant was debarred for a period of five years,
the reason given is that the tender notice had clearly
stated that the street hoardings in the annexures
would be allotted on “as is where is” basis; that the
company having understood the scope and effect of
the terms and conditions of the notice accepted the
award; that “no-objection certificate” is not required
in respect of the existing hoardings; that there was
no document to show that the company had applied
to Calcutta Electric Supply Corporation Ltd. for
connection and that it appeared to the Corporation
that the company did not have the financial capacity
to pay and as such the company was creating
problems on one pretext or the other since obtaining
the allotment of sites. The order also stated that the
appellant had set up a bad example to others having
interest to enjoy the advertisement rights.
29. All these reasons fall far short of rendering the
conduct of the appellant in the present case, so
abhorrent as to justify the invocation of the drastic
W.P.(C) No.8589 of 2024 Page 87 of 89
remedy of blacklisting/debarment. The appellant
very clearly has been subjected to a
disproportionate penalty. The Corporation has lifted
a sledgehammer to crack a nut. We disapprove of
the said course of action on the facts of this case.
***
34. The Division Bench has, in our opinion, not
appreciated the case in its proper perspective.
Merely saying that the blacklisting order carried
reasons is not good enough. Do the reasons justify
the invocation of the penalty of blacklisting and is
the penalty proportionate, was the real question.
35. The Division Bench has observed that blacklisting is
a business decision by which the party affected by
the breach decides not to enter into any contractual
relationship with the party committing the breach. It
also observed that between two private parties the
right to take any such decision is absolute and
untrammelled by any constraints whatsoever. The
observations are too sweeping in their ambit and
wholly overlook the fact that the respondent
Corporation is a statutory body vested with the duty
to discharge public functions. It is not a private
party. Any decision to blacklist should be strictly
within the parameters of law and has to comport
with the principle of proportionality.
36. The Division Bench having noticed the fact that any
decision to blacklist will be open to scrutiny on the
anvil of the doctrine of proportionality has failed to
apply the principle to the facts of the case in the
correct perspective. The Division Bench has also
failed to correctly appreciate the ratio of the decision
W.P.(C) No.8589 of 2024 Page 88 of 89
in B.S.N. Joshi & Sons Ltd. Vrs. Nair Coal Services
Ltd., (2006) 11 SCC 548.
37. There has been no enquiry by the Division Bench as
to whether the conduct of the appellant was part of
the normal vicissitudes in business and common
place hazards in commerce or whether the appellant
had crossed the rubicon warranting a banishment
order, albeit for a temporary period in larger public
interest.”
11.9. In the wake of the above the order dated 30.03.2024
passed by the Chief Engineer, Bridges (WBP), Odisha
(Annexure-1) cannot be held to be tenable in the eye of
law and hence, the same is hereby quashed and set
aside. The matter is thus reverted to the stage of Show
Cause Notices dated 18.10.2023. However, liberty is
reserved to the petitioner to file reply to Show Cause
Notices and the authority may take this opportunity to
intimate the petitioner about existence of twin
conditions in clear, unambiguous and specific terms, if
such material is available on record, so that proper
defence/explanation can be prepared and reasons
explaining the ground suggested by the opposite parties
for banning/blacklisting/debarring can be cited.
11.10. In such event the authority concerned would be
required to consider such explanation and afford the
petitioner opportunity of hearing. After adhering to
formalities required for adhering to the principles of
W.P.(C) No.8589 of 2024 Page 89 of 89
natural justice, appropriate action may be taken by the
authority assigning reason for such decision.
11.11. Needless to observe that the decision taken thereon
shall be communicated to the petitioner forthwith. It is
clarified that until the ground(s) are examined in the
light of discussions made above and appropriate finding
is recorded thereon, the order of banning/blacklisting/
debarment ceases to operate.
12. In the result, finding merit in the writ petition the same
is allowed to the above extent and pending Interlocutory
Application(s), if any, shall stand disposed of, but in the
circumstances, there shall be no order as to costs.
I agree
(HARISH TANDON) (MURAHARI SRI RAMAN )
CHIEF JUSTICE JUDGE
High Court of Orissa, Cuttack
The 20
th May, 2026/Aswini/Bichi/MRS/Laxmikant
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