Patna High Court
Sindhuja Engineer and ContractorversusThe State of Bihar
- Decided
- Disposal
- ALLOWED
Holding
The debarment order dated 09.01.2026 is invalid as it was issued by an incompetent authority and for an indefinite period, and is therefore quashed, with the matter remanded to the proper registering authority to issue a fresh show‑cause notice.
Summary
Sindhuja Engineer and Contractor, a Class I contractor, was debarred indefinitely by the Executive Engineer of the Public Health Division, Banka, after alleged non‑payment of electricity bills. The contractor challenged the Office Order dated 09.01.2026, arguing that the debarment was issued by an authority not empowered under the Bihar Contractors Registration Rules, 2007, and that the order violated natural justice and the principle that debarment cannot be permanent. The Court held that only the Chief Engineer (Urban), who is the registering authority, could issue a show‑cause notice and pass a debarment order. It further observed that an indefinite debarment is unsustainable in view of the Supreme Court’s decision in Khulja Industries Ltd. v. BBNL, which mandates that debarment must be for a limited period. Consequently, the Court quashed the impugned order and remanded the matter to the proper authority to issue a fresh, reasoned show‑cause notice. The writ petition was allowed.
Issues considered
- Whether the Executive Engineer (Respondent No.4) had jurisdiction to issue a show‑cause notice and debar the contractor under the Bihar Contractors Registration Rules, 2007.
- Whether an indefinite debarment order is valid under constitutional and jurisprudential principles, including the Supreme Court’s ruling in Khulja Industries Ltd. v. BBNL.
- Whether the principles of natural justice were complied with in the issuance of the debarment order.
Legislation cited
- Bihar Contractors Registration Rules, 2007 — s. Rule 11(d)
Subjects
- debarment
- blacklisting
- natural justice
- procedural fairness
- contractor registration
- public health engineering
- indefinite ban
- show cause notice
- proportionality
Judgment
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.1454 of 2026
======================================================
Sindhuja Engineer and Contractor having its Principal Place of Business at
village Mow, P.S. Tekari, District Gaya, Bihar through its Authorized
Signatory, Sushil Kumar, aged about 53 years, Male, Son of Jitendra Sharma,
Resident of Flat No. 201, 2nd floor, Yamuna Block-6 Sector D6-Vasant Kunj,
P.S. Vasant Kunj, District South West Delhi, Delhi.
... ... Petitioner/s
Versus
1. The State of Bihar through the Principal Secretary, Public Health and
Engineering Department, Government of Bihar, Patna.
2. The Engineer in Chief, Public Health and Engineering Department,
Government of Bihar, Patna.
3. The Chief Engineer (Urban) cum Registering Authority, Public Health and
Engineering Department, Government of Bihar, Patna.
4. The Executive Engineer, Public Health Division, Banka, District Banka,
Bihar.
... ... Respondent/s
======================================================
Appearance :
For the Petitioner/s : Mr.Prabhat Ranjan
For the Respondent/s : Mr.Addl. Advocate General (07)
======================================================
CORAM: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH
and
HONOURABLE MR. JUSTICE RAJ KUMAR
ORAL JUDGMENT
(Per: HONOURABLE MR. JUSTICE MOHIT KUMAR SHAH)
Date : 09-07-2026
The present writ petition has been filed for quashing of
the Office Order No. 05 dated 09.01.2026, as contained in
Memo No.104, in connection with Agreement No. SBD-
157/2019-20, whereby and whereunder the Executive Engineer,
Public Health Division, Banka, i.e. the respondent No.4 has
debarred the petitioner firm. The petitioner has also prayed for
quashing of the letter dated 14.01.2026, issued by the
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respondent No.4 whereby the petitioner has been directed to
make payment of the electricity bills within 24 hours, failing
which process shall be initiated for debarment/rescindment of
the contract.
2. The brief facts of the case, according to the petitioner
are that the petitioner is a registered Class I contractor under the
provisions of the Bihar Contractors Registration Rules, 2007
(hereinafter referred to as the ‘Rules, 2007’). The petitioner was
granted certificate of registration dated 26.08.2020, as a
Contractor of Public Health Engineering Department by the
Chief Engineer (Urban), Public Health Engineering Department,
Government of Bihar, Patna, i.e. the respondent No.3 for a
period of five years. The petitioner is stated to have participated
in a tender process relating to Mukhya Mantri Peyjal Nischay
Yojana for the District of Banka relating to the work of
management of safe and pure drinking water for the areas which
were affected by High Floride content in the water by
establishing / construction of Floride Removal / Treatment Unit
along with five years operation and maintenance. The said
tender was awarded to the petitioner, leading to execution of an
Agreement bearing No. SBD-157/2019-20 in between the
petitioner and the respondent No.4 as also issuance of work
Patna High Court CWJC No.1454 of 2026 dt.09-07-2026
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order. The petitioner is stated to have completed the work.
3. It is the further case of the petitioner that subsequently
the respondent No. 4, vide Office Order dated 29.12.2025 had
directed the petitioner to pay the up to date electricity bills by
means of receipt failing which it was contemplated that the bills
would be paid from the amount payable to the petitioner from
the concerned work division and further action for
debarment/blacklisting/ rescindment of agreement etc. shall be
taken in terms of the agreement and in accordance with law.
Thereafter, the respondent No.4 has issued the impugned Office
Order dated 09.01.2026, debarring the petitioner indefinitely.
4. The learned counsel for the petitioner submits that the
debarment cannot be for an indefinite period in view of the law
laid down by the Hon’ble Apex Court in the case of Khulja
Industries Limited vs. Chief General Manager, Western
Telecom Project Bharat Sanchar Nigam Limited and Others,
reported in (2014) 14 SCC 731, paragraph No.25 whereof is
reproduced in herein below:
“25. Suffice it to say that “debarment” is
recognised and often used as an effective
method for disciplining deviant
suppliers/contractors who may have
committed acts of omission and commission
or frauds including misrepresentations,
falsification of records and other breaches
of the regulations under which such
contracts were allotted. What is notable is
Patna High Court CWJC No.1454 of 2026 dt.09-07-2026
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that the “debarment” is never permanent
and the period of debarment would
invariably depend upon the nature of the
offence committed by the erring
contractor.”
5. The learned counsel for the petitioner has next
submitted that the impugned order dated 09.01.2026 has been
issued by an incompetent authority inasmuch as the respondent
No.4 is not the authority who had registered the firm of the
petitioner. It is thus submitted that only the respondent No.3
could have either issued the show cause notice to the petitioner
or the order of debarment/ blacklisting qua the petitioner. In this
regard, reference has been made to Rule 11 (d) of the Rules,
2007, which is reproduced herein below:-
“(d) The order of blacklisting/suspension
shall be passed by the officer who is
competent to register the contractor or by the
officer under whom the registering officer
works.”
Thus, it is submitted that since the respondent No.3 i.e.
the Chief Engineer (Urban)-cum-Registering Authority, Public
Health and Engineering Department, Government of Bihar,
Patna is the registering authority of the firm of the petitioner, he
was only authorized to either issue show cause notice to the
petitioner or pass any order of debarment/blacklisting.
6. Per contra, the learned counsel for the respondent-State
has submitted that the respondent No.4 had issued show cause
Patna High Court CWJC No.1454 of 2026 dt.09-07-2026
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notices dated 05.11.2025, 06.11.2025 and 19.11.2025, apart
from other notices before passing the impugned order dated
09.01.2026, hence the principles of natural justice have been
complied with before passing of the impugned order dated
09.01.2026. Nonetheless, the learned counsel for the
respondent-State has not been able to show from the records or
from the Rules, 2007 that the respondent No.4 is the competent
authority to either issue show cause notice to the petitioner,
prior to passing of the order for debarment/ blacklisting or pass
an order of debarment/ blacklisting itself.
7. We have heard the learned counsel for the parties and
gone through the materials on record. We find from the records
that the show cause notices as also the order of debarment of the
petitioner firm have been issued by the respondent No.4, who is
not the registering authority in the present case inasmuch as a
bare perusal of the certificate of registration, annexed as
Annexure P/1 to the present writ petition would show that the
registering authority is the respondent No.3, i.e. the Chief
Engineer (Urban)-cum-Registering Authority, Public Health and
Engineering Department, Govt. of Bihar, Patna, hence it is only
the respondent No.3 who is/was authorized to issue show cause
notice for debarment/ blacklisting as also pass an order of
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debarment/ blacklisting. Thus, a debarment or blacklisting order
passed without a valid show cause notice is not only invalid but
also violates the principles of natural justice, hence is liable to
be quashed on this ground alone.
8. We further find that it is a well settled law that an order
of debarment/blacklisting passed for an indefinite period is
legally unsustainable, as it violates the principles of natural
justice, the doctrine of proportionality, and the fundamental
right to carry on trade. In the present case, by the impugned
order dated 09.01.2026, the petitioner firm has been debarred
for an indefinite period. The law in this regard is no longer res
integra inasmuch as the Hon’ble Apex Court in the case of
Khulja Industries Limited (supra) has held that debarment can
never be permanent. Thus, on this score as well the impugned
order dated 09..01.2026 is unsustainable in the eyes of law.
9. Having regard to the facts and circumstances of the
case and for the foregoing reasons, we deem it fit and proper to
quash the impugned Office Order dated 09.01.2026 and remand
the matter back to the respondent No. 3 who shall issue fresh
show cause notice to the petitioner and after inviting his
objections shall pass a reasoned and a speaking order, in
accordance with law and the agreement entered into between the
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parties.
10. Accordingly, the present writ petition stands allowed.
(Mohit Kumar Shah, J)
( Raj Kumar, J)
Nirmal/AKV
AFR/NAFR AFR
CAV DATE NA
Uploading Date 13.07.2026
Transmission Date NA
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