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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

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
Patna High Court CWJC No.1454 of 2026 dt.09-07-2026
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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
             Patna High Court CWJC No.1454 of 2026 dt.09-07-2026
                                                        7/7




                      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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