Debarment Cannot Survive Completion of the Very Work That Triggered It, Patna High Court Holds

Patna High Court sets aside a BSFCSCL debarment order against a Bihar contractor, ruling that once the defaulted work is completed and accepted, the order assumes the character of an indefinite debarment and cannot stand.

A Division Bench of the Patna High Court, comprising Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Verma, on 14 July 2026 set aside a debarment order that the Bihar State Food and Civil Supplies Corporation Ltd. (BSFCSCL) had continued to enforce against M/s R.S. Construction of Begusarai even after the corporation itself had issued a work experience certificate acknowledging successful completion of the very project on account of which the debarment was imposed. The bench held that once the contractual obligations stood fulfilled and the work was accepted, the basis for the debarment ceased to survive. Without any fresh order extending the debarment with reasons, the order had in effect become an indefinite debarment — a form of punishment that the law does not permit.

The Debarment Order and What Followed

M/s R.S. Construction had earlier been awarded the work of constructing a 5,000 MT capacity godown at Sikarvira, Jhajha, Jamui district, under BSFCSCL. The work was not completed within the stipulated period. On account of this delay, the Executive Engineer, South Bihar Works Division, Patna, passed an order dated 29.03.2025 debarring the contractor from participating in the immediately succeeding tender. The order recorded that if the petitioner failed to complete the work by 31 January 2025, it would not be permitted to participate in the next tender.

Critically, the debarment order neither specified any definite period for which the debarment would continue, nor prescribed the circumstances in which it would cease to operate. It was silent as to what would happen if the contractor subsequently completed the work or obtained a completion certificate.

The petitioner then completed the godown work to the satisfaction of the respondent authorities. On 17 July 2025, the competent authority issued a work experience certificate bearing Letter No. 721, acknowledging successful execution of the project. Despite this, the petitioner's representations to the Executive Engineer and the Corporation Headquarters seeking revocation of the debarment went unanswered.

Bid Rejection and Award to a Rival Contractor

BSFCSCL issued NIT No. 01/SBD/2025-26 dated 28 August 2025, inviting bids for the construction of a Prefab Composite Godown of 1,000 MT storage capacity at Karian, Block Shivajinagar, District Samastipur. M/s R.S. Construction submitted its technical bid. The Technical Bid Evaluation Committee, in its meeting of 25 September 2025, rejected the technical bid by Letter No. 4176 dated 25 September 2025, relying on the debarment order dated 29.03.2025.

The petitioner's representation dated 29 September 2025 seeking reconsideration was rejected by Letter No. 4312 dated 3 October 2025. Financial bids were opened on 6 October 2025 and the work was awarded to Respondent No. 7 — Gyan Prakash of Jehanabad — by issuance of a Letter of Intent and execution of the agreement on the same date.

M/s R.S. Construction filed Civil Writ Jurisdiction Case No. 19706 of 2025 before the Patna High Court, challenging the rejection of its technical bid, the award to Respondent No. 7, and the debarment order itself. During the pendency of the petition, the contract was awarded and acted upon, rendering the challenge to the tender process infructuous. By an order dated 30 June 2026, this Court recorded that the petitioner was confining its relief to a single prayer: a declaration that the debarment dated 29.03.2025 was no longer operative following completion of the work on 17 May 2025 and issuance of the work experience certificate dated 17 July 2025.

The Legal Issue: Can a Debarment Outlive the Default?

The petitioner's counsel argued that the debarment had outlived its purpose. The work on account of which the debarment was imposed had been completed and accepted, a work experience certificate had been issued by the competent authority, yet the corporation had neither revoked the debarment nor even responded to the representations. The continued operation of the order was, accordingly, arbitrary and contrary to law.

Reliance was placed on the Supreme Court's decision in Kulja Industries Ltd. v. Chief General Manager, Western Telecom Project, BSNL, reported in (2014) 14 SCC 731, for the proposition that debarment must be proportionate and for a definite period.

The respondents' counsel defended the debarment order as validly passed on account of the petitioner's contractual default. He submitted that subsequent completion of the work did not obliterate the earlier default. He further argued that since the debarment was confined to the immediately succeeding tender, it could not be characterised as indefinite or arbitrary.

How the Bench Reasoned

Acting Chief Justice Sudhir Singh, writing for the bench, framed the issue precisely: whether the continued operation of the debarment order dated 29.03.2025, after completion and acceptance of the work and issuance of the work experience certificate, amounted to an indefinite debarment, and if so, whether such continued debarment was legally sustainable.

The bench examined the text of the debarment order. It noted that the order was ostensibly linked to the next tender, but was “conspicuously silent as to its cessation upon subsequent completion of the work or issuance of the completion certificate.” The order contained no specification of a definite period and no conditions on which the debarment would come to an end.

Turning to the legal framework, the bench held that the law on debarment was no longer res integra. It drew on paragraphs 17, 18, and 25 of Kulja Industries, where the Supreme Court had held that while the power to blacklist or debar is inherent in every contract-awarding authority, it is not unbridled and must be exercised fairly, reasonably, and proportionately. The Supreme Court had emphasised in that case that “debarment is never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor.”

Applying these principles, the bench accepted that the initial imposition of the debarment had been justified, given the contractor's delay. But the corporation's continued reliance on the order — including its use as grounds for rejecting M/s R.S. Construction's technical bid in a fresh tender — after the defaulted work was completed and formally acknowledged, was a different matter entirely.

Once the contractual obligations stood fulfilled and the work was accepted by the respondents, the very basis on which the petitioner had been debarred ceased to survive. No fresh order extending the debarment or assigning reasons for its continuance had been passed. In those circumstances, the bench found, the debarment had in effect assumed the character of an indefinite debarment, which is impermissible in law.

The bench also noted that the corporation had not passed any order clarifying whether the debarment had exhausted its purpose or remained in force even after the petitioner submitted representations and the work experience certificate was issued. That silence, combined with the continued application of the order, reinforced the character of the debarment as indefinite and therefore unsustainable.

Outcome

The Division Bench allowed the writ petition to the extent of the surviving relief. The debarment order dated 29.03.2025 was set aside. The court answered the framed issue in favour of the petitioner, holding that the order could not be permitted to operate any further after completion and acceptance of the work and issuance of the work experience certificate.