Simplified Explanation of the Judgment
In a recent judgment dated 16 May 2024, the Patna High Court addressed a significant issue concerning contract execution and procedural fairness involving the Urban Development and Housing Department and a local contractor. The case revolved around the beautification work of the Singra Sthan Pond in Gaya, Bihar, awarded to a construction firm.
The petitioner, a construction contractor, was debarred from being considered for future government work due to an alleged delay or non-performance. The debarment was not a formal blacklisting but a temporary restriction until project completion. The petitioner challenged this decision on the ground that the original Bill of Quantity (BOQ) for the project had omitted a critical component — the “base footing” of the structure. According to him, it was impossible to construct the “footing up to ground level” without the foundational base. He supported this argument by highlighting the absence of 17.22 cubic meters of reinforced concrete work from the BOQ.
The petitioner had submitted written representations to the authorities pointing out this technical omission, but he received no response. Despite the communication gap, the project was rescinded, and his security deposit was forfeited. He approached the High Court seeking relief.
During the proceedings, the government counsel informed the Court that the debarment order had already been withdrawn and that the department was willing to include the missing “base footing” in the revised BOQ. In light of this admission, the Court held that the earlier order rescinding the contract and forfeiting the Earnest Money Deposit (EMD) could not stand and was accordingly set aside.
Further, the Court directed that both parties — the petitioner and the concerned government authorities — should mutually agree on a new timeline to complete the remaining work. The omitted base footing portion would also be formally included in the revised BOQ.
The writ petition was thus disposed of with mutual understanding, reinstating the contract and clearing the way for the contractor to resume the assigned work.
Significance or Implication of the Judgment
This judgment is particularly significant for small and medium contractors working on public infrastructure projects. It upholds the principle of procedural fairness and recognizes the importance of accurate documentation in contract execution. The Court made a clear distinction between “debarment” and “blacklisting,” reinforcing that a temporary work stoppage due to technical disputes should not lead to punitive financial penalties unless justified.
For government agencies, the ruling serves as a reminder to ensure transparency, responsiveness to contractor grievances, and accurate preparation of project BOQs. This decision fosters a collaborative resolution approach between public authorities and private contractors, especially where technical ambiguities exist.
Legal Issue(s) Decided and the Court’s Decision
- Whether debarment without blacklisting could continue indefinitely:
❌ No. Debarment tied only to project completion cannot be indefinite, especially if contract flaws exist. - Whether omission in BOQ justified contract rescission and forfeiture of security:
❌ No. The omission was acknowledged by the department, and hence rescinding the contract was unjustified. - Whether the petitioner’s representations required a response:
✅ Yes. Non-response to technical objections violated fair procedure.
Case Title
M/s Rajdeep Construction v. State of Bihar & Ors.
Case Number
CWJC No. 5367 of 2024
Coram and Names of Judges
Hon’ble The Chief Justice Mr. K. Vinod Chandran
Hon’ble Mr. Justice Harish Kumar
Names of Advocates and who they appeared for
- Mr. Shambhu Nath, Advocate (for the petitioner)
- Mr. Standing Counsel 28 (for the State of Bihar)
Link to Judgment
https://www.patnahighcourt.gov.in/ShowPdf/web/viewer.html?file=../../TEMP/d50af89f-2399-4594-8476-6d0722fc8fc6.pdf&search=Blacklisting
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