Facts of the Case

Saj Infracon Project India Limited was the successful bidder for a road widening and strengthening contract (Bhagipatti-Samaur Bankata via Kateya Bazar) for 2017-18. After it failed to execute the work on time, the Executive Engineer, Road Construction Department, debarred the company for an indefinite period from participating in future tenders, vide Office Order No.04 of 2019 read with a letter dated 11.02.2019. The petitioner challenged the debarment and also sought payment of its 8th Running Account bill, provision of GST under the contract, and refund of excess royalty paid.

Issues Involved

  1. Whether the debarment order was valid despite the absence of a specific show cause notice and a defined debarment period.
  2. Whether the petitioner was entitled to a direction for payment of the running account bill and GST/royalty adjustment in the same proceeding.

Petitioner's Arguments

  • The debarment was arbitrary, malafide, and in violation of natural justice, since no show cause notice was issued and no reply obtained before an indefinite debarment; the petitioner also sought payment of outstanding bills and GST provision/royalty refund under the contract.

Respondent's Arguments

  • Not separately elaborated in the order.

Court Order / Findings

  • Applying Supreme Court precedent (UMC Technologies Pvt. Ltd. v. Food Corporation of India; Isolators and Isolators v. MPMKVVCL), the Court held that a debarment show cause notice must be specific as to debarment, and the debarment period must be defined.
  • Since the debarment order dated 11.02.2019 met neither requirement, it was set aside, with liberty to the authority to take fresh steps in line with the cited precedents within four months.
  • The claims relating to payment of the running account bill and GST/refund of excess royalty were left to be pursued by the petitioner before the appropriate jurisdictional forum, and were not decided by this Court.
  • The writ petition was allowed in part.

Important Clarification

The GST and royalty-refund prayers were not decided in this order at all -- the Court expressly relegated the petitioner to another forum for those claims. The only relief actually granted was the setting aside of the debarment order on natural-justice grounds; this is fundamentally a government-contracts/blacklisting case, not a GST ruling.

Sections Involved

  • General principles of natural justice applicable to blacklisting/debarment (no specific GST provision was applied or interpreted).

Decision – In Favour of

Petitioner, in part – the debarment order was quashed with liberty to the authority to proceed afresh; the GST/running-bill/royalty claims were left open for a separate forum.

Case Details

Court: High Court of Judicature at Patna
Case Number: Civil Writ Jurisdiction Case No. 14291 of 2019
Coram: Justice P.B. Bajanthri and Justice Arun Kumar Jha
Date of Order: 4 May 2023

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