Allowing an appeal in BC Biyani Projects Pvt Ltd v State of Madhya Pradesh and Others, the Supreme Court has held that a permanent order for blacklisting a company is impermissible in law.
The court was considering the plea of a company which was blacklisted for the award of contracts by the state of Madhya Pradesh because of unreasonable delays in the completion of six contracts which had been awarded to the company. The order of blacklisting made in March 2013 was for an indefinite period.
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Referring to its earlier decision in Kulja Industries Limited v Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and Others (2014), the court held that “debarment” cannot be permanent and the period of “debarment” would invariably depend on the nature of the offence committed by the contractor.
Taking into consideration that the company had suffered blacklisting for more than three years and that three out of six contracts had been completed by the company, the court held that the period of blacklisting already undergone by the company was sufficient to meet the ends of justice.
The court therefore set aside the order for blacklisting the company.
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The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi.
The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.
