The Patna High Court has ruled that a contractor cannot continue to remain debarred from participating in government tenders after the work for which the debarment was imposed has been completed and formally accepted by the authorities. Holding that such a continued restriction effectively becomes an indefinite debarment, the court set aside the order against M/s R.S. Construction.
The judgment was delivered by the bench comprising Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Verma on July 14, 2026.
Background of the Case
M/s R.S. Construction had earlier been awarded a contract for constructing a 5,000 MT capacity godown under the Bihar State Food and Civil Supplies Corporation. The project was not completed within the stipulated time, following which the Executive Engineer issued a debarment order on March 29, 2025, preventing the contractor from participating in the immediately succeeding tender.
The contractor later completed the project, and the department issued a work experience certificate acknowledging satisfactory completion. Despite this, the authorities relied on the earlier debarment while rejecting the company's technical bid in a subsequent tender. The contractor challenged the continued operation of the debarment before the High Court.
Court's Observation
The High Court noted that although the initial debarment was imposed because of delay in execution, the order did not specify how long it would remain in force or the circumstances in which it would come to an end.
The bench observed that after the work had been completed and accepted by the department, the authorities neither revoked the debarment nor clarified whether it had exhausted its purpose. Instead, they continued to rely on it while rejecting the contractor's bid in a later tender process.
Referring to the Supreme Court's decision in Kulja Industries Ltd. v. Chief General Manager, Western Telecom Project, BSNL, the High Court reiterated that while government authorities possess the power to debar contractors, such power must be exercised fairly, reasonably, and proportionately. Debarment, the Court said, cannot continue indefinitely.
"The continued operation of the said debarment even after the petitioner completed the work and the department itself acknowledged such completion... is unsustainable," the bench observed.
Court's Decision
The Court concluded that once the contractor fulfilled its contractual obligations and the department accepted the completed work by issuing a work experience certificate, the very basis for the debarment no longer existed.
It held that, in the absence of any fresh order extending the restriction or assigning reasons for its continuation, the debarment effectively became an indefinite one, which is not permissible in law.
Accordingly, the Patna High Court set aside the debarment order dated March 29, 2025, and allowed the writ petition to that extent.
Case Details
Case Title: M/s R.S. Construction v. State of Bihar & Ors.
Case Number: Civil Writ Jurisdiction Case No. 19706 of 2025
Judge: Acting Chief Justice Sudhir Singh and Justice Rajesh Kumar Verma
Decision Date: July 14, 2026
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