Delhi High Court - Orders
Kec International Limited vs Power Grid Corporation Of India Ltd on 8 January, 2026
Author: Purushaindra Kumar Kaurav
Bench: Purushaindra Kumar Kaurav
$~71
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 248/2026 and CM APPLs.1132-34/2026
KEC INTERNATIONAL LIMITED .....Petitioner
Through: Mr. Sidharth Luthra, Sr. Advocate
with Mr. Siddhesh Kotwal, Ms.
Manya Hasija, Mr. Shubhansh Patel
and Mr. Sangat Pati, Advocates.
versus
POWER GRID CORPORATION OF INDIA LTD.....Respondent
Through: Mr. Rajiv Nayar, Sr. Advocate with
Mr. Somesh Chandra Jha and Mr.
Anand Kumar Singh, Advocates.
CORAM:
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR KAURAV
ORDER
% 08.01.2026
1. The petitioner has approached this Court against the order dated 18.11.2025 and supplementary order dated 26.12.2025 (hereinafter "Impugned Order"), whereby, the petitioner has been debarred for a period of nine months, as against a maximum period of 3 years, by the respondent.
2. The petitioner-company is a listed company claims to be engaged in engineering and construction sector for over 80 years while the respondent- company is a Maharatana Public Sector Enterprise of the Government of India, and is India's largest Electric Power Transmission Utility.
3. It appears that the respondent invited bids in a tender for two transmission works projects in Rajasthan (collective "the Projects"). The petitioner participated in the said tender, and was declared as the lowest This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09 bidder. Accordingly, a Notification of Award was issued by the respondent in favour of the petitioner on 15.02.2021.
4. The petitioner and the respondent, thereafter, in relation to the said Projects executed two Integrity Pacts dated 24.03.2020 wherein both committed to take all measures to prevent corruption. The two projects, were completed and commissioned on 21.12.2024 and 15.10.2024. The 'Taking Over Certificate' showing completion was issued by the respondent for the projects on 03.02.2025 and 28.12.2024. Thereafter, importantly, on 19.03.2025, the Central Bureau of Investigation ('CBI') registered an FIR against one Mr. Uday Kumar, Senior Manager of the respondent, four employees of the petitioner, and the petitioner itself under Sections 7-10 and 12 of the Prevention of Corruption Act, 1998 ("PC Act, 1998"), alleging involvement in illegal gratification for official works related to the Projects awarded by the respondent in the state of Rajasthan.
5. The final Chargesheet in the said case came to be filed, whereunder Uday Kumar, is purportedly the main accused, while names of certain employees of the petitioner, working on the subject matter of the Project have also been included.
6. In light of these events, on 22.07.2025 the respondent issued a Show Cause Notice ('SCN') to the petitioner alleging, inter alia, violation of the Integrity Pact by the petitioner on account of corrupt practices undertaken during the Projects, and requiring the petitioner to show why the petitioner should not be blacklisted/banned.
7. The said SCN, which is exceedingly detailed and specific, notes that since chargesheet has been filed, the petitioner has violated, inter alia, -- (1) Bidding Documents, Clause 36 of Section II: Instruction to Bidders, Vol 1, This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09 which provides "it is the Employer's policy that requires the Bidders, suppliers and contractors and their subcontractors under the contracts to observe the highest standard of ethics during the procurement and execution of such contracts."; and (2) Integrity Pact, which provides under Section II:
"(1) The Bidder/ Contractor commits itself to take all measures necessary to prevent corruption. The Bidder/ Contractor commits itself to observe the following principles during its participation in the tender process and during the contract execution:
(a) The Bidder/ Contractor will not, directly or through any other person or firm, offer, promise or give to any of POWERGRID's employees involved in the tender process or the execution of the contract or to any third person any material or other benefit which it is not legally entitled to, in order to obtain in exchange an advantage of any kind whatsoever during the tender process or during the execution of the contract. ...
(c) The Bidder/Contractor shall not pass any information provided by POWERGRID as part of business relationship to others and shall not commit any offence under PC/IPC Act. ...
(2) The Bidder/ Contractor will not instigate third persons to commit offences outlined above or be an accessory to such offences."
8. A reply was given by the petitioner to the SCN stating, inter alia--
(1) there are no real allegations against the petitioner; (2) the obligations under the Integrity Act expired on the competition of the Project. The Petitioner was thereafter granted a personal hearing on 19.08.2025. On 18.11.2025, the respondent issued a letter debarring the petitioner for a period of 09 months w.e.f. 18.11.2025.
9. Assailing this letter, a writ petition bearing W.P. (C) 18746/2025 was filed by the petitioner before this Court. The said petition was disposed of vide order dated 17.12.2025, whereby the respondent was directed to pass a fresh/supplementary order expressly dealing with all the contentions of the petitioner. Till the said order was passed, the order dated 18.11.2025 was kept in abeyance.
10. Complying with the order dated 17.12.2025, passed by this Court, the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09 Impugned Order came to be passed by the respondent.
11. A bare perusal of the Impugned Order would clearly indicate that each of the submissions made by the petitioner have been considered and analysed in great detail. Qua the submission made by the petitioner, that since construction work for the project, in relation to which it was engaged, was completed, and Take Over Certificates ("TOCs") were also issued, therefore its obligation under an Integrity Pact came to an end has been dealt with in the Impugned Order in the following manner:
"Regarding duration of the Integrity Pact, Section-IX of the Pact states that "it expires for the Contractor after closure of the contract". The transmission lines under the subject packages have been commissioned and taken over by POWERGRID in Oct 2024 and Dec 2024. However, commissioning and taking over of the lines does not constitute closure of the contract or the completion of execution of the contract(s).
As per Taking Over Certificate (TOC) dated 03/02/2025 (for TW03) and 28/12/2024 (for TW04), punch points/outstanding items/balance works of shutdown and non-shutdown nature are pending for both the contracts. Further, Final Quantity Variation (Amendment), Final Time Extension and LD are yet to be finalized for both contracts, payment reconciliation process is yet to begin and final payments yet to be released. The Defect Liability Period of the contracts is also underway. KEC has also admitted the pendency of payment of retention bills and final Amendment in para 5 of its reply to Show Cause Notice dated 04/08/2025. Further, KEC being a regular EPC contractor is aware that contract is considered closed only when all the Contract Closing Proformas (CCPs) forms are issued, Defect Liability period is completed, and CPGs are released to the Contractor. From the above, it is very clear that as on date of the event that has culminated in a Chargesheet, the contracts were not closed and KEC was very much under the obligations undertaken by it under the Integrity Pact for the subject contracts.
Furthermore, in addition to the Integrity Pact, contract provision at ITB clause 36 inter-alia details "Corrupt Practice" and the remedy available to Employer in the form of sanctioning a firm including declaring ineligible to be awarded a contract if at any time determines that the firm has, directly or through an agent, engaged in corrupt practices in executing a contract. As brought out above, the responsibilities and liabilities of the KEC under the Contract are yet to be completed and the Contract execution is yet to be completed. KEC has sought to deflect the allegations by asserting that the Integrity Pact is no longer in force due to the expiration of its duration, and therefore, the grounds This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09 for issuing a show cause notice are invalid. This claim is factually incorrect, as detailed above. More importantly, KEC's approach of focusing on technicalities rather than addressing the substantive issues raises serious concerns about its commitment to the principles and obligations enshrined in the Integrity Pact. The attempt to sidestep accountability through tenuous reasoning, rather than engaging with the merits of the case, undermines the spirit of integrity and transparency that the Pact is designed to uphold.
Further, KEC has asserted that there are no violations of the Integrity Pact or any other document either during the tendering process or during the execution as alleged. However, the very act of corruption, as mentioned in the chargesheet, occurred during the execution of the contract as the contract is yet to be closed."
12. Further, in relation to the petitioner's submission of there not being any allegations against the petitioner in the FIR, and it also not being investigated, the Impugned Order notes the following:
"Being a case that was investigated by CBI, the contents of FIR and Chargesheet filed by CBI in the subject case have formed the basis of POWERGRID's Show cause notice. In such cases of corruption, POWERGRID can rely on the findings of the premier investigating agency in the country like CBI to take administrative action against KEC.
Further, KEC's submission that there were no allegations against it in the FIR and that KEC was not investigated is not true. As per Annexure-A of the FIR, KEC is listed as accused. Further, the Chargesheet is the result/culmination of the investigations of CBI wherein KEC through it authorized representative(s) has been named as accused number (A-6).
The details of the investigation as brought out in the chargesheet that includes intercepted telephonic conversation between the accused including senior level employees of KEC, shows that officials of KEC had paid bribe to the employee of POWERGRID. The call intercepts also show the procedure through which Bribe money is taken from the account of KEC and paid to the employee of POWERGRID involved in the execution of the contract in question. Furthermore, as per the details in the Chargesheet, the exchange of bribe and the arrest of an official of KEC from the site of the incident was witnessed by independent witnesses and the officials of the CBI. The banking transactions in the Chargesheet show the modus of KEC in generating cash for giving bribe i.e. the money used for the purpose of payment of the undue advantage in the subject case has been remitted from the account of KEC using the Central Procurement Disposal Committee (CPDC) which is a system of KEC for making vendor payments.
Moreover, the assertion that Chargesheet nowhere attributes involvement of KEC in the actions alleged by CBI is also not true as the Chargesheet has deliberated the role of KEC, wherein it is inter-alia mentioned that the undue advantage This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09 remitted from bank account no. 40313588997 of M/s. KEC International Ltd maintained with State Bank of India, CAG Branch Mumbai, was routed through M/s. Umapati Constructions. Further, as per the Chargesheet, both Sh. Jabraj Singh and Sh. Suman Kumar being senior employees of M/s. KEC acted on behalf of the company for clearing pending retention bills and early processing of final amendments. M/s. KEC International was the ultimate beneficiary of the acts of Sh. Jabraj Singh and Sh. Suman Kumar Singh.
As per the contents of chargesheet, the said undue advantage was purportedly given to early clearance of the final amendment and subsequent release of payment to KEC. The said fact has also been admitted by the accused public servant Sh. Uday, during interrogation, as mentioned in the chargesheet. The ultimate beneficiary of Sh. Uday clearing the final amendment and passing the bill early is KEC, the company and not any individual employee. In addition to the role of KEC, the role of 4 employees of the company who have been named as accused have also been detailed in the Chargesheet. The involvement of the employees of KEC in itself would constitute a violation of the Integrity pact which inter-alia states that Contractor will not directly or through any other person, offer to any of POWERGRID's employees involved in the execution of the contract any material or other benefit which it is not legally entitled to, in order to obtain in exchange an advantage of any kind whatsoever during the execution of the contract.
Further, as per the relevant ITB clause 36 and GCC clause 36, POWERGRID may sanction a firm, declaring it ineligible to be awarded a contract if at any time POWERGRID determines that the firm has, directly or through an agent, engaged in corrupt practices in executing a contract.
Also, the Hon'ble Delhi High Court, in PNC Infratech Limited v. Union of India Through Ministry of Road Transport and Highways & Anr., WP. (C) No. 14903 of 2011, dated 29.10.2024, and connected cases, held that the serious allegations against the bidder stood corroborated by the evidence in the chargesheet. The relevant observations of the Hon'ble Court are reproduced below:
"12.13 Likewise, Baldev Singh & Anr. v. State of Punjab and Kartongen Kemi Och Forvaltning AB v. State are distinguishable, as these cases dealt with the weight of an FIR as substantive evidence in criminal proceedings. In the administrative context here, the chargesheet--supported by concrete evidence including recorded conversations and CCTV footage--serves as a substantive basis for action. Thus, while these criminal cases emphasize high thresholds of proof, administrative decisions of debarment rely on a standard of credible evidence that firmly supports the action in question.
12.14 It is indeed a fundamental tenet of criminal law that every individual is presumed innocent until proven guilty by a competent court following a fair trial. However, in the present case, the issue before the Court does not concern establishing guilt in the criminal sense but rather determining whether a 'transgression' has occurred under the terms of the Integrity Pact (IP). The IP is structured to enforce ethical integrity and transparency in public contracts, and its objectives would be undermined if the Petitioners' arguments were to be This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09 accepted. This mechanism is preventive rather than punitive, aimed at promoting public trust by precluding contractors suspected of unethical practices from participating in public tenders.
12.15 The Court is of the view that the breaches alleged against the Petitioners constitute serious infractions that cannot be overlooked or trivialized. The evidence that emerges in the chargesheet--comprising intercepted communications, video footage, and documented instances of bribery--reflects conduct that strikes at the very core of public procurement integrity. The severity of these allegations, coupled with the corroborative material unearthed and referenced in the chargesheet, firmly justifies the Respondents' decision to debar the Petitioners from participating in tender processes."
Further, the Hon'ble High Court in M/s. Saharwal Medicos Pvt Ltd through its Director vs Union of India [WP.(C) 7369 of 2011 dated 25.09.2013] has observed that once the investigation by a State Agency is carried out and culminates in the filing of chargesheet, the state cannot be expected to wait for the outcome of the prosecution and in the meanwhile continue to deal with persons whose conduct has come under a serious cloud.
In view of the facts brought out above, it is clear that the action of the KEC and its employees, including senior employees has resulted into a transgression of integrity pact which has put the reliability and credibility of KEC into question and undermined the integrity of the public procurement process. Further, this action of KEC/its employees is also determined as 'corrupt' practice, constituting violation of ITB clause 36 of the Contracts."
13. It thus appears that the respondent has carefully analysed and scrutinised each of the submissions made by the petitioner and rejected the same by applying its own mind. This Court under Article 226 of the Constitution of India, cannot act as an authority sitting in appeal of the decision passed by the respondent. After considering the detailed, reasoned, and speaking Impugned Order, the Court does not find any reason to interfere into the merits of the same.
14. Mr. Sidharth Luthra, learned senior counsel appearing for the petitioner, however, also submitted, in exclusion to his arguments on merits, that the debarment order also has the consequence of disentitling the petitioner from continuing its contract with other organisations as also from participating in future contracts, and the same is impermissible in law.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09
15. Mr. Luthra, in support of his submission, has pointed out that the Office Memorandum dated 02.11.2021 bearing No. F.1/20/2018-PPD prescribes certain requirements which have to be necessarily followed. In exclusion to the merits of the case, with which this Court is not inclined to interfere, on this limited aspect, let the respondent to place their reply on record.
16. Accordingly, list on 19.01.2026.
PURUSHAINDRA KUMAR KAURAV, J JANUARY 8, 2026 tr/ksr This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 13/01/2026 at 20:32:09