Orissa High Court
Smt. Rinabala Sethi vs State Of Odisha on 22 December, 2025
ORISSA HIGH COURT : CUTTACK
W.P.(C) No.21309 of 2024
In the matter of an Application under Articles 226 and 227
of the Constitution of India, 1950
***
Smt. Rinabala Sethi
Aged about 35 years
Daughter of Late Seshadeba Sethi
At: Balikuda, P.O.: Gopalpur
P.S.: Cuttack Sadar
District: Cuttack. ... Petitioner
-VERSUS-
1. State of Odisha
Represented through
Secretary to Government of Odisha
Department of Water Resources
State Secretariat, Bhubaneswar
District: Khordha.
2. Chief Engineer, Drainage
Department of Water Resources
Government of Odisha
Drainage Circle, Gandarpur,
District: Cuttack - 753 003.
3. Chief Manager (Technical)
State Procurement Cell, Nirman Soudha
Unit-8, Bhubaneswar.
WP(C) No.21309 of 2024 Page 1 of 65
4. Chief Engineer-cum-Chief Manager (Technical)
State Procurement Cell, Nirman Soudha
Unit-8, Bhubaneswar.
5. Executive Engineer
Drainage Division, Gandarpur
Cuttack - 753 003 ... Opposite parties
Counsel appeared for the parties:
For the Petitioner : M/s. Prabodha Chandra Nayak
and S.K. Sahu, Advocates
For the Opposite parties : Mr. Debashis Tripathy,
Additional Government Advocate
P R E S E N T:
HONOURABLE CHIEF JUSTICE
MR. HARISH TANDON
AND
HONOURABLE JUSTICE
MR. MURAHARI SRI RAMAN
Date of Hearing : 10.12.2025 :: Date of Judgment : 22.12.2025
JUDGMENT
MURAHARI SRI RAMAN, J.--
Refusal to accept the Additional Performance Security and the Initial Security Deposit being prepared on 24.07.2024 (and not before 22.07.2024) with respect to the work, ―Clearance of drainage congestion from different drainage channels in Banki and Damapada Block of Cuttack District in Bid identification No.EE-DD- CTC-NO.03/2024-25‖, as communicated vide Letter WP(C) No.21309 of 2024 Page 2 of 65 No.DDC-ESTR-TENP1-15/2024-- 4274, dated 12.08.2024 issued by the Executive Engineer, Drainage Division, Cuttack (Annexure-1) was under challenge on the ground that the order of refusal is bereft of reason though plausible explanation has been proffered.
1.1. In addition thereto and in connection therewith, the petitioner also sought to challenge the Order dated 16.08.2024 (Annexure-7) passed by the Chief Engineer- cum-Chief Manager (Technical) in blocking portal registration in pursuance of recommendation of the Executive Engineer, Drainage Division, Cuttack vide Letter No.4274, dated 12.08.2024 (Annexure-1) and the direction contained therein to effect forfeiture of amount of Earnest Money Deposit in terms of Clause 23.3 of Appendix-IX(A) appended to Volume-II of the Odisha Public Works Department Code on the grounds that such action is not only unjustified, but also illegal, arbitrary and in flagrant violation of the principles of natural justice offending the provisions of Article 14 of the Constitution of India.
Case of the petitioner:
2. The petitioner, a Contractor registered under Public Works Department Contractor's Registration Rules, 1967, having experience in execution of contract works under different Departments of the Government of WP(C) No.21309 of 2024 Page 3 of 65 Odisha, participated in the tender floated by the Executive Engineer, Drainage Division, vide public e-
procurement notice No.EE.DD-CTC-01/2024-25 for different works including the work of ―Clearance of Drainage Congestion from different drainage channels in Banki and Damapada Block of Cuttack District in Bid identification No.EEDD-CTC-NO.01/2024-25 to 07/2024-25‖, where she emerged successful in the technical bid stage and as per Clause 13 of the conditions of tender, the authority conducted transparent lottery on 12.07.2024 amongst the qualified bidders and the petitioner was declared as the lowest (L-
1) and the tender authority vide Letter No.3038 dated 15.07.2024 issued letter of acceptance directing the petitioner to submit the requisite Additional Performance Security (―APS‖, for short) for an amount of Rs.1,16,000/- and Initial Security Deposit (―ISD‖, abbreviated) for an amount of Rs.4,450.00 drawn on any Nationalized Scheduled Bank on or before 22.07.2024.
2.1. Vide Letter No.4053 dated 23.07.2024, the Executive Engineer intimated that though in terms of Works Department Office Memorandum No.4559/W, dated 05.04.2021 under Clause 33 of Volume-II of the Odisha Public Works Department Code (for convenience, ―OPWD Code‖) the petitioner in Letter No.3038 dated 15.07.2024 was instructed to make security deposit towards APS WP(C) No.21309 of 2024 Page 4 of 65 and ISD on or before 22.07.2024 for acceptance of tender, there was failure to comply with the same within the period stipulated. However, it was also directed to explain on or before 08.08.2024 as to why action deemed proper would not be initiated against the petitioner.
2.2. The petitioner vide Letter dated 25.07.2024 intimated the authority concerned showing cause that due to health issues she was unable to prepare APS and ISD within the due date and after recovering from sickness she could prepare APS and ISD on 24.07.2024 and enclosed photocopy of said security deposit(s) drawn in favour of the tendering authority. Enclosing prescription of the physician, the petitioner vide Letter dated 30.07.2024 apprised the authority concerned that delay in deposit of APS and ISD was due to circumstances beyond her control and requested the authority to accept the same and issue work order.
2.3. The Executive Engineer vide Letter dated 23.07.2024 (Annexure-4) directed the petitioner to submit explanation for non-submission of APS and ISD by 08.08.2024, which was responded to by furnishing plausible explanation with evidence demonstrating the circumstances beyond her control, nonetheless the deposits showing APS and ISD as made on 24.07.2024 was submitted. The authority without appreciating such WP(C) No.21309 of 2024 Page 5 of 65 factual position, invited fresh tender for the works in question on 31.07.2024 and date of opening of tender was fixed to 13.08.2024.
2.4. After invitation of fresh tender and when the opening date of the tender is scheduled on 13.08.2024, the Executive Engineer vide Letter dated 12.08.2024 (Annexure-1) refused to accept the deposits already made towards APS and ISD and recommended for blocking the portal registration. The Chief Engineer-cum- Manager (Technical), State Procurement Cell on receipt of said Letter dated 12.08.2024, requested the Executive Engineer, Drainage Division to follow the guidelines for blocking of portal registration as per Clause 23.3 of Office Memorandum No.7885 dated 23.07.2013 of the Works Department, Government of Odisha.
2.5. The grievance of the petitioner is that in absence of service of any show cause notice and without affording opportunity of hearing to the petitioner, the Executive Engineer blocked the portal registration, which fact came to her knowledge on attempting to participate in another tender. Besides this, after blocking the portal registration, the authority concerned has blacklisted and debarred her for three years from participating in the bids.
Counter affidavit filed by the opposite parties:
WP(C) No.21309 of 2024 Page 6 of 653. It is admitted in the counter affidavit that:
i. The petitioner had the eligibility as specified in DTCN;
ii. Lottery was held on 12.07.2024 amongst the lowest qualified bidders and the petitioner was declared L- 1 and by Letter dated 15.07.2024, the petitioner was directed to deposit APS of Rs.1,16,000/- and ISD of Rs.4,450/- on or before 22.07.2024 and submit all original documents by loading during the tender process; and further, by Letter dated 15.07.2024 it was intimated to the petitioner that in terms of Clause 33 of Volume-II of the OPWD Code the deposit was to be made on or before 22.07.2024;
iii. Letter dated 23.07.2024 was issued to explain on or before 08.08.2024 as to why the action deemed proper as per Codal Provision and Clauses of the bid document would not be initiated against her for default in deposit of requisite amount towards APS and ISD within stipulated period;
iv. The petitioner vide Letter dated 25.07.2024 intimated the authority that she was suffering from ill health and could not prepare APS and ISD within due date and after her recovery from sickness, APS and ISD could be deposited on WP(C) No.21309 of 2024 Page 7 of 65 24.07.2024 and enclosed photocopy depicting said deposit drawn in favour of the tendering authority; and another Letter dated 30.07.2024 of the petitioner along with certificate of physician indicated non-deliberate delay being occurred in deposit of APS and ISD.
3.1. The Executive Engineer, Drainage Division, Cuttack intimated the petitioner that the reasons stated in her letters for non-preparation of Fixed Deposits towards APS and ISD within the period specified ―are not satisfactory‖ vide Letter No. 4274, dated 12.08.2024 and communicated said fact to the Chief Manager (Technical) and Chief Engineer, SPL, Nirman Soudh, Unit-8 for his information and requested to block the portal registration and forfeit the Earnest Money Deposit amount with reference to Clause 23.3 of Appendix-IX(A) appended to Volume-II of the OPWD Code.
3.2. A stand is taken in the counter affidavit that due to such non-satisfactory explanation of the petitioner in depositing the amounts aforesaid beyond period specified, the Executive Engineer, Drainage Division, Cuttack has cancelled the tender by issue of Letter No.4049, dated 23.07.2024.
3.3. As a sequel to the above, the Chief Engineer-cum-Chief Manager (Technical) has blocked the portal registration WP(C) No.21309 of 2024 Page 8 of 65 of the petitioner on 16.08.2024. This apart, the petitioner has been blacklisted invoking provisions of Appendix-XXXIV appended to Volume-II of the OPWD Code and debarred from participating in bid.
Hearing:
4. As the pleadings are completed, and the petitioner has been blacklisted in view of Appendix-XXXIV appended to Volume-II of the OPWD Code and her portal registration has been blocked with reference to Clause 23.3 of Appendix-IX(A) appended to Volume-II of the OPWD Code, which prevents her to participate in any other tender, the matter is taken up for final hearing on the consent of the counsel for the respective parties.
4.1. Heard Sri Prabodha Chandra Nayak, learned Advocate for the petitioner and Sri Debashis Tripathy, learned Additional Government Advocate for the opposite parties.
4.2. Hearing being concluded, the matter was reserved for preparation and pronouncement of Judgment.
Rival contentions and submissions:
5. Sri Prabodha Chandra Nayak, learned Advocate submitted that:
i. The amounts towards APS and ISD could be deposited by the petitioner on 24.07.2024 instead WP(C) No.21309 of 2024 Page 9 of 65 of 22.07.2024. The delay was on account of illness of the petitioner which should have been appreciated by the tendering authority. Despite no prohibition or interdiction in law to accept the APS and ISD from the successful bidder belatedly-- here only two days' delay due to situation not within the control of the petitioner-- the authority concerned defying the mandate of the OPDW Code has traversed beyond the scope of his authority and jurisdiction.
ii. Advancing argument further it is stated that as the work is no more available as of date, the petitioner is concerned about the withdrawal of blacklisting and unblocking of portal registration so as to facilitate her to participate in other tenders.
iii. Referring to Clauses 23.1, 23.3, 23.3.1, 23.3.2 and 23.3.3 it is strenuously submitted that the authority concerned having thrown the procedures provided in the OPWD Code to the winds snatched the livelihood of the petitioner by blocking the portal registration even prior to blacklisting.
Besides this, having assigned any reason much less plausible reason, the authority has blacklisted the petitioner, resulting in civil death.
WP(C) No.21309 of 2024 Page 10 of 65iv. Notwithstanding the Letter of Chief Engineer-cum-
Chief Manager (Technical), State Procurement Cell instructed the Executive Engineer, Drainage Division to follow the Guidelines envisaged for blocking of portal registration in tune with Clause 23.22 of Office Memorandum No.7885 dated 23.07.2013, the latter acted contrary to such requirement under the said clause.
v. Amplifying further it is urged that before hearing the petitioner, the authority concerned has condemned the successful bidder by taking a decision adverse to her claim. Not only have the authorities denied the work to be executed by the petitioner notwithstanding the fact that she has made deposits towards APS and ISD within two days' after expiry of period stipulated by the authority concerned, but also deprived her to eke out her livelihood by restraining her from participating in any other tender by blocking the portal registration as also blacklisting her.
5.1. Under the aforesaid circumstances, the learned counsel for the petitioner fervently prayed for issue of writ of mandamus to the opposite parties to act prudently by unblocking the portal registration and withdraw the order of blacklisting.
WP(C) No.21309 of 2024 Page 11 of 656. Justifying the action taken by the authorities invoking the Codal provisions in blacklisting and blocking portal registration, Sri Debashis Tripathy, learned Additional Government Advocate would urge that though the petitioner claims to have complied with the terms by furnishing proof of deposit of APS and ISD of Rs.1,16,000/- and Rs.4,450/- respectively on 24.07.2024, for the purpose of acceptance of tender, it was obligatory on her part to comply with the terms of Office Letter No.DDC-ESTR-TENP1-15/2024-- 3038, dated 15.07.2024, wherein it was categorically stated that the aforesaid amounts were to be deposited in shape of NSC/Post Office Saving Bank Account/Post Office Time Deposit Account/Kisan Vikas Patra/Bank Guarantee in favour of the Executive Engineer, Drainage Division, Cuttack within seven days from issue of the letter, i.e., 22.07.2024 (Annexure-3). In the said letter it was also stipulated that if she fails to furnish the required APS and ISD by the scheduled date her bid would automatically stand cancelled and action deemed proper as per Codal Procedure would be initiated against her. Hence no fault can be imputed to the consequential actions like blacklisting as well as blocking the portal registration as the authority concerned is empowered to exercise such power being conferred by virtue of Clause 23 of Appendix-IX(A) appearing at Volume-II of OPWD Code.
WP(C) No.21309 of 2024 Page 12 of 656.1. In the Letter bearing No.DDC-ESTR-TENP1-15/2024-- 4053/W, dated 23.07.2024 (Annexure-4), the Executive Engineer, Drainage Division, Cuttack has sought for explanation from the petitioner to be furnished on or before 08.08.2024 indicating further actions to be taken for having not complied with the requirements for acceptance of tender though a Letter dated 15.07.2024 was communicated through e-mail for making deposits towards APS and ISD on or before 22.07.2024. Therefore, it is arduously argued that such deposits being made on 24.07.2024 beyond the period stipulated cannot resurrect the automatic cancellation of the bid as contemplated in Letter dated 15.07.2024.
6.2. The authority having thus called upon the petitioner to explain by Letter dated 23.07.2024 there was no necessity to grant further opportunity for the purpose of taking action in tune with Clause 23 of Appendix-IX(A) appended to Volume-II of the OPWD Code. As the authority found the explanation submitted by the petitioner that she was suffering from illness which prevented her to comply with the terms of Letter dated 15.07.2024 within the period stipulated therein, not satisfactory, an Office Order No.DW-I-M-46/24, dated 11.12.2024 (Annexure-H/5 enclosed to Affidavit dated 05.04.2025 sworn to by the Executive Engineer, Drainage Division, Cuttack) was issued by the Chief WP(C) No.21309 of 2024 Page 13 of 65 Engineer, Drainage indicating that her registration is blacklisted and she is ―debarred for three years in participating in bidding with immediate effect due to non-submission of Additional Performance Security (APS) for the work ‗Clearance of Drainage Congestion from different Drainage Channels in Banki and Damapada Block of Cuttack District' invited vide e- procurement notice No.EE-DD-CTC-01/2024-25 and Bid Identification No.EE-DD-CTC-03/2024-25‖.
6.3. Therefore, the learned Additional Government Advocate has made forceful submission not to allow the relief claimed for by the petitioner.
Analysis and discussions:
7. Undisputed facts gathered from the pleadings so far as necessary for the present purpose are:
i. Explaining the delay in furnishing APS and ISD on 24.07.2024 instead of 22.07.2024 in response to show cause notice dated 23.07.2024 issued by the Executive Engineer, Drainage Division, Cuttack, the petitioner demonstrated by adducing evidence of certificate of physician that she was suffering from illness and after recovery, she could comply with the terms of Letter dated 15.07.2024, copy of which is said to have been communicated via e-mail.WP(C) No.21309 of 2024 Page 14 of 65
ii. The Chief Engineer-cum-Chief Manager (Technical) intimated the Executive Engineer, Drainage Division with respect to blocking of the portal registration on 16.08.2024 vide Letter dated 22.08.2024 and the Chief Engineer, Drainage has blacklisted and debarred her from participating in bidding by virtue of Office Order dated 11.12.2024 (Annexure-9).
8. While conceding to the fact that during the pendency of the writ petition, fresh tender has been floated and work has been awarded and completed by another tenderer, the petitioner being debarred from participating in tender process for three years by blacklisting and blocking the portal registration, a seminal question has been raised by Sri Prabodha Chandra Nayak, learned Advocate for the petitioner, whether the authority concerned is competent to invoke power under Appendix-IX(A) appended to Volume-II of the OPWD Code (for convenience be referred to as ―Appendix‖) for the purpose of blocking portal registration and consequently debar her from participating in the bidding process by blacklisting invoking Clause 22.3 of said Appendix on the facts and in the circumstances of the instant case.
WP(C) No.21309 of 2024 Page 15 of 659. Relevant portion of Section-1 of the Detailed Tender Call Notice (―DTCN‖, for short) vide E-Procurement Notice No.EE-DD-CTC-01/2024-25, depicts as follows:
Sl. Name of Tender Class Bid Cost of Period of Rema-
No. works amount of Security Tender comple- rks
(excluding Contr- / docu- tion
GST) actor EMD ment
(Rs.) (Rs.)
(To be (Excludin
remitted g GST)
online)
3. Cleara- Rs.5,18,476/- C and 4,200/- 2,000/- 03 Single
nce of D (three cover
Drainage calendar
Congesti months)
on from
different
Drainage
Channel
s in
Banki
and
Damap-
ada
Block of
Cuttack
District
9.1. It is copiously manifest that the tender amount as per DTCN is ―Rs.5,18,476/-‖. The argument of learned counsel for the petitioner proceeded on the basis that since Clause 61 of the Appendix depicts that all tenders costing Rs.10,00,000/- and above are required to be hoisted in the e-procurement portal, whereas the cost of 1 Clause 6 of Appendix-IX(A) appended to Volume-II of the OPWD Code stands as follows:
"Government after careful consideration have decided to hoist all tenders costing
10 lakhs or above in the e-procurement portal. This will be applicable across all Engineering Departments such as Works Department, Department of Water Resources, Rural Development and Housing and Urban Development Department. Government of Odisha also welcomes hoisting of tenders by any other Departments, Authority, Corporations, Local Bodies etc. of the State with prior approval from Works Department. Works Department is the Nodal Department for the implementation of e-Procurement in the State."
WP(C) No.21309 of 2024 Page 16 of 65instant tender is below said amount, no penal consequences would ensue.
9.2. Bare reading of said Clause 6 of the Appendix shows that the Appendix is an ―executive instructions regarding calling for and acceptance of tenders in e-procurement‖. There is no prohibition or inhibition for the tendering authority to float a tender by way of e-procurement procedure laid down in said Appendix. Valiant attempt was made by urging that for the tender in the present case is below said threshold limit for inviting tender by way of e-procurement process, consequences envisaged in Clause 22 and Clause 23 of the Appendix would not attract. Such an argument may sound attractive, but the same stands repelled inasmuch as the petitioner has participated in the bid and stood L-1. Since the explanation proffered to the authority was not found plausible for the delay in furnishing APS and ISD, steps envisaged under Clause 22 and Clause 23 were taken.
9.3. It is not the case of the petitioner that at the stage of participation in the tender process, the Codal provisions were not made known to her. With eyes wide open she took part in the tender. Therefore, at this stage, she is estopped to raise protest that the cost of work enumerated in the instant e-procurement tender being less than Rs.10,00,000/-, the consequences reflected in Appendix would not attract. Reference may be had to WP(C) No.21309 of 2024 Page 17 of 65 Municipal Committee Katra Vrs. Ashwani Kumar, 2024 SCC OnLine SC 840; Kalinga Warriors Security Service Vrs. State of Odisha, 2023 SCC OnLine Ori 5726. However, this Court appreciates further arguments of the counsel for the petitioner that requirement under the Codal Provision being not followed scrupulously the actions taken by the authorities concerned leading her to suffer evil consequences, the decisions taken by the opposite parties are liable to be set aside.
10. It is contended by Sri Prabodha Chandra Nayak, learned Advocate that though a letter was issued on 15.07.2024 directing the petitioner to deposit APS and ISD on or before 22.07.2024, there was two days' delay in complying with such direction on account of circumstances beyond her control. The fact of sickness being corroborated by certificate of physician, the authority could not have proceeded to block portal registration invoking Clause 23 and thereafter by blacklisting, debarred her from participating in tender in terms of Clause 22 of the Appendix. Amplifying further it is contended that since it is not the case of the opposite parties that the petitioner did not turn up for execution of agreement after finalisation of the tender, the exercise of power under Clause 22 was unwarranted. This Court finds force in such submission of the learned counsel.
WP(C) No.21309 of 2024 Page 18 of 6510.1. The text of Letter dated 11.12.2024 issued by the Chief Engineer, Drainage communicated to the petitioner vide Memo No.5247, dated 11.12.2024 reads thus:
"In pursuance to Department of Water Resources Letter No.31741, dated 21.11.2024 and in conformity with Clause No.22.3 of Appendix-IX(A) of Code Volume-II and amendment to Clause No.3.5.5(V) of OPWD Code Volume-I issued vide Works‟ Department OM No.14459 dated 22.09.2018, Smt. Rinabala Sethi (SC), "C" Class Contractor, At: Balikuda, P.O.: Gopalpur, P.S.: Cuttack Sadar, District: Cuttack, Pin: 753011, having Registration No.935QF298 is hereby Blacklisted and debarred for three years in participation in bidding with immediate effect due to non-submission of Additional Performance Security (APS) for the work "Clearance of Drainage Congestion from different Drainage Channels in Banki and Damapada Block of Cuttack District", invited vide e- procurement Notice No.EE-DD-CTC-01/2024-25 and Bid Identification No.EE-DD-CTC-03/2024-25."
10.2. As is apparent from the above letter under Annexure-9 the authority has invoked provisions of Clause No.22.3 of Appendix-IX(A) of Code, Volume-II and Clause No.3.5.5(V) of OPWD Code, Volume-I in order to blacklist and debar the petitioner for three years in participation in bidding due to non-submission of APS invoked Clause 22.3 of the Appendix (Volume-II) read with Clause 3.5.5(V) of Volume-I of OPWD Code.
10.3. Clause 3.5.5(V) of Volume-I, OPWD Code is extracted herein below:
WP(C) No.21309 of 2024 Page 19 of 65"3.5.5. The following forms shall be used for agreements with the contractors for the purpose noted against each:
*** (V) Percentage Rate Contract.--
Percentage contract will be in addition to item rate, lump sum contracts etc. In such contracts the schedule of quantities shall mention estimated rate of each item and amount thereto. The Contractor has to mention percentage excess of less over the estimated cost (in figures, as well as words) in the prescribed format appended to the tender document. The contractors participated in the tender for more than one work will offer conditional rebate. Rebate offer submitted in separate sealed envelope shall be opened, declared and recorded first. The rebate offered shall be considered after opening of all packages called in the tender notice. The contractors who wish to tender for two or more work shall submit separate tender for each. Each tender shall have the same and number of the works to which they refer, written on the envelope.
The adopted format for percentage rate is same as that of the form adopted for item rate tenders the word "item rate" shall be replaced by "percentage rate" and the contract form may be named as P-1. In this form, time is the essence. The contractor is required to maintain a certain rate of progress specified in the contract. The Contract can also be terminated with penalty when the progress of work is not as per the conditions of contract. The quantity mentioned can be increased or reduced to the extent of 10% for individual items subject to a maximum of WP(C) No.21309 of 2024 Page 20 of 65 5% over the estimated cost. If it excesses the limit stated above prior approval of competent authority is mandatory before making any payment. The period of completion is fixed and cannot be altered except in case of exceptional circumstances with due approval of next higher authority. In case of percentage rate tenders, only percentage quoted shall be considered. Percentage quoted by the Contractor shall be accurately filled in figures and words, so that there is no discrepancy. If any discrepancy is found in the percentage quotes in words and figures, then the percentage quoted by the Contractor in words shall be taken as correct. If any discrepancy is found in the percentage quoted in percentage excess/less and total rate quoted by the Contractor than percentage will be taken as correct. The percentage quoted in the tender without mentioning excess or less and not supported with the corresponding amount will be treated as excess. The Contractor will write percentage excess or less up to one decimal point only. If he writes the percentage excess of less up to two or more decimal point, the first decimal point shall only be considered without rounding off where the contractor has omitted to quote the rates either in figure and words, the Officer opening the tender should record the omission. Bills for percentage rate tenders shall be prepared at the estimated rates for individual items only and the percentage excess or less shall be added our sub-traded from the gross amount of the bill.
* This may not be applicable to the works funded by world Bank and other external agencies, in which case their guidelines shall be followed.
WP(C) No.21309 of 2024 Page 21 of 65Note-I.--
Provision of incentive will be made in the Agreement. This incentive will be @ 1% in case of completion of work ahead of the month (part of the month shall be excluded) and the maximum amount payable will be fixed at 2% if the work is completed two months ahead of the Schedule time.
Incentive should be paid in respect of individual project for new construction/substantial additional or improvement works, the minimum value of which is mentioned below:
Name of the work Minimum value
1. Building work/P.H. work Rs.40.00 lakhs
2. Road work/bridge work Rs.3.00 crores
3. Irrigation work Rs.10.00 crores
Incentive will be paid with approval of next higher authority of tender accepting authority on completion of original work before original time schedule. (Incentive need not be included in the estimate. Specific budget provision may be made under State- Plan out of which the incentive shall be met.) Note-II.--
When the bid amount is up to 10% less than the estimated cost, no additional performance security is required to be deposited. when the bid amount is less than the estimated cost by more than 10% and within 15%, in such an event, the successful bidder will deposit the additional performance security to the extent of 1.5 times of the differential cost of the bid amount and 90% of the estimated cost.
WP(C) No.21309 of 2024 Page 22 of 65Additional Performance Security shall be obtained from the bidder when the bid amount is less than estimated cost put to tender. In such an event, only the successful bidder who has quoted less bid price/ rates than the estimated cost put to tender shall have to furnish the exact amount of differential cost i.e. estimated cost put to tender minus the quoted amount as Additional Performance Security (APS) in shape of Demand Draft/Term Deposit Receipt pledged in favour of the Divisional Officer within seven days, otherwise the bid shall be cancelled and the security deposit shall be forfeited. Further, proceeding for blacklisting shall be initiated against bidder.
Note-III.--
For availing incentive clause in any project which is completed before the stipulated date of completion, subject to other stipulations it is mandatory on the part of the concerned Executive Engineer to report the actual date of completion of the project as soon as possible through fax or e-mail so that the report is received within 7 days of such completion by the concerned SE, CE & the Administrative Department. The incentive for timely completion should be on a graduated scale of one percent to 10 percent of the contract value. Assessment of incentives may be worked out for earlier completion of work in all respect in the following scale:
Before 30% of = 10% of Contract Value
contract period
Before 20 to 30% of = 7.5% of Contract Value
WP(C) No.21309 of 2024 Page 23 of 65
contract period
Before 10 to 20% of = 5% of Contract Value
contract period
Before 5 to 10% of = 2.5% of Contract Value contract period Before 5% of contract = 1% of Contract Value period 10.4. Clause 22 of Appendix-IX(A) of Volume-II of the OPWD Code reads as follows:
"22. Notification of Award and Signing of Agreement.--
22.1.The Employer/Engineer-in-Charge shall notify acceptance of the work prior to expiry of the validity period by cable, telex or facsimile or e-mail confirmed by registered letter. This letter of Acceptance will state the sum that the Engineer-in-charge will pay the contractor in consideration of execution and completion of the works by the contractor as prescribed by the contract and the amount of Performances Security and Additional Performance Security required to be furnished. The issue of the letter of Acceptance shall be treated as closure of the Bid process and commencement of the contract.
22.2.The Contractor after furnishing the required acceptable Performance Security and Additional Performance Security, "Letter to Proceed" or "Work Order" shall be issued by the Engineer-in-charge with copy thereof to the Procurement Officer- Publisher. The Procurement Officer-Publisher shall up load the summary and declare the process as complete.WP(C) No.21309 of 2024 Page 24 of 65
22.3.If the L-1 bidder does not turn up for agreement after finalization of the tender, then he shall be debarred from participation in bidding for three years and action will be taken to blacklist the contractor. Besides the consortium/JV/firm where such an agency/firm already happens to be or is going to be a partner/member/proprietor, he/they shall neither be allowed for participation in bidding for three years nor his/their application will be considered for registration and action will be initiated to blacklist him/them. In that case, the L-2 bidder, it fulfils other required criteria, would be called for drawing agreement for execution of work subject to condition that the L-2 bidder negotiates at par with the rate quoted by the L-1 bidder, otherwise the tender will be cancelled."
10.5. It is highlighted that with the circumstances beyond of the control of the petitioner, the requirements with respect to furnishing APS and ISD could be complied with only on 24.07.2024 instead of 22.07.2024 as stipulated in Letter dated 15.07.2024 of the Executive Engineer, Drainage Division, Cuttack (Annexure-3). Said letter addressed to the petitioner was mentioned to have been sent by ―e-mail/speed post‖. Nothing is placed on record by the learned Additional Standing Counsel to suggest that the e-mail was accessed and within the knowledge of the petitioner at the relevant point of time. Furthermore, the document, certificate of physician, indicating that the petitioner was suffering from sickness WP(C) No.21309 of 2024 Page 25 of 65 was never considered by the authority. No reason has been assigned to discard such certificate. Furthermore there is nothing brought on record by the opposite parties to suggest that on the very date, i.e., 15.07.2024 the letter sent by ―speed post‖ reached the addressee. It is explicit from Note-II appended to Clause 3.5.5(V) of Volume-I, OPWD Code that the successful bidder ―shall have to furnish the exact amount of differential cost i.e. estimated cost put to tender minus the quoted amount as Additional Performance Security (APS) in shape of Demand Draft/Term Deposit Receipt pledged in favour of the Divisional Officer within Seven days, otherwise the bid shall be cancelled‖. Clause 14 of the DTCN specified that, "As per Works Department Memorandum No.4559, dated 05.04.2021 Amendment to Paragraph 3.5.5(V) of Note-II of OPWD Code, Volume-I by modification Additional Performance Security shall be obtained from the successful bidder when the bid amount is less than the estimated cost put to tender. In such event the successful bidder who has quoted less bid price/rates than the estimated cost put to tender shall have to furnish the Additional Performance Security (APS) as stated below in shape of Term Deposit Receipt of Scheduled Bank duly pledged in favour of the Executive Engineer, Drainage Division, Gandarpur, Cuttack/Bank Guarantee in favour of Executive Engineer, Drainage Division, Cuttack from any Nationalised Scheduled Bank in India counter guaranteed by its local branch at Bhubaneswar within seven days of issue of Letter of Acceptance (LoA) by the WP(C) No.21309 of 2024 Page 26 of 65 Executive Engineer, Drainage Division, Cuttack (by e-mail) to the successful bidder otherwise the bid of the successful bidder shall be cancelled and the Earnest Money Deposit/Bid Security shall be forfeited. Further, proceeding for blacklisting shall be initiated against the bidder."
10.6. By the very nature of nomenclature of Additional Performance Security indicates that the same is meant as security for performance of the contract and it comes to exist on the execution of contract. The principles of natural justice and the doctrine of proportionality make it imperative to assess whether the delay, under the circumstances explained, warrants the severe penalty of blacklisting and debarment. The primary objective of the Additional Performance Security and the agreement is to ensure the successful execution of the contract. If the bidder is now prepared to meet these requirements, and the delay has not caused irreparable harm or prejudice to the tendering authority or other bidders, a strict interpretation leading to debarment may be viewed as disproportionate. The tender conditions explicitly state the consequences of an L-1 bidder failing to ―turn up for agreement‖. While there was a delay in depositing the APS and ISD, the petitioner has subsequently appeared, provided an explanation, and expressed willingness to fulfil the requirement.
WP(C) No.21309 of 2024 Page 27 of 6510.7. On meticulous reading of Note-II appended to Clause 3.5.5(V) of Volume-I, OPWD Code juxtaposed with Clause 14 of DTCN, it can be discernible that seven days' period is required to be granted to the successful bidder for the purpose of furnishing APS and ISD. However, additional words ―within seven days of issue of Letter of Acceptance‖ are found in Clause 14 of DTCN, which is not a condition contemplated under Note-II appended to Clause 3.5.5(V) of Volume-I, OPWD Code. Taking cue from the interpretation of the Hon'ble Supreme Court of India in Commissioner of Income Tax Vrs. Major Tikka Khushwant Singh, (1995) 212 ITR 650 that ―The point of law involved for decision in this appeal is already settled by the decision of this Court in R.K. Upadhyaya Vrs. Shanabhai P. Patel, (1987) 3 SCC 96, in which it has been held that the issuance of a notice within the period of limitation gives jurisdiction to the Income Tax Officer to proceed to make reassessment‖, it can safely be said in the present context that in absence of any material depicting that the petitioner could be served with the Letter of Acceptance on 15.07.2024 itself, the opposite parties fell in error of appreciation of fact by taking action for blacklisting and debarment, besides blocking the portal registration.
10.8. Thus, in view of ratio laid down in Patitapabana Bastralaya Vrs. Sales Tax Officer, 2015 (I) ILR-CUT 283, WP(C) No.21309 of 2024 Page 28 of 65 that where statute provided for thirty days' period for production of documents by an assessee-noticee, non- compliance thereof would warrant the final decision to be set aside, the present case having stood on identical footing, the decision of Chief Engineer, Drainage vide Letter dated 11.12.2024 is liable to be set aside.
10.9. Evidence on record reveals that in response to Letter dated 23.07.2024 issued by the Executive Engineer, Drainage Division, Cuttack contemplating action as per Codal Provision and Clauses of the bid document, the petitioner furnishing the compliance towards APS and ISD by Letter dated 25.07.2024, communicated reason for two days' delay by enclosing certificate of the doctor showing illness vide Letter dated 30.07.2024. Scrutiny of screenshot dated 20.08.2024 of portal of ―Tenders Odisha‖ and document dated 16.08.2024 at Annexure-7, i.e., blocking portal registration and Letter dated 11.12.2024 (Annexure-9) showing blacklisting and debarment does not emanate that such evidence adduced by the petitioner showing ill health was impeached.
10.10. It is further noticed that the petitioner after recovering from sickness came forward showing bona fide that she deposited the amounts towards APS and ISD on 24.07.2024. Though explanation with evidence was made available to the authority, as if the WP(C) No.21309 of 2024 Page 29 of 65 explanation submitted by the petitioner to the show cause notice vide Letter dated 23.07.2024 issued by the Executive Engineer, Drainage Division is empty formality, the Chief Engineer-cum-Chief Manager (Tech) has blocked the portal registration. It is apparent from Letter dated 22.08.2024 that no reason is ascribed as to why the explanation submitted by the petitioner was found to be unsatisfactory. Licit comprehension of necessity to assign reasons for the decision can be perceived in Nareshbhai Bhagubhai Vrs. Union of India, (2019) 15 SCC 1 referring to Kranti Associates (P) Ltd. Vrs. Masood Ahmed Khan, (2010) 9 SCC 496, wherein inter alia it has been summarised as follows:
"In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. A quasi judicial authority must record reasons in support of its conclusions. *** Reasons reassure that discretion has been exercised by the decision-maker on relevant grounds and by disregarding extraneous considerations. *** Reasons facilitate the process of judicial review by superior courts. *** Judicial or even quasi-judicial opinions these days can be as different as the Judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants‟ faith in the justice delivery system. *** Reasons in support of decisions must be cogent, clear and succinct. A pretence WP(C) No.21309 of 2024 Page 30 of 65 of reasons or "rubber-stamp reasons" is not to be equated with a valid decision-making process."
Therefore, the decision to block the portal registration cannot be said to have been validly made with rational application of mind.
11. Now that the work has been completed upon fresh tender, the counsel for the petitioner at the stage of hearing confined his argument to the effect that the portal registration is to be unblocked and the blacklisting is to be withdrawn so as to facilitate the petitioner to eke out her livelihood by participating in further tenders.
11.1. Be that as it may, this Court ventures to examine whether the modalities prescribed in Clause 23 of the Appendix has been followed for blocking portal registration. The reason for blocking of portal registration has been cited in Letter dated 22.08.2024 of the Chief Engineer-cum-Chief Manager (Tech), recital of which indicates that the agreement could not be executed due to non-furnishing of APS and ISD within specified period. In consequence thereto, the petitioner was blacklisted and debarred from participating in tenders by issue of Letter dated 11.12.2024. Nonetheless, the Chief Engineer-cum-Chief Manager (Tech) has blocked the portal registration vide Letter dated 22.08.2024. Thus it is seen that portal registration WP(C) No.21309 of 2024 Page 31 of 65 was blocked prior to taking measure to blacklist and debar the petitioner.
11.2. Meaningful reading of Clause 23 of the Appendix does not suggest that blocking of portal registration could precede blacklisting and debarment. It could not be demonstrated by the learned Additional Government Advocate that the procedure envisaged under Clause 22 and Clause 23 of the Appendix has been followed by the authorities concerned. Hence this Court is persuaded to hold that blocking of the portal registration and blacklisting with debarment of the petitioner are illegal, arbitrary and excess exercise of power by the authorities concerned.
12. It is next contended that initially the writ petition was filed with a prayer to issue mandamus to the opposite parties to unblock the portal registration inasmuch as the authorities did not adhere to the procedure laid down in Clause 23 of the Appendix notwithstanding the fact that the petitioner did turn up showing inclination to execute the agreement by fulfilling the condition of providing the security (APS and ISD). Nonetheless, the delay of two days due to circumstances prevailed was not appreciated appropriately by the authority and the authority wished to proceed to blacklist and debar the petitioner from participating in tenders during the pendency of the writ petition.
WP(C) No.21309 of 2024 Page 32 of 6512.1. This Court vide Order dated 03.10.2024 directed to file counter affidavit especially mentioning therein as to whether show cause notice was issued to the petitioner strictly in accordance with Clause 23.3 of the Appendix before blocking the portal registration. Further order was passed on 14.11.2024 as to whether the opposite parties intended to unblock the portal registration after completion of ―90 days‖, which is the minimum period for blocking the portal registration. Such concern of this Court can again be found from Order dated 26.03.2025. The writ petitioner sought for amendment of the writ petition to add prayer with respect to withdrawal of blacklisting and debarment, which came to be passed after filing of writ petition. Such prayer made in petition for amendment vide I.A. No.6084 of 2025 was allowed by Order dated 22.04.2025.
12.2. During the course of hearing of the present case, on the query with respect to such aspect as reflected in the aforesaid orders, the learned Additional Government Advocate fairly conceded that the counter affidavit is silent about exercise of power for blacklisting and debarment before blocking the portal registration and it is conceded that no further show cause notice specifically contemplating action for blacklisting and debarment was issued. Going through the counter affidavit of the opposite parties referring to Clauses 23 WP(C) No.21309 of 2024 Page 33 of 65 and 24 of the Appendix, it is merely stated at paragraph 8 that the petitioner was called upon by show cause letter dated 23.07.2024 to state why action deemed proper should not be initiated within fifteen days in accordance with Clause 23.3 of Appendix IX(A) and the petitioner failed to provide any satisfactory reply in its letter dated 30.07.2024. Perusal of reply dated 30.07.2024 of the petitioner to said show cause notice (Annexure-5) reveals that in response to Letter dated 15.07.2024 the petitioner furnished evidence regarding deposit made towards APS and ISD on 24.07.2024, and submitted prescription of physician demonstrating that the circumstances was beyond her control to deposit on or before 22.07.2024. Though assigning ―reason‖ is heartbeat of every decision making process, as restated in Nareshbhai Bhagubhai Vrs. Union of India, (2019) 15 SCC 1, nevertheless, the impugned Letter dated 11.12.2024 does not ascribe any reason as to why the Chief Engineer, Drainage discarded such evidence and without following the procedure laid down in Clause 23 proceeded not only to blacklist the petitioner, but also to debar her from participating in tenders for three years for the delay in furnishing security.
12.3. In Shri Artatran Bhuyan Vrs. State of Odisha, 2025 (II) ILR-CUT 1042 it has been held as follows:
WP(C) No.21309 of 2024 Page 34 of 65"10. It is beyond cavil of doubt that a fundamental principle embraced in a civilized jurisprudence is that a person cannot be condemned nor can be affected by any action without affording a reasonable opportunity to defend himself. The person against whom any action is taken affecting his right is entitled to know the reason for initiation of such proceeding, so that an adequate opportunity is given to him to respond. It is, therefore, essential to issue a notice containing the grounds on which the authority intended to proceed against the person with clarity, precision and explicit as an ambiguous narration of grounds is regarded as denial of an opportunity. The aforementioned principles assume greater importance in the context of blacklisting of a person as it invites not only civil death, but debarment of a person an opportunity to participate in the matter of a public contract. In this regard, the Courts of the country have highlighted the implied principle of rule of law that every order having an impact on civil consequences should adhere to the principles of natural justice. It is thus an elementary principle of natural justice that a party who suffers the adverse consequences of deprivation to participate in public contract is afforded with adequate and reasonable opportunity to defend.
11. Once the statutory provisions are placed for blacklisting of a person or in other words debarment from participating in a contractual field with the Government or its instrumentalities, the strict adherence thereto should be ensured. Therefore, the notice to show cause must clearly and explicitly WP(C) No.21309 of 2024 Page 35 of 65 contain the incident, which led to the initiation of the proceeding in pursuit of blacklisting a person from participating in a future tender. One of the cardinal principles in this regard is an adequate opportunity to defend should not only be ensured, but seems to be ensured by providing all the materials which forms the foundation of misdeeds or misbehavior or an act contemplated in the statutory provision.
12. In Grosons Pharmaceuticals (P) Ltd. Vrs. State of U.P. & Ors., (2001) 8 SCC 604, the apex Court was considering a case where the contractor who was engaged in a small scale industry of manufacturing and selling drugs was found to have committed several irregularities and the vigilance report corroborated the same. The show cause notice was issued and adequate opportunity to defend was provided and the challenge was made on the ground of non-adherence of the principles of natural justice. The challenge was further founded upon the non-speaking order, which was found by the apex Court untenable on the facts discerned from the record in the following paragraphs:
„2. Learned counsel appearing for the appellant, urged that seeing the nature and seriousness of the order passed against the appellant, the respondent ought to have supplied all the materials on the basis of which the charges contained in the show cause notice were based along with show cause notice and in the absence of supply of materials, the order impugned is against the principles of natural justice. We do not find any merit in this WP(C) No.21309 of 2024 Page 36 of 65 contention. Admittedly, the appellant has only contractual relationship with the State government and the said relationship is not governed by any statutory Rules. There is no statutory rule which requires that an approved contractor cannot be blacklisted without giving an opportunity of show cause. It is true that an order blacklisting an approved contractor results in civil consequences and in such a situation in the absence of statutory rules, the only requirement of law while passing such an order was to observe the principle of audi alteram partem which is one of the facet of the principles of natural justice. The contention that it was incumbent upon the respondent to have supplied the material on the basis of which the charges against the appellant were based was not the requirement of principle of audi alteram partem. It was sufficient requirement of law that an opportunity of show cause was given to the appellant before it was blacklisted. It is not disputed that in the present case, the appellant was given an opportunity to show cause and he did reply to the show cause which was duly considered by the State Government. We are, therefore, of the view that the procedure adopted by the respondent while blacklisting the appellant was in conformity with the principles of natural justice.
3. It was then urged that the impugned order blacklisting the appellant does not contain any reasons and, therefore, the order is invalid. We do not find any merit in the submission. The High Court summoned the entire record and WP(C) No.21309 of 2024 Page 37 of 65 found that elaborate reasons were recorded by the State Government while passing the order blacklisting the appellant. The High Court further recorded a positive finding that the State Government has passed the impugned order after recording elaborate reasons and summary of which is contained in the impugned order.‟
13. In the case of State of Odisha and Ors. Vrs. Panda Infraproject Ltd., (2022) 4 SCC 393, the order of blacklisting debarring the participant in a bid for any work undertaken by the Government of Odisha for an indefinite period was challenged by the contractor on two-fold grounds. Firstly, there was a violation of the principles of natural justice and secondly, the permanent debarment offended the principle of proportionality. In the said given case, the contractor was awarded a contract for construction of a flyover over the railway level crossing and a ten-metre slab of the flyover collapsed at the level crossing, which resulted in loss of one life and the injuries to 11 other persons. A high-level inquiry was conducted and a committee in the comprehensive report found that the said contractor did not submit the formwork design and adopted his own arrangement, which led the collapse of a junk from the under-construction flyover. The report further revealed that the quality assurance has not been maintained in terms of the codes and manuals as well as agreement and a lot of discrepancies in the workmanship were found. A show-cause notice was issued, which was duly replied by the contractor and ultimately, the WP(C) No.21309 of 2024 Page 38 of 65 contractor was blacklisted with immediate effect for rest of his life.
13.1.The apex Court, in the backdrop of the gravity of a misdeed, held that an order of blacklisting after service of show-cause notice and reply duly filed meets the requirement of the natural justice and, therefore, it cannot be perceived that the authorities proceeded with predetermined mind. However, the apex Court on the doctrine of proportionality held that the blacklisting for rest of the period or permanently is too harsh and reduced the period of blacklisting to five years from the date of the order of blacklisting."
12.4. In the case of Kwick Soft Solutions Pvt. Ltd., Tamilnadu Vrs. State of Odisha, W.P.(C) No.24026 of 2024, vide Order dated 21.08.2025 this Court observed as follows:
"3. It is no doubt true that the debarment or blacklisting of any individual or an entity to participate in a tender process is akin to a "civil death" as a person is deprived of entering into any commercial relationship with the public or the Government. Any order of debarment or blacklisting is always regarded as a stigma attached to the commercial dealing with the Government and in effect debars from a person to have the award of the Government contracts. The debarment or blacklisting has an effect of bringing a person from the privilege and advantage of entering into a lawful relationship with the Government or its instrumentalities and above all impacts the livelihood. In effect such debarment has a far-WP(C) No.21309 of 2024 Page 39 of 65
reaching consequence in public contracts and, therefore, the authority must view the misconduct more scrupulously before taking a decision of debarment/blacklisting. The misdeed must be of such magnitude which in ordinary sense is not expected from a reasonable man. It may at times should be judged on the parameter of unfair means or illegal gain. The minimal or accidental omission or mistake, which was subsequently rectified, if it does not, cause any prejudice or hinders in its invocation as the Bank remain committed to the person, in whose favour the Bank Guarantee is issued to honour the same, the authority must view the mistake in such perspective. Mere non-incorporation of UIN of the Odisha Police and incorporation of the PAN number of one of the Directors of the petitioner- Company mistakenly neither invalidates the said Bank Guarantee nor put any invasion into its invocation by the Odisha Police in the event the same is warranted from the conduct of the petitioner. Apart from the same, the said ministerial mistake was rectified by the Bank issuing the Bank Guarantee, which does not in our view invites the civil death as held by the Apex Court in the case of Gorkha Security Services Vs. Government (NCT of Delhi) and others, (2014) 9 SCC 105 in the following:
„16. It is a common case of the parties that the blacklisting has to be preceded by a show- cause notice. Law in this regard is firmly grounded and does not even demand much amplification. The necessity of compliance with the principles of natural justice by giving the opportunity to the person against whom action of blacklisting is sought to be taken has a valid WP(C) No.21309 of 2024 Page 40 of 65 and solid rationale behind it. With blacklisting, many civil and/or evil consequences follow. It is described as "civil death" of a person who is foisted with the order of blacklisting. Such an order is stigmatic in nature and debars such a person from participating in Government tenders which means precluding him from the award of Government contracts.‟ ***"
12.5. Having thus the legal perspective with respect to blacklisting and debarment, fair reading of Clause 23.3 of the Appendix 2 gives rise to conceive that it is the 2 Clause 23 of the Appendix IX(A) of Volume-II of OPWD Code reads as follows:
"23. Blocking of portal registration.-- 23.1. If the Registration Certificate of the Contractor is cancelled/ suspended by the registering authority/blacklisted by the competent authority his portal registration shall be blocked automatically on receipt of information to that effect. 23.2. The portal registration blocked in the ground mentioned in the above Para 23.1 shall be unblocked automatically in receipt of revocation order of cancellation/suspension/blacklisting from the concerned authority.
23.3. The Officer Inviting Tender shall make due inquiry and issue show cause notice to the concerned contractor who is turn shall furnish his reply, if any, within a fortnight from the date of issue of show cause notice. Thereafter the Officer Inviting Tender is required to issue an intimation to the defaulting bidder about his unsatisfactory reply and recommend to the Chief Manager (Tech.) for blocking of portal registration within 10 days of intimation to the defaulting bidder regarding his unsatisfactory reply with intimation to the Registering Authority and concerned Chief Engineer/Heads of Office if any of the following provisions are violated. 23.3.1. Fails to furnish original Technical documents before the designated officer within the stipulated date and time.
23.3.2. Backs out from the bid on any day after the last day of receipt of tender till expiry of the bid validity period.
23.3.3. Fails to execute the agreement within the stipulated date. 23.3.4. If any of the information furnished by the bidder is found to be false/fabricated/bogus.
Accordingly, the Officer Inviting Tender shall recommend to the Chief Manager (Tech.), State Procurement Cell, Odisha for blocking of portal registration of bidder and simultaneously action shall also be initiated by Officer Inviting Tender for blacklisting as per Appendix-XXXIV of OPWD Code, Volume-II."WP(C) No.21309 of 2024 Page 41 of 65
necessary concomitant factor for the Officer Inviting Tender to make due inquiry and issue show cause notice to the concerned contractor, who in turn, shall furnish his reply, if any, within a fortnight from the date of issue of show cause notice. Thereafter the Officer Inviting Tender is required to issue an intimation to the defaulting bidder about his unsatisfactory reply and recommend to the Chief Manager (Tech.) for blocking of portal registration within ten days of intimation to the defaulting bidder regarding his unsatisfactory reply with intimation to the Registering Authority and concerned Chief Engineer/Heads of Office if any of the following provisions are violated. If the conditions laid down therein are found to exist, then the Officer Inviting Tender shall recommend to the Chief Manager (Tech.), State Procurement Cell, Odisha for blocking of portal registration of bidder and simultaneously action shall also be initiated by Officer Inviting Tender for blacklisting as per Appendix-XXXIV3 of the OPWD Code, Volume-II.
3 Clause XXXIV of the Appendix IX(A) of Volume-II of OPWD Code reads as follows:
"Codal Provisions for Blacklisting Contractors.-- A. The Chief Engineer of a department may blacklist a contractor with the approval of concerned Administrative Department on the following grounds:
(a) Misbehaviour/threatening of departmental and supervisory officers during execution of work/tendering process.
(b) Involvement in any sort of tender fixing.
(c) Constant non-achievement of milestones on insufficient and imaginary grounds and non-adherence to quality specifications despite being pointed out.WP(C) No.21309 of 2024 Page 42 of 65
(d) Persistent and intentional violation of important conditions of contract.
(e) Security consideration of the State i.e., any action that jeopardizes the security of the State.
(f) Submission of false/fabricated/forged documents for consideration of a tender.
(g) Non-submission of Additional Performance Security (APS) within stipulated period in pursuance to Works Department Office memorandum No 14299/W, dated 03 10.2017.
The Divisional Officer shall report to the Chief Engineer if in his opinion any of the above wrong has/have been committed by any contractor. On receipt of such a report from the Divisional Officer the Chief Engineer shall make due enquiry and if considered necessary, issue show cause notice to the concerned contractor who in turn shall furnish his reply, if any, within a fortnight from the date of receipt of the show cause notice. Therefore, if the Chief Engineer is satisfied that there is sufficient ground, he shall blacklist the concerned contractor with the approval of the Administrative Department. After issue of the order of blacklisting of the said contractor, the Chief Engineer shall intimate to all Chief Engineers of other Administrative Departments, the Registering Authority as provided under Rule 4 of PWD Contractor‟s Registration Rules, 1967 and Department of Information & Technology for publication in web site of State Government.
B. The registration certificate of blacklisted contractor shall remain automatically suspended while allowing him to complete all his ongoing work(s) unless otherwise rescinded by the competent authority on grounds of breach of conditions of agreement.
C. The name(s) of partners and allied concerns of the blacklisted contractors shall also be communicated to all concerned. Care shall be taken to see that the contractor blacklisted and his partners do not transact any business with Government under a different name or title. D. Once the blacklisting order is issued it shall not be revoked ordinarily unless:
(i) On review in later date, the Chief Engineer is of the opinion that there is sufficient justification to revoke the order of blacklisting, or
(ii) In respect of the same offense, the accused has been honourably acquitted by court of law.
The concerned Chief Engineer will obtain order from the concerned Administrative Department before revoking the order of blacklisting. The order of revocation shall also be communicated to all concerned. E. The Chief Engineer and Administrative Department shall maintain a list of blacklisted contractor. Updated list of blacklisted contractors shall be communicated to all concerned by the Chief Engineers on a quarterly basis.
F. Checklist as per Annexure-I, shall be furnished by the concerned Chief Engineer for blacklisting the contractor. G. Checklist as per Annexure-II, shall be furnished by the concerned Chief Engineer for revoking blacklisting order. Explanation:
(i) Action taken under this rule shall be in addition to any action taken under Rule 11 of PWD Contractor‟s Registration Rules,1967 (Appendix-VIII of OPWD Code, Vol.-II). On revocation of order of blacklisting, registration certificate of the contractor shall valid automatically, if not otherwise become invalid which shall be recorded in the registration certificate by the revoking authority.WP(C) No.21309 of 2024 Page 43 of 65
12.6. The opposite parties in their counter affidavit have not put forth any material affirming that the Chief Engineer has framed any opinion on the existence of any of the grounds enumerated in sub-items (a) to (g) of Item A before taking decision on the report regarding blacklisting by the Divisional Officer. The learned Additional Government Advocate failed to substantiate the stance of the opposite parties in blacklisting the petitioner so far as recording of satisfaction of the Chief Engineer and his independent enquiry as envisaged in Appendix XXXIV. By way of further counter affidavit dated 23.06.2025 sworn to by the Executive Engineer, Drainage Division it is affirmed that "the petitioner was given show cause (notice) dated 23.07.2024 for violation for non-compliance of deposit the APS and ISD in stipulated time and also said letter the petitioner was called upon to explain as to why action deemed proper as per Codal Provisions shall not be initiated". Such affirmation reveals that the authority contemplated further initiation of appropriate proceeding, but this does not disclose whether decision for blacklisting and debarment would be taken. For this purpose no show cause notice mentioning such aspect is stated to have been issued. Though it is further asserted in paragraph
(ii) The ground mentioned above for blacklisting of contractor shall be deemed to be deleted from the grounds for cancellation/suspension of registration certificate U/R-11(a) of PWD Contractor‟s Registration Rules, 1967 (Appendix-VIII of OPWD Code, Vol.-II)."
WP(C) No.21309 of 2024 Page 44 of 6512 of said counter affidavit that provisions of Appendix XXXIV of Volume-II of OPWD Code has been followed, no document is enclosed evincing that the procedure required to be adopted, e.g., recording of opinion and satisfaction, has been adhered to. The safeguards contemplated in such provision are a necessary concomitant factor to protect the contractor from arbitrary actions. Failure to demonstrate that before taking decision leading to civil and evil consequences, the method and modality prescribed in the OPWD Code have been observed, such decision of the authority stands vitiated.
12.7. Since decision to blacklist a contractor would tantamount to awarding ―civil death‖ leading to evil consequences on the anvil of Articles 14, 21 and 19(1) of the Constitution of India, as required under item A envisaged under Appendix XXXIV, the Chief Engineer is required to not only form opinion, but also conduct enquiry and record his satisfaction. Further it is obligated upon him to issue show cause notice. It is not specifically demonstrated by the opposite parties that the Chief Engineer has followed the modality prescribed in said Appendix.
12.8. Nevertheless, record reveals that the decision of blacklisting succeeded blocking of portal vide e-mail dated 16.08.2024 (Annexure-7). This action of the WP(C) No.21309 of 2024 Page 45 of 65 Executive Engineer as communicated to the Chief Engineer-cum-Chief Manager (Technical) is contradictory and runs counter to the Codal Provisions. While the show cause notice dated 23.07.2024 discloses that it is issued by the Executive Engineer, Drainage Division (Annexure-4), the final decision has been taken by the Chief Engineer, Drainage as is apparent from the impugned Letter dated 11.12.2024 (Annexure-9). Such course is not only illegal, but also in gross violation of the Codal Provisions envisaged under the OPWD Code. Said communication containing the decision of blacklisting and debarment of the petitioner for three years from participating in bidding, does not disclose that the enquiry has been conducted by the Chief Engineer and satisfaction to take drastic action has been recorded in writing indicating that the grounds enumerated under Item A of Appendix XXXIV existed.
12.9. Such safeguard for the petitioner and requirement obligating the authority concerned cannot be said to be empty formality and do not exist in vacuum. In the case at hand, the petitioner immediately after recovering from sickness responded and fulfilled the conditions laid in the letter dated 15.07.2024 and turned up showing intention to sign the agreement on 25.07.2024. However, the counter affidavit is silent about the satisfaction of the authority concerned with respect to reply submitted WP(C) No.21309 of 2024 Page 46 of 65 by the petitioner on 30.07.2024 which contained enclosures like ―two numbers of confirmation of deposits and medical prescription dated 15.07.2024‖. Therefore, this Court finds that the authorities have acted arbitrarily and dehors the record. Even though such reply was given to the authority concerned on 30.07.2024, the authorities took more than four months to issue Letter dated 11.12.2024 for taking a decision of blacklisting and debarring the petitioner, that too after blocking the portal registration contrary to procedures laid in Clause 23.1 and Clause 23.2. Cursory glance at Clause 23.2 of the Appendix makes it abundantly clear that the portal registration can be blocked on the ground mentioned in Clause 23.1, i.e., if the registration certificate is cancelled or suspended by the registering authority/blacklisted by the competent authority. For the cavalier and lackadaisical manner of performance of the authorities concerned the petitioner appears to have been prejudiced. This Court deprecates the action of the authorities having proceeded with the matter whimsically and without conscientious application of mind.
12.10. This Court now proceeds to examine the proportionality of penal action having nexus to the circumstances obtained on record. In Ram Kumar WP(C) No.21309 of 2024 Page 47 of 65 Agrawal Engineers Pvt. Ltd. Vrs. State of Odisa, 2022 SCC OnLine Ori 804, this Court observed as follows:
"20. It is true that blacklisting affects the reputation of a person put on the blacklist, it is not limited to his dealings with the Government but also in dealings with private firms and amounts to affecting his business prospects. A blacklist order leads to civil consequences. Such an order must not be passed by any authority without affording due opportunity of being heard to the person likely to be affected by such an order.
21. In other jurisdictions like in USA and UK, the legal position governing blacklisting of suppliers is no different. In USA, instead of using the expression „Blacklisting‟, the term „debarring‟ is used by the Statutes and the Courts. The Federal Government considers „suspension and debarment‟ as a powerful tool for protecting taxpayer resources and maintaining integrity of the processes for federal acquisitions. Comprehensive guidelines are, therefore, issued by the Government for protecting public interest from those contractors and recipients who are non-responsive, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily.
22. It is an undenying fact that the authority must act in fairness while putting a person in the blacklist. The principles of natural justice are attracted in case a person is to be deprived of entering into business relationship, particularly so when such a person has reasonable expectation of making a gainful WP(C) No.21309 of 2024 Page 48 of 65 contract with the Government. The Government or instrumentalities of State are under a constitutional obligation not to discriminate. They owe a duty towards citizens to act fairly, without fear or favour. If the State unfairly puts a party on blacklist, it will amount to denial of an equal opportunity of being able to compete with his adversaries. Blacklisting any person would mean deprivation of an equal opportunity of competing with others. Thus, where valuable rights are sought to be taken away by the Government in depriving of a person dealing with it, the writ Courts cannot act as mere spectator and shall intervene to do justice to the aggrieved party. Another aspect of putting a party on blacklist is the stigma attached with it, besides depriving him of rightful gains which he would have made from the contract had he not been put on blacklist. A situation may arise when the party put on blacklist from executing the contracts in hand. In such a case, it not only puts a stigma on the contractor but also affects his civil rights. Further, plethora of judgments of the apex Court and High Courts have unequivocally resonated and reminded the employers that blacklisting the contractor cannot be for an indefinite period. The order by which a contractor is blacklisted must mention the period for which he is put on the blacklist because blacklisting cannot debar a party forever as a registered contractor.
***
24. Although the „Doctrine of Proportionality‟ has been dealt with as a part of the Wednesbury‟s principle, the Courts have adopted a different WP(C) No.21309 of 2024 Page 49 of 65 position when it comes to the judicial intervention in terms of judicial review. It has been held that the principle entails the reasonableness test with a heightened scrutiny. In other words, to apply this doctrine, not only the decisions have to be within the limits of reasonableness, but only, there has to be a balance between the advantage and disadvantage in the outcome that has been achieved through the administrative action. Therefore, the extent of judicial review is more intense and greater on account of „proportionality‟ test than the „reasonableness‟ test. Further, the apex Court, while applying the rule of proportionality, will think about the public and individual interest in the matter which is not done while applying the Wednesbury‟s principle of unreasonableness. In Gohil Vishvaraj Hanubhai and Ors. Vrs. State of Gujarat and Ors, (2017) 13 SCC 621 it is held in paragraphs 24 to 27 thus:
„24. The next question is whether the impugned decision could be sustained judged in the light of the principles of „Wednesbury unreasonableness‟. In the language of Lord Diplock, the principle is that „a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it‟. Having regard to the nature of the allegations and the prima facie proof indicating the possibility of occurrence of large scale tampering with the examination process which led to the impugned action, it WP(C) No.21309 of 2024 Page 50 of 65 cannot be said that the impugned action of the respondent is „so outrageous in its defiance of logic‟ or „moral standards‟. Therefore, the 2nd submission of the appellant is also required to be rejected.
25. We are left with the 3rd question--
whether the magnitude of the impugned action is so disproportionate to the mischief sought to be addressed by the respondents that the cancellation of the entire examination process affecting lakhs of candidates cannot be justified on the basis of doctrine of proportionality.
26. The doctrine of proportionality, its origin and its application both in the context of legislative and administrative action was considered in some detail by this Court in Om Kumar & Others Vrs. Union of India, (2001) 2 SCC 386. This Court drew a distinction between administrative action which affects fundamental freedoms under Articles 19(1) and 21 and administrative action which is violative of Article 14 of the Constitution of India. This Court held that in the context of the violation of fundamental freedoms;
„54. *** the proportionality of administrative action affecting the freedoms under Article 19(1) or Article 21 has been tested by the courts as a primary reviewing authority and not on the basis of Wednesbury principles. It may be that the courts did not call this proportionality but it really was. This Court, thereafter took WP(C) No.21309 of 2024 Page 51 of 65 note of the fact that the Supreme Court of Israel recognised proportionality as a separate ground in administrative law to be different from unreasonableness.
27. It is nobody‟s case before us that the impugned action is violative of any of the fundamental freedoms of the appellants. We are called upon to examine the proportionality of the administrative action only on the ground of violation of Article 14. It is therefore necessary to examine the principles laid down by this Court in this regard. ***‟
25. It is also well settled that even though the right of the writ petitioner is in the nature of a contractual right, the manner, the method and the motive behind the decision of the authority whether or not to enter into a contract is subject to judicial review on the touchstone of fairness, relevance, natural justice, non- discrimination, equality and proportionality. All these considerations that go to determine whether the action is sustainable in law have been sanctified by judicial pronouncements of the Supreme Court and this Court which are of seminal importance in a system that is committed to the rule of law. A fair hearing to the party being blacklisted thus becomes an essential pre- condition for a proper exercise of the power and a valid order of blacklisting. In addition, the State has to examine the principle of proportionality while examining the instant case since the blacklisting period is not specified."
WP(C) No.21309 of 2024 Page 52 of 6512.11. In Daffodills Pharmaceuticals Ltd. Vrs. State of Uttar Pradesh, (2020) 18 SCC 550, it is held that the blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist. It has been stated as follows:
"14. The decisions in Erusian Equipments and Chemicals Ltd. Vrs. State of West Bengal, (1975) 1 SCC 70 and Raghunath Thakur Vrs. State of Bihar, (1989) 1 SCC 229 as well as later decisions have now clarified that before any executive decision maker proposes a drastic adverse action, such as a debarring or blacklisting order, it is necessary that opportunity of hearing and representation against the proposed action is given to the party likely to be affected. This has been stated in unequivocal terms in Raghunath Thakur (supra) as follows:
„20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the WP(C) No.21309 of 2024 Page 53 of 65 person concerned should be given an opportunity to represent his case before he is put on the blacklist.‟ In Southern Painters Vrs. Fertilizers & Chemicals Travancore Ltd., 1994 Supp (2) SCC 699, the grievance was with respect to unilateral deletion of the petitioners‟ name from the list of approved contractors, maintained by the public sector agency. This court held that such an action was arbitrary:
„11. The deletion of the appellant‟s name from the list of approved contractors on the ground that there were some vigilance report against it, could only be done consistent with and after due compliance with the principles of natural justice. That not having been done, it requires to be held that withholding of the tender form from the appellant was not justified. In our opinion, the High Court was not justified in dismissing the writ petition.‟ ***"
12.12. In B.S.N. Joshi & Sons Ltd. Vrs. Nair Coal Services Ltd., (2006) 11 SCC 548, the Hon'ble Supreme Court held that declaration of a bidder as defaulter must be preceded by decision. A declared defaulter should be an actual defaulter not an alleged defaulter.
12.13. In Kulja Industries Ltd. Vrs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited, (2014) 14 SCC 731, the Hon'ble Supreme Court reiterated the principle for blacklisting/debarment of contractor.
WP(C) No.21309 of 2024 Page 54 of 6512.14. In Vetindia Pharmaceuticals Ltd. Vrs. State of Uttar Pradesh, (2021) 1 SCC 804, it has been held that before blacklisting/debarment, a show cause notice should be issued and the form and content of the show cause notice mandatorily requires mentioning that action of blacklisting is proposed or it should be such that clear inference possibly be drawn to this effect and can be discernible from the notice.
12.15. As is evident from the aforesaid principles as laid down in UMC Technologies Private Limited Vrs. Food Corporation of India, (2020) 13 SCR 1175 and the previous precedents rendered on the subject, it is imperative that the SCN sets out with sufficient clarity the material grounds on which the debarment is proposed. In fact, the very purpose of the SCN is to enable the contractor to respond to the charge as levelled and furnish an explanation as to why it should not be debarred. The ultimate order of debarment, thus, cannot be founded on grounds which were not even conveyed to the contractor and in respect of which it had never been placed on notice. The Court is thus of the firm opinion that notwithstanding the fact that the power to blacklist is one which inheres in the Government or its organs when entering into the commercial arena, the same does not absolve them from WP(C) No.21309 of 2024 Page 55 of 65 adhering to the fundamental principles of natural justice.
12.16. In UMC Technologies Private Limited Vrs. Food Corporation of India, (2020) 13 SCR 1175 it is observed that, "14. Specifically, in the context of blacklisting of a person or an entity by the state or a state corporation, the requirement of a valid, particularized and unambiguous show cause notice is particularly crucial due to the severe consequences of blacklisting and the stigmatization that accrues to the person/entity being blacklisted. Here, it may be gainful to describe the concept of blacklisting and the graveness of the consequences occasioned by it. Blacklisting has the effect of denying a person or an entity the privileged opportunity of entering into Government contracts. This privilege arises because it is the State who is the counter-party in government contracts and as such, every eligible person is to be afforded an equal opportunity to participate in such contracts, without arbitrariness and discrimination. Not only does blacklisting takes away this privilege, it also tarnishes the blacklisted person‟s reputation and brings the person‟s character into question. Blacklisting also has long-lasting civil consequences for the future business prospects of the blacklisted person."
12.17. As is evident from the principles so laid down it is imperative that the show cause notice need to set out with sufficient clarity the material grounds on which the WP(C) No.21309 of 2024 Page 56 of 65 blacklisting and debarment is proposed. Unequivocally the purpose of show cause notice is to enable the contractor/petitioner to respond to the charges levelled against her and furnish an explanation as to why it should not be blacklisted and debarred. In the present case the ultimate decision of blacklisting and debarment vide Letter dated 11.12.2024 taken in pursuance of so- called show cause notice in Letter dated 15.07.2024 cannot be founded on grounds which were not conveyed to the petitioner and in respect of which it had never been placed on notice. This Court is, therefore, of the firm view that notwithstanding the fact that the power of blacklisting and debarment is inhered with the authority concerned under the OPWD Code, while exercising such power it is fundamental and foundational to adhere to principles of natural justice.
12.18. It would suffice to have reference to an imprimatur of the Hon'ble Supreme Court of India in Techno Prints Vrs. Chhattisgarh Textbook Corporation, (2025) 3 SCR 208 = 2025 INSC 236:
"29. However, what is important for us to say is that when there are guiding principles explained by this Court as to when and in what circumstances a blacklisting order can be passed then, in our opinion such principles should also be borne in mind by the Authority at the time of issuing a show cause notice. We WP(C) No.21309 of 2024 Page 57 of 65 say so because in the facts of a given case like the one on hand, on the face of which it could be said that there was no good reason for the Authority to issue a show cause notice calling upon the contractor why he should not be blacklisted. Why ask the contractor to face the proceedings when applying the aforesaid principles, the issue of show cause notice would be an empty formality. We are saying all this keeping in mind the peculiar facts of this case."
12.19. In the case at hand, the contents of the show cause notice dated 23.07.2024 does not disclose as to the nature of action, like blacklisting and debarment, to be taken on the basis of alleged eventuality. When there was substantial compliance made by the petitioner and plausible explanation-- as prescription of the doctor is not disputed or discarded-- was given demonstrating ill health, a prudent person/noticee would not ever comprehend such drastic step by the authorities concerned. The authorities have not discussed as to why the reply submitted by the petitioner found to be unsatisfactory despite production of the evidence showing ill health preventing her to comply with the tenor of the Letter dated 15.07.2024. However, record reveals that the petitioner has complied with the requirement in terms of said letter but with two days' delay. Without appreciating the evidence on record and in absence of impeaching such document showing sickness of the petitioner during the relevant period, WP(C) No.21309 of 2024 Page 58 of 65 drastic decision of blacklisting and debarment has been taken, that too conspicuously after four months from the date of submission of reply/explanation for the delay in deposit of APS and ISD and the action of blocking of portal registration preceded such decision of blacklisting and debarment. In absence of satisfaction being recorded and forming of opinion, the Chief Engineer, Drainage transgressed his authority and it can safely be construed that in this case, when the authority took action of blacklisting/debarment of the petitioner for a period of three years, the show cause notice had not fulfilled the requirement of provisions of the OPWD Code as indicated above.
12.20. No assertion or affirmation is found in the counter affidavit to remotely even to suggest that the Chief Engineer while taking decision to blacklist and debar the petitioner did not comply with the requirements envisaged in Appendix IX(A) read with Appendix XXXIV of Volume-II, OPWD Code. In absence of such a recording of satisfaction and failure to assign reason for discarding or ignoring evidence adduced for the delay in furnishing the security (APS and ISD), the entire proceeding stands vitiated and is not sustainable in the eye of law.
13. The counsel for the petitioner drew attention to an affidavit sworn to by the Executive Engineer, Drainage WP(C) No.21309 of 2024 Page 59 of 65 Division, Cuttack, bringing on record the fact that the petitioner in view of Order dated 26.03.2025 filed an Application dated 03.04.2025 enclosing therewith receipt showing deposit of Rs.10,000/- for consideration of unblocking portal registration in terms of Clause 24 of the Appendix. It is affirmed in the said affidavit that "since the petitioner has already been declared blacklisted, at this juncture, it is not possible to unblock the petitioner from the portal even after completion of ninety days". As it appears said authority is not well- acquainted with the developments carried out in the Codal provision. Maybe this. The authority instead of acting pragmatically, on an apparent pedantic approach asserted as if he was helpless to consider unblocking the portal registration and blacklisting with debarment.
13.1. At this juncture Clause 24.3 can fruitfully be taken note of, which is extracted hereunder:
"24.3. The minimum period of blocking of Portal Registration shall in no case be less than 180 days. After blocking of Portal Registration, the Contractor whose Portal Registration has been blocked may file application to the concerned officer inviting tender showing sufficient ground for unblocking of his portal registration along with a Treasury Challan showing deposit of Rs. 10,000/- (Rupees ten thousand) only (non-refundable) under the head of accounts „0059- Public Works‟ as processing fees. The Officer inviting tender shall forward the application filed by the WP(C) No.21309 of 2024 Page 60 of 65 contractor to the Chief Manager (Tech.), State Procurement Cell."
13.2. On a perspicuous analysis of the materials on record and taking note of ratio laid down by the Hon'ble Supreme Court as well as this Court, having found the actions of blocking the portal registration and blacklisting with debarment of the petitioner for three years from participating in tender process illogical, irrational and not in conformity with the Codal provisions, such decision falls foul of doctrine of proportionality and bereft of adherence to the principles of natural justice. This Court is persuaded to believe on analysis of the documents enclosed to pleadings that the failure on the part of the petitioner in responding to Letter dated 15.07.2024 within stipulated period was beyond her control for the reason ascribed therefor and the bona fide is perceived from the conduct of the petitioner who deposited the amounts towards APS and ISD on 24.07.2024. Such default on the part of the petitioner is not of such magnitude that it would attract any of the grounds leading to sufferance of penal consequences spelt out in the Appendices appended to the OPWD Code. This Court finds the decision of the authority in blacklisting and debarring having no reasonable and rational nexus with the default of the petitioner and the reason assigned is jejune one.
WP(C) No.21309 of 2024 Page 61 of 6513.3. In this connection it may be beneficial to have reference of the doctrine of proportionality as stated in Shri Artatran Bhuyan Vrs. State of Odisha, 2025 (II) ILR-CUT 1042:
"15. On the doctrine of proportionality, the judgment of the apex Court in case of Coimbatore District Central Cooperative Bank Vrs. Coimbatore District Central Cooperative Bank Employees Association reported in (2007) 4 SCC 669 can be gainfully applied wherein it is held that though the doctrine of proportionality is a principle of the administrative law, but that does not give unhindered power to the authorities to use a „sledge-hammer to crack a nut‟. It is further highlighted that the punishment should not be too extreme than the gravity of crime as the writ court seldom interferes with the imposition of penalty in the form of blacklisting provided the method or a manner in which a decision-maker has ordered his priorities in reaching a conclusion or arriving at a decision.
16. It is to be borne in mind that the order of blacklisting not only causes prejudice to the commercial person in praesenti but have a dent to carry for all time to come having a resultant effect of a civil death.
17. Precisely for such reason, the apex Court in case of State of Odisha and Ors. Vrs. Panda Infraproject Ltd., (2022) 4 SCC 393 reduced the period of blacklisting having found opposed to the doctrine of proportionality despite the grave and serious lapses found against the contractor and reduced the same WP(C) No.21309 of 2024 Page 62 of 65 to five years with an avowed object of avoiding the permanent civil death in a commercial field."
13.4. Viewed thus, when doctrine of proportionality is applied to the present fact-situation, this Court is left with no other possible opinion than to hold that the decision of the authority to blacklist and debar the petitioner for three years from participating in the bid is not outcome of conscientious judicious application of mind.
Conclusion:
14. Having diligently considered the material available on record alongside the legal position as set forth by the Courts, the decision of the authority in blacklisting and debarring the petitioner from participating in bidding for three years coupled with blocking of portal registration cannot be countenanced. A fortiori, an order of blacklisting with debarment cannot be made merely because such a power is conferred under the Codal Provision and vested in the authority. From the discussions made hereinabove it is evidently clear that the opposite parties have proceeded to blacklist and debar the petitioner after blocking the portal registration in the manner unknown to law and on wholly untenable grounds. The opposite parties have based their action to debar the petitioner on the grounds which did not even form part of the show cause notice.
WP(C) No.21309 of 2024 Page 63 of 6514.1. Even as it is found that the petitioner has made application dated 03.04.2025 by depositing requisite amount for consideration of unblocking the portal registration, upon quashing the decision for blacklisting and debarment, there is no impediment for the authority concerned to do the needful. But a caveat, since this Court finds that the decision for blacklisting and debarment vide Letter dated 11.12.2024 is without authority and in transgression of Codal Provisions offending doctrine of proportionality; and in addition thereto, it is in violation of principles of natural justice, the authority concerned is required to refund such amount. The discussions made in the foregoing paragraphs with reference to the documents placed by both the parties do not create any ambiguity that the petitioner has been treated unjustly without her fault. The decision in Letter dated 11.12.2024 is inexplicable and the action of the authorities is found to be offending provisions of Articles 14, 19(1)(g) and 21 of the Constitution of India.
14.2. Being conscious of the parameters of judicial review, this Court finds on the facts and in the circumstances of instant case applied by the legal perspective that the impugned decision contained in the Letter dated 11.12.2024 fails to meet the basic postulates of non- arbitrariness and proportionality. Tested with the WP(C) No.21309 of 2024 Page 64 of 65 touchstone of principles set forth by the Courts as taken note of hereinbefore the decision of the opposite parties to blacklist and debar the petitioner for three years for two days' delay in deposit of APS and ISD after blocking the portal registration cannot be sustained.
14.3. Ergo, under the aforesaid premises, this Court directs the opposite parties to unblock the portal registration and refund of the amount deposited for such purpose within a period of ten days hence.
15. With the aforesaid observation and directions, the writ petition stands disposed of. As a result of disposal of the writ petition, pending Interlocutory Application(s), if any, shall stand disposed of, but in the circumstances there shall be no order as to costs.
I agree.
(HARISH TANDON) (MURAHARI SRI RAMAN)
CHIEF JUSTICE JUDGE
Signature Not
Verified
Digitally Signed
Signed by: ASWINI KUMAR
SETHY
Designation: Personal Assistant
(Secretary in-charge) High Court of Orissa, Cuttack
Reason: Authentication
Location: ORISSA HIGH The 22nd December, 2025//Aswini/Bichi/Laxmikant
COURT, CUTTACK
Date: 22-Dec-2025 14:16:03
WP(C) No.21309 of 2024 Page 65 of 65