Debarment Unsustainable After COVID Extension Compliance

The Hon’ble Patna High Court, in Jai Hanuman Enterprises v. State of Bihar & Ors. (Civil Writ Jurisdiction Case No. 1435 of 2025 dated April 30, 2026), set aside an order debarring the petitioner/contractor from participating in future tenders, holding that once the State had granted extension of time for completion of contractual work during the COVID-19 period and the contractor completed the work within the extended timeline, the contractor could not subsequently be debarred on the ground of delay. The Hon’ble Patna High Court further held that blacklisting without issuance of a show cause notice violates both the Bihar Contractor Registration Rules and the principles of natural justice.

The dispute arose from two public works contracts awarded to the petitioner in October 2019 by the Public Health Division, Supaul, which were originally required to be completed within six months. Owing to the outbreak of the COVID-19 pandemic, the petitioner sought extension of time for completion of the works, which was subsequently granted by the Chief Engineer till January 31, 2021. The petitioner thereafter completed the works within the extended timeline on January 19, 2021, and January 25, 2021, respectively.

However, during the subsistence of the extended period itself, the Executive Engineer issued an order dated January 07, 2021, debarring the petitioner from participating in future tenders on the ground of delay in execution of the works. The petitioner later sought revocation of the debarment, following which the Executive Engineer, Superintending Engineer and Chief Engineer all recommended removal of the debarment after recording that the work had already been completed. A satisfaction certificate was also issued in favour of the petitioner in February 2024. Despite such recommendations, the appellate authority rejected the petitioner’s appeal and affirmed the debarment order.

Aggrieved thereby, the petitioner approached the Hon’ble Patna High Court contending that the debarment order was premature and arbitrary since it had been passed before expiry of the extended completion period granted by the department itself. The petitioner further submitted that no show cause notice or opportunity of hearing had ever been granted prior to passing the order of debarment.

Before the Hon’ble Patna High Court, the principal issue for consideration was whether a contractor could be debarred for delay after extension of time had been granted and the work had been completed within the extended timeline, and whether such debarment could be sustained in the absence of compliance with principles of natural justice.

Upon examining the record, the Hon’ble Patna High Court observed that the extension granted till January 31, 2021, clearly demonstrated that the respondent authorities had condoned the delay and permitted the petitioner to complete the work within the extended timeframe, thereby keeping the contractual relationship subsisting. The Hon’ble Patna High Court further noted that despite such extension, the petitioner was debarred even before expiry of the extended timeline, although the records disclosed that the work had in fact been completed within the extended period and accepted by the department itself.

The Hon’ble Patna High Court also found that while rejecting the petitioner’s appeal, the authorities failed to consider material facts including the extension order, completion of work within the extended period, and consistent departmental recommendations favouring revocation of the debarment.

Significantly, the Hon’ble Patna High Court observed that Rule 11(c) of the Bihar Contractor Registration Rules mandatorily requires issuance of a show cause notice before passing an order of blacklisting or debarment. Since the State failed to place on record any material demonstrating that such notice or opportunity of hearing had been granted to the petitioner, the Hon’ble Patna High Court held the impugned action to be violative of principles of natural justice and unsustainable in law. Accordingly, both the debarment order and the appellate order affirming the same were set aside.