The Meghalaya High Court has upheld the five-year blacklisting of the JV of M/s BSCPL Infrastructure Ltd and M/s C&C Constructions. The contractor had challenged its debarment by the Public Works Department (PWD), Government of Meghalaya, but the court dismissed all writ petitions, affirming that the action was lawful and in the public interest.
Background of the Case
The case involves a major highway project awarded in 2011, covering:
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Two-laning works on NH-44E
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Nongstoin-Rongjeng-Tura road
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Initial bid value: ₹1,303.83 crore
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Final cost after revisions: over ₹2,400 crore
Disputes arose regarding contractual claims, which were later referred to arbitration.
Allegations of Corruption
During arbitration, the State scrutinized ledger documents submitted by BSCPL. These documents allegedly showed:
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Payments for gifts, liquor, and hospitality
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Benefits extended to public officials, engineers, and Dispute Resolution Board (DRB) members
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Systematic pattern of illegal gratification
Based on these findings, the PWD issued a show-cause notice in September 2024 and subsequently debarred the contractor for five years in December 2024, citing corrupt and fraudulent practices.
Contractor’s Challenge
The JV argued that:
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The blacklisting was mala fide
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The decision was delayed and unrelated to the contract
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It unfairly prejudiced ongoing arbitration proceedings
The State countered, noting that the contractor had already received ₹2,523 crore, plus ₹94 crore as per the Arbitral Tribunal’s order, and that the ledgers substantiated allegations of illegal gratification.
High Court’s Observations
Justice H.S. Thangkhiew, in a Single Judge Bench ruling, held that:
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The blacklisting was lawful and proportionate
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Show-cause notice clearly detailed the allegations
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The contractor had a fair opportunity to respond
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Findings from the Arbitral Tribunal validated the evidence of corrupt practices
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Five-year debarment was not excessive given the scale of the project and public funds involved
The Court emphasized that public interest outweighs private commercial concerns and found no grounds for interference under Article 226 of the Constitution.
Legal Basis for Blacklisting
The court noted that the power to blacklist derives from:
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Contractual provisions (Clause 59.2(h) of the General Conditions of Contract) addressing corrupt practices
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The State’s inherent right to select contractors
The evidence was deemed credible and substantive, not mere suspicion or hearsay.
Significance
This ruling sends a strong message against corruption in public infrastructure projects. It reinforces the principle that serious misconduct involving large public funds will attract proportionate action, including temporary exclusion from government tenders.
