Authority: High Court of Jharkhand at Ranchi

Order Date: 07 September 2026 (Reserved on 31 August 2026)

Case Overview

  • Parties: petitioner – M/s SK Electricals (proprietorship, represented by Shri Santosh Kumar); respondents – RITES Ltd., its Group General Manager (Civil) & PU‑Head, ERPO, Kolkata, and Neyveli Uttar Pradesh Power Limited (NUPPL).
  • Background: RITES, acting as agent for NUPPL, issued e‑tender No. 09/OT/RITES/ERPO/PU‑KOL/NUPPL‑Kurwa/OHE‑General Electrical/2023 on 31‑Oct‑2023 for design, supply, erection, testing & commissioning of a 25 kV OHE system at NUPPL Dumka Siding.
  • Award: SK Electricals was declared the successful bidder; Letter of Acceptance dated 24‑Jan‑2024 awarded the contract at a total price of Rs 6,40,10,551 (ex‑GST). Agreement No. RITES/PU‑KOL/NUPPL‑OHE/RT760‑00168/2024/637 was executed on 29‑Apr‑2024.
  • Dispute Development: Respondent‑2 (General Manager, Civil) issued several notices:
  • Letter No. RITES/PU‑KOL/OHE/NUPPL/2026/293 dated 16‑Feb‑2026 under Clause 3(iii) of the General Conditions of Contract (GCC) warning of contract determination and forfeiture of performance guarantee/security deposit.
  • Follow‑up letter No. RITES/PU‑KOL/OHE/NUPPL/2026/378 dated 25‑Feb‑2026 reiterating the warning.
  • Termination letter dated 16‑Mar‑2026 terminating the contract, alleging failure to procure copper material, lack of commitment for timely completion, and refusal to undertake additional 11 kV supply work. Performance guarantee of Rs 32,00,528 and security deposit of Rs 13,50,491.66 were forfeited.
  • Debarment Order: On 22‑Apr‑2026, Respondent‑2 issued letter No. RITES/PU‑KOL/OHE/NUPPL/2026/718 declaring SK Electricals a “Poor Performer” and placing it on RITES’ “Negative List of Contractors”, debarred from any future tender for a period of two years (22‑Apr‑2026 to 21‑Apr‑2028).
  • Petitioner’s Contentions: Cited Supreme Court judgments (Erusian Equipment, UMC Technologies, Techno Prints, A.K.G Construction) asserting that blacklisting requires a specific show‑cause notice and an opportunity to be heard; argued that Clause 3(b) of GCC mechanically imposes debarment without discretion, violating natural justice and Articles 14 & 226 of the Constitution.
  • Respondents’ Contentions: Asserted that the contractual jurisdiction clause (city of jurisdiction = Kolkata) barred the writ; claimed multiple notices and repeated breaches justified the Poor Performer declaration and debarment; contended that the petitioner had repeatedly assured material procurement but failed to deliver.
  • Court’s Jurisdiction Analysis: Referred to Supreme Court decisions (Swastik Gases, Indus Mobile Distribution, Maharashtra Chess Association) distinguishing contractual forum clauses from the High Court’s writ jurisdiction under Article 226. Held that the writ court retains discretion and the clause cannot oust its jurisdiction.
  • Legal Principles Applied: Emphasised that blacklisting is a civil death requiring procedural fairness; a specific, unambiguous show‑cause notice is mandatory; automatic debarment after contract termination is not permissible; the court must examine whether the contractor’s conduct is “deviant or aberrant” to justify punitive blacklisting.

Final Outcome

  • The order dated 22‑Apr‑2026 placing SK Electricals in the “Negative List of Contractors” for two years is quashed and set aside (para 46).
  • The declaration of the petitioner as a “Poor Performer” is not interfered with; the petitioner may challenge it separately under applicable law (para 47).
  • The writ petition is disposed of with the above observations; any pending interlocutory applications are also dismissed (para 48‑49).

Topics: Debarment, Natural Justice, Contractor Blacklisting