Blacklisting of public works firms to vary on gravity of offences, SC says

The Supreme Court has said that blacklisting of a contractor for omission and commission in public works should not be dependent only on number of lapse but rather the seriousness and the gravity of the offence.

"Duration of blacklisting cannot be solely per offence. Seriousness of the lapse and the incident and/or gravity of commission and omission on the part of the contractor which led to the incident should be the relevant considerations," a bench of Justices M R Shah and B V Nagarathna said.

In a given case, it may happen that the commission and omission is very grave and because of the serious lapse or negligence, a major incident would have taken place. In such a case, it may be the contractor’s first offence, so the period or duration of the blacklisting or banning can be more than three years, the court added.

The top court set aside an order of the Orissa High Court, which had quashed a decision by the state government to blacklist M/s Panda Infra Projects (India) Pvt Ltd.

The firm was blacklisted as ten meter slab of a flyover over the railway level crossing at Bomikhal Junction in Bhubaneswar, collapsed in 2017 during concreting, which resulted in loss of life and property, including death of one person and injuries to eleven others.

The court ordered that in the instant case, blacklisting of the firm should be for a period of five years. It did not approve of the state government's guidelines of November 26, 2021, which provided that the blacklisting period per offence should be limited to three years subject to an overall maximum cumulative period of ten years for multiple offences.

The top court pointed out in previous judgement in case of Kulja Industries Limited, it was held that “debarment” is never permanent and its period would invariably depend upon the nature of the offence committed by the erring contractor.

"While determining the period for the blacklisting, and for the sake of objectivity and transparency, it is required to formulate broad guidelines. Different periods of debarment depending upon the gravity of the offences, violations and breaches may be prescribed by such guidelines," the court said, citing the earlier judgement.

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