[Cites 10, Cited by 0]

Rajasthan High Court - Jodhpur

M/S. Cl Rawal vs Urban Improvement Trust, Udaipur ... on 9 December, 2025

Author: Ganesh Ram Meena

Bench: Ganesh Ram Meena

[2025:RJ-JD:53294]

      HIGH COURT OF JUDICATURE FOR RAJASTHAN AT
                       JODHPUR
                S.B. Civil Writ Petition No. 14486/2017

M/s C L Rawal, Through its Sole Properitrer C L Rawal S/o
Ganesh Ram Rawal, R/o-78, Jai Mahadev Bhawan, Tagore Nagar,
Hiran Magri Sector 4, Udaipur Rajasthan
                                                                   ----Petitioner
                                    Versus
Urban Improvement Trust Udaipur through its Secretary, Saheli
Marg, Udaipur
                                                                 ----Respondent


For Petitioner(s)         :     Mr. Kamlesh Rawal
For Respondent(s)         :     Mr. Deelip Kawadia
                                Mr. Pooshan



          HON'BLE MR. JUSTICE GANESH RAM MEENA

Order

09/12/2025

1. This instant writ petition has been filed by the petitioner with

a challenge to order dated 18.04.2016 issued by the Urban

Improvement Trust, Udaipur, whereby, the petitioner firm has

been debarred permanently from participating in the tender

process and also cancelled the AA Class contract registration.

2. Prime submission of learned counsel for the petitioner is that

the debarment from participating in the tender process of a firm

can not be made on permanent basis. He submits that as per the

provisions of the Rajasthan Transparency in Public Procurement

Act, 2012, a firm can be debarred from participating in the tender

process for a maximum period of three years. He also submits

that the respondent Trust has no authority to cancel the AA Class

contract registration of the petitioner firm.

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3. Learned counsel for the petitioner also submits that the

allegations which has been made basis by the respondent for their

impugned action or order is that the petitioner while submitting a

tender has placed on record certain forged experience certificates

but the respondent have not been able to show any proof whether

the petitioner firm has committed that forgery, it may be a case

where the petitioner firm is a victim as the authority whose

signatures are there on the registration certificate has given

forged certificate to the petitioner.

4. Learned counsel for the petitioner also submits that the

impugned order has been passed without their being any evidence

on record of forgery committed by the petitioner.

5. Learned counsel appearing for the respondent submits that

the registration of the petitioner firm has been cancelled in view of

the provisions of Public Works Financial and Accounts Rules, which

came into force in the year 1999. Learned counsel for the

respondent also submits that the petitioner firm while submitting

their explanation as regards allegation has admitted their act of

forgery.

6. Considered the submissions made at bar and also perused

the material made available on record.

7. As per the facts on record, the petitioner firm was registered

as 'AA' Class Contractor by the respondent Trust vide order dated

07.09.2010. As per the provisions, a firm is registered as 'AA'

Class contractor after due verification of its experience and

integrity in last fifteen years as regards their work experience.

8. The petitioner firm is said to have been debarred on

permanent basis vide impugned order in view of the allegations of

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submitting forged experience certificate while procuring the

tender.

9. Learned counsel for the respondent submitted that the

petitioner has admitted the allegations of forgery.

10. It is a basic principle of law that whenever there is an

allegation against any person, it is the duty of the alleging

authority to prove the allegations by substantial evidence. If there

is any such allegation against the petitioner firm then the

respondent could have lodged a criminal case and after due

investigation and trial by the competent court, the matter could

have been adjudicated whether the petitioner firm has committed

any forgery or not.

11. The Rajsathan State Legislature in 63 rd year of the Republic

of India enacted an "Act to regulate public procurement with the

objectives of ensuring tranparency, fair and equitable treatments

of bidders, promotion competition, enhancing efficiency and

economy and safeguarding integrity in the procurement process

and for matters connected therewith or incidental thereto."

12. The Act is called the Rajasthan Transparency in Public

Procurement Act, 2012, which receive the accent of his excellency

with Governor on 21.05.2012 and came into force with effect from

its publication in the Government Gazette on 22.05.2012. As per

the Sub Section 2 of Section 1 of the Act of 2012 the said Act is

extended to whole of the State of Rajasthan.

13. Section 46 of the Act of 2012 deals with the debarment of

the firms/persons from bidding Section 46 reads as under:-

"46. Debarment from bidding.- (1) A bidder shall be debarred by the State Government if he has been convicted of an offence -

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(a) under the Prevention of Corruption Act, 1988 (Central Act No. 49 of 1988); or

(b) under the Indian Penal Code, 1860 (Central Act No. 45 of 1860) or any other law for the time being in force, for causing any loss of life or property or causing a threat to public health as part of execution of a public procurement contract.

(2) A bidder debarred under sub-section (1) shall not be eligible to participate in a procurement process of any procuring entity for a period not exceeding three years commencing from the date on which he was debarred. (3) If a procuring entity finds that a bidder has breached the code of integrity prescribed in terms of section 11, it may debar the bidder for a period not exceeding three years.

(4) Where the entire bid security or the entire performance security or any substitute thereof, as the case may be, of a bidder has been forfeited by a procuring entity in respect of any procurement process or procurement contract, the bidder may be debarred from participating in any procurement process undertaken by the procuring entity for a period not exceeding three years.

(5) The State Government or a procuring entity, as the case may be, shall not debar a bidder under this section unless such bidder has been given a reasonable opportunity of being heard."

14. The aforesaid provisions clearly speaks that a firm/person

can be debarred from participating in the tender process for a

maximum period of three years only.

15. Learned counsel for the respondent submitted that the

cancellation of the registration of the petitioner firm and debarring

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the firm permanently is under the provisions of Public Works

Financial and Accounts Rules, which came into force in the year

1999.

16. Once the State Legislature so as to regulate the public

procurement process has enforced the Act of 2012, no any

Regulation or Rules made prior to this Act can supersede the

provisions of this Act. Since the Act of 2012 has been enforced to

regulate the public procurement process all such activities relating

to the public procurement are to be regulated by the provisions of

this Act.

17. Since the Act provides debarment of the firm or person from

tender process only for a maximum period of three years, the

action/order of the respondent debarring the petitioner firm

permanently for the lifetime from participating in the tender

process does not seem to be justified.

18. Learned counsel for the petitioner has also placed reliance on

judgment of the Hon'ble Apex Court in case of M/s Kulja

Industries Limited Vs. Chief Gen. Manager W.T. PROJ. BSNL

& Ors. reported in (2013) 14 S.C.R. 430.

19. The Hon'ble Apex Court in the case of M/s Kulja Industries

Limited (supra) in para 24 has observed as under:-

"Suffice it to say that 'debarment' is recognised and often used as an effective method for disciplining deviant suppliers/contractors who may have committed acts of omission and commission or frauds including misrepresentations, falsification of records and other breaches of the regulations under which such contracts were allotted. What is notable is that the 'debarment' is never permanent and the period of debarment would invariably depend upon

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the nature of the offence committed by the erring contractor"

20. The law laid down by the Hon'ble Apex Court in case of M/s

Kulja Industries Limited has thereafter been relied in case of B.C.

Biyani Projects Pvt. Ltd. Vs. State of Madhya Pradesh & Ors.

reported in 2016 0 Supreme(SC) 1327 and it has been

observed that order of blacklisting the appellant is a permanent

one and this is impermissible in law.

21. Learned counsel for the petitioner has also placed reliance on

the judgment of the Hon'ble Apex Court in case of M/s Daffodills

Pharmaceuticals & Anr. Vs. State of U.P. & Anr. reported in

(2019) 15 S.C.R. 125, wherein para 13 has observed as under:-

"Although, State of U.P. has argued that the impugned order requiring that no procurement ought to be made from Daffodills, is neither a blacklisting nor a debarring order, in our opinion, in fact and in reality, that order is nothing but an order or a directive, debarring and preventing the State of U.P. from local purchase of medicines from Daffodills for an indefinite duration. Unlike a "normal" blacklisting order which has a finite life span (of three or maximum five years), the indefinite directive (which appears to be co-terminus with the lifetime of the criminal case) is facially far more disproportionate than a blacklisting order. Even as on date, it is not clear whether formal charges have been framed against the accused i.e. Surender Chaudhary."

22. In case of Vetindia Pharmaceuticals Limited Vs. State of

Uttar Pradesh & Anr., Civil Appeal No.3647/2020 decided on

06.11.2020, the Hon'ble Apex Court in para 13 observed as

under:-

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"In view of the aforesaid conclusion, there may have been no need to go into the question of the duration of the blacklisting, but for the arguments addressed before us. An order of blacklisting operates to the prejudice of a commercial person not only in praesenti but also puts a taint which attaches far beyond and may well spell the death knell of the organisation/institution for all times to come described as a civil death. The repercussions on the appellant were clearly spelt out by it in the representations as also in the writ petition, including the consequences under the Rajasthan tender, where it stood debarred expressly because of the present impugned order. The possibility always remains that if a proper show cause notice had been given and the reply furnished would have been considered in accordance with law, even if the respondents decided to blacklist the appellant, entirely different considerations may have prevailed in their minds especially with regard to the duration. This Court in Kulja Industries Limited vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and others, (2014) 14 SCC 731, despite declining to interfere with an order of blacklisting, but noticing that an order of permanent debarment was unjustified, observed: -

"28.2. Secondly, because while determining the period for which the blacklisting should be effective the respondent Corporation may for the sake of objectivity and tranparency formulate broad guidelines to be followed in such cases. Different period of debarment depending upon the gravity of the offences, violations and breaches may be

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prescribed by such guidelines. While it may not be possible to exhaustively enumerate all types of offences and acts of misdemenour, or violations of contractual obligations by a contractor, the respondent Corporation may do so as far as possible to reduce if not totally eliminate arbitrariness in the exercise of the power vested in it and inspire conrfidence in the fairness of the order which the competent authority may pass against a defaulting contractor."

Since the order of blacklisting has been found to be unsustainable by us, and considering the long passage of time, we are not inclined to remand the matter to the authorities. In M/s Daffodills Pharmaceuticals (supra), relied upon by the appellant, this court has observed that an order of blacklisting beyond 3 years or maximum of 5 years was disproportionate."

23. Taking into consideration the overall facts and circumstances

of this case as discussed above and the law laid down by the

Hon'ble Apex Court as quoted above, this Court unhesitatingly can

held that the debarment of a firm on permanent basis and

cancellation of its registeration without proving the allegations

against the firm is wholly illegal, arbitrary and unjustified and

thus, the impugned order dated 18.04.2016 deserves to be

quashed and set aside.

24. Accordingly, this writ petition is allowed. The order date

18.04.2016 passed by the Urban Improvement Trust, Udaipur is

quashed and set aside.

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