The Delhi High Court has set aside the debarment of Ceigall India Ltd. from participating in the re-tendering process of a Public Works Department project, holding that the authority was required to issue a 14-day show cause notice under Article 3(1) of the Integrity Pact before excluding the bidder from future contract award processes.
A Division Bench of Justice V. Kameswar Rao and Justice Manmeet Pritam Singh Arora was dealing with a challenge to the debarment letter dated August 14, 2026, issued after the petitioner’s bid in relation to road strengthening works under the PWD’s South Maintenance Zone. The petitioner contended that it had been debarred without the show cause notice mandated under Article 3(1) of the Integrity Pact.
The respondents argued that Article 3(1) applied only to concluded contracts and had no application during the tendering process. They further contended that the rejection of the petitioner’s bid and cancellation of the tender were independent administrative decisions and did not attract the 14-day notice requirement.
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The High Court rejected this submission, observing that Article 3(1) expressly empowers the principal to disqualify a bidder from the tender process or exclude the bidder from future contract award processes, and therefore its requirement of a 14-day notice could not be confined to concluded contracts.
Relying on the Supreme Court’s decision in Gorkha Security Services v. Government (NCT of Delhi), (2014) 9 SCC 105, the Bench reiterated that even in cases of blacklisting or debarment, principles of natural justice must be followed and the proposed action must be specifically put to the affected party so that it has an opportunity to respond.
The Court accordingly set aside the August 14 debarment letter, while granting the respondents liberty to proceed against the petitioner in accordance with Article 3(1) by first issuing a 14-day show cause notice and thereafter proceeding in accordance with law. The petitioner’s remaining prayers were dismissed as withdrawn.
