W.P.(C) Nos.18264 & 23363 of 2025 p. 1 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.18264 of 2025 and W.P.(C) No.23363 of 2025 (In the matter of an application under Articles 226 and 227 of the Constitution of India) In W.P.(C) No.18264 of 2025 Bhilai Engineering Corporation Limited, Hatkhoj Village Industrial Area, Bhilai Dist., Durg, Chhatisgarh …. Petitioner -versus- Steel Authority of India Limited, Rourkela …. Opposite Party In W.P.(C) No.23363 of 2025 Arvind Kumar Jain and others …. Petitioners -versus- Steel Authority of India Limited, Rourkela …. Opposite Party Advocate(s) appeared in this case:- For Petitioners : Mr. Milan Kanungo, Senior Advocate (In both the Writ Petitions) For Opposite Party : Mr. Gautam Mishra, Senior Advocate (In both the Writ Petitions) CORAM: JUSTICE B.P. ROUTRAY JUDGMENT 11th February 2026 Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 2 B.P. Routray, J. 1. Before commencing hearing, Mr. Milan Kanungo, learned Senior Advocate for the Petitioner in W.P.(C) No.18264 of 2025 submits that prayer in said writ petition may be confined to and limited in respect of quashing/setting aside the impugned banning order dated 03.06.2025 (Annexure-1), i.e. the Prayer-A. He also files a memo to that effect, which is kept on record. However, Mr. Kanungo seeks leave to approach appropriate forum in order to pursue the Prayer No.B & C. 2. Heard Mr. Milan Kanungo, learned Senior Advocate for the Petitioners and Mr. Gautam Mishra, learned Senior Advocate for the Opposite Party in both the writ petitions. 3. Both the writ petitions having similar issues are heard together and disposed by this common judgment. 4. The common question arises in both the writ petitions is that, whether the direction for blacklisting the company, i.e. Bhilai Engineering Corporation Limited (hereinafter referred as the ‘Company’) and its’ Directors on the allegations of commission of Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 3 fraud in furnishing the Performance Bank Guarantee (in short, ‘PBG’) in respect of the contract awarded in favour of the Company, is valid ? 5. Brief facts of the case, as common to both the writ petitions, are that, the Petitioner-Company in the first writ petition, i.e. W.P.(C) No.18264 of 2025 has been awarded with the contract dated 05.10.2024 floated by the Steel Authority of India Limited, Rourkela Steel Plant (the Opposite Party) for installation of Coke Dry Cooling Plant including BPTG, Gas Fired Boiler and DM Water Plant as specified in Annexure-3. The contract was granted on 05.10.2024 by executing the agreement and as per the stipulation thereof, the Petitioner-Company has to furnish PBG within a period of thirty days from the date of execution of the contract. Article 5.1 of Annexure-3 (the contract) stipulates, as follows:- “5.1 The Facilities shall be commissioned in 41 (Forty One) months from the Effective Date of the Contract. The Performance Bank Guarantee (PBG) shall be submitted by the Contractor within 30 days of signing of Contract. The Letter of Credit (LC), if applicable, shall be opened by Employer within 30 (thirty) days of 'receipt of correct Performance Bank Guarantee from the Contractor in the format as per Annexure 1 of GCC and its confirmation from the bank'. In case, there is delay in opening of Letter of Credit by Employer, then time of completion shall be extended accordingly. However, in case, there is delay in submission of PBG by the Contractor then the time of completion shall remain unchanged, provided LC has been opened within 30 (thirty) Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 4 days of receipt of correct Performance Bank Guarantee and its confirmation from the bank.” 6. Subsequently, the Petitioner-Company did not furnish PBG within the time stipulated, compelling the authority to request them through several letters to furnish said PBG. Ultimately on 28.03.2025, PBG was furnished vide the letter submitted by Petitioner-Company to Opposite Party. It is mentioned therein that they are submitting the original Bank Guarantee amounting to Rs.40,37,48,800.00p with validity upto 21.08.2029 and claim period upto 21.08.2030 issued by the Banker, namely, Punjab and Sind Bank, Khar Branch, Mumbai in respect of the contract under Annexure-3. 7. After furnishing of PBG at Annexure-5, the Opposite Party verified the same and sent it for confirmation to the concerned Banker at Mumbai on 03.04.2025, which was then detected to be a fraudulent one. Thus, finding the PBG as a fraudulent act committed by the Petitioners, as a Company as well as individuals in the capacity of its Directors, a show-cause notice was issued to the Company as to why action as per the Integrity Pact of Steel Authority of India Limited (SAIL) shall not be taken. The Petitioner-Company submitted its show- cause dated 29.04.2025 under Annexure-9 series and thereafter, upon Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 5 consideration of all such facts and explanation offered by the Petitioner-Company, Opposite Party vide order dated 9th July 2025 (Annexuer-15) terminated the contract. Before that, the Company as well as individual Directors of the Company are banned or blacklisted vide impugned order dated 3rd June 2025 under Annexure-1 to both the writ petitions. The Opposite Party put three years ban order, i.e. till 09.04.2028, from having business dealings with all the plants/units of SAIL including its subsidiaries thereof. The contents of that impugned order under Annexure-1 read as follows:- “OFFICE ORDER Ref. No.: PROJ/MM (P)/554 Date: 03.06.2025 M/s. Bhilai Engineering Corporation Ltd., Bhilai including its Proprietor/Partners/Directors is hereby banned from having business dealings with all Plants/Units of Steel Authority of India Limited (SAIL), including its Subsidiaries for a period of 03 Years till 09,04.202.8 (considering suspension order issued effective from 10.04.2025). The ban is imposed on account of submission of Fake/Forged documents (i.e. Performance Bank Guarantee (PBG)) to comply with the terms and conditions of Contract No. P/PROJ/640/2290000025/R1/24049266 dated: 05.10.2024 for "Coke Dry Cooling Plant including BPTG, Gas Fired Boiler and DM Water Plant for Installation of a Stamp Charged COB#7 at Rourkela Steel Plant (Package-B)". The existing offers against ongoing tenders (prior to issuance of contract) / new offers of the Agency / Application for Fresh Enlistment & Participation in all types offenders i.e. (Open Tender & LTE) shall not be entertained from M/s.Bhilai Engineering Corporation Ltd, Bhilai during the said Banning period. The details of M/s. Bhilai Engineering Corporation Ltd., Bhilai as per available records are mentioned below: Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 6 1. Name of Firm M/s.Bhilai Engineering Corporation Ltd. 2. Vendor Code No. 1000079413, 1000000526, 1000079508 3. Address 4/5, Industrial Area, Nandini Road, Bhilai- 490026, Dist- Durg (CG} 4. Name of Proprietor/ Partner/ Directors Shri Arvind Kumar Jain (Managing Director) This issues with the approval of the Competent Authority. (A.K. Sahu) CGM (Proj.-Coml.)” 8. Mr. Kanungo, learned Senior Advocate for the Petitioners, while challenging the impugned order of banning, submits that such direction of Opposite Party to ban the Company as well as its’ Directors or blacklisting them for a period of three years is without application of mind, since none of the grounds submitted in the show-cause reply of the Company has been taken into consideration by the Opposite Party. It is further submitted that it is not the Opposite Party alone but the Petitioner have been duped and defrauded by such action done by a third party consortium, i.e. Mr.Vijay Chopra, Mr.Ashish Modi and Mr. Raunak, who were authorized to act on behalf of the Petitioner to furnish the PBG. It is further submitted by Mr. Kanungo that a criminal case in Marine Drive P.S. Case No.0119 dated 24.06.2025 has been registered at the instance of the Petitioners, on behalf of the Company. But the Opposite Party has failed to consider such aspects and Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 7 attributed entire fraudulent action on the Petitioners, as a Company as well as individuals to take such drastic steps to ban them for a period of three years as per the impugned order. It is also submitted on behalf of the Petitioners that, the Directors of the Company, who are the Petitioners in 2nd writ petition, i.e. W.P.(C) No.23363 of 2025, have not committed anything wrong in their individual capacity to attribute such alleged action on their part to face the ban order as individuals. He further submits that the Directors of the Company have never been given any opportunity of hearing in their individual capacity before effecting the ban/blacklist order against them personally by the Opposite Party. It is therefore, submitted by the Petitioners that the impugned order has been suffered from gross illegality coupled with non-application of mind and should not be allowed to stand as a punitive action against them. 9. The Opposite Party has filed its counter in both the cases answering the challenge of the Petitioners that such action in furnishing a fraudulent PBG upon execution of the contract is within the liability of the Petitioners, as a Company as well as individuals, and therefore they cannot escape from the consequences thereof. It is submitted by Mr. Mishra, learned Senior Advocate for the Opposite Party that when Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 8 the fraudulent PBG is admitted, as furnished by the Petitioners, to the tune of Rs.40 crores and more, there is no explanation available for the Petitioners to get rid of consequent punitive action banning them from future participation in the contracts. Mr. Mishra further submits that lodging of FIR on behalf of the Petitioner-Company does not take away their liability from the action they have committed with a motive to defraud the Opposite Party. Rather such a step taken by the Petitioner-Company, who lodged the criminal case, is an eye-wash to get rid of the liability on them. 10. Execution of the contract between the parties on 05.10.2024 as per Annexure-3 is not disputed by either party. The execution of such contract is admitted by both Petitioners and Opposite Party and they also admit the requirement of furnishing PBG within a period of thirty days from the date of execution of the contract. It is also not disputed by either party that the alleged PBG as per Annexure-5 was submitted on 28.03.2025, i.e. much after 30 days of prescribed period, and at the same time, it is also admitted that such bank guarantee to the tune of Rs.40 crores and odd furnished by the Petitioner-Company in respect of the contract was found to be fake and fraudulent one. Thus, it is admitted on the part of the Petitioner that the PBG furnished by him on Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 9 28.03.2025 under Annexure-5 was a fake one. But, according to the Petitioner, he has no deliberate intention of defrauding the Opposite Party thereby or he has not intentionally furnished such PBG to the tune of Rs.40 crore and odd. It is the contention of the Petitioner that, such furnishing of the PBG to Opposite Party is without his knowledge that the same is a fake one, because he relying on the third party, as named in the FIR, furnished the Bank Guarantee as per the instruction received from said parties. 11. So, in view of the rival contentions advanced by both the parties, particularly when the PBG as admitted to be a fake one, the question arises for determination is whether the Petitioners, as a Company as well as its’ Directors in individual, would be held liable for such action of banning, or they had the intention to defraud the Opposite Party by furnishing such fake PBG as per Annexure-5. 12. Here some dates are important to be mentioned that, the contract was signed on 05.10.2024, thereby stipulating the time period upto 04.11.2024 to furnish the PBG and till 28.03.2025, no PBG was furnished either fake or genuine. More to that, the PBG furnished under Annexure-5 dated 28.03.2025 was found to be a fake one, as Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 10 confirmed by the Bank authority under Annexure-A to the counter, upon verification of the same by the Opposite Party. These are all undisputed facts. It is the case of the Petitioner that, while furnishing such PBG he relied on some private parties, as named in the FIR (stated above) and relying on them the PBG was furnished as received from them, to the Opposite Party in respect of the contract executed on 05.10.2024. It is the further case of the Petitioners that, in the history of their performance of different contracts with different authorities including SAIL and other public authorities, not a single antecedent is there or even allegation with regard to fraud or dereliction of contract. For the first time, the Petitioners by relying on such third parties have furnished the PBG as per Annexure-5, which was subsequently found as a fraudulent one. The Petitioners have further intimated said fact immediately coming to their knowledge on 03.04.2025 vide Annexure- 6 to the Opposite Party to withdraw said PBG as some confusion and mistake appeared in the same. The Petitioners have not stopped there, but further proceeded to lodge the criminal case that how they have been defrauded, as well as the Opposite Party, by such third parties. Therefore, the Petitioners in their best have expressed their genuineness in their action to furnish the PBG that it was never their Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 11 intent and within their knowledge to furnish the PBG in order to defraud the Opposite Party. 13. Here, the sequence of events, which need to be analyzed, is that on the same date of noticing the PBG as a fake one by the Opposite Party, the Petitioners have submitted its letter to the Opposite Party to withdraw the same on the ground of some confusion and mistake. It is stated in their show-cause reply that how they have been defrauded by said third parties upon whom they have relied to perform the PBG in support of the contract as required by the Opposite Party. 14. It is true that, the banning or blacklisting is a drastic step taken against the defaulter to prevent him from the advantage of entering into lawful participation in future contracts with the authority. In Erusian Equipment & Chemicals Ltd. vs. State of West Bengal and another, (1975) 1 SCC 70, the concept has been explained. It is explained by the Hon’ble Supreme Court that: “12. Under Article 298 of the Constitution the executive power of the Union and the State shall extend to the carrying on of any trade and to the acquisition, holding and disposal of property and the making of contracts for any purpose. The State can carry on executive function by making a law or without making a law. The exercise of such powers and functions in trade by the State is subject to Part III of the Constitution. Article 14 speaks of equality Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 12 before the law and equal protection of the laws. Equality of opportunity should apply to matters of public contracts. The State has the right to trade. The State has there the duty to observe equality. An ordinary individual can choose not to deal with any person. The Government cannot choose to exclude persons by discrimination. The order of blacklisting has the effect of depriving a person of equality of opportunity in the matter of public contract. A person who is on the approved list is unable to enter into advantageous relations with the Government because of the order of blacklisting. A person who has been dealing with the Government in the matter of sale and purchase of materials has a legitimate interest or expectation. When the State acts to the prejudice of a person it has to be supported by legality. xxx xxx xxx 14. The State can enter into contract with any person it chooses. No person has a fundamental right to insist that the Government must enter into a contract with him. A citizen has a right to earn livelihood and to pursue any trade. A citizen has a right to claim equal treatment to enter into a contract which may be proper, necessary and essential to his lawful calling. 15. The blacklisting order does not pertain to any particular contract. The blacklisting order involves civil consequences. It casts a slur. It creates a barrier between the persons blacklisted and the Government in the matter of transactions. The blacklists are “instruments of coercion”. 16. In passing an order of blacklisting the government department acts under what is described as a standardised code. This is a code for internal instruction. The government departments make regular purchases. They maintain list of approved suppliers after taking into account the financial standard of the firm, their capacity and their past performance. The removal from the list is made for Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 13 various reasons. The grounds on which blacklisting may be ordered are if the proprietor of the firm is convicted by court of law or security considerations to warrant or if there is strong justification for believing that the proprietor or employee of the firm has been guilty of malpractices such as bribery, corruption, fraud, or if the firm continuously refuses to return Government dues or if the firm employs a government servant, dismissed or removed on account of corruption in a position where he could corrupt government servants. The petitioner was blacklisted on the ground of justification for believing that the firm has been guilty of malpractices such as bribery, corruption, fraud. The petitioners were blacklisted on the ground that there were proceedings pending against the petitioners for alleged violation of provisions under the Foreign Exchange Regulations Act. 17. The Government is a Government of laws and not of men. It is true that neither the petitioner nor the respondent has any right to enter into a contract but they are entitled to equal treatment with others who offer tender or quotations for the purchase of the goods. This privilege arises because it is the Government which is trading with the public and the democratic form of Government demands equality and absence of arbitrariness and discrimination in such transactions. Hohfeld treats privileges as a form of liberty as opposed to a duty. The activities of the Government have a public element and, therefore, there should be fairness and equality. The State need not enter into any contract with any one but if it does so, it must do so fairly without discrimination and without unfair procedure. Reputation is a part of a person's character and personality. Blacklisting tarnishes one's reputation. 18. Exclusion of a member of the public from dealing with a State in sales transactions has the effect of preventing him from purchasing and doing a lawful trade in the goods in discriminating against him in favour of other people. The State can impose reasonable conditions regarding rejection and acceptance of bids or qualifications of bidders. Just as exclusion of the lowest tender will Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 14 be arbitrary, similarly exclusion of a person who offers the highest price from participating at a public auction would also have the same aspect of arbitrariness. 19. Where the State is dealing with individuals in transactions of sales and purchase of goods, the two important factors are that an individual is entitled to trade with the Government and an individual is entitled to a fair and equal treatment with others. A duty to act fairly can be interpreted as meaning a duty to observe certain aspects of rules of natural justice. A body may be under a duty to give fair consideration to the facts and to consider the representations but not to disclose to those persons details of information in its possession. Sometimes duty to act fairly can also be sustained without providing opportunity for an oral hearing. It will depend upon the nature of the interest to be affected, the circumstances in which a power is exercised and the nature of sanctions involved therein. 20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government for purposes of gains. The fact that a disability is created by the order of blacklisting indicates that the relevant authority is to have an objective satisfaction. Fundamentals of fair play require that the person concerned should be given an opportunity to represent his case before he is put on the blacklist.” 15. In Patel Engineering Limited vs. Union of India and another, (2012) 11 SCC 257, the Hon’ble Supreme Court relying on Erusian Equipment & Chemicals Ltd. (supra) and other cases also, have stated that to blacklist a person from entering into a contractual relationship with the State amounts to depriving such person to be treated equally with others in the matter of contract. It is stated as follows:- Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 15 “14. The nature of the authority of the State to blacklist the persons was considered by this Court in the abovementioned case and took note of the constitutional provision (Article 298), which authorises both the Union of India and the States to make contracts for any purpose and to carry on any trade or business. It also authorises the acquisition, holding and disposal of property. This Court also took note of the fact that the right to make a contract includes the right not to make a contract. By definition, the said right is inherent in every person capable of entering into a contract. However, such a right either to enter or not to enter into a contract with any person is subject to a constitutional obligation to obey the command of Article 14. Though nobody has any right to compel the State to enter into a contract, everybody has a right to be treated equally when the State seeks to establish contractual relationships. The effect of excluding a person from entering into a contractual relationship with the State would be to deprive such person to be treated equally with those, who are also engaged in similar activity. 15. It follows from the above judgment in Erusian Equipment case that the decision of the State or its instrumentalities not to deal with certain persons or class of persons on account of the undesirability of entering into the contractual relationship with such persons is called blacklisting. The State can decline to enter into a contractual relationship with a person or a class of persons for a legitimate purpose. The authority of the State to blacklist a person is a necessary concomitant to the executive power of the State to carry on the trade or the business and making of contracts for any purpose, etc. There need not be any statutory grant of such power. The only legal limitation upon Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 16 the exercise of such an authority is that the State is to act fairly and rationally without in any way being arbitrary— thereby such a decision can be taken for some legitimate purpose. What is the legitimate purpose that is sought to be achieved by the State in a given case can vary depending upon various factors.” 16. In Blue Dreamz Advertising Private Limited and another vs. Kolkata Municipal Corporation and others, (2024) 15 SCC 264, the Hon’ble Supreme Court relying on various previous decisions including Kulja Industries Limited vs. Chief General Manager, Western Telecom Project Bharat Sanchar Nigam Limited and others, (2014) 14 SCC 731, have stated that such action of banning or blacklisting is demonstrated as a penalty that treats the blacklisted company or person as ineligible from participating any contract under the State. It is stated as follows: “24. What is significant is that while setting out the guidelines prescribed in USA, the Court noticed that comprehensive guidelines for debarment were issued there for protecting public interest from those contractors and recipients who are non-responsible, lack business integrity or engage in dishonest or illegal conduct or are otherwise unable to perform satisfactorily. The illustrative cases set out also demonstrate that debarment as a remedy is to be invoked in cases where there is harm or potential harm for public interest particularly in cases where the person's conduct has Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 17 demonstrated that debarment as a penalty alone will protect public interest and deter the person from repeating his actions which have a tendency to put public interest in jeopardy. In fact, it is common knowledge that in notice inviting tenders, any person blacklisted is rendered ineligible. Hence, blacklisting will not only debar the person concerned from dealing with the employer concerned, but because of the disqualification, their dealings with other entities also is proscribed. Even in the terms and conditions of tender in the present case, one of the conditions of eligibility is that the agency should not be blacklisted from anywhere. 25. In other words, where the case is of an ordinary breach of contract and the explanation offered by the person concerned raises a bona fide dispute, blacklisting/debarment as a penalty ought not to be resorted to. Debarring a person albeit for a certain number of years tantamounts to civil death inasmuch as the said person is commercially ostracised resulting in serious consequences for the person and those who are employed by him. 26. Too readily invoking the debarment for ordinary cases of breach of contract where there is a bona fide dispute, is not permissible. Each case, no doubt, would turn on the facts and circumstances thereto.” 17. In the given facts of the present case, the circumstances appeared, as explained by the Petitioner-Company that his action in furnishing the PBG under Annexure-5 was never an intentional one, but he did it in good faith relying on those private parties named in the Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 18 FIR and subsequently on detection of the same or finding any defect therein, he immediately applied on 03.04.2025 to withdraw the same to furnish another fresh PBG. Looking to the other side from the angel of Opposite Party, it is found that though the Petitioner-Company was liable to furnish the PBG on or before 04.11.2024 in terms of the contract under Annexure-3, but the same was not submitted. Rather it was submitted upon persuasion by the Opposite Party after more than four months on 28.03.2025. When the Opposite Party doubting on the conduct of the Petitioner-Company verified the same, it came to their knowledge on 03.04.2025 through the e-mail sent by the concerned Banker that such PBG furnished by the Petitioner was a fake one and does not bear any genuineness. The confirmation was received from the Banker at 10.29 AM on 03.04.2025 as per Annexure-A. But, surprisingly the letter addressed by the Petitioner-Company to the Opposite Party on the same day as per Annexure-6 does not bear any time, which would otherwise infer that the same has been submitted after 10.29 AM on 03.04.2025. It is true that, the FIR has been lodged by the Petitioner-Company at Mumbai, but the fate of the said FIR is still in dark till date and on query, it is submitted by the learned counsel for the Petitioner that those accused persons, who have Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 19 furnished the security for equal amount to the PBG, are still absconded and yet to be apprehended. Thus, it becomes clear that said criminal case is still awaiting collection of evidence and nothing has progressed in it till now. 18. It is true that, the Petitioner-Company, despite giving its intimation on 03.04.2025 under Annexuere-6 to the Opposite Party, has not mentioned anything thereafter till submission of the show-cause reply regarding their innocence or non-involvement in furnishing the fake PBG on 28.03.2025. The explanation came from the side of the Petitioner-Company with reasons as to their bona-fideness only in their reply to the suspension order effected on 10.04.2025. 19. It is a different aspect that the contract executed between the Petitioner-Company and the Opposite Party has already been terminated and stated to be sub-judice before this Court in another writ petition. In the present writ petition, it needs to be seen whether there was any bona fide approach on the part of the Petitioner in submitting such PBG on 28.03.2025 without any intention to defraud the Opposite Party. Had the investigation in the criminal case been completed or progressed to substantial extent, there have been a clear picture with Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 20 regard to the intention of the Petitioner-Company in submission of the fake PBG on 28.03.2025, but this is not the case here. It is to be adjudged from the circumstances stated above regarding conduct of the Petitioner. 20. As stated earlier, the Petitioners have not cleared anything in their letter dated 03.04.2025 under Annexure-6 regarding any sort of confusion or mistake on their part for furnishing a fresh PBG in place of the PBG furnished on 28.03.2025. It is also true that, even after lodging of the FIR, the Petitioner-Company do not think it proper to intimate the Opposite Party as to the fake PBG furnished by him on 28.03.2025, but when the order of suspension of the contract came on 10.04.2025, it is replied on 11.04.2025 about such action committed on their part. By taking recourse to the FIR and the contents thereof, it has been tried best on the part of the Petitioner to explain how he furnished the PBG on 28.03.2025 in good faith believing the same as genuine. Here, it is to be reminded that the contract between the Petitioner- Company and the Opposite Party does not specify inclusion of any third party in the matter of furnishing the PBG. It is between the Petitioner-Company and those persons named in the FIR that they entered into a deal how to procure the PBG for the required amount, Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 21 i.e. a tune of Rs.40 crore and odd. Thus, the Opposite Party has nothing to do in the dealings made between the Petitioner-Company and those third parties named in the FIR, who in the opinion of the Petitioner- Company, have played the fraud with him as well as the Opposite Party. 21. The burden is on the Petitioner-Company to justify his action that by furnishing the PBG dated 28.03.2025 under Annexure-5 they have acted in a good faith, since it is their case that they were completely unaware of such fraudulent action taken by those other parties named in the FIR. It is a matter between the Petitioner- Company and those accused persons, who have defrauded the Petitioner-Company in furnishing such PBG on behalf of the Petitioner to the Opposite Party. The Opposite Party has nothing to do in the same. In order to discharge such burden that comes on the Petitioner- Company, they took rescue of the actions taken in lodging the criminal case against the fraudsters as well as the intimation sent to the Opposite Party on 03.04.2025. But as stated earlier, the letter dated 03.04.2025 under Annexure-6 submitted by the Petitioner-Company to the Opposite Party does not explain in detail that they have also been defrauded by those third persons and upon good faith believing on Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 22 those persons, the PBG has been furnished to the Opposite Party. Though the Petitioner-Company has failed to discharge its burden to prove his good faith in submitting the fake PBG on 28.03.2025, but at the same time it is to be accepted on record that the action of the Petitioner-Company with the intention to defraud the Opposite Party by furnishing the fake PBG is yet to be proved by concrete materials. This would have been better achieved by progress in the criminal case. In such situation, it is important to look into the Integrity Pact and the conditions of banning order as per the guidelines of Opposite Party. 22. Annexure-E to the counter is the Integrity Pact along with the guidelines for banning the agents participating in the tender and limited tender. Clause 3 of the Integrity Pact speaks of disqualification from tender process and exclusion from future contracts. It reads as follows:- “Section 3 – Disqualification from tender process and exclusion from future contracts If the Bidder(s)/Contractor(s), before award or during execution has committed, a transgression through a violation of Section 2, above or in any other form such as to put their reliability or credibility in question, the Principal is entitled to disqualify the Bidder(s)/Contractor(s) from the tender process or take action as per the procedure mentioned' in the “Guidelines Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 23 on Banning of business dealings”. Copy of the “Guidelines on Banning of business dealings” is placed at (page nos.20-30).” The guidelines as per Annexure-E for banning the business dealing reads at Clause 6.7 that, if the agency has resorted to corrupt, fraudulent practices including mis-representation of facts and/or fudging/forging/tampering of documents. 23. Further Clause 7.7 stipulates as follows:- “The Banning period may range from 1 year to 3years depending on the gravity of the case as decided by the Competent Authority. Ordinarily, the period of banning shall be in the range of 1-2 years from the date of issuance of order depending on the severity of the irregularities/ lapses committed/ termination of contract due to poor performance, etc. However, in case of fraud/ forgery/ corrupt/ fraudulent practice or tampering of documents by the Agency as given in para 6.7 above, the period of banning to be imposed on the Agency would be three years. The period of suspension, if any, shall be accounted for up to a maximum of 6 months in the period of banning provided the banning order is issued within the period of suspension.” Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 24 24. In terms of the period mentioned in Clause 7.7, the Petitioner- Company has been banned for a period of three years as found committing fraud on the Opposite Party. 25. In the circumstances as stated above, leading to furnishing the fake PBG dated 28.03.2025 under Annexure-5 as per the explanation of the Petitioner as well as the circumstances subsequent to the same including lodging of FIR, if analysed minutely as discussed above, even taking into account the previous conduct of the Petitioner- Company that it has a unblemished record in the matter of contract with State, in the opinion of this Court, no reason is found to interfere with the impugned banning order in respect of the Company, Further, the period of three years is left un-interfered since there is no scope under Clause 7.7 to interfere into the quantum of punishment. As such, the impugned order banning the Petitioner-Company in the first writ petition, i.e. W.P.(C) No.18264 of 2025 is not interfered with. 26. So far as the second writ petition regarding the order of ban on the Directors in individual capacity is concerned, as seen from the impugned order re-produced above, the name of the proprietor/partner/ Director is stated as Arvind Kumar Jain (Managing Director). But in Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 25 W.P.(C) No.23363 of 2025, four Petitioners have joined together stating them as Directors of the Petitioner-Company, i.e. Bhilai Engineering Corporation Limited, that they have been affected individually by such banning order issued by the Opposite Party. 27. It is apparent from record that before giving any individual ban to the Directors of the Company, no opportunity of hearing in the individual capacity to its’ Directors has been granted either to said Arvind Kumar Jain or any other Director. The record also does not show on the face of it any action committed by the Directors of the Company in individual capacity either to defraud the Opposite Party or in furnishing the fake PBG dated 28.03.2025 under Annexure-5. Therefore, the impugned ban order cannot operate against the Director of the Company in individual capacity. It is true that, a Company is juristic person and it has to be run by its’ Directors for practical purposes. But at the same time, a punitive order or a penalty imposed on the Company cannot be allowed to act on individual capacity against the Directors, particularly without granting any opportunity of hearing in individual capacity. Therefore, the impugned order dated 03.06.2025 under Annexure-1 in W.P.(C) No.23363 of 2025 to the effect it is upholding against Shri Arvind Kumar Jain in individual Digitally Signed Signed by: BASANTA KUMAR BARIK Reason: Authentication Location: High Court of Orissa, Cuttack Date: 17-Feb-2026 17:51:59 Signature Not Verified W.P.(C) Nos.18264 & 23363 of 2025 p. 26 capacity or any other Director of the Company is liable to be set aside. The same is accordingly set aside in respect of W.P.(C) No.23363 of 2025, i.e. against the individual capacity of the Directors. 28. In the result, W.P.(C) No.18264 of 2025 is dismissed and W.P.(C) No.23363 of 2025 is allowed as stated above. (B.P. Routray) Judge C.R. Biswal B.K. Barik/ A.R.-cum-Senior Secretaries