1 2025:CGHC:58545-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPC No. 2677 of 2025 M/s Pearl India Marketing Services Private Limited, Through Its Authorized Signatory / Representative, Having Its Office At Plot No. F- 281, Behind Gumber Petrol Pump, Vyapar Vihar, Bilaspur, Chhattisgarh, 495001 ... Petitioner(s) versus 1 - State Of Chhattisgarh Through The Secretary, Department Of Energy, Mahanadi Bhawan, Mantralaya, Naya Raipur, Chhattisgarh – 492002 2 - Chhattisgarh State Renewable Energy Development Agency (Creda) Through Its Chief Executive Officer, C.R.E.D.A., V.I.P. Road, Raipur, Chhattisgarh – 492006 3 - Superintendent Engineer R.E.-1, C.R.E.D.A., V.I.P. Road, Raipur, Chhattisgarh – 492006 4 - Executive Engineer R.E.-V, C.R.E.D.A., V.I.P. Road, Raipur, Chhattisgarh - 492006 ... Respondent(s) For Petitioner(s) : Mr. Kishore Bhaduri, Sr. Adv along with Mr. Sabyasachi Bhaduri and Mr. Harsh Dave, Advocates For Respondent(s) : Mr. Shashank Thakur, Dy. A.G. and Ms. Akriti Singh, Advocate MANPREET KAUR Digitally signed by MANPREET KAUR Date: 2025.12.04 10:54:26 +0530 2 Hon'ble Shri Ramesh Sinha, Chief Justice Hon'ble Shri Bibhu Datta Guru, Judge Order on Board Per Ramesh Sinha , Chief Justice 03.12.2025 1. Heard Mr. Kishore Bhaduri, learned Senior Advocate assisted by Mr. Sabyasachi Bhaduri and Mr. Harsh Dave, learned counsel for the petitioner. Also heard Mr. Shashank Thakur, learned Deputy Advocate General, appearing on behalf of the State/respondents No.1 and 3 as well as Ms. Akriti Singh, learned counsel appearing for respondents No. 2 to 4. 2. The present petition has been filed by the petitioner with the following relief(s):- “A. Call for Records: direct Respondents to produce the entire tender file, evaluation note- sheets, sample-approval dossiers, and post- commissioning inspection reports pertaining to Tender No. 155945 dated 10-07-2024. B. Issue an appropriate writ, order or direction in the nature of certiorari quashing and setting aside (a) the impugned black-listing order dated 05- 05-2025 bearing No. 1695/RE-05/PM- JANMAN/2025-26 (Annexure P/1); and (b) the consequential order dated 13-05-2025 bearing No. 2037/RE- 05/PM-JANMAN/2025- 26 whereby the Petitioner's Earnest-Money Deposit has been forfeited (Annexure P/2); 3 C. Direct the Respondents forthwith to: (a) release to the Petitioner the entire outstanding contractual sum of 4,48,11,214/-- which already includes the GST component of 49,26,433/- that the Petitioner has remitted-together with interest at 12% p.a. from the respective invoice due-dates until realisation; (b) refund the forfeited Earnest-Money Deposit, also with interest at 12 % p.a.; and (c) grant a commensurate extension of time, without penalty, for completion of the balance supply and installation of the Home-Light Systems under the subsisting work orders. D. That the Hon'ble Court may kindly be pleased to grant any other relief(s)/ order(s)/ direction(s) in favour of petitioner, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice.” 3. The facts, in brief, indicate that the respondent–Chhattisgarh State Renewable Energy Development Agency (CREDA) issued a Notice Inviting Tender (NIT) dated 10.07.2024 for the design, supply, installation and commissioning of Solar Home Lighting Systems of 300 Wp capacity, along with a five-year comprehensive maintenance contract. The petitioner participated in the tender process and was declared the L-1 bidder following negotiations conducted vide letters dated 14.08.2024, 09.09.2024 and 12.09.2024. Several work orders dated 13.09.2024, 23.09.2024 and 20.12.2024, as well as a Letter of Intent dated 12.03.2025, were issued in favour of the petitioner. As required under Clause 21 relating to “Samples”, the petitioner submitted 4 sample systems along with NABL-accredited test reports, which were duly examined and approved by the Tender Committee, the Chief Executive Officer, and the Superintending Engineer of CREDA, with such approval being circulated to all district offices. 4. Pursuant to the said approval, the petitioner commenced supply and installation of the Solar Home Lighting Systems between 30.10.2024 and 30.12.2024 across various districts in the State, in accordance with the work orders and the technical specifications prescribed under the MNRE PM-JANMAN Scheme Guidelines dated 04.01.2024. The petitioner asserts that the systems installed conformed to the approved sample, and that more than half of the work had been completed, with Joint Commissioning Certificates being issued by the respective district and zonal offices. Subsequently, upon scrutiny of these commissioning reports at the Head Office, CREDA issued communications dated 28.02.2025, 07.03.2025, 21.03.2025 and 08.04.2025, raising objections to the modules installed, alleging deviation in cell count and mounting structure, despite the fact that the tender and MNRE specifications only required a minimum 300-watt module with 19% efficiency, without prescribing cell configuration. 5. The petitioner furnished replies to the aforesaid communications, clarifying that the systems were procured from a CREDA- registered vendor and installed strictly as per the approved sample and the work-order specifications. However, ignoring the 5 said replies and without affording any cogent opportunity of hearing, the respondent issued an order dated 05.05.2025 blacklisting the petitioner, followed by a further order dated 13.05.2025 directing forfeiture of the Earnest Money Deposit. The petitioner, having already completed installation of 729 systems, raised running-account bills amounting to Rs.4,48,11,214/-, and deposited Rs.49,26,433/- towards GST, but no payment was released by the respondent. Alleging arbitrariness, violation of natural justice, wrongful blacklisting, forfeiture of EMD and non- payment of executed work, the petitioner has approached this Court by filing the present petition. 6. Learned counsel for the petitioner submits that the impugned action of the respondent-CREDA is wholly arbitrary, illegal and unsustainable in law, inasmuch as the petitioner had no contractual liberty to alter or modify any term, condition, specification or structure beyond what was expressly sanctioned in the work order and in the CREDA-approved sample, and every supply was made strictly in conformity with those very approved specifications. It is urged that under the tender conditions the petitioner was mandatorily required to procure all components exclusively from a CREDA-registered vendor, and therefore, the petitioner’s performance stood entirely governed by the tender notice, work order and CREDA’s own procurement rules. It is contended that the tender documents, technical schedules and work orders only required a minimum 300 Wp module with 19% 6 efficiency, and were completely silent on the number of cells. The petitioner’s vendor supplied 340 Wp modules exceeding the prescribed wattage and these very modules formed part of the sample submitted, tested, verified and approved by the Tender Committee and CREDA officials. Thus, alleging a 72-cell requirement after installation is an ex post facto insertion of a non- existent condition and is arbitrary and impermissible. Likewise, no requirement existed for use of a C-channel mounting structure, and the petitioner cannot be faulted for installing the very structure type reflected in the approved sample. It is further submitted that blacklisting the petitioner violates Articles 14, 19(1)(g), 301 and 304 of the Constitution, being manifestly arbitrary, unreasonable and devoid of any rational basis, particularly when the alleged deviations were matters entirely beyond the control of the petitioner. 7. Reliance is placed on the judgment of the Hon’ble Supreme court in Kulja Industries Limited v. Western Telecom Project BSNL (2014) 14 SCC 731, relevants para of which is quoted hereinbelow: “25. 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 7 never permanent and the period of debarment would invariably depend upon the nature of the offence committed by the erring contractor.” 8. Learned counsel for the petitioner further places reliance on Gorkha Security Services v. Govt. of NCT of Delhi, (2014) 9 SCC 105, wherein the Hon’ble Supreme Court held that blacklisting is a drastic measure akin to “civil death” of a contractor and requires strict adherence to principles of natural justice, and that mere mechanical issuance of notices is not legally sufficient. Further reliance is placed on Medipol Pharmaceutical India Pvt. Ltd. v. PGIMER, (2020) 9 SCC 369, wherein it was held that the State must act fairly and without discrimination while entering into contractual relationships. He further argued that the effect of blacklisting by CREDA extends beyond the State of Chhattisgarh and virtually prevents the petitioner from participating in any Government tenders across India, thereby causing grave and irreparable prejudice, affecting even other products manufactured by the petitioner, and potentially leading to closure of the petitioner’s factory and loss of livelihood for its employees. It is contended that the blacklisting is without jurisdiction, null and void and issued with a pre- determined mind, ignoring the fact that the petitioner had satisfied all objective and essential criteria and had installed the very system that CREDA had itself approved after due testing and verification. 9. It is further urged that the petitioner has always attended to 8 complaints, undertaken regular servicing and preventive maintenance and continued to discharge contractual obligations despite non-payment of invoices. The withholding of legitimate dues amounting to several crores and the respondent’s failure to respond to repeated representations is, according to him is arbitrary, unreasonable, unjust and contrary to the principles laid down in Air India Ltd. v. Cochin International Airport Ltd., (2000) 2 SCC 617, wherein it was held that the State may prescribe tender conditions but must do so in a fair, reasonable and bona fide manner. It is argued that the respondent, being “State” under Article 12, is constitutionally obliged to act fairly, transparently and in accordance with the rule of law, and that the impugned action is vitiated by non-application of mind, malafides, procedural irregularity and violation of Articles 14 and 19(1)(g). Counsel further submits that by depriving the petitioner of its lawful payments and by illegally blacklisting it, the respondent has infringed the petitioner’s fundamental right to trade and business, which is integral to the right to life and livelihood. It is, therefore, urged that the impugned orders are ex facie illegal, arbitrary, irrational and unsustainable in law. 10. On the other hand, learned State counsel appearing for the State/respondent No. 1 submits that the main contesting party in this petition is the respondents No. 2 and 4/ CREDA, which had passed the impugned order and blacklisted the petitioner from future participation. 9 11. Learned counsel appearing for respondents No. 2 and 4/ CREDA submits that the present writ petition is wholly misconceived and not maintainable as the petitioner seeks to bypass the efficacious statutory and contractual remedies specifically provided under the tender conditions and the binding arbitration clause contained in Clause 25 of the General Conditions of Contract. It is argued that the reliefs claimed such as quashing of the blacklisting order dated 05.05.2025, the consequential forfeiture order dated 13.05.2025, and monetary claims amounting to Rs.4,48,11,214/- with interest arise purely out of contractual obligations and commercial disputes, and therefore fall outside the limited scope of writ jurisdiction. Reliance is placed on the judgment passed by the Hon’ble Supreme Court in the matter of Union of India v. T.R. Verma, 1957 SCC OnLine SC 30, to submit that when an alternative and equally efficacious remedy is available, the extraordinary jurisdiction under Article 226 ought not to be invoked. It is further submitted, relying upon the judgment passed in the matter of Tata Motors Ltd. v. BEST, (2023) 19 SCC 1, that judicial review in tender and contractual matters must be exercised with extreme restraint and only in cases of proven arbitrariness, malafides, bias or irrationality, none of which is made out by the petitioner. 12. It is further submitted that the petitioner has deliberately misrepresented facts and is attempting to conceal persistent non- compliance with essential specifications of the tender, despite 10 repeated notices and opportunities granted by CREDA. Learned counsel for the respondents / CREDA further pointed out that the inspection reports from multiple districts revealed serious deviations such as installation of 68-cell solar modules instead of 72-cell modules, the absence of mandatory C-channel mounting structures, and use of unapproved combinations of components, each violating Clause 7 (“Rejection of Works”), Clause 13 (Warranty/CMC obligations), and Clause 17 (Forfeiture of EMD) of the tender conditions. It is submitted that the petitioner was repeatedly directed vide notices dated 28.02.2025, 07.03.2025, 21.03.2025 and 08.04.2025 to rectify the defects, and was categorically warned that failure to do so would invite blacklisting. Despite this, the petitioner not only failed to perform rectification within the stipulated time but also admitted, vide its letter dated 27.03.2025, that it had modified solar panels as per availability without any authorization from the competent authority. It is argued that such conduct demonstrates wilful breach of contract and disregard for public interest. She further submitted that the impugned orders dated 05.05.2025 and 13.05.2025 were passed strictly as per procedure, in accordance with the tender terms, and after affording full opportunity of hearing, and are necessary to protect the public exchequer from further financial loss. Hence, the writ petition deserves to be dismissed in limine. 13. We have heard learned counsel appearing for the parties at length, carefully considered their rival submissions, and have also 11 meticulously perused the pleadings as well as the documents annexed with the writ petition, including the impugned orders. The material placed on record has been examined in the light of the applicable legal principles and the judgments relied upon. 14. At the outset, it is evident that the primary grievances of the petitioner is pertaining to release of outstanding contractual payments, alleged wrongful rejection of work, and the forfeiture of Earnest Money Deposit that arise from the terms of the tender and the contract executed between the parties. These issues, involving detailed evaluation of technical specifications, performance of work, quality assessment, and alleged deviations, are matters of evidence and adjudication best suited for the forum agreed upon by the parties under Clause 25 of the General Conditions of Contract, which provides for arbitration as the mechanism for dispute resolution. In view of the settled law laid down in T.R. Verma and Tata Motors Ltd. (supra), this Court is not inclined to exercise its writ jurisdiction to adjudicate complex contractual claims for monetary reliefs when an equally efficacious alternate remedy is available. 15. Clause 25 of the Notice Inviting Tender, which deals with arbitration, is reproduced hereinbelow for easy reference:– “25. Arbitration Clause: Except as otherwise provided in this contract all questions and disputes relating to the meaning of the specifications, designs, drawings and 12 instructions, herein before mentioned as to thing whatsoever, in anyway, arising out of or relating to the contract, designs drawings, specifications, estimates, concerning the works, or the execution or failure to execute the same, whether arising during the progress of the work or after the completion or abandonment thereof, shall be referred to the Chief Engineer in writing for his decision within a period of thirty days of such occurrence. Thereupon, the Chief Engineer shall give his written instructions and/or decision within a period of sixty days of such written request. This period can be extended by mutual consent of the parties. Upon receipt of written instructions or decision, the parties shall promptly proceed without delay to comply such decision or instructions. If the Chief Engineer fails to give his instructions or decision in writing within a period of sixty days or mutually agreed time after being requested if the parties are aggrieved against the decision of the Chief Engineer, the parties may within thirty days prefer such dispute/disputes for arbitration to Addi. Chief Engineer/Supt Engineer subject to the jurisdiction and limitations in accordance with the provisions of Chhattisgarh Madhyastham Adhikaran Adhiniyam, 1983. In case, the dispute is within the jurisdiction of Addl. Chief Engineer/Supt Engineer, he shall then act as sole arbitrator and he shall pass an award after hearing both the parties strictly in accordance with the provisions of the Arbitration Act, 1996 and the rule made their under for the time being in force. If the Bidder does not make any demand for 13 arbitration in respect of claim(s) in writing within ninety days on receiving information from the Engineer-In- Charge that the final bill is ready for payment, the claim of the Bidder shall be deemed to have been waived and shall be absolutely barred and the RDA shall be discharged or released of all the liabilities under the contract in respect of such claim(s). A reference to the Arbitration shall be no ground for not continuing the work on the part of the Bidder and payment as per terms and conditions of the agreement shall be continued by the RDA.” 16. However, the question that remains for consideration is whether the impugned blacklisting order dated 05.05.2025, which debars the petitioner “until further orders,” withstands judicial scrutiny. It is well established that blacklisting has serious civil consequences, affects the fundamental right to carry on trade, and must satisfy the requirements of fairness, proportionality, and adherence to natural justice. 17. The Supreme Court, in Baccarose Perfumes & Beauty Products Pvt. Ltd. v. Central Bureau of Investigation & Another, (2025) 1 SCC 384, has observed as under: “22. A perusal of the scheme of CrPC, 1973 allows us to infer that mere registration of FIR cannot be interpreted to mean that it constitutes the initiation of such proceedings. A registration of FIR necessitates an investigation by a competent officer as per the detailed process outlined in 14 Section 155 to 176 CrPC. It is only after a final report (or as referred in the common parlance, a challan or a charge-sheet) is submitted as per the compliance of Section 173(2) CrPC, cognizance for the offence(s) concerned is taken. However, undoubtedly, the court is not bound by the said report.” 18. In M/s. Erusian Equipment & Chemicals Ltd. (supra), it has been observed by the Apex Court as under: “20. Blacklisting has the effect of preventing a person from the privilege and advantage of entering into lawful relationship with the Government 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. ” 19. In B.S.N. Joshi & Sons Ltd. vs Nair Coal Services Ltd. & Ors., (2006) 11 SCC 548, the Apex Court held as under: “41. … When a contractor is blacklisted by a department he is debarred from obtaining a contract, but in terms of the notice inviting tender when a tenderer is declared to be a defaulter, he may not get any contract at all. It may have to wind up its business. The same would, thus, have a disastrous effect on him. Whether a person defaults in making payment or not would depend upon the context in which the allegations are made as also 15 the relevant statute operating in the field. When a demand is made, if the person concerned raises a bona fide dispute in regard to the claim, so long as the dispute is not resolved, he may not be declared to be defaulter.” 20. The order of blacklisting appears to be disproportionate and contrary to the ratio laid down by the Apex Court in Kulja Industries Ltd. vs Chief General Manager Western Telecom Project BSNL & Ors., (2014) 14 SCC 731, wherein the Apex Court has observed as under: “25. 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 the nature of the offence committed by the erring contractor.” 21. An order of blacklisting should not be issued in ordinary cases of breach of contract because it has severe civil consequences, amounting to “civil death” and "commercial exile" for the affected party. This drastic penalty, which bars a party from future contracts and damages their reputation, must be reserved for egregious cases, not for minor violations or bona fide disputes, 16 and must always adhere to principles of proportionality and natural justice. 22. On perusal of the record, it appears that although the respondent agency issued several notices calling upon the petitioner to rectify defects, the show-cause notice dated 08.04.2025 did not specify the proposed duration of blacklisting nor did it provide a clear basis for permanent or indefinite debarment. The order dated 05.05.2025 is also bereft of reasons regarding why such an open- ended and indefinite blacklisting was warranted, particularly when the matter involves disputed compliance with technical specifications. The absence of a determinative time period and lack of reasons for adopting the harshest measure renders the order disproportionate and violative of procedural fairness. 23. In view of the above, while this Court refrains from interfering with the contractual aspects of the dispute including the issues of payment, rectification, forfeiture of EMD, and interpretation of tender specifications, the blacklisting order dated 05.05.2025 cannot be sustained in its present form. The said order is therefore quashed, leaving it open to the Respondent Agency to initiate fresh proceedings, if so advised, strictly in accordance with law and upon compliance with the requirements of due process, including issuance of a proper, reasoned show-cause notice specifying the duration and grounds of the proposed debarment. 24. As regards the remaining disputes between the parties, including 17 the petitioner’s claims for the sum of Rs.4,48,11,214/-, its challenge to the forfeiture of the Earnest Money Deposit, and all questions relating to compliance with technical specifications, installation standards, and inspection findings, the petitioner is required to invoke the arbitration clause under Clause 25 of the General Conditions of Contract. 25. Accordingly, the writ petition stands partly allowed to the limited extent indicated hereinabove. The impugned order dated 05.05.2025 blacklisting the petitioner is set aside. All other prayers and challenges raised in the petition are declined, with liberty to the petitioner to seek appropriate relief through arbitration in accordance with law. 26. No order as to costs. Sd/- Sd/- (Bibhu Datta Guru) (Ramesh Sinha) Judge Chief Justice Chandra / Manpreet