Jharkhand High Court
M/S Binsys Technologies Private … vs The State Of Jharkhand Through Chief … on 26 June, 2025
Author: Rajesh Shankar
Bench: Rajesh Shankar
2025:JHHC:16969-DB
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P. (C) No. 1545 of 2024
M/s Binsys Technologies Private Limited, a registered company
incorporated under the provisions of the Indian Companies Act 1956,
having its office at 2nd & 3rd floor above Bata Showroom, 383 Bank
Street, Munirka, P.O. & P.S. Munirka & District New Delhi (Delhi -
110067), through Dhiraj Kumar, Assistant Manager - Finance &
Accounts, aged about 34 years, Son of Sambhu Singh, Resident of Basti
Jalal, P.O. & P.S. Dighwara, & District - Saran (Bihar-841221).
... Petitioner
Versus
1. The State of Jharkhand through Chief Secretary, Government of
Jharkhand, having his office at Project Building, P.O., P.S. -
Dhurwa & District - Ranchi.
2. The Examination Controller, Jharkhand Staff Selection
Commission, through its Secretary, Kalinagar, Chaibagan, P.O. &
P.S. - Namkom & District - Ranchi.
3. Jharkhand Staff Selection Commission, through its Secretary,
Kalinagar, Chaibagan, P.O. & P.S. - Namkom & District - Ranchi.
4. Deputy Secretary, Jharkhand Staff Selection Commission,
Kalinagar, Chaibagan, P.O. & P.S. Namkom & District - Ranchi.
... Respondents
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CORAM: HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJESH SHANKAR
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For the Petitioner: Mr. Ajit Kumar, Sr. Advocate
Mr. Vikalp Gupta, Advocate
For the State: Mrs. Sunita Kumari, A.C. to Sr. S.C.-II
For the JSSC: Mr. Sanjoy Piprawall, Advocate
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Reserved on: 23.06.2025 Pronounced on: 26/06/2025
Per M.S. Ramachandra Rao, C.J.
1. The petitioner is a private limited company incorporated under
the Companies Act, 1956.
2. The 3rd respondent is the Jharkhand Staff Selection Commission,
the 2nd respondent is the Examination Controller of the said
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Commission and the 4th respondent is Deputy Secretary of the said
Commission.
The background facts
3. The 3rd respondent issued a tender on 16.11.2021 inviting
Expression of Interest for selection and empanelment of agencies for
conduct and processing of various recruitment examinations which
have to be conducted by the 3rd respondent. The petitioner deposited the
tender fee and the Earnest Money Deposit on 17.12.2021 and
participated in the bidding process.
4. A general agreement dt. 03.01.2022 was executed between the
petitioner and the 3rd respondent empanelling the petitioner with the
said respondent for three years from 03.01.2022 to 02.01.2025 for
conducting assigned examination process.
5. The petitioner was declared as L-1 bidder and subsequently, a
Work Order dt. 12.04.2022 was granted in its favour for conducting
OMR Based Jharkhand Diploma Level Combined Competitive
Examination 2021.
6. The said examination was conducted on 03.07.2022 at 83
examination centres in the State of Jharkhand.
The FIR dt.14.7.2022
7. However, there was allegedly a question paper leak which
resulted in an F.I.R. Namkum P.S. Case No. 227 of 2022 dt. 14.07.2022
being registered by the Police under Sections 467, 468, 420, 120-B IPC,
Section 66 of the Information Technology Act and Section 10 of the
Bihar Conduct of Examinations Act, 1981.
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The show cause notice dt.25.7.2022
8. Annexure 8 is a show-cause notice-cum-suspension letter issued
by the 2nd respondent on 25.07.2022 to the petitioner informing the
petitioner about the registration of the said F.I.R. on allegations of
question paper leakage in the said examination and suspending the
empanelment of the petitioner immediately. In the same show-cause
notice, petitioner was asked to show cause by 01.08.2022 why it cannot
be blacklisted for its connivance in the question paper leakage.
Petitioner’s reply to the show cause notice
9. On 01.08.2022 the petitioner gave a reply refuting allegations in
the show-cause notice.
10. It was contended that the confidential examination material was
handed over as per instructions of the 3rd respondent Commission in a
secure and sealed cover, that the examination was conducted by the said
Commission with supervision and control of the District
Administration; and after handing over of the examination material, all
forthcoming events and activities till the end of the examination were
looked after by the 3rd respondent-officials and the petitioner was
nowhere involved in the conduct of examination except with respect to
CCTV, Biometric and candidate frisking.
11. The petitioner denied knowledge of the incident quoted in the
show-cause notice and also stated that police investigation is going on
and even the press briefings of the Police officials indicate that the
petitioner is nowhere involved in the incident. Petitioner also contended
that they have no relation with the incident of paper leakage and
requested for immediate withdrawal of the letters suspending its
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contract. It was also pointed out that blacklisting was unjustified before
the closure of the police report.
The black listing order dt. 02.08.2023
12. On 02.08.2023 the 3rd respondent passed the blacklisting order
stating that petitioner’s explanation to the show-cause notice was ‘not
satisfactory’ and it had not accepted any responsibility for the paper
leak. In the said order, there is a reference to a letter issued by the
Senior Superintendent of Police, Ranchi on 13.10.2022 alleging that an
Ex-Director of the petitioner by name Arun Kumar, and a Director of
the petitioner by name Ajit Kumar, were found to be in touch with one
Abhishek Kumar said to be involved in the paper leak and that was why
the petitioner was being blacklisted. Also no period for which the
petitioner was being blacklisted was mentioned.
The contentions of petitioner
13. Petitioner contends that neither the petitioner nor any of its
Directors or employees have been made accused in the police case
registered on 14.07.2022, nor any evidence has come to light about its
involvement and that they were not charge-sheeted by the police and,
therefore, the order of blacklisting, that too for an indefinite period of
time, is illegal, arbitrary and violation of Articles 14 and 19(1)(g) of
Constitution of India, apart from Article 300-A of the Constitution of
India.
14. Petitioner contends that though it was relieved from all works by
3rd respondent, it was made to continue work by 3rd respondent on their
request and continued to provide various data, work-sheets as per various
needs and requirements raised by the 3rd respondent from time to time and
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several emails (Annexure-15 series) exchanged between the parties
support its stand. It is contended that the 3rd respondent did not refund
the performance bank guarantees in the form of FDRs.
15. Petitioner contends that as per para 10.2 of the Service
Agreement dt. 12.01.2022 between the parties, the petitioner shall be
solely responsible for the leakage if it is proved that the same is due to
lack of care/failure attributable solely on the part of the petitioner or its
employees or any person/body engaged by the petitioner.
16. Petitioner contends that neither the petitioner nor its employees
were named in the F.I.R. and they were not also charge-sheeted. It is
also contended that the petitioner has no connection with any of the
accused persons responsible for the leakage and, therefore, blacklisting
indefinitely when there is a serious dispute, cannot be sustained.
The stand of the 3rd respondent -Commission
17. The Respondents 2 to 4 in their counter affidavit referred to the
letter of the Senior Superintendent of Police, Ranchi dt. 13.10.2022
referred to above, and contended that because of the question paper leak
and the 3rd respondent had allotted the work to the petitioner, the
petitioner had committed a criminal act and, therefore, it was entitled to
be blacklisted.
18. It is, however, not denied in the counter affidavit filed by
Respondents 2 to 4 on 07.12.2024 that investigation is still not
complete but in spite of the same, it was decided to cancel the Work
Order dt. 12.04.2022 issued to the petitioner and also to blacklist the
petitioner indefinitely.
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Consideration by the Court
19. We have noted the contentions of the parties.
20. The Supreme Court of India in Erusian Equipment &
Chemicals Ltd. v. State of West Bengal & Anr1 held at paragraph 20
that blacklisting has the effect of preventing a person from the privilege
and advantage of entering into lawful relationship with the Government
for the purposes of gains; and the fact that a disability is created by the
order of blacklisting indicates that the relevant authority is to have an
objective satisfaction.
21. In B.S.N. Joshi & Sons Ltd. v. Nair Coal Services Ltd &
Others2, the Supreme Court held that if a contractor is blacklisted on
the ground that he was a defaulter, he may not get any contract at all
and he may have to wind up its business. So, when a demand is made, if
a contractor 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.
22. In Kulja Industries Limited v. Chief General Manager,
Western Telecom Project Bharat Sanchar Nigam Limited &
Others3 the Supreme Court held that though blacklisting a contractor is
a business decision, it is subject to judicial review when the same is
taken by the State or any of its instrumentalities; that any such decision
will be open to scrutiny not only on the touchstone of the principles of
natural justice but also on the doctrine of proportionality. The Supreme
Court held that a fair hearing to the party being blacklisted thus
1
(1975) 1 SCC 70
2
(2006) 11 SCC 548
3
(2014) 14 SCC 731
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becomes an essential precondition for a proper exercise of the power
and a valid order of blacklisting made pursuant thereto; and the order
itself has to be reasonable, fair and proportionate to the gravity of the
offence and this can be examined by a writ court. It also observed that
as regards the period for which the order of debarment will remain
effective, the same would depend upon the seriousness of the case
leading to such debarment. It also held that debarment is never
permanent and the period of debarment would invariably depend upon
the nature of the offence committed by the erring contractor.
23. In Blue Dreamz Advertising Pvt. Ltd. and Another v. Kolkata
Municipal Corporation and Others4, the Supreme Court reviewed all
the above decisions and held that blacklisting has always been viewed
as a drastic remedy and orders passed have been subjected to rigorous
scrutiny. According to the Court, 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 ostracized resulting in serious consequences for the
person and those who are employed by him. Too readily invoking the
debarment for ordinary cases of breach of contract where there is a
bona fide dispute, is not permissible. It also held that merely because
the blacklisting order contains reasons, it cannot be upheld unless the
reasons justify the invocation of the penalty of blacklisting and the
4
2024 SCC OnLine SC 1896
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penalty is proportionate when it is imposed by a statutory body vested
with the duty to discharge public functions.
24. Keeping in mind these principles, we may firstly point out that it
is not permissible for the 3rd respondent to debar the petitioner/blacklist
the petitioner indefinitely, as has been clearly held in paragraph 25 of
the judgment of Kulja Industries Limited (supra 3).
25. Secondly, there is a serious bona fide dispute as to whether the
petitioner or its employees are involved in the alleged paper leak since
the petitioner has empathically denied any responsibility in connection
with the paper leak, as can be seen from its explanation given on
01.08.2022 to the show-cause notice dt. 25.07.2022.
26. Merely on the basis of letter of the Senior Superintendent of
Police, Ranchi dt. 13.10.2022 and though the petitioner or its
employees have not been charge-sheeted till date by the police in the
F.I.R. registered by them, the petitioner cannot be presumed to be guilty
of the offence of leaking of question paper. In India, there is a
presumption of innocence and the respondents cannot, on the basis of
the letter dt. 13.10.2022, presume the guilt of the petitioner and
blacklist the petitioner for an indefinite period of time.
27. Therefore, the impugned order dt. 02.08.2023 passed by
Respondent 4 blacklisting the petitioner is quashed and the respondents
are directed to make the payment of bills/invoices totaling to
Rs.2,90,00,176/- along with interest @ 7% per annum for the work
done by it.
28. The respondents shall also release to petitioner the FDRs
amounting to Rs.31,84,800/- and Rs.9,85,805/- submitted by the
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petitioner towards performance bank guarantees to the 3rd respondent
within 4 weeks, if not invoked, or in the alternative, if they had been
invoked/ encashed, refund the amounts covered by the said FDRs with
interest @ 7% per annum from the dates of invocation of the said
FDRs/bank guarantees till the date of payment. The Respondent 3 shall
also pay cost of Rs.2,00,000/- to the petitioner for its arbitrary action.
29. With the aforesaid directions and observations, this writ petition
is allowed.
(M.S. Ramachandra Rao, C.J.)
(Rajesh Shankar, J.)
N.A.F.R.
Manoj/-
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