Indefinite Blacklisting Without Time Limit Is Arbitrary: Delhi High Court Quashes 18-Year Debarment of Contractor, Follows Kulja Industries

1. Case Snapshot

Case Name: Kaveri Infrastructure Pvt Ltd. vs Delhi Jal Board, Through Its Chief Executive Officer

Citation: W.P.(C) 16962/2022

High Court: High Court of Delhi

Bench: Hon'ble Mr. Justice Amit Bansal

Date of Judgment: 2nd July, 2026

Area of Law: Contract Law, Administrative Law, Public Procurement, Blacklisting

2. Judgment in Brief

The Delhi High Court quashed an indefinite blacklisting order passed by the Delhi Jal Board (DJB) against a contractor that had been debarred since 2008. The petitioner, Kaveri Infrastructure, was blacklisted following a CBI investigation into alleged corruption in securing a contract. The impugned order dated 22nd July 2022 reiterated the earlier blacklisting without specifying any time period, stating the petitioner would remain debarred "till the outcome of the investigation/court proceedings/appeals." The Court held that blacklisting cannot be for an indefinite period, relying on Kulja Industries Ltd. v. Chief General Manager and Sabharwal Medicos Pvt Ltd. v. Union of India. The Court noted that DJB's own Rules prescribe a maximum blacklisting period of two years. Even though the petitioner and its Managing Director were convicted in 2013 (with appeals pending), the Court found that continued blacklisting since 2008 was arbitrary. The Court quashed the impugned order and directed that the petitioner would be entitled to participate in all future tenders of DJB, subject to fulfilment of eligibility norms.

3. Relevant Facts

Background

• The petitioner is a company engaged in installation of water supply and sewerage rehabilitation works, tube well installation, and deep bore hand pump projects.

• On 09.09.2004, the respondent issued a Notice Inviting Tender for renovation of old pipelines. The petitioner applied and was awarded the work.

CBI Investigation and Initial Blacklisting

• The CBI registered an FIR on 23.04.2007 alleging that the petitioner had secured a ₹35.84 crore contract through corrupt and extraneous considerations.

• The respondent debarred the petitioner vide circular dated 25.06.2007.

• The petitioner filed W.P.(C) 5398/2007, and this Court quashed the debarment on 14.09.2007, granting liberty to the respondent to issue a fresh notice.

Fresh Show Cause Notice and Blacklisting Order

• On 10.10.2007, the respondent issued a fresh show cause notice.

• On 28.03.2008, the respondent passed an order blacklisting the petitioner for an indefinite period, stating the petitioner "shall not be allowed to participate in the tendering process till such time the outcome of the investigation being carried

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