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The State of Odisha vs. M/S Panda Infraproject Limited

Civil Appeal · 2022 INSC 232Decided 24 Feb 2022
Civil Appeal Nos. 1083-1084 of 2022
M.R. Shah · B.V. Nagarathna

Background

The respondent contractor built a flyover over a railway crossing in Bhubaneswar; during construction, a 10-metre slab collapsed, killing one person and injuring eleven others. A government inquiry blamed the contractor for faulty formwork design and inadequate safety measures, and after a show-cause notice and reply, the State permanently blacklisted the contractor from all future government work. The Orissa High Court quashed the blacklisting order, holding it was pre-decided and violated natural justice.

Decision Breakdown

The Supreme Court held that issuing a show-cause notice after an inquiry report, and then deciding based on the report and the contractor's reply, does not make an order "pre-determined": a tentative view before proceedings begin is not the same as prejudgment, and the contractor had been given a real opportunity to respond. The Court also disapproved of the State's own guideline capping blacklisting purely by number of offences (3 years per offence), holding that the gravity of the incident, not just the offence count, should govern the period. Given the seriousness of the fatal accident, permanent debarment was inappropriate, so the Court restricted the blacklisting to five years instead.

Lesson Learnt

A blacklisting or debarment order survives natural-justice challenge if the affected party was given a genuine opportunity to respond to specific allegations before the final decision, but even a justified blacklisting must be proportionate in duration to the actual gravity of the wrongdoing, not open-ended or purely formulaic.

Official source (sci.gov.in)View Judgment (PDF)

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