Even a Day’s Blacklisting Can’t Justify Lifetime Exclusion from Tenders: Orissa High Court Strikes Down Perpetual Debarment Clause in Balasore Municipality Tender

“Use of the word ‘ever’ in tender clause amounts to civil death — violates Article 19(1)(g)” — In a landmark ruling safeguarding the constitutional right to trade and profession, the Orissa High Court has declared that perpetual exclusion of bidders from government tenders on the basis of past blacklisting — even for a day — is arbitrary, unconstitutional, and violative of Article 19(1)(g) of the Constitution.

The Division Bench of Chief Justice Harish Tandon and Justice M.S. Raman struck down Clause 15 of a tender floated by Balasore Municipality, terming it “a clause of civil death” that offends the fundamental rights of bidders.

“The expression ‘ever blacklisted or debarred’ conveys a laudable message that even a person who has suffered blacklisting or debarment for a limited period is perpetually debarred from participating in the tender process. Such permanent debarment is opposed to decisions of the apex Court and to Article 19(1)(g) of the Constitution of India,” observed the Chief Justice.

“Blacklisting Can’t Be a Weapon for Civil Death” — Court Applies Proportionality Doctrine to Tender Conditions

At the heart of the constitutional challenge was Clause 15 of the tender, which permanently disqualified any bidder who had “ever been blacklisted or debarred,” regardless of the duration or whether such debarment had been revoked. The clause explicitly stated that revocation of blacklisting would not be recognised, leading to permanent ineligibility.

Reading down this condition, the Court held:

“The word ‘ever’ used in the said clause in its grammatical meaning applies for all time to come and cannot be given a restrictive meaning. It creates an obstacle of permanent nature… The said clause inculcates a clear and explicit expression that even a bidder who suffered an order of blacklisting for a day shall be prevented from participating in the said tender process.”

The Court found the blanket and irreversible exclusion to be in direct violation of the test of proportionality, a constitutional doctrine reaffirmed by the Supreme Court in multiple rulings, including State of Odisha v. Panda Infraproject Limited (2022) 4 SCC 393, and applied by the Orissa High Court in Artatran Bhuyan v. State of Odisha (2025 SCC OnLine Ori 2844).

Quoting from the apex court's approach in Panda Infraproject, the High Court reiterated:

“Perpetual blacklisting tantamount to a civil death which, in other words, undermines the fundamental rights guaranteed under Article 19(1)(g) and must be restricted to a reasonable time period.”

Judicial Review of Tender Conditions Justified Where Fundamental Rights Are in Jeopardy

Rejecting the notion that tender conditions are immune from judicial scrutiny, the Bench emphasized that courts are competent to intervene where tender clauses infringe constitutional rights, are arbitrary, or violate settled legal principles.

“Blacklisting is no doubt a necessary disciplinary tool,” the Bench noted, “but it cannot become a punitive weapon that permanently destroys the livelihood and professional standing of an individual.”

The Court reminded the authorities that blacklisting, while permitted, must be proportional, justified, and time-bound, in accordance with constitutional guarantees and judicial precedent.

Tender Quashed, Municipality Directed to Issue Fresh Tender Within 15 Days

Striking down Clause 15 in its entirety, the Court proceeded to quash the entire tender process, holding that such an unconstitutional clause taints the entire tender document. The Municipality was given 15 days to issue a fresh tender that conforms to constitutional norms and principles of fairness.

“We thus quash and set aside the said tender because of the stringent terms and conditions which violate constitutional rights,” the Court declared.

The other legal issues raised by the petitioners — including challenge to the cancellation of an earlier tender and the failure to provide services in public markets — were deemed academic, given the invalidation of the present tender.

Constitutional Protections Extend to Contractors and Service Providers Too

This judgment serves as a resounding assertion of the principle that government contracts and tender conditions are not above the Constitution. While the government may frame eligibility conditions in public interest, the Court made it abundantly clear that such power is not absolute and must respect the right to carry on trade and business.

“A clause that disqualifies a person from public bidding forever — without giving him a second chance — creates an artificial bar on his livelihood. The Constitution does not permit such unchecked exclusion,” the Court warned.

Date of Decision: 28 January 2026