‘Public Interest Must Prevail’: Meghalaya HC Upholds Five-Year Blacklisting Of Highway Contractor

Last Updated:January 06, 2026, 12:57 IST

The case arose from a major highway infrastructure project involving two-laning works on NH-44E and the Nongstoin-Rongjeng-Tura road

The court noted that the show-cause notice clearly detailed the allegations and that the petitioners had been afforded an adequate opportunity to respond. (File)

Holding that public interest must prevail over private commercial considerations, the Meghalaya High Court (HC) has upheld a five-year blacklisting of a major highway contractor after finding that the state’s action was based on credible material pointing to corrupt practices during execution of a public infrastructure project.

“…the State is obligated to put public interest over everything else in such matters," said the bench, while turning down the plea filed by the joint venture of M/s BSCPL Infrastructure Ltd and M/s C&C Constructions.

The venture had challenged its debarment by the Public Works Department (Roads), Government of Meghalaya, from participating in future tenders.

A single-judge bench of Justice HS Thangkhiew held that the impugned action was lawful, proportionate, and taken in the larger public interest, finding no violation of principles of natural justice or lack of authority on the part of the State.

The case arose from a major highway infrastructure project involving two-laning works on NH-44E and the Nongstoin-Rongjeng-Tura road, awarded to the petitioner JV in 2011 at a bid value of Rs 1,303.83 crore. The project cost was later revised to over Rs 2,400 crore following additional works and price adjustments. Disputes between the parties were subsequently referred to arbitration.

During the arbitral proceedings, the state scrutinised ledger documents submitted by M/s BSCPL in support of its claims.

According to the government, these records reflected repeated expenditure on costly gifts, liquor, hospitality, and other benefits allegedly extended to public officials, engineers, and members of the Dispute Resolution Board, among others, pointing to a pattern of corrupt practices.

On the basis of these materials, the PWD issued a show-cause notice in September 2024, followed by an order dated December 3, 2024, debarring the JV for five years on grounds of corrupt and fraudulent conduct. The petitioners assailed the decision as mala fide, belated, and intended to prejudice the ongoing arbitration proceedings.

The state countered the challenge by submitting that the JV had already received Rs 2,523 crore towards project payments, apart from Rs 94 crore awarded pursuant to orders of the arbitral tribunal. It was also alleged that the contractor had adopted a systematic approach of extending illegal gratification to officials, Dispute Resolution Board members, and MoRTH officials, and had even sought reimbursement of such expenses before the arbitral tribunal.

Rejecting the writ petitions, the court held that the power to blacklist flowed both from the contractual framework— particularly Clause 59.2(h) of the General Conditions of Contract dealing with corrupt practices during execution — and from the state’s inherent right to decide with whom it would contract.

The court noted that the show-cause notice clearly detailed the allegations and that the petitioners had been afforded an adequate opportunity to respond.

The court also relied on observations recorded by the arbitral tribunal, which had examined the same ledger entries and noted that an FIR had been registered on the basis of the available material, prima facie lending credence to the allegations of illegal gratification.

These materials, the court held, constituted credible and substantive evidence, not mere suspicion or conjecture.

On proportionality, the court ruled that a five-year debarment could not be termed excessive considering the scale of the project, the magnitude of public funds involved, and the seriousness of the alleged misconduct. Emphasising that public interest must override private commercial considerations, the court found no grounds to interfere under Article 226 of the Constitution.

News india ‘Public Interest Must Prevail’: Meghalaya HC Upholds Five-Year Blacklisting Of Highway Contractor

Read More