Shillong, Feb 20: The Meghalaya High Court has refused to overturn a five-year ban imposed on Hyderabad-based M/s BSCPL Infrastructure Ltd, ruling that ledger entries detailing gifts and cash payments to public officials were sufficient grounds for blacklisting the company from government contracts in the state.
A Division Bench comprising Chief Justice Revati Mohite Dere and Justice W Diengdoh on February 19 dismissed the company’s appeal, affirming both the December 3, 2024 blacklisting order issued by the Public Works Department (PWD) and an earlier decision by a Single Judge that had also gone against the firm.
The dispute traces back to a major road construction contract awarded in February 2011 to a joint venture between BSCPL Infrastructure Ltd and C&C Construction. The project, valued at Rs 1,303.83 crore, involved the two-laning of the Shillong–Nongstoin and Nongstoin–Rongjeng–Tura stretches of NH-44. Though initially scheduled for completion by March 2014, the work was delayed for several years and ultimately concluded in December 2017 at a revised cost of Rs 2,406.46 crore.
Subsequent disagreements between the contractor and the PWD led to prolonged arbitration proceedings. In May 2019, the joint venture submitted an extensive statement of claims exceeding 9,500 pages across 16 volumes. Within these documents was a “business promotion account” ledger that recorded a series of payments made between 2014 and 2017 during the execution of the contract.
The ledger entries listed expenditures such as cash payments for gifts to government officials, purchases of whisky bottles, an HP laptop for a PWD junior engineer, Samsung mobile phones and tablets presented as Christmas gifts, Titan watches for local administrators, monthly cash payments to a police station, a Rs 4 lakh contribution to a Police Officers’ Wives Association, and a Rs 5 lakh cheque issued to Nongkhnum We Care Society reportedly “as per instructions of Higher Management.”
According to the state, these entries were formally examined only in September 2024 after cross-examination of the company’s witnesses before the arbitral tribunal. A complaint was filed at Sardar Police Station in East Khasi Hills on September 3, 2024, resulting in the registration of FIR No. 286(9) of 2024 under provisions of the IPC and the Prevention of Corruption Act. A show cause notice was issued on September 16, followed by the blacklisting order in December.
Challenging the action, BSCPL—represented by senior counsel Mr Jethmalani—argued that the blacklisting was legally unsound and motivated by malice. The company contended that the show cause notice lacked specific details, including the names of officials allegedly bribed and any evidence of a quid pro quo. It maintained that the ledger entries reflected legitimate business expenses and goodwill gestures rather than bribes. The firm also pointed to the five-year gap between submission of the ledger documents and the initiation of action, alleging that the move was intended to undermine the arbitration proceedings and deny it legitimate claims. It further noted that the FIR did not explicitly allege offences under the Prevention of Corruption Act and had described the entire arbitral award amount of Rs 2,366.77 crore as “property stolen.”
The High Court was not convinced by these submissions. It observed that the company had neither denied the ledger entries nor provided a satisfactory explanation for them, dismissing the claim that they were routine expenses or charitable contributions as an afterthought. Addressing the issue of delay, the bench noted that the arbitration proceedings had been stayed for considerable periods and that cross-examination began only in July 2022, with the complaint being lodged soon after the proceedings concluded. This timeline, the court held, did not invalidate the blacklisting.
The judges referred to Clause 37 of the contract, dealing with corrupt or fraudulent practices, and Clause 59.2(h), which defines corrupt practice as offering or giving anything of value to influence a public official in the procurement process or contract execution. The court further clarified that even in the absence of such contractual provisions, the PWD retained inherent authority to debar contractors involved in corrupt conduct.
Citing established Supreme Court precedent, the bench underscored that blacklisting carries civil consequences and therefore requires procedural fairness, but also emphasized that the State has a duty to prioritize public interest above all else.
The court refrained from commenting on the merits of the ongoing arbitration proceedings or the criminal investigation, both of which are pending before separate forums. With the dismissal of the writ appeal, the five-year ban on the company remains in force.
