1. This writ petition has been preferred by the petitioner company with the prayer to quash office order No. 8 EB, dated 29-1-99 (Annexure 15), passed by the Bihar State Electricity Board (hereinafter referred to as the Board), whereby the petitioner company has been ". . . blacklisted and all business dealings of B.S.E. Board with the firm and its associates are debarred". The petitioner company is a manufacturer of electrical equipment and has been a supplier to the Board for a long time.

2. Shorn of the details, the petitioner company had received orders from the Board for supply of 45 sets of Isolators of 132 KV of different amperes as per the exact specifications of the Board, vide letter No. Trans. 1032/95-03-EB, dated 18-2-97 (Annexure 1). It is manifest from this letter that the Board had prescribed detailed specifications according to which the petitioner had to manufacture and supply 45 sets of 132 KV Isolators to the Board made to meet the specific needs of the Board. Paragraphs 14 and 15 of the letter deals with the suppliers guarantees, and are set out hereinbelow for the facility of quick reference :-

"14. GUARANTEEAll equipments/materials to be supplied against this order will be guaranteed against bad workmanship defective materials and unsatisfactory services for a period of one year from the date of commissioning or eighteen months from the date of receipt by the consignee and if the materials are found defective during this period the same shall be replaced or rectified by the suppliers free of any cost whatsoever."15. PERFORMANCE GUARANTEETo ensure satisfactory performance of the equipments supplied against this order, you shall, after the supply is fully completed, furnish a bank guarantee of the amount of 5% (Five) percent of the value of the order. The guarantee shall be issued by a Nationalised Bank and made payment to the Dy. Director of Accounts (Hd. Qrs.), B.S.E. Board, Patna, and its terms and conditions shall be as provided in the Bank Guarantee form attached. The performance guarantee should be furnished in the form attached. The performance guarantee should be furnished immediately, after the supply is effected fully, on a non-judicial stamp paper of Rs. 50,00 only. Delay in submission of performance guarantee will entail delay in release of your 5% Bank Guarantee submitted against terms of payment clause.The performance guarantee shall cover the following to Bihar State Electricity Board.You shall warrant the successful and satisfactory operation of the equipment furnished under the contract, under the conditions and for the services specified against any and all defects in design, materials and workmanship and shall upon written notice by the Bihar State Electricity Board, Patna, fully remedy free of expense to the Board such defects as developed under the normal use of the said equipment within the first year of service but not exceeding 18 months from the date of despatch of the said equipment by the supplier.On the performance and execution of the order in all respects, the Bank Guarantee will be returned without any interest and on presentation of the "No Demand Certificate"

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3 The petitioner company had informed the Board that 15 out of the 45 sets were ready for pre-despatch inspection, and had requested for inspection by the functionaries of the Board, vide letter dt. 3-7-97 (Annexure 3). The Board by its letter dt. 14-7-97 (Annexure 4), had informed the petitioner company about deputation of an Electrical Executive Engineer for inspection. Accordingly, the inspection took place from 6-8-97 to 19-8-97 and 17-9-97 to 18-9-97, the 15 sets were qualitatively adjudged and approved by Ram Kripal Singh, Electrical Executive Engineer, vide his inspection report dt. 19-9-97 (Annexure 5). This test report will be of relevance when we discuss the issue relating to disciplinary proceedings by the Board against its officials. The Board had accordingly informed the petitioner company, vide l