Mandatory consideration of both gravity of the offense and actual loss suffered is required for imposing maximum penalties in administrative debarment.

JUDGMENT :

Om Narayan Rai, J.

1. The petitioners, three in number, are aggrieved by the debarment of the petitioner no. 1 from contracting with Coal India Limited and its subsidiaries. The petitioners’ request to the respondents to review the two years’ ban imposed on the petitioner no. 1 has been spurned by an order dated May 02, 2025 passed by the Chairman, Coal India Limited and hence the writ petition.

FACTS:

2. Shorn of minute details, the salient facts of the case, as may be gathered from the pleadings of the parties (i.e. the writ petition filed by the petitioner and the affidavit-in-opposition filed on behalf of the respondent), are as follows:-

a) On July 23, 2021 a “Notice Inviting Tender cum e-Reverse Auction Open Domestic Tender” (hereafter “NIT”) was published by the respondent no. 1 for running contracts and empanelment as reserve running contract holders for a period of two years from the date of issuance of running contract for supply of bulk explosives to all the subsidiary companies of the respondent no. 1.

b) The NIT prescribed certain terms and conditions that were required to be fulfilled by bidders in order to be eligible for the contract. One of the primary conditions in the NIT was that preference would be given to eligible bidders as per the Procurement Public (Preference to Make in India), Order 2017 of the Government of India. In terms thereof “Local Suppliers” were to be preferred over Non-Local suppliers. There was a further sub-division of the category of Local Suppliers as well into Class-I and Class-II Local Suppliers.

c) The NIT defined “Class-I Local Supplier”, “Class-II Local Supplier”, “Non-Local Supplier” and “Local Content” in the following manner:-

“a. 'Class-I Local Supplier' means a supplier, whose goods and/or services offered for procurement, has local content equal to or more than 50%.

b. 'Class-II Local Supplier' means a supplier, whose goods and/or services, offered for procurement, has 20% or more local content but less than 50%.

c. 'Non–Local Supplier' means a supplier, whose goods and/or services, offered for procurement, has local content less than 20%.

d. 'Local Content' means the amount of value added in India which shall be the total value of the item procured (excluding net domestic indirect taxes) minus the value of imported content in the item (including all customs duties) as a proportion of the total value, in percent.”

d) The petitioner no. 1 participated in the tender process and ultimately, on October 08, 2021 the petitioner no. 1 and the respondent no. 1 entered into a running contract and a reserve running contract for supply of bulk explosives for a period of two years effective from October 10, 2021. Such contract was to remain valid till October 09, 2023.

e) While the petitioner no. 1 was executing the earlier contract, on March 04, 2023 the respondent no. 1 published another NIT for conclusion of running contracts and empanelment as reserve running contract holders for a period of two years for supply of cartridge explosives to all the subsidiaries companies of the respondent no. 1.

f) The petitioner no. 1 participated in the said tender process also and ultimately on May 31, 2023 the petitioner no. 1 and the respondent no. 1 entered into a running contract and reserve running contract for supply of cartridges explosive for a period of two years.

g) On August 25, 2023, the respondent no. 1 wrote a letter to the petitioner no. 1 informing that a complaint had been received by the Hon’ble Minister for Coal, Mines