Proportionality in blacklisting requires objective criteria and fair duration assessment under Article 14.

Blacklisting by a State instrumentality must rest on objective criteria and remain proportionate to the misconduct so as to comply with Article 14. A false declaration in a tender may justify debarment, but the duration must be assessed against the gravity of the breach, deliberate conduct, harm caused, corrective steps, and any mitigating circumstances. In the absence of internal benchmark guidelines, comparable regulatory standards, including the General Financial Rules and prior sanctions for the same conduct, may inform the assessment. A debarment period found plainly disproportionate is arbitrary and liable to reconsideration.

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Issues: Whether the period of debarment imposed on the petitioner for making a false declaration in the tender was disproportionate and arbitrary, so as to offend Article 14 of the Constitution of India.

Analysis: The petitioner's incorrect disclosure was held to justify debarment, but the duration of five years had to satisfy constitutional standards of fairness and non-arbitrariness. In the absence of internal benchmark guidelines, the period of blacklisting had to be correlated to the gravity of the misconduct and any mitigating circumstances. The Court noted that relevant guidance could be drawn from the General Financial Rules, 2017, which contemplate debarment for breach of integrity for a period not exceeding two years, and from the JICA sanctions already imposed for the same conduct. The Court also considered the factors relevant to debarment, including whether the wrongdoing was deliberate, the extent of harm, and whether corrective measures had been taken.

Conclusion: The five-year debarment was held to be plainly disproportionate and liable to be reconsidered by the respondent authority. The challenge succeeded to that extent and relief was granted in favour of the petitioner.

Final Conclusion: Blacklisting decisions by a State instrumentality must be guided by objective criteria and must remain proportionate to the misconduct, with due regard to mitigating factors and comparable regulatory benchmarks.

Ratio Decidendi: A punitive debarment imposed by a State instrumentality is judicially reviewable where, in the absence of objective guidelines, its duration is disproportionate to the misconduct and therefore arbitrary under Article 14.

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