Isabella Mariam

The High Court of Kerala Division Bench of Chief Justice Soumen Sen and Justice Syam Kumar V.M. held that a contractor concealing a prior blacklisting order while participating in a government tender cannot claim equitable relief before a writ court, as full and honest disclosure is a prerequisite to invoking such jurisdiction. The Court also held that public authorities may be directed to release payments for completed work, subject to contractual recoveries, with the remaining balance to be remitted directly to the contractor's secured creditors in satisfaction of outstanding garnishee notices.

The dispute arose from a contract awarded by the Kerala State Electricity Board Limited (KSEB) to a private solar energy company for installation of rooftop solar plants in Kerala under the Soura Project subsidy scheme. The letter of allocation was issued on 16.12.2021. The contractor undertook installation works and executed 1745 rooftop solar installations across the State. Relevant documents were submitted to KSEB for release of Central Financial Assistance (CFA) from the Ministry of New and Renewable Energy (MNRE). The total CFA was approximately ₹9 crores, out of which about ₹4 crores had been disbursed while the balance amount was withheld.

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Subsequently, KSEB received information that the contractor had previously been blacklisted by the Jharkhand Renewable Energy Development Agency (JREDA) following termination of a contract in October 2019. A show cause notice dated 17.06.2023 was issued asking why the contract should not be terminated for suppression of this fact during the tender process. After considering the reply, KSEB terminated the contract on 01.07.2023 and blacklisted the contractor and its promoters from participating in future tenders.

In the writ proceedings before the Single Judge, the contractor accepted the termination and blacklisting but challenged the withholding of payments for installations already completed. KSEB contended that contractual clauses permitted recovery and withholding of amounts due to violation of tender conditions and suppression of material facts. The Single Judge directed release of the balance amount subject to certain conditions. KSEB challenged that direction through the present writ appeal.

The Division Bench examined the circumstances under which the contractor had participated in the tender despite an earlier blacklisting order. The Court recorded that “as early as on 30.10.2019, the JREDA had terminated the contract and M/s. Soura Natural Energy Solutions Private Limited has been blacklisted for five years with immediate effect.” The Bench noted that at the time of participation in the Kerala tender process, “the order of blacklisting passed by the Director, JREDA on 30.10.2019 was in force.”

Addressing the conduct of the contractor, the Court stated that “the writ court is a court of equity” and observed that “if a person has invoked the writ jurisdiction with unclean hands and suppressed the material facts, the writ court will nip such proceeding at the bud as fairness requires that a writ petitioner must state the full and true facts.” The Bench further recorded that “the petitioners had suppressed the factum of blacklisting at the time of submission of their tender and when the contract was entered into.”

The Court noted that the contractor had attempted to challenge the JREDA blacklisting only in 2023 before the Jharkhand High Court, which dismissed the challenge. The Bench observed that “this clearly shows that, at the time of participating in the tender, the order of blacklisting was in force, but was suppressed.”

At the same time, the Court took into account the execution of work already completed under the contract. It recorded that the contractor had installed “1745 rooftop solar plants across Kerala” and that the installations had been made “to the satisfaction of the KSEB.” The Bench further stated that official communications demonstrated that “the amount is due and payable towards the work executed.”

The Court also considered the financial position of the contractor, noting that “garnishee proceedings have been initiated by the banks against the writ petitioners for default in repaying the bank loans.” In these circumstances, the Bench considered it appropriate to determine the amounts recoverable under the contract and address the payment mechanism accordingly.

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The Court held that a writ court exercising equitable jurisdiction is not obligated to entertain a petition where the petitioner has suppressed material facts. The Court directed that upon forfeiture of ₹1,93,11,741/-, the Kerala State Electricity Board shall remit the remaining balance directly to the concerned bank or banks, in discharge of the garnishee notices arising from amounts owed by the contractor. The Court partly allowed the appeal and modified the judgment of the learned Single Judge to the extent indicated.

Advocates Representing the Parties

For the Petitioners: Sri. Raajesh S. Subrahmanian; Sri. Santhosh Mathew (Senior Advocate)

For the Respondents: Dr. Thushara James; Shri. Noel Jacob; Sri. M.S. Amal Dharsan

Case Title: State Nodal Officer, Soura Project & Ors. v. Manoj M.S. & Anr.
Neutral Citation: NA
Case Number: Writ Appeal No. 382 of 2026
Bench: Chief Justice Soumen Sen, Justice Syam Kumar V.M.