Gujarat High Court Quashes Debarment of Firm in Tender Process

Court Rules Against Surat Municipal Corporation's Actions on False Affidavit Claims

In a significant ruling, the Gujarat High Court has quashed the debarment of M/s DG Nakrani by the Surat Municipal Corporation, which was imposed for allegedly submitting a false affidavit during a tender process. The court found the Corporation's actions of debarring the petitioner, forfeiting its Earnest Money Deposit (EMD), and registering a criminal offence against the firm as illegal and arbitrary.

The petitioner, M/s DG Nakrani, had participated in an online tender process initiated by the Surat Municipal Corporation for providing sanitation services at Smimer Hospital. After successfully emerging as the lowest tenderer, the petitioner was set to receive the work order. However, a complaint was filed alleging that the firm provided false details in its affidavit, leading to a vigilance inquiry and subsequent debarment by the Corporation.

The crux of the case revolved around the affidavit submitted by the petitioner, which stated that no police cases were pending against the firm. The Corporation interpreted ongoing complaints under the Minimum Wages Act, 1948, filed before the Magistrate, as police cases, which led to the debarment. The High Court clarified that such complaints do not qualify as police cases under Section 154 of the Criminal Procedure Code and thus, no false assertion was made in the affidavit. Additionally, a previous blacklisting of the firm was annulled and did not require disclosure in the tender process.

In light of these findings, the High Court directed the Surat Municipal Corporation to release the EMD to the petitioner and reconsider the tendering process, taking into account the court's order and subsequent developments. The ruling underscores the importance of precise interpretation of legal terms and adherence to procedural fairness in administrative actions.

Bottom Line:

Writ petition challenging debarment and forfeiture of EMD by a municipal corporation based on allegations of filing a false affidavit in the tender process. Held, complaints under the Minimum Wages Act, 1948, are not "police cases" and do not need to be disclosed in the affidavit. Debarment and related actions found illegal and arbitrary.

Statutory provision(s): Minimum Wages Act, 1948, Section 154 Cr.P.C.

M/s. DG Nakrani v. Smimer Hospital, (Gujarat)(DB) : Law Finder Doc Id # 2807125