Introduction
In June 2024, the Calcutta High Court rejected a plea challenging a tender awarded by the Indian Railway Catering and Tourism Corporation (IRCTC). The plea alleged that the successful bidder was involved in the infamous 'Rail Neer scam' and had not disclosed this during the tender process. This decision has significant implications for the legal landscape surrounding tenders and corruption allegations in India.
Background of the Case
The case arose when M/s. Araha Hospitality Private Limited contested the awarding of a tender by IRCTC. The petitioner argued that the successful bidder had a history of corruption, specifically the 'Rail Neer scam', which should have disqualified them from the tender process. The petitioner claimed that the bidder’s failure to disclose past criminal charges violated the integrity pact and the Notice Inviting Tender (NIT) conditions.
Court's Rationale and Decision
A single bench of Justice Shampa Sarkar presided over the case. The court concluded that the petitioner failed to prove that the IRCTC’s actions were arbitrary, perverse, or showed favoritism. The court highlighted that judicial interference in tender policies should be minimal, particularly when technical experts formulate the terms and conditions of tenders.
The petitioner’s argument centered on Section 7 of the Integrity Pact, which mandates the disclosure of any past transgressions. The petitioner alleged that non-disclosure of involvement in the 'Rail Neer scam' compromised the credibility of the bidder, which should have led to their disqualification.
Arguments Presented
The petitioner argued that the IRCTC's failure to consider the bidder's past corruption charges, which were brought to their attention in June 2024, violated the integrity pact. They emphasized that credibility, past performance, experience, and honesty are crucial for suppliers, particularly in sectors involving public service like food and water supply.
On the other hand, the Solicitor General of India, Tushar Mehta, representing IRCTC, argued that the plea was an afterthought, filed two months after the tender was awarded. Mehta referred to Sections 2(g) and 5(1) of the Integrity Pact, which require the disclosure of transgressions within the past three years. Since the FIR was registered in 2015, it fell outside the mandatory disclosure period.
Judicial Reasoning
The court's decision emphasized the principle that the judiciary should not interfere with the technical and policy decisions of tendering authorities unless there is clear evidence of arbitrariness or unfairness. Justice Sarkar stated that the petitioner did not provide sufficient evidence to show that the IRCTC’s actions were biased or unjust.
Furthermore, the court noted that Rule 151 of the General Financial Rules, 2017, stipulates that a bidder can only be debarred if convicted under the Prevention of Corruption Act, 1988, or the Indian Penal Code. As the case in question involved charges from 2015 and no recent conviction, the IRCTC’s decision to award the tender stood justified.
Implications of the Decision
This ruling sets a precedent regarding the judicial review of tenders and the interpretation of integrity pacts. The court’s decision underscores the importance of adhering to procedural rules and timelines in the tendering process. It also highlights the limited scope of judicial intervention in technical and policy matters handled by specialized authorities.
The ruling may influence future cases involving allegations of corruption and the tender process. It clarifies that past criminal charges outside a specified period need not necessarily disqualify a bidder, provided there is no recent conviction. This decision reinforces the principle that technical evaluations and decisions made by competent authorities should not be easily overturned by the courts.
Conclusion
The Calcutta High Court’s dismissal of the plea against IRCTC’s tender award underscores the importance of following procedural norms and the limited role of judicial review in technical and policy decisions. This ruling clarifies the interpretation of integrity pacts and sets a significant precedent for future cases involving tender processes and allegations of corruption.
The court's decision highlights the judiciary's respect for the expertise and discretion of tendering authorities, provided there is no evidence of arbitrary or unfair practices. This approach promotes stability and fairness in public procurement processes, ensuring that technical evaluations and decisions are respected and upheld.
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