The Gujarat High Court overturned a resolution by the Surat Municipal Corporation that had debarred a sanitation-services firm for two years, after accusing it of submitting a false affidavit during a tender process. The Corporation had claimed that the firm failed to disclose criminal complaints filed against it under Section 22 of the Minimum Wages Act in its bid documents, treating those as “police cases.” The High Court rejected this characterization.
Under Section 22 of the Minimum Wages Act, offenses such as paying less than the prescribed minimum wages and flouting related rules are punishable by fine or imprisonment. The High Court’s division bench, however, held that though such violations are indeed offenses, they do not qualify as “police cases” as understood under criminal procedure statutes. The Court explained that a “police case” refers to a First Information Report registered under Section 154 of the Criminal Procedure Code (now Section 173 under the BNSS), and the Minimum Wages Act offenses do not fall into that category. In the instant matter, the complaints against the firm were filed before a judicial magistrate, not with the police. Thus, these judicial complaints cannot be treated as cases registered by the police.
The firm had taken part in a tender floated by the Surat Municipal Corporation for sanitation services in a hospital (SMIMER Hospital). After being declared the successful bidder, the firm was accused of making false statements in its affidavit by denying any “police case” against it, despite there being complaints under the Minimum Wages Act. A vigilance inquiry was instituted, and the Standing Committee of the Corporation recommended debarment based on those false assertions. Subsequently, on 19 April 2025, the firm was debarred for two years, and its Earnest Money Deposit (EMD) was forfeited. Simultaneously, the Committee decided to pursue a criminal complaint for the alleged false affidavit.
When the firm challenged this before the High Court, it argued that since the complaints under the Minimum Wages Act were judicial in nature and not filed at a police station, it was not obligated to disclose them in the affidavit which asked only for “police cases.” The firm further contended that it had no duty to list prior blacklisting, because although it was blacklisted in 2017, that blacklist had been cancelled in 2013, well before the current tender.
The High Court scrutinized the facts and legal positions. It noted that the petitioner had explained its situation in representations before the Standing Committee. The Court found that the Corporation had ignored these clarifications when it passed the resolution to debar and register a criminal case. The bench held that excluding the firm from procurement and registering a complaint for a false affidavit were both unjustified. It said the Corporation erred in treating Minimum Wages Act complaints as if they were police-registered criminal cases, since the record showed those complaints were purely judicial proceedings under Section 22.
Ultimately, the Court ruled that the resolution debarring the firm, forfeiting its EMD, and simultaneously initiating a criminal offense, was “illegal and arbitrary.” The Court set aside the resolution and directed the Corporation to reassess the matter, giving the firm a hearing with all concerned parties.
0 Comments
Thank you for your response. It will help us to improve in the future.