MANIPAL TECHNOLOGIES LIMITED vs BANK OF BARODA
- Court
- Karnataka High Court
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WA No. 1602 of 2026
TH
RESERVED ON 24 JUNE 2026
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 16 DAY OF JULY, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MRS. JUSTICE K.S. HEMALEKHA
WRIT APPEAL NO. 1602 OF 2026 (GM-TEN)
BETWEEN:
1. MANIPAL TECHNOLOGIES LIMITED
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
UDAYAVANI BUILDING, PRESS CORNER
MANIPAL, UDUPI, KARNATAKA
INDIA - 576 104
REPRESENTED BY ITS AUTHORIZED SIGNATORY
MR. PRABHAKAR DAYANANDA KAMATH
2. JYOTHI G. NAYAK
DAUGHTER OF
LATE ANANTHARAYA R KAMATH
AGED 56 YEARS
A SHAREHOLDER OF APPELLANT NO. 1
HAVING HER ADDRESS AT
UDAYAVANI BUILDING, PRESS CORNER
MANIPAL, UDUPI, KARNATAKA
INDIA - 576 104
…APPELLANTS
(BY SRI K.G. RAGHAVAN, SENIOR ADVOCATE FOR
SRI RAGHURAM CADAMBI, ADVOCATE)
AND:
Digitally
signed by
AMBIKA H B
Location:
High Court
of Karnataka
1. BANK OF BARODA
A BANKING COMPANY CONSTITUTED
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WA No. 1602 of 2026
UNDER THE BANKING COMPANIES
(ACQUISITION AND TRANSFER OF
UNDERTAKINGS) ACT, 1970
HAVING ITS REGISTERED OFFICE AT:
BARODA HOUSE, MANDVI
BARODA - 390 001
HAVING ITS BRANCH AT
ST
NO. 332, DOUBLE ROAD, 1 STAGE
NEAR CMH ROAD JUNCTION
INDIRANAGAR, BANGALORE - 560 038
REPRESENTED BY ITS MANAGER
2. SESHAASAI TECHNOLOGIES LIMITED
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT 1956
HAVING ITS REGISTERED OFFICE AT,
9, LALWANI INDUSTRIAL ESTATE 14
KATRAK ROAD,
WADALA, MUMBAI, MAHARASHTRA-400031
REPRESENTED BY ITS DIRECTOR.
3. KL HI-TECH SECURE PRINT LIMITED
A COMPANY INCORPORATED UNDER
THE PROVISIONS OF THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
PLOT NO.22-23, ANRICH INDUSTRIAL ESTATE
IDA, BOLLARAM, SANGAREDDY DISTRICT
TELANGANA, INDIA - 502 328
REPRESENTED BY ITS DIRECTOR
…RESPONDENTS
(SRI K. SHASHI KIRAN SHETY, ADVOCATE GENERAL/
SENIOR ADVOCATE A/W
SRI VIGNESH SHETTY, ADVOCAE FOR C/R-1 &
SMT. AMRUTHA B.R., ADVOCATE FOR R-3)
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, 1961 PRAYING TO ALLOW THE
PRESENT WRIT APPEAL AND SET ASIDE THE IMPUGNED ORDER
DATED 08.06.2026 PASSED BY THE LEARNED SINGLE JUDGE IN
W.P. No.16741 OF 2026 INSOFAR AS IT DECLINES THE INTERIM
RELIEFS SOUGHT BY THE APPELLANTS & ETC.
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WA No. 1602 of 2026
THIS APPEAL, HAVING BEEN HEARD AND RESERVED FOR
JUDGMENT, COMING ON FOR PRONOUNCEMENT THIS DAY,
JUDGMENT WAS PRONOUNCED AS UNDER:
CORAM: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON'BLE MRS. JUSTICE K.S. HEMALEKHA
C.A.V. JUDGMENT
(PER: HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
INTRODUCTION
1. The appellants have filed the present appeal impugning an
interim order dated 08.06.2026 passed by the learned Single Judge
in Writ Petition No.16741/2026 (GM-TEN) [ impugned order ]. In
terms of the impugned order, the learned Single Judge has declined
to grant any interim relief.
2. Appellant No.1 [ MTL ] had submitted its bid pursuant to the
Request for Proposal for Empanelment of Vendors for Printing and
Supply of Magnetic Strip and Variable QR code Printed Self-Service
Passbook (SSPB) [ RFP ] issued by Respondent No.1 – Bank of
Baroda [ BoB ]. However, MTL's bid was not evaluated because it
did not meet the pre-qualification criteria under point No.14 of the
tender conditions. The said disqualification was reflected on the
Government eMarketplace portal [ GeM Portal ] on 26.05.2026 as
under:
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WA No. 1602 of 2026
"Reason for Technical Evaluation
Reason
Not meeting the eligibility criteria specified in Bid
Clause as per details indicated in the comment
Comment
The bid submitted by the company is not
considered for further processing as the company
does not meet the requirements stipulated under
Prequalification Criteria Point No.14."
3. Aggrieved by being held ineligible, the appellants had filed the
writ petition, inter alia, challenging the aforesaid disqualification
[ impugned disqualification ]. Additionally, the appellants had
challenged point No.14 of the pre-qualification criteria for
submission of bids, which formed a part of the RFP [ the impugned
clause ]. In the aforesaid context, the appellants sought interim
relief, praying for a stay of the impugned disqualification. Further,
they sought directions to BoB to permit MTL to participate in the
tender process and to restrain BoB from finalising the tender
process pursuant to the RFP. The learned Single Judge did not
accede to the ad interim prayers, and this has led the appellants to
file the present appeal. Respondent Nos.2 and 3, being the bidders
whose bids have been ranked L-1 and L-2 respectively in the tender
process, were impleaded as parties to the present appeal by an
order dated 24.06.2026 passed on I.A No.2 of 2026.
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WA No. 1602 of 2026
4. On 10.04.2026, BoB issued the RFP for the “Empanelment of
Vendors for the Printing and Supply of Magnetic Strip and Variable
QR Code-Printed Self-Service Passbook (SSPB) for 3 years”.
5. Before proceeding further, it would be relevant to refer to the
impugned clause which is set out below:
S.N. Eligibility Criteria Documents to
be submitted
in support of
Eligibility
Criteria
Whether
Complied
(Yes/No)
14 The vendor company and/or
any of its Promoters Directors
should not be
1. Defaulter/willful defaulter to
any tax/Govt. Authorities/
statutory dues etc.
2. Not having any credit
facilities classified as non-
performing accounts as on
the date of issuance of RFP
either in their individual
capacity or as Partner/
Director/Trustee/Guarantor
etc.
3. Related to any present
employee/Director/Board
members of the bank.
4. Bidder or sister concerns
should not be a NPA holder in
any Bank/Financial Institution
Bidder should
submit an
undertaking on
their letterhead
along with copy
of PAN card
and authority to
check
CIBL/CRIF
reports
6. On 08.05.2026, MTL submitted its bid on the GeM Portal
along with supporting documents. MTL's bid was not considered for
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WA No. 1602 of 2026
the technical evaluation because it was found ineligible on account
of the impugned clause. This was reflected on the GeM portal on
26.05.2026. MTL immediately filed a representation on 26.05.2026
contesting the impugned disqualification. It claimed that the
reasons for the impugned disqualification were vague as it did not
disclose any basis for such disqualification. Thereafter, the
appellants filed the writ petition.
7. The appellants contended that MTL had been rendering
similar services to BoB and other banks and institutions for several
years without any complaint. They also submitted that the
impugned disqualification was not based on any deficiencies
attributed to MTL but to one of the Directors (Sri T. Gautham Pai).
The appellants contend that Sri T. Gautham Pai ceased to be a
Promoter Director and, therefore, MTL could not be disqualified on
the ground that its Promoter Director was a defaulter.
8. The appellants also challenged the impugned clause on the
ground that it was arbitrary and exclusionary, and that it had no
nexus with the object of the RFP, which was to invite competitive
bids from entities engaged in the business of such supplies. It was
contended that the impugned clause had the effect of excluding
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WA No. 1602 of 2026
technically competent entities from providing the required supplies if
it was found that one of the Promoter Directors or any Director of
the entity had defaulted in payment of its dues. It was further
contended that such a default did not affect the tenderer's ability to
execute the contract. BoB disputes this contention and claims that
the impugned clause is relevant and material, as it ensures that the
tendering entity is financially sound and creditworthy. It is argued
that the financial stress of the promoter would invariably translate
into the entities under the control of such persons being in default,
and thus BoB did not consider it expedient to enter into contracts
with such entities.
9. In the aforesaid background, two questions that fall for
consideration are:
(i) whether the impugned clause is invalid as being
manifestly arbitrary and violative of Article 14 of the
Constitution of India; and
(ii) whether the involvement of Sri T.Gautham Pai in MTL
renders it ineligible in terms of the impugned clause.
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WA No. 1602 of 2026
PREFATORY FACTS
10. Briefly stated, the relevant facts necessary to address the said
controversy are as follows.
11. MTL was incorporated on 13.01.2000 under the Companies
Act, 1956. At the time of incorporation, it was known as Manipal
Press Private Limited. Thereafter, it was converted into a public
company, and its name was changed to Manipal Press Limited. On
‒
23.05.2011, its name was once again changed to its current name
Manipal Technologies Limited. Prior to its incorporation, the subject
business was carried on in the name and style of a partnership firm
M/s. Manipal Power Press. Sri T. Gautham Pai was one of the
constituent partners of the said firm.
12. Sri T. Gautham Pai is a signatory to the Memorandum of
Association [ MOA ] and the Articles of Association [ AOA ] of MTL.
Section 2.26 of the AOA reflects Sri T. Goutam Pai as a Promoter.
Sections 2.26 and 2.27 of the AOA of MTL are reproduced below:
"Section 2.26 Promoters means (1) Mr.T. Satish
U.Pai (2) Mr.T.Gautham S.Pai and (3) Manipal
Media Network Limited a company incorporated
under the Companies Act 1956 having its
registered office at Udayavani Building Manipal –
576 104 Karnataka India and includes their
respective successors and permitted assigns.
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WA No. 1602 of 2026
Section 2.27 Related Party means (a) each
Promoter who is an individual (b) any parent
grandparent or great-grandparent of any individual
described in sub-clause (a) (c) any lineal
descendant of any individual described in sub-
clause (a) or sub-clause (b) above (d) any spouse
or former spouse of any individual described in
sub-clause (a) sub-clause (b) or sub-clause (c)
above or (e) any entity in which any individual
described in sub-clause (a) sub-clause (b) sub-
clause (c) or sub-clause (d) has a direct or indirect
interest. For this purpose any individual who was
adopted shall be treated the same as any
individual who was not adopted. For example a
stepparent and step-child shall be treated as a
parent and child respectively."
13. BoB had also prduced a copy of the list of Directors furnished
by MTL along with its bid, which reflected Sri T. Gautham Pai as the
Managing Director of MTL, holding the said office since 29.07.2003.
The updated draft red herring prospectus dated 10.11.2025 of one
of MTL’s group companies, Manipal Payment and Identity Solutions
Limited, sets out the profile of the promoters and the promoter
group. It reflects Sri T. Gautham Pai and his parents, Sri T. Satish
U. Pai and Smt. Sandhya S. Pai, as individual promoters. The
corporate promoters of the said company includes MTL. In the said
prospectus, Sri T. Gautham Pai is reflected as Executive Chairman
and whole-time Director of MTL.
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WA No. 1602 of 2026
14. Sri T. Gautham Pai was also a Director of M/s. MVP Group
International Inc., whose credit facilities have been classified as a
Non-Performing Accounts [ NPA ]. An application under Section 95 of
the Insolvency and Bankruptcy Code, 2016 [ IBC ] has also been filed
before the National Company Law Tribunal, Bengaluru against Sri.
T. Gautham Pai in relation to the same. The said action is a subject
matter of challenge in another proceeding instituted in this court.
15. Undisputedly, the returns filed by MTL with the Registrar of
Companies [ RoC ], till 08.05.2026 reflected Sri T. Gautham Pai as a
Promoter Director. On 08.05.2026, MTL filed Form DIR-12 with the
RoC regarding the change in the designation of Sri T. Gautham Pai
from a Promoter Director to a Professional Director. The form
indicates that the said change took effect from 21.01.2026.
16. It is contended on behalf of BoB before this court that Sri
T. Gautham Pai has defaulted in his guarantee obligations in
relation to the financial assistance availed by M/s. MVP Group
International Inc.
RIVAL CONTENTIONS
17. Mr K.G. Raghavan, learned Senior Counsel appearing for the
appellants, contended that the impugned clause is an exclusionary
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WA No. 1602 of 2026
clause and must be interpreted strictly. He submitted that although
the tendering entity may have wide discretion in determining the
technical specifications, the exclusionary clause that debars
participation in tenders must be construed strictly. He submitted
that the impugned clause is an exclusionary clause and, therefore, it
was necessary to test its relevance with the object of the tender. He
submitted that MTL was well established in the business of printing
and supply of magnetic strips and QR code passbooks. More
importantly, its credentials are well established, as it currently
supplies the said products to BoB and other banks.
18. He submitted that, even assuming that one of the Directors of
MTL was a defaulter or associated with another defaulting entity, the
same would not affect MTL’s ability to supply magnetic strips and
QR-code-printed passbooks.
19. Next, he submitted that even if it is assumed that the
impugned clause is valid, MTL had not incurred any such
disqualification. He further submitted that Sri T. Gautham Pai was
no longer the Promoter Director and was now a Professional
Director on the Board of MTL. He submitted that his designation had
changed with effect from 21.01.2026, even though Form DIR-12
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was filed subsequently on 08.05.2026. He submitted that the term
"Promoter" is defined under Section 2(69) of the Companies Act,
2013 [ Companies Act ], which requires that the person be
specifically named in the prospectus or identified in the company's
annual returns referred to in Section 92 of the Companies Act. He
submitted that, therefore, Sri T. Gautham Pai could not be
considered a Promoter of MTL.
20. Mr. K. Shashikiran Shetty, learned Senior Counsel appearing
for BoB, countered the aforesaid submissions. First, he submitted
that it was not open for MTL to challenge the impugned clause after
having participated in the tender process. Second, he submitted
that the impugned clause has a direct nexus with the object of
ensuring that the tendering entity is financially stable and has a
credible track record. He submitted that the Promoters of a
corporate entity in default cannot exploit the corporate structure to
conceal their credit status. He submitted that BoB could not be
expected to enter into contracts with entities whose promoters had
defaulted on their financial obligations.
21. Next, he submitted that the documents accompanying the bid
listed Sri T. Gautham Pai as a Promoter, and the list of Directors
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WA No. 1602 of 2026
also listed him as MTL’s Managing Director. He submitted that Sri
T. Gautham Pai was in control of MTL and, therefore, was clearly its
Promoter. He submitted that MTL had filed Form DIR-12 with the
RoC, showing a change in the status of Sri T. Gautham Pai from
Promoter Director to Professional Director, on the same date as the
filing of the bid, that is, on 08.05.2026. He further submitted that this
was clearly done with a view to escaping the ineligibility under the
impugned clause. He also pointed out that, by a resolution of the
Board of Directors of MTL dated 13.03.2026, Sri T. Gautham Pai
had been re-appointed as the Executive Chairman of MTL for a
period of three years with effect from 28.05.2026. He also referred
to the decision of the Supreme Court in Arcelormittal India Private
1
Limited vs. Satish Kumar Gupta and Others and, on the strength
of that decision, contended that the controlling authority would mean
de facto control.
REASONS AND CONCLUSIONS
22. At the outset, we may note that the impugned order is an ad
interim order. However, the counsel had advanced arguments and
invited a ruling on the merits of the controversy. During the course
of the arguments, we had also put the learned counsel for the
1
(2019) 2 SCC 1
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WA No. 1602 of 2026
parties on notice that any view expressed on the contentions
advanced may be dispositive of the controversy. Mr. Raghavan,
learned Senior Counsel appearing for the appellants, fairly
acknowledged the same.
23. The first question to be addressed is whether the impugned
clause is invalid on the ground of manifest arbitrariness. The effect
of the impugned clause is to exclude entities or companies that are
defaulters or whose credit facilities have been classified as NPAs. It
also explicitly bars entities whose Promoter Directors are defaulters
or whose credit facilities have been declared NPAs. The sole
purpose of the clause is to ensure that bidders possess strong
financial standing and are creditworthy. Clearly, a default in financial
obligations by the promoters or persons in control would directly
undermine the company’s standing and creditworthiness.
24. A company is not a natural person capable of directing its own
affairs; its affairs are managed and controlled by its directors, and
their standing and credibility are thus relevant in assessing the
company’s credentials. Whilst, in the legal sense, a company has an
identity separate from its shareholders and directors, it is well
accepted that, in the commercial sense, corporatisation is only a
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WA No. 1602 of 2026
method of carrying on a commercial enterprise. The commercial
identity of a closely held company is no different from its
shareholders and the persons in control of the company. This
principle was clearly recognised by the Supreme Court in New
2
Horizons Ltd. vs. Union of India . In the aforesaid case, the
Supreme Court had considered a situation in which one of the
tenderers was not considered on the ground that it lacked the
requisite past experience. The tenderer (New Horizons Ltd.) was a
company in the nature of a joint venture, and its shareholders had
the necessary experience. The High Court did not accept the
shareholders' experience as the company’s. The High Court held
that it was one thing for the shareholders of the company to have
experience and quite another for the company to have such
experience. However, the Supreme Court did not concur with the
said view. The Supreme Court held that the terms and conditions of
such documents must be construed from the standpoint of a prudent
businessman, and when a businessman enters into a contract, he
seeks to assure himself about the credentials of the person who is
entrusted with the work, and such credentials must be examined
from a commercial point of view, which would not only include the
2
(1995) 1 SCC 478
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WA No. 1602 of 2026
background of the company but also the persons who are in control
of the company. We may refer to the following extract of the said
decision:
" 23 . Even if it be assumed that the requirement
regarding experience as set out in the
advertisement dated 22-4-1993 inviting tenders is
a condition about eligibility for consideration of the
tender, though we find no basis for the same, the
said requirement regarding experience cannot be
construed to mean that the said experience should
be of the tenderer in his name only. It is possible
to visualise a situation where a person having past
experience has entered into a partnership and the
tender has been submitted in the name of the
partnership firm which may not have any past
experience in its own name. That does not mean
that the earlier experience of one of the partners of
the firm cannot be taken into consideration.
Similarly, a company incorporated under the
Companies Act having past experience may
undergo reorganisation as a result of merger or
amalgamation with another company which may
have no such past experience and the tender is
submitted in the name of the reorganised
company. It could not be the purport of the
requirement about experience that the experience
of the company which has merged into the
reorganised company cannot be taken into
consideration because the tender has not been
submitted in its name and has been submitted in
the name of the reorganised company which does
not have experience in its name. Conversely there
may be a split in a company and persons looking
after a particular field of the business of the
company form a new company after leaving it. The
new company, though having persons with
experience in the field, has no experience in its
name while the original company having
experience in its name lacks persons with
experience. The requirement regarding experience
does not mean that the offer of the original
company must be considered because it has
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WA No. 1602 of 2026
experience in its name though it does not have
experienced persons with it and ignore the offer of
the new company because it does not have
experience in its name though it has persons
having experience in the field. While considering
the requirement regarding experience it has to be
borne in mind that the said requirement is
contained in a document inviting offers for a
commercial transaction. The terms and conditions
of such a document have to be construed from the
standpoint of a prudent businessman. When a
businessman enters into a contract whereunder
some work is to be performed he seeks to assure
himself about the credentials of the person who is
to be entrusted with the performance of the work.
Such credentials are to be examined from a
commercial point of view which means that if the
contract is to be entered with a company he will
look into the background of the company and the
persons who are in control of the same and their
capacity to execute the work. He would go not by
the name of the company but by the persons
behind the company. While keeping in view the
past experience he would also take note of the
present state of affairs and the equipment and
resources at the disposal of the company. The
same has to be the approach of the authorities
while considering a tender received in response to
the advertisement issued on 22-4-1993. This
would require that first the terms of the offer must
be examined and if they are found satisfactory the
next step would be to consider the credentials of
the tenderer and his ability to perform the work to
be entrusted. For judging the credentials past
experience will have to be considered along with
the present state of equipment and resources
available with the tenderer. Past experience may
not be of much help if the machinery and
equipment is outdated. Conversely lack of
experience may be made good by improved
technology and better equipment. The
advertisement dated 22-4-1993 when read with
the notice for inviting tenders dated 26-4-1993
does not preclude adoption of this course of
action. If the Tender Evaluation Committee had
adopted this approach and had examined the
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WA No. 1602 of 2026
tender of NHL in this perspective it would have
found that NHL, being a joint venture, has access
to the benefit of the resources and strength of its
parent/owning companies as well as to the
experience in database management, sales and
publishing of its parent group companies because
after reorganisation of the Company in 1992 60%
of the share capital of NHL is owned by Indian
group of companies namely, TPI, LMI, WML, etc.
and Mr Aroon Purie and 40% of the share capital
is owned by IIPL a wholly-owned subsidiary of
Singapore Telecom which was established in 1967
and is having long experience in publishing the
Singapore telephone directory with yellow pages
and other directories. Moreover in the tender it
was specifically stated that IIPL will be providing
its unique integrated directory management
system along with the expertise of its managers
and that the managers will be actively involved in
the project both out of Singapore and resident in
India."
[emphasis supplied]
25. In the present case, the impugned clause is intended to
ensure that eligible bidders possess the necessary credentials.
From a commercial point of view, the credentials of the promoters
and persons in control of the company cannot be excluded from the
scope of such consideration.
26. It is also necessary to bear in mind that the scope of judicial
review in tender matters is narrow. In Tata Cellular vs. Union of
3
India , the Supreme Court had referred to the earlier decisions and
distilled the scope of judicial review in contractual matters as under:
3
(1994) 6 SCC 651
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WA No. 1602 of 2026
"94. The principles deducible from the above are:
(1) The modern trend points to judicial restraint in
administrative action.
(2) The court does not sit as a court of appeal but
merely reviews the manner in which the decision
was made.
(3) The court does not have the expertise to
correct the administrative decision. If a review of
the administrative decision is permitted it will be
substituting its own decision, without the
necessary expertise which itself may be fallible.
(4) The terms of the invitation to tender cannot be
open to judicial scrutiny because the invitation to
tender is in the realm of contract. Normally
speaking, the decision to accept the tender or
award the contract is reached by process of
negotiations through several tiers. More often than
not, such decisions are made qualitatively by
experts.
(5) The Government must have freedom of
contract. In other words, a fair play in the joints is
a necessary concomitant for an administrative
body functioning in an administrative sphere or
quasi-administrative sphere. However, the
decision must not only be tested by the application
of Wednesbury principle of reasonableness
(including its other facts pointed out above) but
must be free from arbitrariness not affected by
bias or actuated by mala fides.
(6) Quashing decisions may impose heavy
administrative burden on the administration and
lead to increased and unbudgeted expenditure.
Based on these principles we will examine the
facts of this case since they commend to us as the
correct principles."
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WA No. 1602 of 2026
27. The terms of invitation of the tender are in the realm of a
contract, and it is necessary that the State or the State authorities
have full freedom of contract and sufficient fair play in the joints.
The scope of judicial review is largely confined to examining
4
whether the administrative decisions fail the Wednesbury Principle .
The said principle, as set out in The Supreme Court Practice, 1993
(Volume I, Pages 849-850) and noticed in Tata Cellular ( supra ),
reads as under:
“4. Wednesbury principle .— A decision of a
public authority will be liable to be quashed or
otherwise dealt with by an appropriate order in
judicial review proceedings where the court
concludes that the decision is such that no
authority properly directing itself on the relevant
law and acting reasonably could have reached it.
( Associated Provincial Picture Houses
Ltd. v. Wednesbury Corpn. [(1948) 1 KB 223 :
(1947) 2 All ER 680] , per Lord Greene, M.R.)”
5
28. In Raunaq International Ltd. vs. I.V.R. Construction Ltd. ,
the Supreme Court emphasized that in arriving at a commercial
decision, certain commercial considerations are paramount, which
would include the financial ability of a tenderer to fulfil the
requirements of a job. We may also refer to the following
4
‒
Wednesbury Principle the principle of reasonableness as articulated by Lord Greene,
M.R. in Associated Provincial Picture Houses Ltd. vs. Wednesbusy Corpn: (1947) 2 All
ER 680
5
(1999) 1 SCC 492
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WA No. 1602 of 2026
observations made by the Supreme Court in Municipal
6
Corporation, Ujjain vs. BVG India Ltd. :
"14. The judicial review of administrative action is
intended to prevent arbitrariness. The purpose of
judicial review of administrative action is to check
whether the choice or decision is made lawfully
and not to check whether the choice or decision is
sound. If the process adopted or decision made by
the authority is not mala fide and not intended to
favour someone; if the process adopted or
decision made is neither so arbitrary nor irrational
that under the facts of the case it can be
concluded that no responsible authority acting
reasonably and in accordance with relevant law
could have reached such a decision; and if the
public interest is not affected, there should be no
interference under Article 226."
7
29. In Silppi Constructions Contractors vs. Union of India ,
the Supreme Court referred to its earlier decisions and observed as
under:
“19. This Court being the guardian of fundamental
rights is duty-bound to interfere when there is
arbitrariness, irrationality, mala fides and bias.
However, this Court in all the aforesaid decisions
has cautioned time and again that courts should
exercise a lot of restraint while exercising their
powers of judicial review in contractual or
commercial matters. This Court is normally loathe
to interfere in contractual matters unless a clear-
cut case of arbitrariness or mala fides or bias or
irrationality is made out. One must remember that
today many public sector undertakings compete
with the private industry. The contracts entered
into between private parties are not subject to
6
(2018) 5 SCC 462
7
(2020) 16 SCC 489
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WA No. 1602 of 2026
scrutiny under writ jurisdiction. No doubt, the
bodies which are State within the meaning of
Article 12 of the Constitution are bound to act fairly
and are amenable to the writ jurisdiction of
superior courts but this discretionary power must
be exercised with a great deal of restraint and
caution. The courts must realise their limitations
and the havoc which needless interference in
commercial matters can cause. In contracts
involving technical issues the courts should be
even more reluctant because most of us in Judges'
robes do not have the necessary expertise to
adjudicate upon technical issues beyond our
domain. As laid down in the judgments cited above
the courts should not use a magnifying glass while
scanning the tenders and make every small
mistake appear like a big blunder. In fact, the
courts must give “fair play in the joints” to the
government and public sector undertakings in
matters of contract. Courts must also not interfere
where such interference will cause unnecessary
loss to the public exchequer.
20. The essence of the law laid down in the
judgments referred to above is the exercise of
restraint and caution; the need for overwhelming
public interest to justify judicial intervention in
matters of contract involving the State
instrumentalities; the courts should give way to the
opinion of the experts unless the decision is totally
arbitrary or unreasonable; the court does not sit
like a court of appeal over the appropriate
authority; the court must realise that the authority
floating the tender is the best judge of its
requirements and, therefore, the court's
interference should be minimal. The authority
which floats the contract or tender, and has
authored the tender documents is the best judge
as to how the documents have to be interpreted. If
two interpretations are possible then the
interpretation of the author must be accepted. The
courts will only interfere to prevent arbitrariness,
irrationality, bias, mala fides or perversity. With this
approach in mind we shall deal with the present
case.”
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WA No. 1602 of 2026
30. In the present case, it is not alleged that the impugned clause
was introduced mala fide or for any ulterior purpose. Bearing the
aforesaid principles in mind, we are unable to accept that the
impugned clause is required to be set aside on the ground that it is
manifestly arbitrary or falls foul of Article 14 of the Constitution of
India.
31. MTL had participated in the pre-bid meeting held on
18.04.2026 without raising any objection to the impugned clause
and had, along with its bid, furnished an undertaking dated
08.05.2026 affirming its compliance with the said clause. We find
merit in the contention that MTL had participated in the tender
unreservedly and could not now be heard to challenge the tender
conditions after having been held as disqualified on the basis of the
said conditions. The Supreme Court in National High Speed Rail
8
Corpn. Ltd. v. Montecarlo Ltd. held that where the conditions of
a tender were within the knowledge of a bidder at the time of
participating in the tender process, it is not open to the bidder,
having accepted the terms and conditions of the tender with full
knowledge thereof and having participated in the process, to
8
(2022) 6 SCC 401
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WA No. 1602 of 2026
thereafter make a grievance in respect of such conditions. The said
observation reads as under:
“ 44. …once the original writ petitioner participated
having knowledge of the aforesaid clauses in ITB,
thereafter it was not open for the original writ
petitioner to challenge the same. … If the original
writ petitioner was aggrieved either it would not
have participated and/or ought to have challenged
such clauses before participating in the tender
process. ”
32. The second question to be addressed is whether the
impugned disqualification is arbitrary and contrary to the impugned
clause. The principal controversy concerns whether Sri T. Gautham
Pai is a Promoter Director. As noted above, Mr. Raghavan had
earnestly contended on behalf of the appellants that Sri T.Gautham
Pai's status as a Promoter has to be ascertained with reference to
the Annual Returns under Section 92 of the Companies Act. He
also referred to MTL’s annual returns, which reflect that there are
two promoters: one is a body corporate and the other is Tridevita
Family Trust. Whereas the body corporate owns 80.93% of MTL’s
equity share capital, Tridevita Family Trust owns 2.98%. The
appellants argue that since Sri T. Gautham Pai is not reflected as
Promoter Director of MTL, it could not be held as ineligible by virtue
of the impugned clause. It is also pointed out that, with effect from
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WA No. 1602 of 2026
21.01.2026, Sri T. Gautham Pai is reflected as a whole-time Director
in the category of a ‘professional’ and not a ‘promoter’.
33. The expression "Promoter Director" used in the impugned
clause does not refer to a "Promoter" as defined under the
Companies Act. Therefore, it would be erroneous to proceed on the
basis that the scope of the expression "Promoter Director" is
confined to the definition of "Promoter" under Section 2(69) of the
Companies Act. The expression "Promoter" is derived from the
word "promote," and in ordinary parlance, a promoter is a person
who promotes, supports, and publicises. The expression "promote"
rd
is defined in the Shorter Oxford English Dictionary, 3 Edition,
Volume II, inter alia as, "support or actively encourage (a cause,
venture, etc.); further the progress of ....".
34. Having stated the above, we may now refer to the meaning of
the "Promoter" as defined under Section 2(69) of the Companies
Act. The same is set out below:
" (69) "promoter" means a person –
(a) who has been named as such in a prospectus
or is identified by the company in the annual return
referred to in section 92; or
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WA No. 1602 of 2026
(b) who has control over the affairs of the
company, directly or indirectly whether as a
shareholder, director or otherwise; or
(c) in accordance with whose advice, directions or
instructions the Board of Directors of the company
is accustomed to act:
Provided that nothing in sub-clause (c) shall
apply to a person who is acting merely in a
professional capacity."
35. It is apparent from the above that the term "promoter" is not
confined to a person named in the prospectus or identified in the
annual return; it would also include a person who has control over
the affairs of a company, either directly or indirectly, whether a
shareholder, a director, or otherwise. Thus, the key question is
whether there is material on record for BoB to conclude that Sri T.
Gautham Pai is a Promoter Director of MTL.
36. At this stage, it would also be relevant to note that MTL is a
closely held company. MTL was incorporated, inter alia , by Sri
T. Gautham Pai, who is also a signatory to MTL’s MOA and AOA.
The AOA of MTL, furnished along with the bid, also lists Sri
T. Gautham Pai as a Promoter. The list of shareholders of MTL as
on 07.04.2026, as produced by the appellants, indicates that there
are 23 (twenty three) shareholders, and 71.46% of the equity share
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WA No. 1602 of 2026
capital is held by Smt. Sandhya S. Pai on behalf of Tridevita Family
Trust.
37. A copy of the trust deed of Tridevita Family Trust – 2017 has
also been produced, which indicates that Sri. T. Satish U. Pai, the
father of Sri Gautham Pai, is the settlor in the said Trust, and that
Smt. Sandhya S. Pai (Sri T. Gautham Pai's mother) and Tridevitha
Consultancy Services Private Limited are trustees. The primary
beneficiaries of the said Trust are Smt.Sandhya S. Pai – herself one
of the trustees – and the two granddaughters of the settlor
(Ms.Trisha G Pai and Ms.Devina G Pai); the secondary
beneficiaries include the settlor’s daughter-in-law, Mrs.Vanita G. Pai
(Sri T. Gautham Pai's wife). The terms of the trust deed indicate
that the trustees have the power to add, remove or re-classify the
beneficiaries. However, the said power is confined to the legally
wedded spouses of the lineal descendants of Sri T. Gautham Pai,
the widow/widower of the lineal descendants of Sri T. Gautham Pai
and any trust established for the benefit of the beneficiaries. The
majority of the shares of Manipal Media Network Limited (52.79%)
are held by Smt. Sandhya S. Pai on behalf of the Tridevita Family
Trust, which, as noted above, is predominantly for the benefit of the
family of Sri Satish Pai.
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WA No. 1602 of 2026
38. The updated draft red herring prospectus of M/s Manipal
Payment and Identity Solutions Limited indicates that as on the date
of the said prospectus (10.11.2025), 14.01% of the shares of
Manipal Media Network Limited were held by MTL.
39. The status of Sri T. Gautham Pai in MTL must be considered,
bearing in mind that MTL is a closely held company of the family of
Sri Gautham Pai. Undisputedly, Sri T. Gautham Pai was the
promoter of MTL and continues to be the whole-time Director of
MTL. The annual return filed indicates that Sri T. Gautham Pai has
been the Managing Director of MTL from 29.07.2003.
40. Concededly, till the filing of Form DIR-12 on 08.05.2026, Sri
T. Gautham Pai was also reflected as a Promoter of MTL in the
annual returns. It is stated that his status changed from Promoter
Director to Professional Director, with effect from 21.01.2026. There
is some controversy about whether the change in status occurred
on the date as reflected in Form DIR-12 as the same was filed on
08.05.2026, which is the date of submission of the bid by MTL.
However, in our view, that may not be material. This is because the
re-categorization of Sri T. Gautham Pai as a Professional Director in
place of a Promoter Director in the said records, brought about no
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WA No. 1602 of 2026
change on the ground. He continued to be a whole-time Director
exercising the executive powers of MTL. He remained in the
management of MTL, and the change in his categorisation had no
effect whatsoever on his powers or functioning in that role.
41. BoB has also produced a certified copy of the resolution of the
Board of MTL at a meeting held on 13.03.2026, whereby it is
resolved to reappoint Sri T. Gautham Pai as Executive Chairman of
the company for a period of three years with effect from 28.05.2026.
The nature of his duties as set out in the said resolution is
reproduced below:
" (A) Nature of Duties
(a) Strategic Leadership
•
Set the overall vision, mission, and long-
term strategic direction of the organization
•
Drive strategic initiatives and organizational
transformation
•
Lead the process of planning for the
succession of the CEO and other senior
management roles.
(b) Board Oversight & Corporate
Governance
•
Chair all Board and shareholder meetings
•
Facilitate productive Board discussions and
decision-making
•
Recruit, evaluate, and, when necessary,
replace board members and senior executives
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WA No. 1602 of 2026
•
Ensure the Board fulfills its fiduciary
responsibilities
•
Ensure the company adheres to legal,
ethical, and regulatory standards
•
Oversee risk management frameworks and
internal controls
•
Establish and uphold the Company's culture
and values
(b) Executive Management
•
Oversee operations of the Company by
providing guidance to the CEOs
•
Provide guidance and mentorship to the
executive leadership team
•
Align operational activities with the
company's strategic goals
•
Drive a high-performance culture by setting
measurable targets for senior leaders and holding
them accountable for delivering against
organizational goals.
(c) Stakeholder Relations
•
Serve as the primary ambassador of the
organization to major stakeholders
•
Maintain relationships with key investors
and stakeholders
•
Lead high-stakes negotiations and major
business development opportunities
(d) Financial Oversight
•
Oversee financial health and capital allocation
•
Approve budgets, investments, mergers, and
acquisitions
•
Drive shareholder value creation"
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WA No. 1602 of 2026
42. The expression "control" is defined under Section 2(27) of the
Companies Act as under:
"(27) “control” shall include the right to appoint
majority of the directors or to control the
management or policy decisions exercisable by a
person or persons acting individually or in concert,
directly or indirectly, including by virtue of their
shareholding or management rights or
shareholders agreements or voting agreements or
in any other manner"
43. As it is apparent, the term "control" has been defined
expansively and would include any person who controls the
management of policy decision. In Arcelormittal India Private
Limited ( supra ), the Supreme Court had considered the import of
the word "control" as defined under Section 2(27) of the Companies
Act and observed as under:
“46. The expression “control” is defined in Section
2(27) of the Companies Act, 2013 as follows:-
“(27) “control” shall include the right to appoint
majority of the directors or to control the
management or policy decisions exercisable by a
person or persons acting individually or in concert,
directly or indirectly, including by virtue of their
shareholding or management rights or
shareholders agreements or voting agreements or
in any other manner;”
47. The expression “control” is therefore defined
in two parts. The first part refers to de jure control,
which includes the right to appoint a majority of the
directors of a company. The second part refers to
de facto control. So long as a person or persons
acting in concert, directly or indirectly, can
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WA No. 1602 of 2026
positively influence, in any manner, management
or policy decisions, they could be said to be “in
control”. A management decision is a decision to
be taken as to how the corporate body is to be run
in its day to day affairs. A policy decision would be
a decision that would be beyond running day to
day affairs, i.e., long-term decisions. So long as 76
management or policy decisions can be, or are in
fact, taken by virtue of shareholding, management
rights, shareholders agreements, voting
agreements or otherwise, control can be said to
exist.”
44. In the present case, Sri T. Gautham Pai, as a whole-time
director and Executive Chairman of MTL, excercises control over its
management and policy decisions. He is thus, in view of the matter,
in de facto control of the company.
45. Given Sri Gautham Pai's long-standing position at MTL and
his executive role in the company, it is clear that he was and
continues to be firmly in control of MTL. Thus, Sri T. Gautham Pai
would be a promoter of MTL not only in common parlance but also
within the meaning of Section 2(69) of the Companies Act. The
second question, is accordingly answered.
46. It is also contended that neither Sri T. Gautham Pai nor any
entity in which he is a Director has defaulted. However, the material
facts in this regard have not been placed on record. Thus, we do
not consider it apposite to render any opinion on this question. The
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WA No. 1602 of 2026
parties are not precluded from agitating the same in the pending writ
petition.
CONCLUSION
47. We find no ground to interfere with the impugned order. The
appeal is dismissed with the aforesaid observations.
48. The pending interlocutory application/s also stand disposed
of.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(K.S. HEMALEKHA)
JUDGE
AHB