Concealment of prior malpractices in similar projects vitiates the award of a government tender.

The Respondent issued a tender for the ‘Up-gradation, Operation & Maintenance of Inspection & Certification Centre’ at Jhuljhuli, Delhi

The Petitioner Consortium was declared the successful L1 bidder on 27.03.2025, and a Letter of Acceptance (LoA) was issued on 26.08.2025

On 18.11.2025, the Respondent issued a Show Cause Notice (SCN) alleging concealment of an FIR dated 13.05.2025 registered against a consortium member, M/s Naman Electronics, in Gujarat

Subsequent fact-finding revealed that M/s Naman Electronics’ license for a similar project in Mehsana, Gujarat, had been suspended on 21.02.2024 and cancelled/surrendered on 16.11.2024 following an investigation into the fraudulent issuance of fitness certificates

Consequently, the Respondent cancelled the tender and the LoA on 04.02.2026

The Petitioner challenged these orders, arguing that the FIR was a post-bid development and did not fall under the disclosure mandate of the tender

1. Whether the Petitioner’s failure to disclose the prior investigation and cancellation of its license in Gujarat constituted a violation of the disclosure requirements under Clause 3 of the tender

2. Whether the cancellation of the tender and LoA by the Respondent was arbitrary or illegal

The court primarily applied Clause 3 of the Tender Document ("Instructions to Bidders"), which mandates an undertaking that no consortium member is under investigation, charge-sheeted, convicted, or blacklisted regarding any similar project

It also considered the principle from Siemens Ltd v. State of Maharashtra, which defines exceptions to the non-maintainability of writ petitions against show-cause notices when the authority acts with a pre-determined mind

the court relied on the administrative law principle that non-disclosure of material facts vitiates the award of a contract and that authorities may act to preserve the sanctity of the procurement process

The court rejected the Petitioner’s contention that the FIR (registered on 13.05.2025) was the only relevant event

It noted that Clause 3 required disclosure of "investigations" in similar projects

Since the investigation into malpractices in Gujarat led to a license suspension in February 2024 and cancellation in November 2024—both occurring prior to the bid submission in February 2025—these were material facts that the Petitioner was obligated to disclose

The court observed that the scope of work in the Mehsana project was identical to the subject tender, qualifying it as a "similar project"

The court reasoned that had these facts been disclosed, the Respondent would likely not have issued the LoA

It further held that the Siemens Ltd. precedent was inapplicable as the record clearly established a breach of tender conditions

The court found no arbitrariness in the impugned orders dated 04.02.2026 and 18.02.2026, as the Petitioner had suppressed material facts regarding its disqualification in a similar project

No costs were awarded