01Facts
The Respondent issued a tender for the ‘Up-gradation, Operation & Maintenance of Inspection & Certification Centre’ at Jhuljhuli, Delhi
¶ 2.1The Petitioner Consortium was declared the successful L1 bidder on 27.03.2025, and a Letter of Acceptance (LoA) was issued on 26.08.2025
¶ 2.2On 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
¶ 2.3Subsequent 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
¶ 8Consequently, the Respondent cancelled the tender and the LoA on 04.02.2026
¶ 10The Petitioner challenged these orders, arguing that the FIR was a post-bid development and did not fall under the disclosure mandate of the tender
¶ 302Issues
i.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
¶ 13, 14ii.2. Whether the cancellation of the tender and LoA by the Respondent was arbitrary or illegal
¶ 1803Law Applied
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
¶ 10, 13It 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
¶ 3.2, 17the 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
¶ 15, 1804Reasoning
The court rejected the Petitioner’s contention that the FIR (registered on 13.05.2025) was the only relevant event
¶ 12, 14It noted that Clause 3 required disclosure of "investigations" in similar projects
¶ 13Since 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
¶ 14, 16The court observed that the scope of work in the Mehsana project was identical to the subject tender, qualifying it as a "similar project"
¶ 15The court reasoned that had these facts been disclosed, the Respondent would likely not have issued the LoA
¶ 16It further held that the Siemens Ltd. precedent was inapplicable as the record clearly established a breach of tender conditions
¶ 1705Holding
The High Court dismissed the petition, holding that the Respondent's decision to cancel the tender and LoA was a legitimate exercise to preserve the sanctity of the procurement process
¶ 18, 19The 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
¶ 15, 18No costs were awarded
¶ 19Original Court PDF
Consortium Of M/S Naman Electronics M/S Likhma Ram Bhambhu And M/S Shiv KumarvsGovernment Of Nct Of Delhi
Click to open original judgment
Original judgment, available to read, download and summarize on LawLens.in
