Case Note & Summary
The petitioners, Siemens Ltd. and another, filed a writ petition challenging the communication dated 3 June 2010 by which the first respondent, Mumbai Railway Vikas Corporation Ltd., refused to issue bid documents for a World Bank aided project (MUTPII) to the first petitioner. The first petitioner had entered into a settlement agreement with the World Bank in 2009, agreeing to voluntarily desist from bidding for any World Bank aided project for two years and to pay US$100 million for anticorruption work, following an investigation into corruption in a project in Russia. The World Bank communicated this debarment to the Union Ministry of Finance, which informed the first respondent. The first respondent sought clarification from the World Bank, which confirmed the debarment. The petitioners argued that the refusal was arbitrary and violated Article 14. The court held that the first petitioner was bound by its own voluntary undertaking and the first respondent was obligated to follow World Bank guidelines. The petition was dismissed.
Headnote
A) Public Procurement - Debarment from Bidding - Voluntary Settlement Agreement - The court considered whether a bidder voluntarily agreeing to desist from bidding for World Bank aided projects can challenge the refusal to issue bid documents. Held that the petitioner is bound by its own voluntary undertaking and the respondent's action is not arbitrary (Paras 2-4).
Issue of Consideration
Whether the First Respondent's refusal to issue bid documents to the First Petitioner, based on a voluntary settlement agreement with the World Bank, is arbitrary and violative of Article 14 of the Constitution.
Final Decision
The petition is dismissed. No order as to costs.
Law Points
- Voluntary settlement agreement
- debarment from bidding
- World Bank aided project
- judicial review of contractual disqualification
- no arbitrariness in following World Bank guidelines
Case Details
WRIT PETITION NO. 2449 OF 2010
Dr. D.Y. Chandrachud, Anoop V. Mohta
Mr. Aspi Chinoy, Sr. Advocate with Mr. V. R. Dhond with Mr. Shailesh Mendon with Mr. Shahezdad Kazi i/by Negandhi Shah & Himayatullah for the petitioners. Mr. Nitin Thakkar, Sr. Advocate with Ms. Usha Srivastava i/by Consulta Juris for respondent no.1. Mr. Suresh Kumar with Mr. Deepak Rai for respondent no.2.
Mumbai Railway Vikas Corporation Ltd. & anr.
Subscribe to unlock Case Details (Citation, Judge, Date & more)
Subscribe Now
Nature of Litigation
Writ petition challenging refusal to issue bid documents for a World Bank aided project.
Remedy Sought
Petitioners sought to challenge the communication dated 3 June 2010 refusing to issue bid documents to the first petitioner.
Filing Reason
The first petitioner was debarred from bidding due to a voluntary settlement agreement with the World Bank.
Issues
Whether the refusal to issue bid documents based on a voluntary settlement agreement is arbitrary and violative of Article 14.
Submissions/Arguments
Petitioners argued that the refusal was arbitrary and violated Article 14.
Respondents contended that the first petitioner was bound by its own voluntary undertaking and the respondent was obligated to follow World Bank guidelines.
Ratio Decidendi
A bidder who voluntarily enters into a settlement agreement with the World Bank agreeing to desist from bidding for World Bank aided projects cannot later challenge the refusal to issue bid documents as arbitrary, as the respondent is obligated to follow the World Bank's guidelines.
Judgment Excerpts
The First Petitioner has not been permitted to bid in view of a settlement that was entered into by the First Petitioner with the World Bank under which the First Petitioner agreed to voluntarily desist from bidding for any World Bank aided project, across the world, for a period of two years and to make a financial commitment of US Dollars 100 million over fifteen years to support anticorruption work.
Procedural History
The petition was filed challenging the communication dated 3 June 2010. The court heard the matter and delivered judgment on 7 December 2010.
