Case Note & Summary
The Supreme Court of India heard appeals by the State of Madhya Pradesh against a High Court judgment that had set aside the rejection of U.P. State Bridge Corporation Ltd.'s (UPSBC) bid in a public tender for constructing a flyover. The tender, issued on 02.12.2019, required bidders to certify that no investigation by a regulatory authority was pending against them. UPSBC had an FIR dated 15.05.2018 lodged against it for a bridge collapse that killed 15 persons, which led to a charge sheet and a pending trial, though the trial was stayed by the Allahabad High Court on 30.07.2019. UPSBC did not disclose these facts in its bid. The State rejected UPSBC's bid as non-responsive for suppression of material facts, and also rejected Rachana Construction Co.'s bid for failing to meet technical capacity criteria. The High Court allowed UPSBC's writ petition, holding that since no 'investigation' was pending as defined under Cr.P.C., there was no suppression. The Supreme Court reversed this, holding that the term 'investigation' in the tender must be interpreted broadly to include the entire process from FIR to trial, and that the suppression was a fraudulent practice under clauses 4.1 and 4.3(b) of the N.I.T. The court also upheld the rejection of Rachana Construction Co.'s bid. The appeals were allowed, restoring the State's rejection of both bids.
Headnote
A) Public Tenders - Fraudulent Practice - Suppression of Material Facts - N.I.T. Clauses 4.1, 4.3(b), Appendix IA para 13, Annex I clause 7(b) - The bidder suppressed the fact of an FIR, charge sheet, and pending trial regarding a bridge collapse that killed 15 persons. The court held that such suppression constitutes a fraudulent practice, rendering the bid non-responsive, and the authority is entitled to reject the bid and forfeit the bid security. (Paras 1-20) B) Interpretation of Statutes - Investigation under Cr.P.C. - Sections 2(g), 2(h), 2(i) Cr.P.C. - The court held that the term 'investigation' in the bid document must be interpreted in the context of the tender's purpose, not strictly as defined in Cr.P.C. The bidder's concealment of the FIR and its aftermath was a material misrepresentation. (Paras 15-18) C) Public Tenders - Technical Capacity - Clause 2.2.2.2(ii) N.I.T. - The court upheld the rejection of Rachana Construction Co.'s bid for failing to meet the 'one similar work' criterion, as the work completed was less than 25% of the estimated project cost. (Paras 19-20)
Issue of Consideration
Whether the suppression of an FIR, charge sheet, and pending trial in a bid document amounts to a fraudulent practice and justifies rejection of the bid as non-responsive.
Final Decision
The Supreme Court allowed the appeals, set aside the High Court judgment, and upheld the rejection of UPSBC's bid and Rachana Construction Co.'s bid as non-responsive. The State was entitled to forfeit the bid security of UPSBC.
Law Points
- Public Tenders
- Fraudulent Practice
- Suppression of Material Facts
- Bid Responsiveness
- Interpretation of Investigation
