Court’s Decision
In Writ Petition No. 867 of 2024, the Bombay High Court dismissed a challenge to a public tender and associated work order for implementation of an Integrated Surveillance and City Operations Platform (ISCOP) in Nashik. Although the petitioner alleged forgery and manipulation in the bidding process, the Court held that the petitioner lacked locus standi and the petition suffered from delay and laches. Nonetheless, in view of the grave allegations—including the alleged use of a certificate by a deceased Chartered Accountant—the Court directed Respondent Nos. 1 and 2 to conduct an internal enquiry into the implementation of the tender process and to take action, if discrepancies are found.
Facts
Respondent No. 1 (Nashik Municipal Smart City Development Corporation Ltd.) issued an e-tender on 5 July 2022 for implementation and maintenance of ISCOP for the city’s Emergency Operation Centre. The tender required bidders to have an average annual turnover of at least ₹35 crores over the past five years. Respondent No. 3 was declared the successful bidder and was issued a work order dated 29 December 2022.
The petitioner, who claimed to be a subcontractor associated with another entity that submitted a bid, alleged that Respondent No. 3 secured the contract through fraudulent means, particularly by submitting a forged certificate from a Chartered Accountant who had died in 2015. The petitioner sought cancellation of the work order and a direction for a probe into the entire tender process.
Issues
- Whether the petitioner had locus standi to maintain the writ petition.
- Whether the petition should be dismissed on account of delay and laches.
- Whether the allegations of fraud and forgery warranted cancellation of the work order and a judicial enquiry.
- Whether the public interest required interference at this stage when 100% of the work had already been completed.
Petitioner’s Arguments
The petitioner contended that:
- Respondent No. 3 had committed fraud by submitting a certificate dated 21 July 2022 allegedly signed by a Chartered Accountant who had passed away in 2015.
- After receiving a letter from the Municipal Corporation dated 2 August 2022, Respondent No. 3 withdrew the certificate, which further confirmed the forgery.
- Even if forgery was ignored, Respondent No. 3 did not meet the required turnover threshold based on its audited accounts.
- The petitioner, though not a direct bidder, was a subcontractor involved in the process and thus had the right to challenge the work order.
- The petition was filed only upon discovery of the fraud and the petitioner had relied on orders passed by the Court in January 2024 staying payments to Respondent No. 3.
In support of his arguments, he relied on:
- S.P. Chengalvaraya Naidu v. Jagannath, (1994) 1 SCC 1 – for the principle that fraud vitiates all.
- M/s K.K. Vidyut v. Union of India, W.P. (L) No. 35600 of 2024 – to assert that fraudulent contracts must be cancelled regardless of the stage of execution.
Respondents’ Arguments
Respondent Nos. 1 and 2 (the Corporation) and Respondent No. 3 (successful bidder) raised preliminary objections:
- The petitioner had no locus standi, not being a bidder in the tender.
- The petition was filed over a year after the work order was issued, during which substantial work had been completed.
- The Chartered Accountant’s certificate had been voluntarily withdrawn and other audited documents, including global turnover from the Singapore subsidiary, had been duly considered.
- The tender evaluation committee had found Respondent No. 3 eligible based on consolidated financials showing turnover exceeding ₹52 crores.
- Judicial review cannot be exercised to protect private interests over public interest, citing Coastal Marine Construction & Engineering Ltd. v. BPCL, W.P. (L) No. 6003 of 2025.
Analysis of the Law
The Court examined locus standi and held that the petitioner could not be considered an “aggrieved person” as required under Article 226, applying the tests laid down in:
- Jasbhai Motibhai Desai v. Roshan Kumar Haji Bashir Ahmed, (1976) 1 SCC 671
The Court emphasized that to maintain a writ of certiorari, a petitioner must show that their legal right has been affected. The petitioner here, being a subcontractor who neither submitted a bid nor possessed any legal expectation of receiving the work order, failed this threshold. - NHAI v. Gwalior-Jhansi Expressway Ltd., (2018) 8 SCC 243
Held that a party who did not participate in the tender process could not challenge the contract awarded to another. - Airport Authority of India v. Centre for Aviation Policy, Safety and Research, 2022 SCC OnLine SC 1334
The Court reiterated that writs challenging tender processes must only be entertained by aggrieved parties or qualified bidders.
Precedent Analysis
- Jasbhai Motibhai Desai v. Roshan Kumar Haji Bashir Ahmed
Applied to rule that the petitioner lacked locus standi, as he had no personal right affected by the tender process. - NHAI v. Gwalior-Jhansi Expressway Ltd.
Affirmed the principle that only participating bidders may challenge tender outcomes. - Airport Authority of India v. CAPSR
Used to reject PIL-style tender challenges by non-bidders or NGOs. - S.P. Chengalvaraya Naidu v. Jagannath and M/s K.K. Vidyut v. Union of India
Though cited by the petitioner to assert that fraud unravels all contracts, the Court found them inapplicable due to the petitioner’s lack of standing and delay.
Court’s Reasoning
The Court declined to interfere for the following reasons:
- No Locus Standi: The petitioner did not submit a bid, nor was he legally entitled to any relief even if the work order were cancelled.
- Gross Delay and Laches: The petition was filed over a year after the work order, during which the work was nearly completed.
- Public Interest and Completion: Since the ISCOP project had been completed, quashing the work order would serve no purpose and disrupt public administration.
Despite this, the Court found merit in the allegation that a forged certificate had been submitted—especially since the certificate was later withdrawn—and directed the Corporation to conduct an internal enquiry.
Conclusion
The High Court dismissed the writ petition but issued the following direction:
“Respondent Nos.1 and 2 shall conduct enquiry into the manner in which the tender process has been implemented and if any discrepancy is noticed, they would be free to take appropriate action.”
No opinion was expressed on the petitioner’s substantive allegations, which were left to the internal enquiry.
Implications
This ruling reaffirms the high bar for locus standi in tender challenges. Subcontractors or peripheral actors cannot maintain writ petitions unless they demonstrate a direct legal injury. The decision also underscores that delay and completion of public works will deter judicial interference. However, it recognizes that serious allegations of fraud—like forged documents—must be probed, even if judicial remedies are denied to individual petitioners.
The order strikes a balance between protecting public interest in completed projects and ensuring accountability in public procurement.