'No Disclosure Of Criminal Antecedents': Delhi High Court Quashes IRCTC's Grant Of Tender On Catering Services To Highest Bidder

A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela noted that the successful bidder (respondent no. 2) did not comply with the 'Integrity Pact', which forms a part of the tender documents.

“Thus, in our opinion, the process by which the respondent No.2 has been issued the Letter of Award is vitiated being in contravention of the conditions of the tender documents, that too, touching upon the need and duty of the tendering authority, which in this case is a public authority, to evaluate as to whether reliability or credibility of the respondent No.2 qua transgressions impinging on anti-corruption principle, were questionable or not. Such a failure, in our opinion, on the part of the respondent No.1 which occurred on account of non-disclosure of criminal antecedents by respondent No.2 along with its bid, is undoubtedly not in conformity with the principle of fairness in public tenders where every possible steps need to be taken to remove any chances of any transgression which may impinge on anti-corruption approach.”

The Court was considering a challenge of a partnership firm (petitioner) engaged in the business of operation and management of catering services, against IRCTC's issuance of a Letter of Award to the respondent no. 2.

IRCTC issued a notice in February 2024 inviting e-open tender for providing catering services and operation of base kitchens in trains for five years, further extendable up to two years. With a bid of Rs. 56.06 crores, respondent no.2 was declared as the highest bidder in the financial round. Subsequently, respondent no.2 was awarded the tender.

The High Court took note that the 'Integrity Pact', signed by respondent no. 2 and stated that it forms a part of the tender documents. It observed that any violation of the pact would result in the disqualification of the tenderer.

It noted that Section 2(g) of the Integrity Pact mandates that the bidders/ contractors shall disclose any transgression with any other company that may impinge on the anti-corruption principle.

It further noted that as per Section 3 of Integrity Pact, IRCTC is entitled to disqualify the bidders from the tender process and even exclude from future contracts, in case a bidder, before award or during execution of the work, has or is found to have committed a transgression through violation of Section 2. It observed that under Section 3, IRCTC can disqualify bidder in two situations, (i) in a situation where violation of Section 2 is found and (ii) in a situation where transgression is found otherwise.

“Accordingly, our reading of Section 3 is very clear, which is that apart from transgression by a bidder/ contractor through violation of Section 2, disqualification can take place in case of transgression of the integrity principle in any other form i.e. in a form not mentioned in Section 2.”

It further referred to Section 5 of Integrity Pact, which provides that the bidder is to declare that no previous transgressions had occurred in the last three years conforming to the anti-corruption principle. It noted that the time period of “last three years” occurring in Section 5 could not be interpolated or imported to Section 3. Thus, the tenderer has to disclose all the transgressions irrespective of the time period when they occurred.

“In our considered opinion for enabling the IRCTC/ respondent No.1 to evaluate as to whether any contractor/ tenderer is guilty of transgression such as to put their reliability and credibility in question, the bidder/ tenderer is under a mandate of the tender condition to disclose all such transgressions irrespective of the period when they are said to have occurred.”

Here, noting that respondent no. 2 did not disclose any transgressions, the Court observed “However, in the instant case, what we find is that there is no disclosure of the criminal antecedents by the respondent No.2 in its bid submitted in pursuance of the subject tender which prevented the respondent No.1 to have an occasion to consider and take a decision as to whether the reliability or credibility of respondent No.2 was in question on account of the transgressions which occurred even prior to past three years.”

In view of the above, the Court opined the Letter of Award was vitiated due to contravention of the tender documents. It stated that the non-disclosure of transgressions by respondent no. 2 did not conform to the principle of fairness in public tenders.

The Court thus quashed the Letter of Award issued by IRCTC to respondent no. 2. It directed IRCTC to initiate a fresh tender process.

It also said that respondent no. 2 shall be allowed to carry on the work until the fresh tender is allotted.

Case title: M S Deepak And Co Through Its Partner Smt Poonam Porwal vs. IRCTC

Citation: 2025 LiveLaw (Del) 464