New Delhi: The Delhi High Court on April 22 annulled a Rs 56 crore catering contract given to RK Associates and Hoteliers Pvt. Ltd by IRCTC (Indian Railway Catering and Tourism Corporation for not disclosing information about the pending criminal cases.
The court ruled that non-disclosure violates key tender conditions, which have been designed to strengthen anti-corruption principles. The division bench comprising Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela held that IRCTC defied its own tender conditions by giving the contract to RK Associates despite its failure to disclose.
The court order read, “The process by which the respondent No.2 (RK Associates) has been issued the Letter of Award is vitiated by being in contravention of the conditions of the tender documents… Such a failure is undoubtedly not in conformity with the principle of fairness in public tenders.”
The contract was challenged by MS Deepak and Company, which is a rival bidder who proposed a Rs 41 crore bid against the Rs 56 crore bid of RK Associates.
Deepak and Company asserted that a case was lodged in 2015 against railway officials and some private licensees, including RK Associates. The case is still pending, and the company has failed to disclose its details.
It added that under Section 2 (g) and 3 of the Integrity Pact, it was the duty of RK Associates to disclose the pendency of this case to IRCTC.
IRCTC responded to this, citing that only cases within the last three years are required to be disclosed. However, the court straightforwardly dismissed the argument and found the rival Company’s claim meritorious.
The court noted, “In our considered opinion, the time period of ‘last three years’ occurring in Section 5 cannot be interpolated or imported to Section 3… The bidder is under a mandate to disclose all such transgressions irrespective of the period when they are said to have occurred.”
