The High Court of Delhi addressed a Writ Petition challenging the eligibility of a successful bidder (Respondent No. 2, Alankit Assignments Limited) in a tender process governed by a Request for Proposal (RFP) issued by the Union of India (Respondent No. 1).
The Core Issue
The central issue before the Court was whether the successful bidder (Respondent No. 2) remained eligible to be awarded and operate the tender contract, given the existence of a pending criminal investigation and prosecution complaint filed against the company (through its Director) by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA). The case revolved around the strict interpretation and application of the RFP’s mandatory eligibility criteria concerning involvement in unlawful activity and pending criminal charges.
Petitioner’s Submissions (M/S I.V.S. LANKA PRIVATE LIMITED)
The petitioner, M/S I.V.S. Lanka Private Limited, argued for the disqualification or termination of the contract awarded to Respondent No. 2 by drawing the Court’s attention to two critical clauses of the RFP:
- Chapter IV Pre-Verification: This clause mandates disqualification if any adverse report regarding security, illegal activity, or pending criminal investigation/charges comes to the Mission’s notice during the tender process. It further provides for contract termination and debarment if such information is revealed after the agreement is signed.
- Chapter V Mandatory Eligibility Criteria: This clause requires the bidding company to certify that it and its subsidiaries are not involved in any unlawful activity and have no outstanding criminal or civil liabilities.
The petitioner contended that the facts of the ED case squarely fall within the ambit of a “pending criminal investigation/charges,” thereby mandating the disqualification of Respondent No. 2 as per the RFP’s explicit conditions.
Respondent’s Submissions (Union of India)
Counsel for the Union of India (Respondent No. 1) submitted that, at the time of finalization of the bid, initial enquiries made from the Ministry of Home Affairs and other agencies only related to the security angle, and these inputs reported no security concerns regarding Respondent No. 2’s participation. This submission focused narrowly on the ‘security’ component of the pre-verification clause, suggesting initial clearance was based on this factor.
Court’s Prima Facie Finding
The Division Bench found that the Respondent No. 1’s reliance solely on the “security angle” was insufficient, noting that the RFP clauses clearly cover “pending criminal investigation/charges” as a separate ground for disqualification.
The Court referred to a Status Report filed by the Enforcement Directorate in a connected matter, which confirmed several crucial facts:
- A Prosecution Complaint (PC) has been filed in an ECIR case against multiple parties, including Alankit Assignments Limited (Respondent No. 2), through its Director, Ankit Agarwal.
- The Special Court, PMLA, had already taken cognizance of this complaint on August 7, 2021.
- A Provisional Attachment Order had been issued against assets belonging to the company’s Director.
- The role of the Director remains under investigation.
In light of the ED’s report detailing the PMLA proceedings and the Special Court’s cognizance, the Court concluded that there “prima facie seems to be some merit in the submissions of the petitioner” regarding the violation of the RFP’s pre-verification and mandatory eligibility clauses.
Court’s Order
The High Court issued the following operative directions:
- Re-consideration Directed: Respondent No. 1 (Union of India) is directed to re-consider its decision for awarding the tender to Respondent No. 2.
- Opportunity of Hearing: The re-consideration must be done after providing Respondent No. 2 an opportunity of hearing.
- Adherence to RFP: The re-consideration must strictly keep in view the provisions of the RFP, including Chapter IV (Pre-Verification) and Chapter V (Mandatory Eligibility Criteria), specifically concerning the effect of pending criminal investigations.
- No Takeover/Operation: The counsel for Respondent No. 1 confirmed that, on instructions, Respondent No. 2 shall not be allowed to takeover or operate the tender until the next date of listing.
- Next Date: The matter is listed for further hearing on October 17, 2025, with the direction that the Respondent No. 1’s decision must be taken before that date.
This decision effectively puts the award of the tender on hold pending a fresh assessment by the Union of India regarding the eligibility of the successful bidder, based on the material facts revealed by the Enforcement Directorate.
