Court rules that disqualifying bidders with criminal charges is not arbitrary, prioritizes public interest in sensitive projects.
In a significant ruling, the Delhi High Court has upheld the Delhi Jal Board's (DJB) tender conditions that disqualify bidders with pending First Information Reports (FIRs) or charge-sheets, emphasizing the need for preventive measures in projects of public health and environmental significance. The judgment was delivered by a bench comprising Mr. Nitin Wasudeo Sambre and Mr. Ajay Digpaul, who heard the petitions filed by M/s Dhanvine Engineering Pvt. Ltd. and others against the Delhi Jal Board.
The petitioners challenged the eligibility conditions in a tender dated January 15, 2026, which disqualified bidders based on pending criminal proceedings, arguing that such conditions violated the presumption of innocence and were arbitrary and discriminatory. The tender was for constructing decentralized sewage treatment plants and sewage pumping stations in Delhi, crucial for public health and environmental safety.
The court, however, dismissed the petitions, asserting that the tender conditions were framed to safeguard public interest and were neither arbitrary nor discriminatory. It noted that the conditions were preventive, ensuring integrity and accountability in executing sensitive public projects. The court emphasized that the presumption of innocence, applicable in criminal trials, does not extend to commercial contracts or tender processes, where preventive governance principles are paramount.
The judgment highlighted that the Delhi Jal Board, responsible for public health and sanitation, was justified in exercising caution and adopting preventive measures in selecting contractors for significant projects. The court also observed that the tender conditions did not target the petitioners specifically but applied to all parties facing similar criminal investigations.
The ruling aligns with previous Supreme Court judgments emphasizing the tendering authorities' discretion in setting conditions to meet project requirements. The court reiterated that judicial review in tender matters should be exercised with restraint, especially when public interest is at stake.
The decision underscores the judiciary's role in balancing private commercial interests against the broader public good, affirming that public interest must always prevail in conflicts. The judgment will likely have implications for future tenders involving public health and environmental projects, setting a precedent for prioritizing integrity and accountability over private commercial gains.
Bottom Line:
Tender conditions imposing disqualification of bidders based on pending FIRs or charge-sheets are not arbitrary or discriminatory when framed in public interest for projects of public health and environmental significance.
Statutory provision(s):
General Financial Rules 2017, Article 21 and 47 of the Constitution of India, Prevention of Corruption Act, 1988, Indian Penal Code, Prevention of Money Laundering Act, 2002
M/s Dhanvine Engineering Pvt. Ltd. v. Delhi Jal Board, (Delhi)(DB) : Law Finder Doc id # 2853515
