The disqualification of a bidder for violating the Integrity Pact is valid even if the transgression occurred more than three years prior to the tender, and the mere pendency of a criminal case cannot act as a bar on participating or succeeding in the tender.

JUDGMENT

Rajarshi Bharadwaj, J. - By this appeal, the correctness of the judgement of the Learned Single Judge dated 02.12.2022 passed in W.P.A. No 23775 of 2022 (BLA Project Private Limited-versus-Damodar Valley Corporation & Ors.) has been questioned by the appellant/respondent No.1.

2. The facts of the case in a nutshell are that the appellant No. 1 herein the Damodar Valley Corporation (hereinafter referred to as 'DVC') had floated a notice inviting tender (hereinafter referred to as 'NIT') No. DVC/Tender/Head Quarter/Fuel/CMM/Works and Service/00020 dated 08.09.2022 for the work of lifting coal from collieries in Talcher, Odisha and supplying to the thermal plants in RCR mode. The NIT required the intending bidders to upload Envelope 1 containing hardcopy of the documents, Envelope 2, being the Technical Bid and Envelope 3 being the Financial Bid online by 19.09.2022. Seven intending bidders participated in the tender and submitted their bids and the writ petitioner herein i.e. respondent No.1 in the instant appeal being one of them. The writ petitioner/respondent No.1 submitted Envelope 1, Envelope 2 and Envelope 3 on 16.09.2022 and duly submitted a bank guarantee in lieu of earnest money deposit on 15.09.2022.

3. The writ petitioner, BLA Projects Private Limited and the appellant No. 1 entered into an Integrity Pact, a set of organisational procedures to ensure fairness and transparency in the tender process. Section 2 of the Pact provides for the commitments of the bidders/ contractors towards the Principal. In order to prevent corruption, the bidders/ contractors must not enter into any undisclosed agreement or understanding with other bidders, must not commit offences under the Indian Penal Code or Prevention of Corruption Act and must not improperly use or pass on to other any information, document provided by the Principal as part of the business relationship for the purpose of competition and personal gain. Section 3 of the Pact provides for disqualification of a bidder/contractor by the Principal from tender process, if the bidder has violated the provisions of Section 2 before the award or during the execution or in any other form such as to put his integrity in question. Section 5 of the Integrity Pact covers previous transgressions but restricts the requirement of declaration of such past transgressions to 3 years preceding the Integrity Pact which forms part of the tender documents of September 2022. Moreover, a bidder is disqualified from the tender process and banned from business dealings on the ground of incorrect declaration of previous transgressions.

4. The appellant No. 1, out of the 7 bidders rejected 2 bidders including respondent No's. 1 bid on October 31, 2022 for 'Techno Commercial not compliant' under Envelope 2. A subsequent letter to the respondent No. 1 dated November 05, 2022 stated that the rejection of the technical bid was based upon an FIR of 09.06.2018 and a Charge sheet of 24.10.2019 made against respondent No. 1 violating section 3 of the Integrity Pact. Aggrieved by the termination of the bid, respondent No.1 sought reference of disputes to arbitration wherein damages were awarded to the respondent No.1.

5. The writ petitioner/respondent No.1 thereafter filed a writ petition wherein the Learned Single Judge was pleased to pass an order in favour of the writ petitioner/respondent No.1 stating that the writ petitioner had fulfilled each of the qualifying criteria in the tender document and the invitation for bids, yet was disqualified by the appellant No.1 on the grounds as mentioned in the letter dated 05.11.2022 that the writ petitioner had indulged in fraudulent practices which resulted in an FIR being registered on 09.06.2018 and a charge sheet of 24.10.2019. It was, however, held by the Learned Single Judge that the charge of pilferage and fraudulent practices do not form part of the commitments under section 2 of the Integrity Pact since the impugned disqualification was grounded on t