New Delhi: The Supreme Court has imposed a fine of Rs 5 lakhs on the Himachal Pradesh Housing and Urban Development Authority (HIMUDA), saying that the authority in collusion with a private company, regarding a tender for a commercial complex in Shimla, took the “high court for a ride and misused the process of law for covering up the irregularities and illegalities” committed in the tender process by the officers of the authority.
In a judgment delivered on April 2, a bench comprising justices Bela M Trivedi and Pankaj Mithal said: “we have found that the respondent no.1 HIMUDA, within the meaning of Article 12 of the Constitution of India, had acted malafide and in collusion with the respondent no.2 (Vasu Constructions), and had taken the High Court for a ride, the present appeal deserves to be allowed with heavy cost”.
“The appeal is allowed with a cost of Rs. 5,00,000/- to be deposited by the respondent no. 1 HIMUDA with the Supreme Court Advocates-on-Record Association, within two weeks from today. However, it is clarified that the respondent no.1 shall be at liberty to initiate a fresh tender process in accordance with law and after following the due process of law”, said Justice Trivedi, who authored the judgment on behalf of the bench.
The bench said considering the entire chain of events, and the conduct of the HIMUDA and the private company, “we have no hesitation in holding that the respondent no. 1 in collusion with the respondent no. 2, had taken the high court for a ride and misused the process of law for covering up the irregularities and illegalities committed in the tender process….”. Setting aside the high court order, the bench said the officers of the authority committed the irregularities for awarding the contract to the private company under the guise of court’s order.
The apex court said the high court passed the order without proper application of mind and without assigning any cogent reason for brushing aside the findings recorded by the independent committee and the observations made by the single bench (of the high court) in the order on January 8, 2021, and added, “the same deserves to be quashed and set aside”.
The bench said it is a matter of surprise that the high court could not notice the ill-intention of the authority and private company and disposed of the petition, permitting them to go ahead with the original tender, ignoring the reports of the independent committee. “And, the observations made by the single bench in the order dated 08.01.2021 with regard to the irregularities and illegalities committed by the officers of the respondent no. 1 HIMUDA”, said the bench.
The bench said that there was no right whatsoever created in favour of the respondent no. 2, and since the respondent no. 1 HIMUDA had already accepted the recommendations of the committee appointed by the high court and the order dated January 8, 2021 passed by the High Court, and had cancelled the tender and issued a fresh notice inviting tender (NIT) on December 17, 2021. “The respondent no. 1 could not have agreed to allow the respondent no. 2, who was found to be not technically qualified, to go ahead with the execution of the project in question and that too without giving the other two parties any opportunity to negotiate”, said the apex court.
In December 2018, HIMUDA granted a letter of intent (LOI) to Vasu Constructions to construct a commercial complex in Shimla. However, the LOI had to be withdrawn due complaints of irregularities in the process and litigation before the high court by unsuccessful bidders. In February 2021, HIMUDA cancelled the tender process in the wake of the proceedings before the high court.
Vasu Construction, aggrieved by the cancellation of the tendering process by the HIMUDA, moved the high court. The authority before the division bench of the high court contended that it had no objection to going ahead with the initial tendering process, in case Vasu Construction was ready to execute the work on the same terms and conditions, which were agreed initially. The high court disposed of the matter after noting the authority’s no objection in granting a contract to the Vasu Constructions. In November 2022, the contract was signed between HIMUDA and Vasu Constructions.
Appellant – Level 9 BIZ Pvt. Ltd., who was not a party to the proceedings, being a civil writ petition, filed by Vasu Constructions in the High Court of Himachal Pradesh, moved the apex court challenging the order dated October 18, 2022, passed by the high court.
