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CORPORATE LAWYER: TENDER MATTERS - Supreme Court held show cause for blacklisting proceedings - does not tantamount to pendency of blacklisting proceedings. The contract restored to the successful bidder for tender.


Sanjay Kishan Kaul (J) & S.A Bobde (J)

It is not uncommon that the unsuccessful bidders in tender are challenging the tender process against the successful bidder in Writ Jurisdiction before the High Court.

The similar issue came in appeal before the Supreme Court in "Caretel Infotech Ltd Vs. HPCL & Ors." In this case the Bombay High Court DB had set aside the allocation of tender in favour of the successful bidder for not disclosing the pendency of blacklisting proceedings against it, which condition debars the person from participating in the tender, as per terms thereof.

The Supreme Court set aside the Judgment of High Court of Bombay and restored the tender in favour of successful bidder and held that in Writ Jurisdiction there should be minimum interference in commercial matters of Tenders etc.

It was held that mere issuance of show cause notice for blacklisting would not amount to pendency of blacklisting proceedings or start of blacklisting proceedings - as the word suggests it is only show cause as to why the proceedings for blacklisting should not be started. Therefore, it cannot be held that blacklisting proceedings are pending at the time of application for tender by the successful bidder.

The appeal was allowed.


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