The Delhi High Court recently set aside a tender issued by the Indian Railway Catering and Tourism Corporation (IRCTC) for onboard catering services in trains. The tender was awarded to the highest bidder, but the Court found that the award was flawed due to the bidder's failure to disclose ongoing criminal proceedings, violating both the tender conditions and public anti-corruption principles.
The case arose when M/S Deepak and Co., a partnership firm operating catering services, challenged the Letter of Award (LoA) dated April 17, 2024, issued to the highest bidder (respondent no. 2). This tender covered onboard catering and base kitchen operations for five years.
The Court emphasized that respondent no. 2 failed to disclose its criminal antecedents while submitting the bid, which violated the Integrity Pact — an essential part of the tender documents.
“There is no disclosure of the criminal antecedents by the respondent No.2 in its bid...which prevented the respondent No.1 to evaluate if the reliability or credibility of respondent No.2 was in question,” the Court noted.
The Integrity Pact, as per its Section 2(g) and Section 3, mandates full disclosure of any past or pending criminal matters that may impact the bidder's credibility. Section 3 specifically empowers IRCTC to disqualify any bidder who has engaged in any form of transgression — not just recent ones.
Importantly, while Section 5 limits the declaration of past misconduct to three years, the Court clarified:
“The time period of ‘last three years’ in Section 5 cannot be interpolated into Section 3.”
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The High Court found that the criminal proceedings against respondent no. 2 — including CBI and ED cases under the Prevention of Corruption Act and PMLA — were not disclosed, despite being relevant and ongoing. The failure to disclose such significant legal issues violated the core principle of fairness in public tenders.
The Court also rejected IRCTC’s defense that the Integrity Pact was limited to misconduct in the last three years. Referring to similar precedents, the Court stressed that:
“Every effort must be made in public tenders to eliminate any scope of corruption. The omission of disclosure here violates the fairness and transparency expected.”
On these grounds, the Court quashed the tender and directed IRCTC to initiate a fresh bidding process in compliance with all terms, including full disclosure obligations.
It also said that respondent no. 2 shall be allowed to carry on the work until the fresh tender is allotted.
Case title: M S Deepak And Co Through Its Partner Smt Poonam Porwal vs. IRCTC (W.P.(C) 6460/2024)
