Delhi High Court scrapped IRCTC’s Rs 56 crore contract with RK Associates for not disclosing a criminal case. The Court ordered a fresh tender process within 3 months.
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NEW DELHI: On April 22, 2025, the Delhi High Court cancelled a Rs 56 crore catering contract given by the Indian Railway Catering and Tourism Corporation (IRCTC) to RK Associates and Hoteliers Pvt. Ltd.
The reason was that the company did not share information about a pending criminal case during the bidding process. This non-disclosure was found to be against the rules of the tender.
The Court said that not informing about such a case broke an important rule meant to ensure honesty and fairness in public contracts.
A bench of Chief Justice Devendra Kumar Upadhyaya and Justice Tushar Rao Gedela said that IRCTC went against its own rules when it gave the contract to RK Associates, even though the company had not disclosed important legal matters that questioned its credibility.
“The process by which the respondent No.2 (RK Associates) has been issued the Letter of Award is vitiated being in contravention of the conditions of the tender documents … Such a failure is undoubtedly not in conformity with the principle of fairness in public tenders,”
-the Court said.
A rival bidder, MS Deepak and Co., who had placed a bid of Rs 41 crores, challenged the contract. They said that RK Associates had not informed IRCTC about a pending criminal case filed in 2015. That case involved some railway officers and private contractors, including RK Associates.
It was being investigated under the Prevention of Corruption Act and the Prevention of Money Laundering Act (PMLA).
Deepak and Co. pointed out that even if the Supreme Court had paused the legal case, it was still necessary for RK Associates to declare it during the tender process. They referred to Sections 2(g) and 3 of the Integrity Pact, which make such disclosure mandatory.
The High Court agreed with Deepak and Co.’s arguments and clearly disagreed with IRCTC’s view that only legal issues from the last three years needed to be reported.
“In our considered opinion, the time period of ‘last three years’ occurring in Section 5 cannot be interpolated or imported to Section 3… The bidder is under a mandate to disclose all such transgressions irrespective of the period when they are said to have occurred,”
-the judges said.
The Court added that RK Associates’ failure to mention the old criminal case stopped IRCTC from properly judging the company’s trustworthiness.
“Had the criminal antecedents relating to the period prior to past three years been disclosed as mandated… (IRCTC) would have been in a position to take a decision as to whether the ‘reliability and credibility’ of (RK Associates) was in question or not and depending on such decision the tender process could/ should have proceeded further. However, in the instant case, what we find is that there is no disclosure,”
-the Court noted.
The judges stressed the importance of transparency in public projects.
“Every possible step needs to be taken to remove any chances of transgression which may impinge on anti-corruption approach,”
-the Court added.
To support their decision, the judges also mentioned a ruling by the Calcutta High Court in the case Damodar Valley Corporation v. BLA Projects, where it was stated that even older offences must be reported if they affect the bidder’s reputation.
However, the Court did not agree with one point raised by the petitioner. They said IRCTC was not wrong to allow RK Associates to fix a small error in the Integrity Pact. RK Associates had submitted the document with a signature from their authorised representative, but some witness signatures were missing. These were added later after the financial bids were opened.
“The Integrity Pact, as submitted by the tenderer initially under the signatures of its authorised signatory, was duly compliant… The requirement of witness signatures was premature,”
-the Court explained.
In the end, the Court cancelled the Letter of Award issued to RK Associates in April 2024. It ordered IRCTC to restart the tender process and finish it within three months.
To make sure services do not get affected, the Court allowed RK Associates to continue working until a new contract is given.
Senior Advocate Kirti Uppal appeared for the petitioners along with Advocates Himanshu Pathak, Riya Gulati, Amit Singh, and Archisha Satyarthi.
IRCTC was represented by Solicitor General Tushar Mehta with Advocates Saurav Agrawal, Anshuman Chowdhury, and Aarya Bhat.
RK Associates was represented by Senior Advocates Sandeep Sethi and Jayant Mehta along with a team of Advocates including Jasmeet Singh, Gautam Khazanchi, Mahinder Singh Hura, Saif Ali, Pushpendra S. Bhadoriya, Vijay Sharma, Riya Kumar, Rajat Sinha, Pranav Menon, Vaibhav Dubey, and Saurav.
CASE TITLE:
Deepak VS IRCTC
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