The Delhi High Court nullified BSNL’s decision to terminate its contract with an IT firm, citing a lack of substantive evidence. The court emphasized that serious allegations like collusion or malpractice cannot be based on speculation or subjective impressions. It ruled that perceptions of overconfidence alone do not justify such actions, ensuring fairness in contractual disputes.
New Delhi: The Delhi High Court has set-aside BSNL’s decision to cancel a purchase order it placed with Millennium Automation Private Limited for central billing and internet protocol data recovery (IPDR) solutions.
BSNL, a state-owned telecom company, had terminated the multi-crore contract dated July 19, citing allegations of collusion and mala fide conduct by the company in securing the order.
In a ruling delivered on November 19, Justice Sanjeev Narula emphasized the importance of maintaining the integrity of the tendering process, stating that any deviations must be met with appropriate consequences.
However, he noted that BSNL’s claims of “compromised integrity” were not supported by “concrete material” evidence.
The judge pointed out that as a ‘State’ entity under Article 12 of the Constitution of India, BSNL had a duty to act fairly when rescinding the purchase order. He described the communication from BSNL and the new grounds for the order’s cancellation as “unreasonable, arbitrary, and unsustainable.”
The court ruled,
“Accordingly, the instant petition is allowed and the impugned communication dated 06th August, 2024 is set aside.”
Justice Narula stated that serious allegations such as collusion or malpractice cannot be based on mere conjecture or perceptions of overconfidence.
He emphasized that,
“There must be tangible evidence to substantiate such charges, especially when they serve as the basis for rescinding a Purchase Order.”
The petitioner argued that they had already incurred significant expenses related to the procurement of supplies and that BSNL’s withdrawal from the contract lacked a reasonable basis.
On August 5, the petitioner had submitted a list of equipment suppliers along with their clearance status from the Trusted Telecom Portal of the National Security Council Secretariat, but BSNL issued a communication rescinding the purchase order the very next day.
Bharat Sanchar Nigam Limited (BSNL) is an Indian central public sector undertaking under the ownership of the Department of Telecommunications, Ministry of Communications, Government of India. Established on October 1, 2000, BSNL provides a wide range of telecommunications services across India, including fixed-line telephone, mobile telephony, broadband, and internet services.
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