The Supreme Court Today (April 2nd) imposed a penalty of Rs 5 lakh on the Himachal Pradesh Housing and Urban Development Authority (HIMUDA) for acting in cahoots with a private company for the award of a tender for the construction of a commercial complex in Shimla.
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NEW DELHI: The Supreme Court imposed a significant fine of Rs 5 lakh on the Himachal Pradesh Housing and Urban Development Authority (HIMUDA) for its collusion with Vasu Constructions, a private firm, in the matter of awarding a tender for constructing a commercial complex in Shimla. This decision brings to light the intricate legal battle and the judiciary’s stance against malpractice in tender processes.
Justices Bela M Trivedi and Pankaj Mithal, constituting the bench, found that HIMUDA attempted to deceive the high court by planning to award the contract to Vasu Constructions, despite prior identification of “gross irregularities” in the tendering procedure by the state high court.
The Supreme Court’s bench articulated its decision with clear disapproval of the actions taken by HIMUDA, stating,
“We have no hesitation in holding that the respondent no. 1 (HIMUDA) in collusion with the respondent no. 2 (Vasu Constructions), 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 by the officers of the respondent no. 1, and for anyhow awarding the contract to the respondent no. 2 under the guise of the court’s order.”
This assertion underscores the gravity with which the court viewed the manipulation and misuse of legal processes by both the public authority and the private company involved.
In overturning the October 2022 high court order that had approved the contract’s award to Vasu Constructions, the Supreme Court highlighted the malafide actions of HIMUDA. Notably, the court emphasized that HIMUDA, despite being a ‘State’ within the Article 12 context of the Indian Constitution, acted in bad faith and in collusion with the private firm, thereby misleading the high court. This led to the imposition of a hefty fine on HIMUDA, with instructions to deposit the amount with the Supreme Court Advocates-on-Record Association within two weeks.
The tender process’s history, dating back to December 2018 when HIMUDA initially issued a letter of intent to Vasu Constructions, has been fraught with controversy and legal challenges. Following complaints and litigation pointing out irregularities in the tender process, an independent committee recommended the tender’s cancellation, leading to HIMUDA cancelling the tender process in February 2021. However, subsequent actions by HIMUDA to proceed with Vasu Constructions, despite these controversies, prompted the legal challenge that culminated in the Supreme Court’s decisive action.
This ruling not only highlights the judiciary’s vigilant oversight in public tender processes but also sets a precedent for the handling of similar cases, ensuring that public bodies and private entities adhere to the highest standards of integrity and legal compliance. The case concludes with the possibility of issuing a new tender, offering a fresh start to the project under scrutiny.
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