In a recent development, the Supreme Court has levied a hefty penalty of ₹5 lakh on the Himachal Pradesh Housing and Urban Development Authority (HIMUDA). This decision comes after the court found HIMUDA guilty of colluding with a private company in awarding a tender for constructing a commercial complex in Shimla.
A bench comprising justices Bela M Trivedi and Pankaj Mithal observed that HIMUDA attempted to deceive the high court by agreeing to grant the contract to the same construction company despite previous declarations by the state high court regarding severe irregularities in the tendering process.
The bench stated, “We have no hesitation in holding that HIMUDA, in collusion with Vasu Constructions, misled the high court and misused the legal process to cover up irregularities in the tender process.”
Furthermore, the Supreme Court annulled the high court’s order from October 2022, which had approved the contract’s award to Vasu Constructions. The court emphasized that since HIMUDA acted in bad faith and colluded with the private firm, it must bear a substantial cost.
The court directed HIMUDA to deposit the penalty of ₹5 lakh with the Supreme Court Advocates-on-Record Association within two weeks. However, the authority is permitted to issue a fresh tender.
The controversy dates back to December 2018 when HIMUDA issued a letter of intent to Vasu Constructions for constructing a commercial complex in Shimla. However, the letter had to be withdrawn due to complaints of irregularities and subsequent litigation initiated by unsuccessful bidders.
An independent committee, appointed by the high court, recommended the cancellation of the tender due to numerous shortcomings and irregularities. Subsequently, HIMUDA canceled the tender process in February 2021 amid ongoing proceedings before the high court.
Nevertheless, after Vasu Constructions contested the tender cancellation, HIMUDA informed the division bench that it had no objection to proceeding with the initial tendering process if the firm agreed to the same terms and conditions. The division bench disposed of the petition, recording HIMUDA’s no-objection to awarding the tender to Vasu Constructions. This decision was challenged in the Supreme Court by another bidder.
The Supreme Court’s ruling serves as a stern warning against malpractices in public procurement processes and highlights the importance of transparency and integrity in such dealings.
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