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Score Information Technologies Ltd. v. Sriyash Technologies Ltd. & Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 2470 of 2016)Decided 3 Mar 2016
Civil Appeal No. 2470 of 2016
Justice Kurian Joseph · Justice Rohinton Fali Nariman

Background

The State of Uttarakhand, through its Transport Commissioner, arranged for a Smart Card-based driving licence and vehicle registration project to be executed via HILTRON (a public sector undertaking) without any open tender, and HILTRON in turn brought in the appellant to carry out the work. A rival company challenged this arrangement in the Uttarakhand High Court as non-transparent and violative of Article 14 (equality before law); a single judge dismissed the challenge, but the Division Bench on appeal set aside the arrangement, holding that awarding contracts without any transparent or public process was impermissible even if the State wasn't obligated to hold a formal tender. The appellant (who had contracted with HILTRON, not the State directly) appealed to the Supreme Court.

Decision Breakdown

The Supreme Court upheld the High Court's reasoning that whatever the State does must be done transparently, and that a process "shrouded in thick blackness" cannot stand even if a formal tender isn't legally mandatory. It rejected the appellant's argument that the Division Bench shouldn't have gone beyond the locus-standi issue decided by the single judge. However, since a decade had passed since the original 2006 MOU, the Court directed the State to re-examine the entire issue afresh and to execute the project lawfully and expeditiously in the public interest, disposing of the appeal with no order as to costs, while leaving the appellant free to pursue any separate grievance against HILTRON.

Lesson Learnt

Government bodies do not always have to hold a formal tender to award contracts, but whatever process they use to select a contractor must be transparent and publicly known: opaque, behind-the-scenes arrangements for public projects can be struck down even without a tender requirement being violated.

Official source (sci.gov.in)View Judgment (PDF)

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