Dhruv Swimming Institute Through Proprietor Mahendra Billore vs. Chief Municipal Officer Nagar Palika Parishad Shujalpur

Held

The Court held that the respondent authority acted within its bounds by considering the petitioner's reply and evaluating the pending criminal case. The Court found that the authority had come to a reasoned conclusion, and despite viewing the explanation positively, the aspect of the criminal case could not be overlooked. The Court noted that while the petitioner had approached the High Court and obtained interim relief, the proceedings before the police authority had not been quashed, meaning a criminal case was still pending. The Court concluded that the authority had followed the necessary procedure, including principles of natural justice, and had not committed any material illegality or acted arbitrarily. The handling of the objection was not deemed arbitrary, nor was any mala fide attributed. The Court found no perversity or illegality in the impugned order and therefore, no case was made out to interfere under Article 226 of the Constitution. The ratio decidendi is that a pending criminal case, even if under challenge and with interim relief, can be a valid ground for disqualification in a tender process if the authority, after due consideration, deems it a substantive objection, provided natural justice is followed.

Facts

The petitioner, Dhruv Swimming Institute, filed a writ petition challenging an order dated May 7, 2026, passed by the Chief Municipal Officer, Municipal Council, Shujalpur. This order cancelled the petitioner's online tender for the operation and maintenance of a swimming pool. The cancellation was primarily based on the pendency of a criminal case against the petitioner. The petitioner had been declared the highest bidder and compliant with tender conditions. However, a notice was issued alleging ineligibility due to recent GST/MSME registration, doubtful experience certificates, and the pending criminal case. The petitioner responded, clarifying the registrations were statutory, experience certificates were genuine, and the criminal case arose from a civil property dispute and was under challenge with interim relief granted. Despite this, the respondent authority rejected the tender.

Key Issues

1. Whether the pendency of a criminal case, which is under challenge before the High Court and has interim relief, constitutes a valid ground for cancelling a tender awarded to the highest bidder, especially when the tender conditions do not explicitly disqualify candidates on this basis? (Question of law and mixed fact and law, concerning principles of natural justice and contractual eligibility). Petitioner's arguments: The petitioner contended that the cancellation was arbitrary and perverse as interim relief was granted in the criminal case. They argued that the GST and MSME registrations were obtained statutorily and experience certificates were genuine, with no mandatory prior experience required. The criminal case, arising from a civil dispute, should not be a disqualifying factor, especially when under challenge. The impugned order was non-speaking and lacked cogent reasons, violating the petitioner's right to trade under Article 19(1)(g) of the Constitution. Revenue/State's arguments: The respondent authority argued that despite the petitioner's explanations, the pending criminal case could not be overlooked. The authority followed due procedure by issuing a notice and considering the petitioner's reply, but ultimately found the pending criminal case to be a substantive objection.