Stay On Blacklisting Order Does Not Efface Underlying Fact; Bidder Must Make Candid Disclosure: Delhi High Court

"An interim order staying the operation of a blacklisting order does not efface or obliterate the underlying factum that an order of blacklisting had in fact been passed on 09.12.2025." Delhi High Court, in a significant ruling dated May 19, 2026, held that the grant of an interim stay on a blacklisting order does not dispense with a bidder's obligation to disclose the existence of such an order to a tendering authority.

A division bench of Justice Anil Kshetarpal and Justice Amit Mahajan observed that "the bidder could not unilaterally proceed on the assumption that grant of interim protection dispensed with the obligation of disclosure itself." The Court emphasized that tender conditions requiring disclosure are rooted in the principle of "utmost candour" expected from participants in public procurement.

The Petitioner, M/s Velocis Systems Pvt. Ltd, challenged its technical disqualification by the National Informatics Centre Services Incorporated (NICSI) in a tender for the empanelment of agencies for office support and project management. The Respondent disqualified the Petitioner on the grounds that it furnished incorrect and incomplete information regarding its blacklisting status. Specifically, the Petitioner had been blacklisted by APEDA on December 9, 2025, but failed to clearly disclose this in its bid submitted on December 30, 2025.

The primary question before the Court was whether the Respondent was justified in disqualifying the Petitioner for non-disclosure, given that the blacklisting order had been stayed by the High Court in a separate proceeding a day before the bid was submitted. The Court was also called upon to determine whether an ambiguous declaration that fails to clearly state a bidder's status "not blacklisted" or "not under active debarment" warrants summary rejection under the terms of a Request for Empanelment (RFE).

Limited Scope Of Judicial Review In Tender Matters

The Court began by reiterating that the scope of judicial review in matters relating to tenders and contractual decisions is strictly limited. It noted that the Court does not sit in appeal over the decision of the tendering authority. Interference is warranted only where the decision-making process is found to be arbitrary, mala fide, or in violation of the terms of the tender.

Disclosure Of Blacklisting Mandatory Despite Interim Stay

The Bench addressed the Petitioner's central argument that the stay of the blacklisting order on December 29, 2025, meant that the allegation of non-disclosure was misconceived. Rejecting this contention, the Court held that while an interim order may "eclipse" the operation of a blacklisting order during the pendency of proceedings, it does not "efface or obliterate" the fact that such an order was passed.

The Court observed that the issue before the Respondent was not merely the operative enforceability of the blacklisting order, but whether the Petitioner had made a "full, fair and candid disclosure of all material facts relevant to the declaration accompanying the bid documents." It noted that it was always open to the Petitioner to disclose the factum of blacklisting along with the subsequent interim order and leave it to the tendering authority to assess its effect.

"The interim order dated 29.12.2025 may at best be construed as having eclipsed the operation of the blacklisting order during pendency of proceedings; however, the said order did not efface or obliterate the underlying factum that an order of blacklisting had in fact been passed."

Ambiguity In Eligibility Declarations Cannot Be Ignored

The Court further scrutinized the declaration submitted by the Petitioner, which stated it "has not been blacklisted or not under active blacklisting period/active debarred list." The Bench found this formulation to be "at best, ambiguous and capable of multiple interpretations." It held that such a statement does not constitute a clear or unequivocal assertion of compliance with the tender requirements.

The Court emphasized that in matters of public procurement, strict adherence to tender conditions is required, particularly where the condition relates to eligibility. It ruled that any ambiguity in a material declaration cannot be ignored as a "mere technical irregularity," especially when the RFE empowers the authority to summarily reject bids based on false or incorrect information.

Tendering Authority Best Suited To Interpret Tender Conditions

Relying on the Gujarat High Court’s decision in Bgr Deco Consortium v. Gujarat Mineral Development Corporation Ltd, the Court noted that the tendering authority, being the author of the document, is best suited to interpret its requirements. Constitutional courts, the Bench stated, ought to defer to such interpretation in the absence of mala fides or perversity.

The Court found no arbitrariness in the Technical Evaluation Committee’s (TEC) decision. It held that once a declaration is found to be ambiguous and not in strict conformity with the prescribed requirement, the consequence of summary rejection under Clause 8.1(c) of the RFE cannot be said to be arbitrary or disproportionate.

"The bidder could not unilaterally proceed on the assumption that grant of interim protection dispensed with the obligation of disclosure itself."

Compliance With Principles Of Natural Justice

Regarding the Petitioner's claim that the rejection order was non-speaking and violated natural justice, the Court observed that the Petitioner was afforded an opportunity to submit a representation, which was duly considered by the TEC. The Bench clarified that in technical evaluations, the decision of the committee is not required to be in the nature of a "detailed adjudicatory or quasi-judicial order."

The Court concluded that the Respondent's decision-making process was founded on material borne out of the record. Finding no merit in the petition, the Court dismissed the challenge, affirming the Petitioner's disqualification from the tender process.

Date of Decision: May 19, 2026