In a recent legal case concerning Scott Edil Pharmacia Ltd. through its Authorized signatory, Dinkar Vishnu Chavan & Another vs Municipal Corporation of Greater Mumbai & Another, the Municipal Corporation Greater Mumbai (MCGM) issued a blacklisting order against two petitioners for a period of three years, barring them from participating in any tender process initiated by the corporation. This decision stemmed from the submission of allegedly forged performance certificates during a tender process for the supply of various medical supplies.

On February 3, 2022, MCGM announced two tenders for supplying medications to its municipal hospitals and dispensaries. The technical bids were to be opened on February 28, 2022, followed by the financial bids on March 29, 2022. The petitioners submitted bids for both tenders but later decided to withdraw their applications, citing plans to upgrade their facilities in line with international Good Manufacturing Practices (GMP) guidelines. This withdrawal occurred on July 1, 2022, within the bid validity period of 180 days. Consequently, MCGM deemed the bids "non-responsive" and forfeited the Earnest Money Deposit (EMD).

In May 2023, MCGM issued show-cause notices to the petitioners, alleging that they had submitted fake documents in support of their bids. Despite the petitioners’ attempts to deflect responsibility onto third parties, MCGM blacklisted them on March 7, 2024.

The petitioners’ counsel, Mr. Kapse, argued that the withdrawal of bids during the validity period negated any grounds for blacklisting, as there was no concluded contract. He maintained that the show-cause notice was issued as an afterthought and that the petitioners had not derived any undue benefit from the tender process. Citing the Supreme Court case VETINDIA Pharmaceuticals Limited vs. State of Uttar Pradesh, he contended that blacklisting is only justified in the context of an enforceable contract.

In contrast, Ms. Yadav, representing MCGM, asserted that the corporation is within its rights to take action against bidders for misrepresentation or forgery, regardless of whether a contract was finalized. She emphasized that the submission of fraudulent documents warranted strict repercussions.

The court carefully considered the arguments from both sides. It acknowledged that the petitioners had indeed participated in the tender process but noted the discrepancies in the performance certificates they submitted. These discrepancies prompted MCGM to seek verification from the Food and Drug Authority (FDA), which ultimately confirmed the certificates were forged.

Despite the petitioners’ claims of third-party involvement in the forgery, the court pointed out that the responsibility for submitting accurate documents rests with the bidders. The tender documents clearly stipulated that the consequences for submitting fraudulent documents could include rejection of the bid and potential blacklisting.

Furthermore, the court highlighted that the conditions for blacklisting were outlined not only in the General Conditions of Contract (GCC) but also in the General Instructions to Tenderers. This reinforced the notion that submission of forged documents would lead to severe penalties.

The court ultimately ruled that MCGM was justified in blacklisting the petitioners due to their submission of forged documents, underscoring that mere withdrawal from the tender process does not absolve bidders from accountability for their actions. This case serves as a critical reminder of the serious implications of misrepresentation in public procurement and the stringent measures that authorities can impose on violators.

The petitioners’ claim of being a global leader in the pharmaceutical industry was noted, but the court emphasized that such status does not excuse negligence in documentation. Consequently, the petition was dismissed, affirming the integrity of the tender process and the consequences of forgery. This ruling reinforces the importance of due diligence and honesty in tender submissions, particularly in dealings with public authorities, where the stakes are considerably high.