Authority: High Court of Karnataka at Bengaluru

Order Date: 16 July 2026

Case Overview

  • Parties: Appellants – Manipal Technologies Limited (MTL) and shareholder Jyothi G. Nayak; Respondents – Bank of Baroda, Seshaasai Technologies Limited and KL Hi‑Tech Secure Print Limited.
  • Nature of Proceeding: Writ appeal (WA No. 1602 of 2026) filed under Section 4 of the Karnataka High Court Act challenging an interim order dated 08 June 2026 that declined the appellants’ request for interim relief.
  • Background: On 10 April 2026 Bank of Baroda issued an RFP for the empanelment of vendors to print and supply magnetic‑strip and variable QR‑code printed self‑service passbooks (SSPB) for a three‑year period. Clause 14 of the RFP stipulated that the vendor and any of its promoters or directors must not be defaulters, must not have credit facilities classified as non‑performing assets (NPAs), must not be related to any current employee/director of the bank, and must not be an NPA holder.
  • Bid Submission & Disqualification: MTL submitted its bid on the Government e‑Marketplace (GeM) portal on 08 May 2026, attaching the required undertaking and supporting documents. The bid was deemed ineligible under clause 14 and the disqualification was posted on the GeM portal on 26 May 2026, citing “Not meeting the eligibility criteria specified in Bid Clause”.
  • Appellants’ Contentions: MTL argued that it had been supplying similar products to Bank of Baroda for years without complaint and that the disqualification was based on the status of one of its directors, Sri T. Gautham Pai, who had ceased to be a promoter director and was a “professional director” as of 21 January 2026. MTL claimed clause 14 was arbitrary, exclusionary and unrelated to the object of the RFP.
  • Respondents’ Contentions: Bank of Baroda contended that clause 14 was material to ensure financial soundness of the vendor and that Sri T. Gautham Pai, as a promoter/director, remained a defaulter in guarantees to a sister concern (MVP Group International Inc.) whose credit facilities were classified as NPAs.
  • Legal Issues Considered:

1. Whether clause 14 is manifestly arbitrary and violative of Article 14 of the Constitution.

2. Whether Sri T. Gautham Pai, despite the change in designation, remains a “Promoter Director” within the meaning of the clause.

  • Key Facts Presented:
  • MTL incorporated on 13 January 2000, originally as Manipal Press Private Ltd, later renamed Manipal Technologies Ltd.
  • Sri T. Gautham Pai is listed in MTL’s Memorandum and Articles of Association as a promoter and has been Managing Director since 29 July 2003.
  • Form DIR‑12 filed on 08 May 2026 indicated a change of Sri T. Gautham Pai’s status from “Promoter Director” to “Professional Director” effective 21 January 2026.
  • Board resolution dated 13 March 2026 re‑appointed Sri T. Gautham Pai as Executive Chairman for three years, effective 28 May 2026, with detailed duties covering strategic leadership, board oversight, executive management and financial oversight.
  • Sri T. Gautham Pai is also a director of MVP Group International Inc., whose credit facilities are classified as NPAs, and an insolvency application under Section 95 of the IBC is pending before the NCLT, Bengaluru.
  • MTL participated in the pre‑bid meeting on 18 April 2026 without raising any objection to clause 14 and submitted an undertaking on 08 May 2026 affirming compliance.
  • Judicial Reasoning:
  • The court applied the Wednesbury principle of reasonableness and noted that judicial review in tender matters is limited to preventing arbitrariness, irrationality, bias or mala‑fides.
  • Citing Supreme Court precedents (New Horizons Ltd., Tata Cellular, National High Speed Rail Corp. v. Montecarlo Ltd., etc.), the court held that the commercial relevance of a promoter’s financial standing is legitimate and that clause 14 serves a bona‑fide purpose of ensuring creditworthiness.
  • The term “Promoter Director” in the clause is not confined to the statutory definition of “promoter” under the Companies Act; it includes any person exercising control over the company.
  • The court examined control under Section 2(27) of the Companies Act and found Sri T. Gautham Pai, as whole‑time director and Executive Chairman, exercised de‑facto control over MTL, satisfying the promoter requirement.
  • The change of designation to “Professional Director” did not diminish his control or the fact that he remained a promoter in the ordinary sense.
  • No evidence was placed before the court to show that Sri T. Gautham Pai or any entity in which he is a director had actually defaulted; therefore the court refrained from adjudicating that aspect.

Final Outcome

  • The appeal is dismissed; the interim order dated 08 June 2026 denying interim relief is affirmed.
  • All pending interlocutory applications are also disposed of.
  • The tender process proceeds without MTL’s participation.

Topics: Tender Eligibility, Judicial Review