Authority: High Court of Karnataka at Bengaluru

Order Date: 8 July 2026

Case Overview

  • Parties: Appellant – M/S MP24 CONSTRUCTION COMPANY (sole proprietorship of Sri Kantharaju H.M.) acting as lead member of a consortium with RAMALINGAM CONSTRUCTION COMPANY PVT. LTD. (RCCL). Respondents – State of Karnataka (Public Works Department), KARNATAKA ROAD DEVELOPMENT CORPORATION LIMITED (KRDCL), its Tender Evaluation Committee, State Level Debarment Committee, and BHARAT VANJIYA EASTERN PVT. LTD. (BVEPL). Individual officials of KRDCL (Chief Engineer, Managing Director, etc.) also named.
  • Tender Background: RFP dated 25‑02‑2025 invited bids for the development of the Devanahalli‑Vemagal‑Kolar stretch of State Highway‑96 (design length 48.20 km) on a PPP‑DBFOMT‑Hybrid Annuity model. Estimated project value Rs 762.86 crore. Notification No. KRDCL/IFB/2024‑25/28 issued on 25‑02‑2025. Four bidders submitted bids on 16‑04‑2025: (i) MP24‑RCCL consortium, (ii) BVEPL, (iii) Dineshchandra R. Agrawal Infracon Pvt. Ltd., (iv) Bhartia Infra Projects Ltd.
  • Consortium Details: Joint Bidding Agreement and Power of Attorney dated 11‑04‑2025; MP24 held 74 % share, RCCL 26 % share. RCCL emailed MP24 on 16‑04‑2025 (02:37 PM) withdrawing from the consortium; MP24 rejected the withdrawal at 04:07 PM.
  • Bid Evaluation: Technical bids opened 19‑04‑2025; all four bidders deemed technically qualified. Financial bids opened 16‑05‑2025. MP24‑RCCL submitted the lowest financial bid of Rs 50.50 crore (excluding GST); BVEPL’s bid was Rs 53.25 crore.
  • Allegations of Forgery: BVEPL complained on 19‑05‑2025 that MP24’s technical bid contained a forged work‑experience certificate purportedly issued by the Andhra Pradesh Water Resources Department (APWRD). APWRD confirmed on 04‑06‑2025 that the certificate was “purely bogus and forged”. RCCL also alleged that MP24 used RCCL’s credentials without consent and had withdrawn from the consortium.
  • KRDCL Actions: After verification, KRDCL cancelled MP24’s bid and invoked clauses 2.6.2/2.6.3 of the RFP, forfeiting the Earnest Money Deposit (EMD) of Rs 7,63,00,000 (bank guarantee Rs 7.62 crore + e‑payment Rs 1 lakh) and retaining a non‑refundable bid‑document fee of Rs 10 lakh. FIR No.RC2172025A0077 dated 11‑07‑2025 was registered against MP24 for forgery, cheating, fraud, etc.
  • Writ Petitions: MP24 filed W.P. Nos. 25668, 22904, 31906 of 2025 seeking (a) quashing of the debarment order dated 13‑08‑2025 (debarred MP24 for three years, RCCL for two years), (b) setting aside letters dated 24‑07‑2025, 25‑07‑2025, 11‑08‑2025, (c) direction to award the contract to MP24, and (d) refund of the forfeited EMD of Rs 7,36,00,000. Interim order on 13‑08‑2025 restrained invoking the EMD and directed clarification of Government Circular dated 11‑05‑2022.
  • Single Judge Decision: On 09‑12‑2025 the learned Single Judge dismissed all three writ petitions, holding that (i) MP24 failed to establish a case for interference, (ii) principles of natural justice were not violated, and (iii) the debarment order was not arbitrary.
  • Appeals: Writ Appeals No. 2026/2025 (challenging W.P. 25668) and No. 2028/2025 (challenging W.P. 22904) were heard together. The appeals were reserved and judgment pronounced on 08‑07‑2026.
  • Submissions by MP24: Alleged lack of a valid show‑cause notice, violation of natural justice, improper authority for the debarment order, failure to consider mitigating factors (unauthorised employee, no mens rea), excessive penalty, and that BVEPL also submitted forged documents. Relied on Supreme Court decisions (CCS Computers, Aligarh Muslim University, Gorkha Security Services, Vetindia Pharmaceuticals) and Government Circulars dated 03‑12‑2002, 11‑05‑2022, 16‑01‑2025.
  • Submissions by Respondents: Asserted that MP24 uploaded a forged certificate, that the consortium’s withdrawal was not communicated to KRDCL, that vicarious liability attaches to the lead member, and that the tender process was still pending, giving KRDCL discretion to award to BVEPL or re‑tender. Contended that BVEPL’s documents were not forged.
  • Court’s Reasoning:
  • The forged APWRD certificate was undisputed; RCCL’s withdrawal email was not disclosed to KRDCL before technical evaluation, constituting material misrepresentation.
  • Vicarious liability applies; MP24’s employee acted without authorisation, but the company remains responsible.
  • The procedural safeguards of Rule 26‑A/26‑B were complied with: MP24 received multiple notices, was invited to two hearings (01‑08‑2025 and 12‑08‑2025) and chose not to attend; thus a reasonable opportunity to be heard was provided.
  • Natural‑justice principles were satisfied; the “useless formality” doctrine applies because the outcome (disqualification) would have been the same even with a hearing.
  • The debarment order, issued under Section 14A of the Karnataka Transparency in Public Procurement Act, 1999 and Rule 26‑B, was within the statutory maximum of three years and therefore not disproportionate.
  • The forfeiture of the EMD is permissible under the RFP clauses (2.6.2/2.6.3) and is not subject to Section 74 of the Contract Act; case law (Kailash Nath Associates, NHAI v. Ganga Enterprises) supports forfeiture at the pre‑award stage.
  • The court rejected MP24’s claim that the State Government needed to take a fresh decision after the SLDC recommendation; Rule 26‑B sub‑rule 6 mandates that the Government “shall” act on the SLDC’s recommendation.
  • Regarding BVEPL, the court noted that one certificate (NHAI) had been withdrawn before bid opening, while the Ashoka Buildcon certificate’s authenticity required verification. Accordingly, KRDCL was directed to re‑examine BVEPL’s certificates.
  • Conclusion & Directions:

1. Both writ appeals are dismissed.

2. The debarment of MP24 for three years and RCCL for two years stands.

3. The forfeiture of the EMD of Rs 7,63,00,000 remains.

4. KRDCL shall re‑examine the genuineness of the certificates submitted by BVEPL and take appropriate action if any are found to be false.

Final Outcome

  • The appeals are dismissed; debarment, EMD forfeiture and related orders are upheld; KRDCL is instructed to verify BVEPL’s documents.

Topics: Public Procurement, Debarment