Supreme Court slaps Himachal Pradesh housing authority with ₹5 lakh fine

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Supreme Court slaps Himachal Pradesh housing authority with ₹5 lakh fine

The Himachal Pradesh Housing and Urban Development Authority (HIMUDA) was fined ₹5 lakh by the Supreme Court on Tuesday for conspiring with a private company to award a tender for building a commercial complex in Shimla.

The public body attempted to deceive the high court, according to a bench of justices Bela M. Trivedi and Pankaj Mithal, by consenting to give the contract to the same construction company in spite of the state high court's earlier ruling about egregious irregularities in the tendering process.

Without hesitation, we hold that respondent no. 1 (HIMUDA) colluded with respondent no. 2 (Vasu Constructions) to deceive the high court and abuse the legal system to conceal the irregularities and illegalities committed by respondent no. 1's officers during the tender process. Respondent no. 2 was nonetheless given the contract under the pretense of a court order, and the bench was filled as a result.

The top court emphasized that since HIMUDA, despite being a "State" within the meaning of Article 12 of the Indian Constitution, acted dishonestly and in collusion with the private firm took the high court for a ride, the public authority must bear a heavy financial burden, overturning the October 2022 high court order that approved the award of the contract to Vasu Constructions.

Under such circumstances, the high court's contested order is revoked. The court stated that the authority may still issue a new tender, but that the appeal is granted with a cost of ₹5 lakh, which must be deposited by HIMUDA with the Supreme Court Advocates-on-Record Association within two weeks of today.

A letter of intent (LIO) for the construction of a commercial complex in Shimla was issued by HIMUDA to Vasu Constructions in December 2018. However, the LOI had to be revoked due to allegations about irregularities in the process and legal action taken by unsuccessful bidders in front of the high court.

The high court-appointed independent commission that looked into the tendering process also suggested canceling it, pointing out numerous flaws and anomalies. Following the high court proceedings, HIMUDA canceled the tender process in February 2021.

But after Vasu Constructions contested the tender's cancellation, HIMUDA said before the division bench that it had no problem with the initial tendering process continuing as long as the company was prepared to carry out the work under the original terms and conditions. The petition stating HIMUTA's lack of opposition to the tender being awarded to Vasu Constructions was then dismissed by the division bench. A different bidder contested this order in front of the supreme court.