Delhi HC sets aside BSNL's decision to revoke contract with IT company

The Delhi High Court has set aside BSNL's decision to withdraw a purchase order placed by it with a private IT company in relation to providing central billing and internet protocol data recovery (IPDR) solutions.

The state-owned telecom company had rescinded the multi-crore contract with Millennium Automation Private Limited, dated July 19, for 'Supply, Installation, Testing, Commissioning and Annual Maintenance of IT hardware and related software for BSNL's centralized Mobile Billing System and Probe based IPDR Management Solution', alleging collusion and mala fide on part of the company in securing the purchase order.

Justice Sanjeev Narula, in a judgement passed on November 19, said that while the sanctity of the tendering process must be zealously guarded and any deviation must be met with appropriate consequences, the argument of "compromised integrity" in this case could not be sustained in the absence of any "concrete material" to support BSNL's claims.

 

The judge stated that being 'State' within the meaning of Article 12 of the Constitution of India, BSNL failed to fulfill its responsibility of acting fairly in rescinding the purchase order.

"The impugned communication, along with the new grounds introduced to support the impugned rescission, are unreasonable, arbitrary and unsustainable," the court stated.

"Accordingly, the instant petition is allowed and the impugned communication dated 06th August, 2024 is set aside," concluded the court.

The court ruled that the allegations as serious as collusion or malpractice cannot rest on conjecture or the mere perception of overconfidence.

"There must be tangible evidence to substantiate such charges, especially when they serve as the basis for rescinding a Purchase Order," it said.

The petitioner asserted in the high court that they had already incurred substantial costs in the procurement of supplies and that the withdrawal from the contract was without any reasonable basis.

It was said that on August 5, the petitioner submitted a list of its equipment suppliers as well as the status of their clearance from Trusted Telecom Portal of National Security Council Secretariat but the very next day, BSNL issued a communication rescinding the purchase order.