Delhi High Court Upholds DJB's Ban on Corrupt Firms from Water Projects
In a significant ruling, the Delhi High Court has firmly upheld the Delhi Jal Board's decision to prohibit companies facing corruption or money-laundering allegations from participating in bids for high-value sewage and water infrastructure projects. A bench comprising Justices Nitin Wasudeo Sambre and Ajay Digpaul declared that this eligibility condition represents a bona fide measure enacted in the public interest and does not require judicial interference.
Court Dismisses Petitions from Private Firms
The court dismissed petitions filed by two private firms that had challenged the eligibility clause introduced by DJB in January. This clause renders a bidder ineligible if an FIR or chargesheet exists against the company or its key managerial personnel, alleging fraud, corruption, financial irregularities, or other economic offences related to DJB contracts. It also applies if they are under investigation by agencies such as the Anti-Corruption Branch, Central Bureau of Investigation, Enforcement Directorate, or Economic Offences Wing.
The two firms, currently facing Enforcement Directorate proceedings under the Prevention of Money Laundering Act, argued that since they had not been convicted, the clause was arbitrary and discriminatory. However, the court rejected this argument, noting that the allegations against these companies involve connivance with DJB officials, cheating, and fraud.
Preventive Measure to Safeguard Public Interest
The bench emphasized that the decision taken by DJB in framing such a clause is not targeted but is a bona fide decision taken in the public interest. "The specific work of public importance, like essential public services relating to the water supply, will always have overriding public interest," the bench observed. The court accepted DJB's argument, presented by standing counsel Tushar Sannu, that the clause is preventive rather than punitive, aimed at protecting public interest and preventing future harm.
Furthermore, the court underlined that the tender in question relates to the design, construction, and operation of decentralised sewage treatment plants and pumping stations, along with long-term maintenance. Any delay or compromise in quality would directly affect sewage-treatment outcomes, groundwater contamination, and pollution levels in the Yamuna River, leading to wide-ranging public-health consequences.
Background of the Case
Both companies and their directors face allegations in an alleged multi-crore scam involving the augmentation and upgradation of 10 sewage treatment plants, based on complaints from DJB's vigilance wing. They are facing proceedings under the Prevention of Corruption Act, the Indian Penal Code, and the Prevention of Money Laundering Act. The court noted that merely because the petitioners were not convicted, or because a conviction might lead to disqualification for three years, does not confer any leverage upon them to claim discrimination.
This ruling reinforces the importance of integrity in public infrastructure projects and sets a precedent for other government bodies to implement similar measures to ensure transparency and accountability in public works.
