‘Seeds planted in fraud’: Raj HC upholds JDA cancellation of work order over false bid affidavit

Jaipur: The Rajasthan High Court has upheld JDA’s cancellation of a work order given to a security services society that hid its past debarment by SMS Hospital. Justice Sameer Jain delivered the ruling on 29 April 2026 in a writ petition by M/s. Sahara Ex Servicemen Welfare Co-Operative Society Limited.

The petitioner is a co-operative society of ex-servicemen based in Jaipur. The Jaipur Development Authority (JDA) issued a Notice Inviting Bid on 8 August 2025 for security and Class IV services for one year. The society submitted its bid on 27 August 2025 with a notarised affidavit. The affidavit swore that the society had never been debarred, blacklisted, or declared a defaulter by any government department, hospital, or co-operative unit. The society won the bid. JDA issued the work order on 24 November 2025 and the contract was signed the same day.

The dispute began in February 2026. JDA’s Additional Commissioner issued a show cause notice on 2 February 2026, attaching an office order from Sawai Man Singh Hospital, Jaipur. The SMS Hospital order had debarred the society from its tender process for six months — from 9 December 2024 to 6 June 2025. JDA found the society’s reply unsatisfactory. On 18 March 2026, it cancelled the work order, forfeited the bank guarantee, and barred the society from future JDA tenders for six months. The society moved the High Court under Article 226.

Counsel Jagmohan Saxena and Khushal Singh Rathore submitted that the cancellation order was illegal and arbitrary. Their core argument turned on timing. The SMS Hospital debarment had ended on 6 June 2025, well before JDA issued the tender notice on 8 August 2025. By the time the society filed its bid, it was no longer under any active debarment. The society therefore believed in good faith that a past debarment, already served out, did not need to be disclosed.

JDA’s counsel Ambika Sharma vehemently opposed the petition. She submitted that the society had deliberately concealed a material fact to gain the work order. The affidavit was false and concocted. Point 13 of the technical bid required every bidder to swear that it had never been debarred — not merely that it was not currently debarred. By suppressing the SMS Hospital order, the society had violated Point 13 of the technical bid. It had also breached Clause 13 of the tender, which lets JDA cancel the contract, forfeit the bank guarantee, and blacklist the bidder. The cancellation was therefore lawful.

The Court framed a single question: whether suppression of a past debarment in a sworn affidavit justified the cancellation of the work order. The answer was yes.

Justice Jain held that the affidavit told a clear lie. The society had sworn it had never been debarred. The SMS Hospital order showed it had been debarred in December 2024. He also pointed to Annexure A of the tender — the Code of Integrity — which placed two obligations on every bidder. Sub-clause (b) prohibited any misrepresentation or omission used to gain a benefit. Sub-clause (h) required disclosure of any debarment by any other procuring entity in the last three years. The SMS Hospital debarment fell squarely inside that three-year window.

The Court rejected the timing argument outright. It observed: “The petitioner’s contention that the debarment period had expired prior to the NIB is legally hollow.” This meant a bidder cannot dodge the disclosure rule by saying it had already served out the punishment. The whole point of the clause was to let JDA assess a bidder’s past operational record and commercial integrity.

Justice Jain relied on two Supreme Court rulings. In State of Madhya Pradesh v. U.P. State Bridge Corporation Limited (2020 INSC 686), the Supreme Court held that omitting facts that would influence a bidding process amounts to a “fraudulent practice.” In M/s. Sciemed Overseas Inc. v. BOC India Limited, (2016) 3 SCC 70, the Supreme Court warned that filing false affidavits has become an “unhealthy” trend that must be discouraged before it becomes routine.

The judge then summed up the principle in striking language. “If the seeds of a commercial relationship between a private entity and the State are planted in fraud, every subsequent offshoot that grows from such seeds, including the work order, the contract inter se the parties, and even subsequent work done under the said contract, is fatally infected with the poison of fraud.” This meant that once the bid was secured by deceit, everything downstream — the contract, the bank guarantee, the work itself — was tainted and could be undone by JDA.

The High Court dismissed the writ petition. Justice Jain held that the society had failed to show any illegality, arbitrariness, or procedural irregularity in JDA’s cancellation order of 18 March 2026. The cancellation of the work order, the forfeiture of the bank guarantee, and the six-month debarment from future JDA tenders were all upheld. No order as to costs.

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