2016 (1) TMI 1358 - SC - Indian Laws

Supreme Court upholds cost penalty for false affidavit & improper contract, stresses integrity of judicial proceedings

M/s Sciemed Overseas Inc. Versus BOC India Limited & Ors.

The Supreme Court upheld the High Court's decision to impose costs of Rs. 10 lakhs on the petitioner for filing a false affidavit and found the contract ... Filing of false affidavits - imposition of costs - whether the High Court was correct in imposing costs of ₹ 10 lakhs on the petitioner for filing a false or misleading affidavit in this Court? Held that: - In Muthu Karuppan v. Parithi Ilamvazhuthi [2011 (4) TMI 1481 - SUPREME COURT] this Court expressed the view that the filing of a false affidavit should be effectively curbed with a strong hand. It is true that the observation was made in the context of contempt of Court proceedings, but the view expressed must be generally endorsed to preserve the purity of judicial proceedings. The imposition of costs by the High Court was justified - petition dismissed - decided against petitioner. Issues Involved:1. Imposition of costs for filing a false or misleading affidavit.2. Validity of the contract awarded to the petitioner.3. Allegations of improper qualification and tender process.4. Factual controversies surrounding the completion of the awarded work.5. Misleading affidavit and its impact on judicial proceedings.Detailed Analysis:1. Imposition of Costs for Filing a False or Misleading Affidavit:The Supreme Court considered whether the High Court was correct in imposing costs of Rs. 10 lakhs on the petitioner for filing a false or misleading affidavit. The Court found that the imposition of costs, although steep, was justified. The High Court had determined that the contract awarded to the petitioner was improper and of a commercial nature, findings that were not challenged. The Supreme Court emphasized the alarming increase in cases of false affidavits over the past fifteen years, highlighting the need to discourage this trend.2. Validity of the Contract Awarded to the Petitioner:The Rajendra Institute of Medical Sciences (RIMS) issued a tender for the installation and supply of a centralized liquid medical oxygen system. The petitioner and respondent No.1 submitted bids. Despite the respondent's claim that the petitioner did not meet the technical bid requirements, the petitioner was awarded the contract. The High Court found the decision-making process improper but did not find it arbitrary, mala fide, or discriminatory. The High Court declined to interfere with the contract award due to the advanced stage of the work and the financial implications of canceling the contract.3. Allegations of Improper Qualification and Tender Process:The respondent filed a writ petition challenging the petitioner's qualification and the awarding of the contract. The High Court initially directed RIMS to consider the respondent's representation, but it was later revealed that a work order had already been issued to the petitioner. The respondent's subsequent petition was dismissed by the High Court, which found that the issues raised were factual and could not be adjudicated in writ jurisdiction. The Supreme Court later directed the High Court to hear the matter on merits, finding no disputed questions of fact.4. Factual Controversies Surrounding the Completion of the Awarded Work:The High Court appointed an advocate to verify the petitioner's claim that the work was near completion. The advocate's report revealed significant deficiencies, including the non-installation of the main liquid oxygen gas tank and a separate 3-phase electric supply system. The High Court concluded that the petitioner had filed a false affidavit, leading to the dismissal of the petitioner's appeal and the imposition of costs.5. Misleading Affidavit and Its Impact on Judicial Proceedings:The petitioner filed an affidavit claiming near completion of the project, which was later found to be false. The High Court did not accept the petitioner's apology and imposed costs. The Supreme Court upheld this decision, emphasizing the importance of preserving the sanctity of affidavits and discouraging false statements. The Court cited previous judgments underscoring the need to curb false affidavits to maintain the integrity of judicial proceedings.Conclusion:The Supreme Court dismissed the petition, finding no reason to interfere with the High Court's judgment and order. The petitioner was granted six weeks to deposit the costs with the Jharkhand Legal Services Authority, which would then forward the amount to the respondent. The matter was to be listed in the High Court for compliance after eight weeks.