False Affidavit in Tender Dispute: Supreme Court Imposes Heavy Penalty

The case of M/s Sciemed Overseas Inc. vs. BOC India Limited & Ors. revolves around a legal dispute concerning a tender awarded for the installation and supply of a centralized liquid medical oxygen system at Rajendra Institute of Medical Sciences (RIMS), Ranchi. The case gained prominence due to the filing of a misleading affidavit by the petitioner, which led to the imposition of a hefty cost by the High Court. The Supreme Court upheld this decision, emphasizing the need for honesty in judicial proceedings.

In this blog, we analyze the legal journey of this case, the key arguments presented by both parties, the observations made by the courts, and the final verdict.

Background of the Case

The Rajendra Institute of Medical Sciences (RIMS), Ranchi, issued a tender on February 10, 2007, inviting bids for the installation and supply of a centralized liquid medical oxygen system with medical gas pipelines. The project, meant for a 1000-bedded hospital, was to be executed on a turnkey basis within 150 days.

The Bidding Process

Two companies submitted bids for the project:

M/s Sciemed Overseas Inc. (Petitioner)
BOC India Limited (Respondent No. 1)

The bids were processed by RIMS, and on June 25, 2007, the Director of RIMS issued a memorandum informing both companies about the opening of the price bid of the technically qualified bidders.

However, BOC India raised objections, arguing that Sciemed had failed to meet the technical bid requirements and should not have been invited for the price bid opening. When BOC’s representation was ignored by RIMS, they filed a writ petition before the Jharkhand High Court.

Initial Legal Proceedings

BOC India filed W.P. (C) No. 4203 of 2007 before the Jharkhand High Court, challenging the award of the contract to Sciemed. The High Court disposed of the petition on July 31, 2007, granting BOC the liberty to file another representation, which RIMS was directed to consider.

However, an important fact was concealed from the court—RIMS had already awarded the contract to Sciemed on July 25, 2007, six days before the High Court’s order.

BOC India learned about this only on September 8, 2007, when the Director of RIMS responded to their representation, revealing that the work order had already been issued to Sciemed.

Feeling aggrieved, BOC filed another writ petition (W.P. (C) No. 4830 of 2007) before the High Court, challenging the work order issued to Sciemed. However, the High Court dismissed this petition on September 10, 2007, ruling that the matter involved disputed questions of fact that could not be adjudicated in writ jurisdiction.

Appeal Before the Supreme Court

BOC then filed an appeal before the Division Bench of the Jharkhand High Court (L.P.A. No. 319 of 2007), which was dismissed on October 10, 2007, affirming the Single Judge’s ruling.

Unwilling to accept defeat, BOC approached the Supreme Court through a Special Leave Petition. On March 14, 2008, the Supreme Court granted leave and directed the High Court to hear the matter on merits, ruling that the issue did not involve disputed questions of fact.

The Controversial Affidavit

During the pendency of the appeal, Sciemed, through its proprietor Shailendra Prasad Singh, filed an affidavit on February 20, 2008, stating:

“The work order has already been acted upon, and the project is almost near completion. 85% of the amount has already been released to the answering respondent, rendering the present SLP, in any case, infructuous and liable to be rejected.”

This statement played a crucial role in the subsequent legal developments.

Verification by the High Court

After the Supreme Court remanded the case, the Jharkhand High Court reconsidered the matter. The Single Judge dismissed BOC’s writ petition on May 14, 2008, stating that although Sciemed was awarded the contract improperly, canceling the work order at this stage would lead to financial losses and disruption of hospital services. Instead, BOC was given the option to file a suit for damages.

BOC then filed an appeal before the Division Bench, which took a different approach. The Bench appointed an independent advocate to inspect the work site and verify Sciemed’s claims.

Findings of the Investigation

The advocate’s report, submitted on July 3, 2008, revealed significant deficiencies in the project:

The main Liquid Oxygen Gas Tank had not yet been installed.
The three-phase electric supply system required for the project had not been set up.
The oxygen gas tank was still in transit from Bangalore.

This directly contradicted Sciemed’s affidavit, which claimed that the project was near completion.

Imposition of Costs

The Division Bench concluded that Sciemed had filed a false affidavit before the Supreme Court. Consequently, it dismissed Sciemed’s appeal on September 22, 2008, and imposed a cost of Rs. 10 lakhs, payable to the Jharkhand Legal Services Authority.

Supreme Court’s Final Judgment

Sciemed challenged the High Court’s decision before the Supreme Court, arguing:

The statement in the affidavit was not false but made in good faith.
The affidavit did not influence the Supreme Court’s decision and should be ignored.

The Supreme Court rejected these arguments, holding that the statement was misleading and had the potential to impact judicial proceedings. The Court cited precedents emphasizing the sanctity of affidavits in legal proceedings.

In the case of Suo Moto Proceedings Against R. Karuppan, Advocate (2001) 5 SCC 289, the Court had observed:

“Sanctity of affidavits has to be preserved and protected, discouraging the filing of irresponsible statements, without any regard to accuracy.”

The Supreme Court also referred to Muthu Karuppan v. Parithi Ilamvazhuthi (2011) 5 SCC 496, where it held:

“Giving false evidence by filing false affidavit is an evil which must be effectively curbed with a strong hand.”

Consequently, the Supreme Court upheld the High Court’s imposition of costs and dismissed Sciemed’s petition.

Conclusion

The judgment in M/s Sciemed Overseas Inc. vs. BOC India Limited & Ors. serves as a stern warning against misleading the courts through false affidavits. It reinforces the principle that judicial integrity must be upheld, and parties must act with utmost honesty.

Through this ruling, the Supreme Court has sent a clear message that attempts to mislead the judiciary will not be tolerated, and those engaging in such practices will face severe consequences.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: Ms Sciemed Overseas vs BOC India Limited & Supreme Court of India Judgment Dated 11-01-2016.pdf

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