MANIPAL TECHNOLOGIES LIMITED v. BANK OF BARODA

Judgment

1. The appellants have filed the present appeal impugning an interim order dated 08.06.2026 passed by the learned Single Judge in Writ Petition No.16741/2026 (GM-TEN) [impugned order]. In terms of the impugned order, the learned Single Judge has declined to grant any interim relief.

2. Appellant No.1 [MTL] had submitted its bid pursuant to the Request for Proposal for Empanelment of Vendors for Printing and Supply of Magnetic Strip and Variable QR code Printed Self-Service Passbook (SSPB) [RFP] issued by Respondent No.1 – Bank of Baroda [BoB]. However, MTL's bid was not evaluated because it did not meet the pre-qualification criteria under point No.14 of the tender conditions. The said disqualification was reflected on the Government eMarketplace portal [GeM Portal] on 26.05.2026 as under: - 4 - WA No. 1602 of 2026 "Reason for Technical Evaluation Reason Not meeting the eligibility criteria specified in Bid Clause as per details indicated in the comment Comment The bid submitted by is not considered for further processing as the company does not meet the requirements stipulated under Prequalification Criteria Point No.14." the company

Aggrieved by being held ineligible, the appellants had filed the writ petition, inter alia, challenging the aforesaid disqualification [impugned disqualification]. Additionally, the appellants had challenged point No.14 of the pre-qualification criteria submission of bids, which formed a part of the RFP [the impugned clause]. In the aforesaid context, the appellants sought interim relief, praying for a stay of the impugned disqualification. Further, they sought directions to BoB to permit MTL to participate in the tender process and to restrain BoB from finalising the tender process pursuant to the RFP. The learned Single Judge did not accede to the ad interim prayers, and this has led the appellants to file the present appeal. Respondent Nos.2 and 3, being the bidders whose bids have been ranked L-1 and L-2 respectively in the tender process, were impleaded as parties to the present appeal by an order dated 24.06.2026 passed on I.A No.2 of 2026. - 5 - WA No. 1602 of 2026

4. On 10.04.2026, BoB issued the RFP for the “Empanelment of Vendors for the Printing and Supply of Magnetic Strip and Variable QR Code-Printed Self-Service Passbook (SSPB) for 3 years”.

5. Before proceeding further, it would be relevant to refer to the impugned clause which is set out below: Whether Complied (Yes/No) Documents to be submitted in support of Eligibility Criteria Bidder should submit an undertaking on their letterhead along with copy of PAN card and authority to CIBL/CRIF reports S.N. Eligibility Criteria 14 The vendor company and/or any of its Promoters Directors should not be

1. Defaulter/willful defaulter to tax/Govt. Authorities/ statutory dues etc.

2. Not having any credit facilities classified as non- performing accounts as on the date of issuance of RFP individual either capacity as Partner/ Director/Trustee/Guarantor etc.

3. Related to any present employee/Director/Board members of the bank.

4. Bidder or sister concerns should not be a NPA holder in any Bank/Financial Institution

6. On 08.05.2026, MTL submitted its bid on the GeM Portal along with supporting documents. MTL's bid was not considered for - 6 - WA No. 1602 of 2026 the technical evaluation because it was found ineligible on account of the impugned clause. This was reflected on the GeM portal on

26.05.2026. MTL immediately filed a representation on 26.05.2026 contesting the impugned disqualification. It claimed that the reasons for the impugned disqualification were vague as it did not disclose any basis for such disqualification. Thereafter, the appellants filed the writ petition.

7. The appellants contended that MTL had been rendering similar services to BoB and other banks and institutions for several years without any complaint. They also submitted that the impugned disqualification was not based on any deficiencies attributed to MTL but to one of the Directors (Sri T. Gautham Pai). The appellants contend that Sri T. Gautham Pai ceased to be a Promoter Director and, therefore, MTL could not be disqualified on the ground that its Promoter Director was a defaulter.

8. The appellants also challenged the impugned clause on the ground that it was arbitrary and exclusionary, and that it had no nexus with the object of the RFP, which was to invite competitive bids from entities engaged in the business of such supplies. It was contended that the impugned clause had the effect of excluding - 7 - WA No. 1602 of 2026 technically competent entities from providing the required supplies if it was found that one of the Promoter Directors or any Director of the entity had defaulted in payment of its dues. It was further contended that such a default did not affect the tenderer's ability to execute the contract. BoB disputes this contention and claims that the impugned clause is relevant and material, as it ensures that the tendering entity is financially sound and creditworthy. It is argued that the financial stress of the promoter would invariably translate into the entities under the control of such persons being in default, and thus BoB did not consider it expedient to enter into contracts with such entities.

9. In the aforesaid background, two questions that fall for consideration are: (i) whether the impugned clause is invalid as being manifestly arbitrary and violative of Article 14 of the Constitution of India; and (ii) whether the involvement of Sri T.Gautham Pai in MTL renders it ineligible in terms of the impugned clause. - 8 - WA No. 1602 of 2026 PREFATORY FACTS

10. Briefly stated, the relevant facts necessary to address the said controversy are as follows.

11. MTL was incorporated on 13.01.2000 under the Companies Act, 1956. At the time of incorporation, it was known as Manipal Press Private Limited. Thereafter, it was converted into a public company, and its name was changed to Manipal Press Limited. On

23.05.2011, its name was once again changed to its current name ‒ Manipal Technologies Limited. Prior to its incorporation, the subject business was carried on in the name and style of a partnership firm M/s. Manipal Power Press. Sri T. Gautham Pai was one of the constituent partners of the said firm.

12. Sri T. Gautham Pai is a signatory to the Memorandum of Association [MOA] and the Articles of Association [AOA] of MTL. Section 2.26 of the AOA reflects Sri T. Goutam Pai as a Promoter. Sections 2.26 and 2.27 of the AOA of MTL are reproduced below: "Section 2.26 Promoters means (1) Mr.T. Satish U.Pai (2) Mr.T.Gautham S.Pai and (3) Manipal Media Network Limited a company incorporated registered office at Udayavani Building Manipal – 576 104 Karnataka respective successors and permitted assigns. the Companies Act 1956 having India and includes - 9 - WA No. 1602 of 2026 (a) (c) any in sub-clause Section 2.27 Related Party means (a) each Promoter who is an individual (b) any parent grandparent or great-grandparent of any individual described lineal descendant of any individual described in sub- clause (a) or sub-clause (b) above (d) any spouse or former spouse of any individual described in sub-clause (a) sub-clause (b) or sub-clause (c) above or (e) any entity in which any individual described in sub-clause (a) sub-clause (b) sub- clause (c) or sub-clause (d) has a direct or indirect interest. For this purpose any individual who was adopted shall be the same as any treated individual who was not adopted. For example a stepparent and step-child shall be treated as a parent and child respectively."

13. BoB had also prduced a copy of the list of Directors furnished by MTL along with its bid, which reflected Sri T. Gautham Pai as the Managing Director of MTL, holding the said office since 29.07.2003. The updated draft red herring prospectus dated 10.11.2025 of one of MTL’s group companies, Manipal Payment and Identity Solutions Limited, sets out the profile of the promoters and the promoter group. It reflects Sri T. Gautham Pai and his parents, Sri T. Satish U. Pai and Smt. Sandhya S. Pai, as individual promoters. The corporate promoters of the said company includes MTL. In the said prospectus, Sri T. Gautham Pai is reflected as Executive Chairman and whole-time Director of MTL. - 10 - WA No. 1602 of 2026

14. Sri T. Gautham Pai was also a Director of M/s. MVP Group International Inc., whose credit facilities have been classified as a Non-Performing Accounts [NPA]. An application under Section 95 of the Insolvency and Bankruptcy Code, 2016 [IBC] has also been filed before the National Company Law Tribunal, Bengaluru against Sri. T. Gautham Pai in relation to the same. The said action is a subject matter of challenge in another proceeding instituted in this court.

15. Undisputedly, the returns filed by MTL with the Registrar of Companies [RoC], till 08.05.2026 reflected Sri T. Gautham Pai as a Promoter Director. On 08.05.2026, MTL filed Form DIR-12 with the RoC regarding the change in the designation of Sri T. Gautham Pai from a Promoter Director to a Professional Director. The form indicates that the said change took effect from 21.01.2026.

16. It is contended on behalf of BoB before this court that Sri T. Gautham Pai has defaulted in his guarantee obligations in relation to the financial assistance availed by M/s. MVP Group International Inc. RIVAL CONTENTIONS

17. Mr K.G. Raghavan, learned Senior Counsel appearing for the appellants, contended that the impugned clause is an exclusionary - 11 - WA No. 1602 of 2026 clause and must be interpreted strictly. He submitted that although the tendering entity may have wide discretion in determining the technical specifications, the exclusionary clause that debars participation in tenders must be construed strictly. He submitted that the impugned clause is an exclusionary clause and, therefore, it was necessary to test its relevance with the object of the tender. He submitted that MTL was well established in the business of printing and supply of magnetic strips and QR code passbooks. More importantly, its credentials are well established, as it currently supplies the said products to BoB and other banks.

18. He submitted that, even assuming that one of the Directors of MTL was a defaulter or associated with another defaulting entity, the same would not affect MTL’s ability to supply magnetic strips and QR-code-printed passbooks.

19. Next, he submitted that even if it is assumed that the impugned clause is valid, MTL had not incurred any such disqualification. He further submitted that Sri T. Gautham Pai was no longer the Promoter Director and was now a Professional Director on the Board of MTL. He submitted that his designation had changed with effect from 21.01.2026, even though Form DIR-12 - 12 - WA No. 1602 of 2026 was filed subsequently on 08.05.2026. He submitted that the term "Promoter" is defined under Section 2(69) of the Companies Act, 2013 [Companies Act], which requires the person be specifically named in the prospectus or identified in the company's annual returns referred to in Section 92 of the Companies Act. He submitted that, therefore, Sri T. Gautham Pai could not be considered a Promoter of MTL.

20. Mr. K. Shashikiran Shetty, learned Senior Counsel appearing for BoB, countered the aforesaid submissions. First, he submitted that it was not open for MTL to challenge the impugned clause after having participated in the tender process. Second, he submitted that the impugned clause has a direct nexus with the object of ensuring that the tendering entity is financially stable and has a credible track record. He submitted that the Promoters of a corporate entity in default cannot exploit the corporate structure to conceal their credit status. He submitted that BoB could not be expected to enter into contracts with entities whose promoters had defaulted on their financial obligations.

21. Next, he submitted that the documents accompanying the bid listed Sri T. Gautham Pai as a Promoter, and the list of Directors - 13 - WA No. 1602 of 2026 also listed him as MTL’s Managing Director. He submitted that Sri T. Gautham Pai was in control of MTL and, therefore, was clearly its Promoter. He submitted that MTL had filed Form DIR-12 with the RoC, showing a change in the status of Sri T. Gautham Pai from Promoter Director to Professional Director, on the same date as the filing of the bid, that is, on 08.05.2026. He further submitted that this was clearly done with a view to escaping the ineligibility under the impugned clause. He also pointed out that, by a resolution of the Board of Directors of MTL dated 13.03.2026, Sri T. Gautham Pai had been re-appointed as the Executive Chairman of MTL for a period of three years with effect from 28.05.2026. He also referred to the decision of the Supreme Court in Arcelormittal India Private Limited vs. Satish Kumar Gupta and Others1 and, on the strength of that decision, contended that the controlling authority would mean de facto control. REASONS AND CONCLUSIONS

22. At the outset, we may note that the impugned order is an ad interim order. However, the counsel had advanced arguments and invited a ruling on the merits of the controversy. During the course of the arguments, we had also put the learned counsel for the 1 (2019) 2 SCC 1 - 14 - WA No. 1602 of 2026 parties on notice that any view expressed on the contentions advanced may be dispositive of the controversy. Mr. Raghavan, learned Senior Counsel appearing the appellants, fairly acknowledged the same.

23. The first question to be addressed is whether the impugned clause is invalid on the ground of manifest arbitrariness. The effect of the impugned clause is to exclude entities or companies that are defaulters or whose credit facilities have been classified as NPAs. It also explicitly bars entities whose Promoter Directors are defaulters or whose credit facilities have been declared NPAs. The sole purpose of the clause is to ensure that bidders possess strong financial standing and are creditworthy. Clearly, a default in financial obligations by the promoters or persons in control would directly undermine the company’s standing and creditworthiness.

24. A company is not a natural person capable of directing its own affairs; its affairs are managed and controlled by its directors, and their standing and credibility are thus relevant in assessing the company’s credentials. Whilst, in the legal sense, a company has an identity separate from its shareholders and directors, it is well accepted that, in the commercial sense, corporatisation is only a - 15 - WA No. 1602 of 2026 method of carrying on a commercial enterprise. The commercial identity of a closely held company is no different from its shareholders and the persons in control of the company. This principle was clearly recognised by the Supreme Court in New Horizons Ltd. vs. Union of India2. In the aforesaid case, the Supreme Court had considered a situation in which one of the tenderers was not considered on the ground that it lacked the requisite past experience. The tenderer (New Horizons Ltd.) was a company in the nature of a joint venture, and its shareholders had the necessary experience. The High Court did not accept the shareholders' experience as the company’s. The High Court held that it was one thing for the shareholders of the company to have experience and quite another for the company to have such experience. However, the Supreme Court did not concur with the said view. The Supreme Court held that the terms and conditions of such documents must be construed from the standpoint of a prudent businessman, and when a businessman enters into a contract, he seeks to assure himself about the credentials of the person who is entrusted with the work, and such credentials must be examined from a commercial point of view, which would not only include the 2 (1995) 1 SCC 478 - 16 - WA No. 1602 of 2026 background of the company but also the persons who are in control of the company. We may refer to the following extract of the said decision: incorporated under "23. Even if it be assumed that the requirement regarding experience as set out advertisement dated 22-4-1993 inviting tenders is a condition about eligibility for consideration of the tender, though we find no basis for the same, the said requirement regarding experience cannot be construed to mean that the said experience should be of the tenderer in his name only. It is possible to visualise a situation where a person having past experience has entered into a partnership and the tender has been submitted in the name of the partnership firm which may not have any past experience in its own name. That does not mean that the earlier experience of one of the partners of into consideration. the firm cannot be Similarly, a company Companies Act having past experience may undergo reorganisation as a result of merger or amalgamation with another company which may have no such past experience and the tender is submitted reorganised company. It could not be the purport of the requirement about experience that the experience of the company which has merged into the reorganised company cannot be consideration because the tender has not been submitted in its name and has been submitted in the name of the reorganised company which does not have experience in its name. Conversely there may be a split in a company and persons looking after a particular field of the business of the company form a new company after leaving it. The new company, though having persons with experience in the field, has no experience in its the original company having name while lacks persons with its name experience experience. The requirement regarding experience does not mean that the offer of the original company must be considered because it has the name of - 17 - WA No. 1602 of 2026 in mind the said requirement experience in its name though it does not have experienced persons with it and ignore the offer of the new company because it does not have experience in its name though it has persons having experience in the field. While considering the requirement regarding experience it has to be contained in a document inviting offers for a commercial transaction. The terms and conditions of such a document have to be construed from the standpoint of a prudent businessman. When a businessman enters into a contract whereunder some work is to be performed he seeks to assure himself about the credentials of the person who is to be entrusted with the performance of the work. Such credentials are to be examined from a commercial point of view which means that if the contract is to be entered with a company he will look into the background of the company and the persons who are in control of the same and their capacity to execute the work. He would go not by the name of the company but by the persons behind the company. While keeping in view the past experience he would also take note of the present state of affairs and the equipment and resources at the disposal of the company. The same has to be the approach of the authorities while considering a tender received in response to the advertisement issued on 22-4-1993. This would require that first the terms of the offer must be examined and if they are found satisfactory the next step would be to consider the credentials of the tenderer and his ability to perform the work to be entrusted. For judging the credentials past experience will have to be considered along with the present state of equipment and resources available with the tenderer. Past experience may not be of much help if the machinery and lack of is outdated. Conversely equipment experience may be made good by improved technology The better advertisement dated 22-4-1993 when read with the notice for inviting tenders dated 26-4-1993 does not preclude adoption of this course of action. If the Tender Evaluation Committee had adopted this approach and had examined the equipment. - 18 - WA No. 1602 of 2026 tender of NHL in this perspective it would have found that NHL, being a joint venture, has access to the benefit of the resources and strength of its parent/owning companies as well as experience in database management, sales and publishing of its parent group companies because after reorganisation of the Company in 1992 60% of the share capital of NHL is owned by Indian group of companies namely, TPI, LMI, WML, etc. and Mr Aroon Purie and 40% of the share capital is owned by IIPL a wholly-owned subsidiary of Singapore Telecom which was established in 1967 and is having long experience in publishing the Singapore telephone directory with yellow pages and other directories. Moreover in the tender it was specifically stated that IIPL will be providing integrated directory management its unique system along with the expertise of its managers and that the managers will be actively involved in the project both out of Singapore and resident in India." [emphasis supplied]

25. In the present case, the impugned clause is intended to ensure that eligible bidders possess the necessary credentials. From a commercial point of view, the credentials of the promoters and persons in control of the company cannot be excluded from the scope of such consideration.

26. It is also necessary to bear in mind that the scope of judicial review in tender matters is narrow. In Tata Cellular vs. Union of India3, the Supreme Court had referred to the earlier decisions and distilled the scope of judicial review in contractual matters as under: 3 (1994) 6 SCC 651 - 19 - WA No. 1602 of 2026 "94. The principles deducible from the above are: (1) The modern trend points to judicial restraint in administrative action. (2) The court does not sit as a court of appeal but merely reviews the manner in which the decision was made. (3) The court does not have the expertise to correct the administrative decision. If a review of the administrative decision is permitted it will be substituting necessary expertise which itself may be fallible. its own decision, without (4) The terms of the invitation to tender cannot be open to judicial scrutiny because the invitation to tender is in the realm of contract. Normally speaking, the decision to accept the tender or award the contract is reached by process of negotiations through several tiers. More often than not, such decisions are made qualitatively by experts. (5) The Government must have freedom of contract. In other words, a fair play in the joints is a necessary concomitant for an administrative body functioning in an administrative sphere or quasi-administrative decision must not only be tested by the application of Wednesbury principle of reasonableness (including its other facts pointed out above) but must be free from arbitrariness not affected by bias or actuated by mala fides. sphere. However, (6) Quashing decisions may impose heavy administrative burden on the administration and lead to increased and unbudgeted expenditure. Based on these principles we will examine the facts of this case since they commend to us as the correct principles." - 20 - WA No. 1602 of 2026

27. The terms of invitation of the tender are in the realm of a contract, and it is necessary that the State or the State authorities have full freedom of contract and sufficient fair play in the joints. The scope of judicial review is largely confined to examining whether the administrative decisions fail the Wednesbury Principle4. The said principle, as set out in The Supreme Court Practice, 1993 (Volume I, Pages 849-850) and noticed in Tata Cellular (supra), reads as under: review proceedings where “4. Wednesbury principle.— A decision of a public authority will be liable to be quashed or otherwise dealt with by an appropriate order in judicial the court concludes that the decision is such that no authority properly directing itself on the relevant law and acting reasonably could have reached it. (Associated Houses Ltd. v. Wednesbury Corpn. [(1948) 1 KB 223 : (1947) 2 All ER 680] , per Lord Greene, M.R.)” Provincial Picture

28. In Raunaq International Ltd. vs. I.V.R. Construction Ltd.5, the Supreme Court emphasized that in arriving at a commercial decision, certain commercial considerations are paramount, which would include the financial ability of a tenderer to fulfil the requirements of a job. We may also refer to the following 4 Wednesbury Principle ‒ the principle of reasonableness as articulated by Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. vs. Wednesbusy Corpn: (1947) 2 All ER 680 5 (1999) 1 SCC 492 - 21 - WA No. 1602 of 2026 observations made by the Supreme Court in Municipal Corporation, Ujjain vs. BVG India Ltd.6: "14. The judicial review of administrative action is intended to prevent arbitrariness. The purpose of judicial review of administrative action is to check whether the choice or decision is made lawfully and not to check whether the choice or decision is sound. If the process adopted or decision made by the authority is not mala fide and not intended to favour someone; the process adopted or decision made is neither so arbitrary nor irrational that under the facts of the case it can be concluded that no responsible authority acting reasonably and in accordance with relevant law could have reached such a decision; and if the public interest is not affected, there should be no interference under Article 226."

29. In Silppi Constructions Contractors vs. Union of India7, the Supreme Court referred to its earlier decisions and observed as under: “19. This Court being the guardian of fundamental rights is duty-bound to interfere when there is arbitrariness, irrationality, mala fides and bias. However, this Court in all the aforesaid decisions has cautioned time and again that courts should exercise a lot of restraint while exercising their in contractual or review powers of commercial matters. This Court is normally loathe to interfere in contractual matters unless a clear- cut case of arbitrariness or mala fides or bias or irrationality is made out. One must remember that today many public sector undertakings compete with the private industry. The contracts entered into between private parties are not subject to judicial