Delhi HC Confutes BSNL’s Decision To Rescind Contract With IT Company

The Delhi High Court has recently annulled BSNL’s decision to cancel a purchase order it had placed with Millennium Automation Private Limited for providing central billing and IPDR solutions.

BSNL rescinded the multi-crore contract, alleging collusion and bad faith by the company in securing the order.

Justice Sanjeev Narula, in a ruling on November 19, emphasized that while the integrity of the tendering process is critical, BSNL’s allegations of compromised integrity lacked concrete evidence.

The court noted that BSNL, as a state entity, failed to act fairly when it annulled the contract without substantiating its claims.

“The impugned communication and new grounds for rescinding the order are unreasonable, arbitrary, and unsustainable,” the judge remarked. The court also clarified that serious accusations such as collusion must be backed by tangible evidence, not just conjecture.

Millennium Automation argued that it had already incurred significant costs in procuring supplies, and the contract’s cancellation was unjustified. The company had provided BSNL with the status of its equipment suppliers, cleared by the National Security Council’s Trusted Telecom Portal, but BSNL rescinded the order the very next day.

The court concluded by setting aside the communication dated August 6, 2024, effectively reinstating the purchase order.