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'World Bank is not a 'Government agency' for the purposes of Article 12 of the Constitution': Delhi HC

'World Bank is not a 'Government agency' for the purposes of Article 12 of the Constitution': Delhi HC

Case Title: A2Z Infraservices Limited & Anr. V. North Delhi Municipal Corporation

In a recent decision, the Delhi High Court bench of Justice Vipin Sanghi and Justice Jasmeet Singh held that World Bank is not a government agency and that to be a government agency, a body must be under "pervasive and actual control" of the Government of India.

The respondent i.e. the North Delhi Municipal Corporation had rejected the petitioners bid on the ground that the petitioner stands debarred by World Bank. The petitioner is a private limited company. The Municipal Corporation had stated that the petitioner did not disclose the fact that it is debarred by the World Bank in the undertaking submitted by the petitioner. 

Senior Advocate Rajiv Nayar, speaking on behalf of the petitioners had contended that the debarment by either the World Bank Group or by the AIIB, and by the AFDB does not amount to either debarment by the Government, or the Government Agency. Further for the World Bank to be categorized as the “Government Agency”, it will have to be established that the World Bank acts as an agent of Government of India.

He submitted that an “...agent is bound by instructions of the principal. It certainly cannot be said that the World Bank acts on the instructions of the Government of India. “

Nayar further submitted that the World Bank is not a Government authority under Article 12 of the Constitution of India, and no writ would lie against the World Bank. He submits that if the World Bank were a Government Agency, it would certainly qualify as an authority under Article 12, and writ petition would lie against it.

The Delhi High Court bench after the above submissions held that the World Bank–or any of the other international bodies, which have proceeded to debar the petitioner, cannot be considered as a “Government Agency”. This is for the reason that none of these international bodies are bound by any directions issued by the Government of India.

The Court stated, “The Government of India does not exercise control, actual or pervasive, over their affairs and that is why they have been held as not amenable to the writ jurisdiction of the High Court, as they are not considered State or other authority within meaning of the said expressions under Articles 12, and 226, of the Constitution of India.. By mere implication, the World Bank cannot be construed as a government agency when, generally understood, it is not a government agency."

It said, "We are, therefore, of the view, that “Government agency”– in the present context, certainly cannot be construed as encompassing within its scope, bodies like the World Bank."

Thus, the Court disposed of the petition stating that the petitioner cannot be barred from participating in the re-tendering process, unless the Municipal body amends the terms and conditions of the tender so as to specifically bar all such bidders who have been barred by international bodies, like the World Bank. 

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