Complaint Under Minimum Wages Act Not Police Case: Gujarat High Court Quashes Firm's Debarment For Not Disclosing Info In Tender Process

The Gujarat High Court quashed Surat Municipal Corporation's order debarring a firm for two years for allegedly filing a false affidavit in the tender process, noting that the firm not disclosing cases filed against it under Minimum Wages Act would not amount to a "police case". 

The Corporation had argued that several criminal complaints were filed against the petitioner firm under Section 22 Minimum Wages Act; hence the petitioner was supposed to disclose it.

Section 22 of the Act prescribes penalties for certain offences, such as payment of less than the minimum wages and contravention of any rule or order made under Section 13 with punishment by imprisonment or fine.

A division bench of Justice AS Supehia and Justice Pranav Trivedi said:

"Indubitably, violation of the provisions mentioned under Section 22 is an offence. However, the expression used in the format Annexure–III, “no police case”, has been construed against the petitioner by respondent No.2 – Corporation as suppression of “criminal complaints” under the Minimum Wages Act. A 'police case' is governed by Section 154 of the Cr.P.C. (now Section 173 of the BNSS), which prescribes registration of First Information Reports in cognizable offences defined under Section 2(c) of Cr.P.C. (Section 2(g) of the BNSS). The offence under the Minimum Wages Act, 1948 does not fall within the category of a police case.In the present case, the documents on record reveal that the complaints have been filed before the Additional Chief Judicial Magistrate under Section 22 of the Minimum Wages Act, 1948. Thus, such complaints cannot be construed as or given the colour of a police case". 

"Unquestionably, respondent No.2 – Corporation has not pointed out that any police case relating to a cognizable or non-cognizable offence has been registered against the petitioner. Respondent No.2 – Corporation has erred in considering complaints under the Minimum Wages Act, 1948, filed by the employees against the petitioner, as police cases. Hence, it cannot be said that the petitioner has made any false assertion in the affidavit dated 24.02.2023" the bench added. 

The firm had challenged a resolution passed by Surat Municipal Corporation debarring it, along with forfeiture of Earnest Money Deposit (EMD) and also registering a criminal offence for filing a false affidavit in the tender process for providing sanitation services at a hospital. 

The Corporation through an Online Tender invited bids for providing sanitation services at SMIMER Hospital. The petitioner submitted its bid and duly participated in the tender process, and was declared successful tenderer and was allotted the work order. 

A complaint was filed before the Corporation, alleging that false details were given by the petitioner in its affidavit for securing the contract. A vigilance inquiry was conducted and the Standing Committee sent a proposal to the Corporation on 10.12.2024 for debarring the petitioner for two years. The petitioner was also heard by the  Standing Committee, and on 18.04.2025, the petitioner gave a detailed representation to the Standing Committee regarding the contents of the affidavit filed in the bid document.

 Ultimately, the Corporation passed a resolution dated 19.04.2025 and debarred the petitioner for two years. A further decision was taken by the Standing Committee to file a police complaint for producing an affidavit containing false assertions. Against this the petitioner moved the high court. 

A division bench of Justice AS Supehia and Justice Pranav Trivedi

The Corporation had held that the petitioner had allegedly made false assertions on two counts — first, that despite the statement in the affidavit that no police case has been filed against the petitioner, various criminal cases are registered before the Labour Court under Minimum Wages Act, which were not disclosed. Secondly though the that though the petitioner was blacklisted, the same was not disclosed. 

The petitioner argued that cases under Minimum Wages Act cannot be considered as police cases and hence, they were not required to be disclosed in the petitioner's affidavit. It was also argued that there was not a whisper about the petitioner's blacklisting int he resolution; further the petitioner was earlier blacklisted in 2017 however the same was cancelled in 2013 and hence the petitioner was not required to disclose it in the tender process, which was initiated in 2023.

The court noted that the petitioner had clarified its stance before the standing committee however the Committee, by the  resolution, had ignored the same and also decided to register a criminal offence against the petitioner for filing a false affidavit.

"Hence, we are of the considered opinion that the decision taken by respondent No.2 – Corporation vide Resolution No.804 of 2025 dated 19.04.2025, debarring the petitioner for a period of two years, forfeiting its EMD, and simultaneously registering a criminal offence against the petitioner, is illegal and arbitrary and hence deserves to be quashed and set aside," the court said. 

The court also directed the Corporation to consider the petitioner's case and pass necessary orders after hearing the respective aggrieved parties.

Case title: M/S DG NAKRANI v/s SMIMER HOSPITAL & ORS.

R/SPECIAL CIVIL APPLICATION NO.6805 of 2025

Click Here To Read/Download Order

Citation : 2025 LiveLaw (Guj) 192