World Bank a Govt Agency as per Article 12 of Constitution, HC replies2 min read


The Delhi High Court recently withdrew on whether the World Bank is in the category of ” Government agency “in reference to Article 12 of the Constitution, which defines” State “and” other authorities “.

A divisional court consisting of Judge Vipin Sanghi and Judge Jasmeet Singh addressed the matter while dealing with an appeal contesting the applicant’s decision to reject the offer and his further exclusion from participation in any proceedings.
The applicant company felt injured by the NDMC’s decision to reject its offer and the subsequent disqualification, which resulted in its exclusion from the World Bank.
The petitioner’s lawyer argued that a ban by the World Bank Group is not the same as a ban by the government or a government agency, as the agency falls outside the definition of Article 12 of the Constitution.

The Permanent State Attorney, on the other hand, argued that the World Bank has Indian representatives in its body, which includes the Union Finance Minister, and that the Indian government has voting rights in the World Bank. According to this logic, it is a government agency.

The petitioner’s attorney cited the decision of the United States Court in Phillip W. Sedgwick v. Meri Systems Protection Board, which said that regardless of whether the United States has a 25% stake in the World Bank, it is not a “Federal Agency”. He added that India not only has no interests but also has a voting power of 3.5%.

He further argued that in order for it to be classified as a “Government Agency”, it must be established that the World Bank acts as an agent of the Indian government. He claims that an agent is bound by the instructions of the principal, and certainly the World Bank does not act according to the instructions of the Indian government.
Hearing both parties, the Tribunal noted that the World Bank, or any of the other international organizations, which have proceeded to disqualify the petitioner, cannot be considered a “Government Agency” as these international organizations are not subject to the instructions given. . by the government of India.

“The Government of India does not exercise real or general control over its affairs and that is why it was considered that they are not subject to the jurisdiction of the High Court, as they are not considered a state or other authority in the meaning of such expressions under Articles 12 and 226 of the Indian Constitution “.

In view of the foregoing, the Court held that the applicant cannot be disqualified as the clauses of that Agreement aim to disqualify the bidder who does not reveal its disqualification by a ‘Public Body’ and, in the present context, certainly cannot be interpreted as comprehensive organizations such as the World Bank in its scope.

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