Kerala Gold Smuggling case fallout: Kerala High Court stays Government Order blacklisting PwC from IT and electricity projects

The Kerala High Court has stayed the Kerala government's order barring consultancy firm Pricewaterhouse Coopers (PwC) from participating in projects of its Electronics and Information Technology Department for two years..A Single Bench of Justice PV Asha stayed the government order for two weeks..The State government's contract with PwC was terminated on November 30, for alleged failure on the part of the company in ensuring due diligence in the deployment of resources. It was alleged that PwC failed to undertake background checks when appointing a person for the Kerala Space Park Project..PwC was earlier appointed Project Management Unit for two projects of the government - the Kerala Fibre Optic Network (KFON) and the Space Park Project..The Government Order is suspected to be a fallout of the Kerala Gold Smuggling Case, which involved the smuggling of gold through diplomatic channels. One of the accused in that case, Swapna Prabha Suresh, was an employee of PwC, and worked on the Kerala Space Park Project. She is a former employee of the Consulate of the United Arab Emirates at Thiruvananthapuram..The Government Order dated November 27 barred PwC from participating in future projects and terminates the subsisting Space Park and KFON contracts..In its petition before the High Court, PwC has denied any mala fides, claiming that "the individual" found to have indulged in unrelated illegalities was appointed on the recommendation of the Managing Director of the Kerala State Information Technology Infrastructure Limited, KFON, and Space Park Projects.Additionally, background checks had been duly performed, it has been averred. .The petition assails the termination notice and the subsequent 'blacklisting' of the consultancy, contending that it ought to have been allowed to defend itself and be heard prior to the Order against it.The failure of the government to provide PwC an opportunity to be heard violates the principles of natural justice, the petition states. .The petition moved before the Kerala High Court has been filed through Menon & Pai Advocates, Kochi..A team from Shardul Amarchand Mangaldas comprising Partners Anuj Berry and Aashish Gupta, Principal Associate Aditya Mukherjee, and Associates Krishna Tamgirala and Ralshit Akshay Jha briefed Senior Advocate Mukul Rohatgi, who appeared for PwC.