No blacklisted armaments company will be awarded contracts unless their names are cleared by the Central Bureau of Investigation (CBI) that is probing them, parliament was informed Monday.
In cases where contracts have been awarded, action would be taken on the basis of what the contract provided for, Defence minister AK Antony said in a written reply in the Lok Sabha.
He said it had been decided that "where the tender process has already been started and where the companies mentioned in the FIR (first information report) are figuring, each case should be dealt as per the tender conditions, keeping in view the FIR in question. No tender (would) be awarded to the companies mentioned in the FIR unless the CBI investigation clears them totally".
Where the tender process has not yet started, there would be "no dealing with the companies mentioned in the FIR, till the finalization of investigation," Antony added.
Where contracts have been concluded and executed, action would be taken against the companies according to the provisions of the contract, on completion of the CBI probe, the minister said.
The defence ministry had blacklisted seven firms, including Israeli Military Industries and Singapore Technology, earlier this year after allegations of their bribing Indian officials surfaced against them.
The CBI had May 17 registered an FIR against former Ordnance Factory Board director general Sudipto Ghosh under the Prevention of Corruption Act. The seven companies were mentioned in the FIR.
The temporary putting on hold of all contracts with the blacklisted firm has derailed the artillery modernisation programme of the Indian Army that has been hanging fire for over two decades and has been mired in controversy.