2013 (9) TMI 390 - SC - Indian Laws

Eligibility to enter into tender - Non compliance of tender terms - Held that - at the material time there was no blacklisting or delisting of the Appellant-company and that in those circumstances it was not relevant to make any disclosure in this regard. The very fact that the Tendering Authority, in terms of its communication dated 22nd July 2013 had not adverted to this ground at all, lends credence to the contention that a valid argument had been proffered had this ground been raised. Regardless of the weight, pithiness or sufficiency of the explanation given by the Appellantcompany in this regard, this issue in its entirety has become irrelevant for our cogitation for the reason that it does not feature as a reason for the impugned rejection. This ground should have been articulated at the very inception itself, and now it is not forensically fair or permissible for the Authority or any of the Respondents to adopt this ground for the first time in this second salvo of litigation by way of a side wind. The impugned Judgment is indubitably a cryptic one and does not contain the reasons on which the decision is predicated. Since reasons are not contained in the impugned Judgment itself, it must be set aside on the short ground that a party cannot be permitted to travel beyond the stand adopted and expressed by it in its earlier decision. Filing of the latest Income Tax Return was a collateral term, and accordingly the Tendering Authority ought to have brought this discrepancy to the notice of the Appellant-company and if even thereafter no rectification had been carried out, the position may have been appreciably different. It has been asserted on behalf of the Appellant-company, and not denied by the learned counsel for the Respondent-Authority, that the financial bid of the Appellant-company is substantially lower than that of the others, and, therefore, pecuniarily preferable - Decided in favour of appellant. Precedent value - Held that - Court, and even more so the High Court as well as the subordinate courts have to face lengthy arguments in each case because of the practice of citing innumerable decisions on a particular point of law. The rule of precedence, which is an integral part of our jurisprudence, mandates that this exposition of law must be followed and applied even by coordinate or co-equal Benches and certainly by all smaller Benches and subordinate Courts. We hasten to clarify that if a co-ordinate Bench considers the ratio decidendi of the previous Bench to be of doubtful efficacy, it must comply with the discipline of requesting Hon ble the Chief Justice to constitute a larger Bench. Furthermore there are some instances of decisions even of a Single Judge, which having withstood the onslaughts of time have metamorphosed into high authority demanding reverence and adherence because of its vintage and following in contradistinction of the strength of the Bench. This is a significant characteristic of the doctrine of stare decisis. Tata Cellular has been so ubiquitously followed, over decades, in almost every case concerning Government tenders and contracts that it has attained heights which dissuade digression by even a larger Bench. The law of precedence and of stare decisis is predicated on the wisdom and salubrity of providing a firmly founded law, without which uncertainty and ambiguity would cause consternation in society. It garners legal predictability, which simply stated, is an essential. The sheer plethora of precedents makes it essential that this Court should abjure from discussing each and every decision which has dealt with a similar question of law. Failure to follow this discipline and regimen inexorably leads to prolixity in judgments which invariably is a consequence of lengthy arguments.

Issues Involved:
1. Compliance with essential terms of the tender.
2. Applicability and relevance of clause (i) regarding blacklisting.
3. Compliance with clause (j) regarding the submission of the latest Income Tax Return.
4. Judicial review of administrative actions in tender processes.
5. Precedence and application of legal principles in tender-related disputes.

Issue-Wise Detailed Analysis:

1. Compliance with Essential Terms of the Tender:
The primary issue was whether the Appellant-company had failed to meet the essential terms of the tender, specifically clauses (i) and (j). The courts concluded that the Appellant-company's offer was ineligible due to non-compliance with these terms.

2. Applicability and Relevance of Clause (i) Regarding Blacklisting:
Clause (i) required a declaration that the applicant was not blacklisted by any government body in the past five years. The learned Single Judge did not analyze this clause, focusing instead on clause (j). The Division Bench also did not delve into clause (i), concentrating on the legal implications of clause (j). The Supreme Court noted that the Respondents raised the violation of clause (i) but rejected this effort, as it was not part of the initial grounds for disqualification.

3. Compliance with Clause (j) Regarding Submission of Latest Income Tax Return:
Clause (j) required the submission of the latest Income Tax Return. The Appellant-company failed to file this document with its bid, leading to its disqualification. The Division Bench deemed clause (j) essential, and thus non-compliance rendered the bid ineligible. However, the Supreme Court found that clause (j) was not an essential term but a collateral one. The Court opined that the Tendering Authority should have allowed the Appellant-company to rectify this discrepancy. The financial bid of the Appellant-company being substantially lower than others was also noted.

4. Judicial Review of Administrative Actions in Tender Processes:
The Supreme Court emphasized the principles laid out in Tata Cellular v. Union of India (1994) 6 SCC 651, which guides judicial review of administrative actions. The Court should confine itself to questions of legality, such as whether the decision-making authority exceeded its powers, committed an error of law, breached natural justice, made an unreasonable decision, or abused its powers. The Court reiterated that adherence to tender rules is crucial to avoid discrimination and maintain transparency.

5. Precedence and Application of Legal Principles in Tender-Related Disputes:
The Supreme Court highlighted the importance of following binding precedents, particularly Tata Cellular, in tender-related disputes. The Court criticized the practice of citing numerous decisions, advocating for reliance on the most relevant and authoritative cases. The decision in Tata Cellular was deemed sufficient to govern the legal principles in this case.

Conclusion:
The Supreme Court allowed the appeal, setting aside the impugned judgment. The disqualification of the Appellant-company for not submitting its latest Income Tax Return was deemed insufficient to disregard its bid. The Respondents were directed to proceed further, considering the Appellant-company's bid. Each party was to bear its respective costs.

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