2008 (5) TMI 711 - HC - Indian Laws

Summary

Issues Involved:
1. Validity of the Letter of Intent (LOI) issued to Respondent No. 2.
2. Compliance with pre-qualification criteria and evaluation criteria in the bidding process.
3. Allegations of arbitrary and discriminatory actions by Respondent No. 1.
4. Eligibility of Respondent No. 2 to participate in the tender process.
5. Transparency and legality of the tender process.

Detailed Analysis:

1. Validity of the Letter of Intent (LOI) Issued to Respondent No. 2:
The petitioner challenged the LOI dated 23.6.2007 issued to Respondent No. 2 for the Crowborough Hotel project. The petitioner argued that Respondent No. 2 did not meet the eligibility criteria and that the tender process was flawed. However, the court found that the bidding process was conducted transparently, and Respondent No. 2 was the highest bidder, quoting Rs. 98.99 crores compared to the petitioner's Rs. 90.61 crores. The court concluded that the decision to award the LOI to Respondent No. 2 was justified and did not warrant interference.

2. Compliance with Pre-qualification Criteria and Evaluation Criteria in the Bidding Process:
The petitioner contended that the respondent did not clearly define the financial criteria in the bid documents, violating the principles of transparency. The court noted that the Evaluation Committee initially decided to assess financial criteria on a "point based scale" and later fixed specific turnover and net worth criteria. However, these criteria were not included in the EOI. The court held that the absence of specific criteria in the EOI did not constitute a deviation from the tender terms, as the sliding criteria were for internal assessment. The court emphasized that the petitioner did not challenge the EOI at the relevant time and could not do so after participating in the process.

3. Allegations of Arbitrary and Discriminatory Actions by Respondent No. 1:
The petitioner alleged that the respondent arbitrarily changed the financial criteria to favor Respondent No. 2. The court examined the minutes of the Evaluation Committee meetings and found that the criteria were amended to adopt the sliding scale based on the consultant's recommendation. The court concluded that the changes were made transparently and were not arbitrary or discriminatory. The court also noted that the petitioner failed to demonstrate any substantial prejudice due to the adoption of the sliding criteria.

4. Eligibility of Respondent No. 2 to Participate in the Tender Process:
The petitioner argued that Respondent No. 2, a coal dealer with no experience in the hotel industry, did not meet the eligibility criteria. The court found that Respondent No. 2 had a valid management contract with T.K. International Ltd., a reputed hotel industry, which satisfied the requirement for a consortium. The court also noted that the petitioner did not submit a solvency certificate in the name of Centre Point Group Enterprise and lacked a valid management contract with ITC Welcomgroup. Thus, the court held that Respondent No. 2 was eligible to participate in the tender process.

5. Transparency and Legality of the Tender Process:
The court emphasized that judicial review in contractual matters focuses on the decision-making process rather than the merits of the decision. The court found that the tender process was conducted transparently, with the aim of maximizing revenue for the state. The court noted that the petitioner failed to demonstrate any overwhelming public interest that would require judicial intervention. The court concluded that the tender process did not suffer from illegality, procedural impropriety, or arbitrariness.

Conclusion:
The court dismissed the writ petition, holding that the petitioner lacked the locus standi to challenge the tender process and failed to demonstrate any substantial prejudice or public interest that warranted judicial intervention. The court vacated the interim order and directed the parties to bear their respective costs.