2013 (2) TMI 860 - HC - Indian Laws

Summary

Issues Involved:
1. Jurisdiction of the Court in scrutinizing government tenders.
2. Alleged arbitrary cancellation of tenders by the respondent.
3. Compliance with the CPWD Manual and reasonableness of rates.
4. Validity of the subsequent tender process initiated by the respondent.

Summary:

1. Jurisdiction of the Court in scrutinizing government tenders:
The Court emphasized that its role under Article 226 of the Constitution of India is to ensure fair play by the authorities in tender processes, not to act as an appellate body. The Court's function is to ensure that authorities act within their formulated policies unless there is an attempt to tailor a policy for an individual.

2. Alleged arbitrary cancellation of tenders by the respondent:
The petitioners, registered civil contractors, claimed that the respondent arbitrarily canceled their tenders despite being the lowest bidders (L-1) for 16 works. The cancellation was initially justified on administrative grounds, but the petitioners alleged it was to favor certain contractors. The Court found that the respondent's justification for cancellation, based on higher rates compared to adjacent areas, was flawed as the petitioners' bids were below the estimated value.

3. Compliance with the CPWD Manual and reasonableness of rates:
The Court examined the CPWD Manual-2012, which mandates that reasonability of rates should be assessed based on justification rates. The petitioners' bids were below these justification rates, and the Court found no policy supporting the respondent's comparison with Abnormally Low Rates (ALRs) from adjacent areas. The Court concluded that the respondent's process in scrutinizing the tenders was faulty and not in compliance with the CPWD Manual.

4. Validity of the subsequent tender process initiated by the respondent:
The Court quashed the respondent's decision dated 30.11.2012 canceling the earlier tender and the subsequent tender process initiated on 13.12.2012. The Court directed that the bids submitted by the petitioners be processed in accordance with the law as per the original NIT dated 15.11.2012.

Conclusion:
The writ petition was allowed with costs of Rs. 10,000/-, which were waived by the petitioners. The stay application became infructuous and was disposed of accordingly.