2020 (6) TMI 807 - HC - Indian Laws

Constitutional Validity of Conditions No. 4 and 5 under Technical Bid Evaluation (Additional Eligibility) criteria in e-tender notice ID No. 2020- AAI 048738 1 issued by the respondent No.2/AAI (AAI) inviting applications for providing environmental support services (up- keeping) - HELD THAT - The scope of judicial review in matters relating to tender are now well settled. In JAGDISH MANDAL VERSUS STATE OF ORISSA AND OTHERS 2006 (12) TMI 447 - SUPREME COURT , after considering the relevant case law, the Supreme Court had observed that There were good and adequate reasons for the Committee to reject the lowest tenders of fifth respondent in both cases and there was no justification for the High Court to interfere with the contracts awarded to the respective appellant in these two appeals. We also record the statement made by the counsel for the appellants in the two appeals, on instructions, that the appellants are ready and willing to execute their respective works, without seeking any revision in rates or compensation for the delay in commencement of the work on account of pendency of the legal proceedings till now. In the instant case, nothing has been brought out by the petitioner to demonstrate that the process adopted or the decision taken by the respondent No 2/AAI is contrary to the law laid down by the Supreme Court. There is no material to arrive to a conclusion that the decision taken by the respondent No.2/AAI is arbitrary or irrational or that public interest is adversely affected that would compel us to interfere in the tender conditions - It has only made them more stringent. It cannot be said that the authority issuing the tender is not empowered to impose more stringent conditions to ensure better quality of performance of the contract and also to ensure that the contractor has the financial means to execute the contract and that he is not a fly by night operator who will abandon the work midstream. In the present case, the petitioner has failed to demonstrate as to how Conditions No.4 and 5 have been introduced only to eliminate it or to favour a few individuals. There is no justification for this court to exercise its jurisdiction under Article 226 of the Constitution of India only to dilute the additional stringent conditions imposed by the respondent No.2/AAI in order to make it compliant with the CVC guidelines. From a perusal of the above, the principle which emerges is that after having participated in the tender process, a bidder cannot turn around and challenge the tender conditions. The bidder has no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by interested parties in response to the NIT in a transparent manner and free from any hidden agenda - petition dismissed.

Summary

Issues Involved:
1. Validity of Conditions No. 4 and 5 under Technical Bid Evaluation in the e-tender notice.
2. Compliance of the tender conditions with Central Vigilance Commission (CVC) guidelines.
3. Allegations of arbitrariness and favoritism in the tender conditions.
4. Scope of judicial review in tender matters.

Detailed Analysis:

1. Validity of Conditions No. 4 and 5 under Technical Bid Evaluation in the e-tender notice:
The petitioner challenged Conditions No. 4 and 5 of the e-tender notice, arguing that they were unjust, unreasonable, and unconstitutional. These conditions involved a scoring system for technical bid evaluation, requiring bidders to secure a minimum of 70 marks out of 100 to qualify. The criteria included firm turnover, scale and size of operations, number of projects, manpower on roll, quality focus and capability, possession of machinery, and presentation.

2. Compliance of the tender conditions with Central Vigilance Commission (CVC) guidelines:
The petitioner argued that the additional conditions in the e-tender notice were not in conformity with CVC guidelines dated 17.12.2002, which set forth specific criteria for financial turnover and experience in similar works. The petitioner contended that the respondent had previously followed these guidelines without additional conditions and that the current conditions were contrary to these guidelines.

3. Allegations of arbitrariness and favoritism in the tender conditions:
The petitioner claimed that the additional conditions were arbitrary and inserted to eliminate competition, thereby favoring certain bidders. The petitioner argued that these conditions would deny fair competition and lacked justification, especially when the respondent had adhered to CVC guidelines in prior tenders.

4. Scope of judicial review in tender matters:
The court highlighted the limited scope of judicial review in tender matters, emphasizing that judicial review is intended to prevent arbitrariness, irrationality, unreasonableness, bias, and mala fides. The court referred to precedents such as Jagdish Mandal vs. State of Orrisa and Michigan Rubber (India) Ltd. Vs. State of Karnataka, which established that courts should not interfere in tender conditions unless they are proven to be arbitrary, irrational, or against public interest.

Judgment Analysis:

Compliance with CVC Guidelines:
The court found that the respondent had not diluted any of the CVC guidelines but had made them more stringent. The court observed that imposing more stringent conditions to ensure better quality and financial stability of the contractor was within the authority's rights and did not violate any guidelines.

Arbitrariness and Favoritism:
The court noted that the petitioner failed to provide evidence that the tender conditions were arbitrary or intended to favor specific individuals. The court referenced a similar case from the Gujarat High Court, which upheld identical conditions, stating that adopting the Quality and Cost Based Selection (QCBS) system was not arbitrary or illegal.

Judicial Review:
The court reiterated that judicial review in tender matters is limited to checking the legality of the decision-making process, not the soundness of the decision itself. The court emphasized that the petitioner, having participated in the tender process, could not challenge the conditions post participation. The court cited precedents where similar challenges were dismissed, reinforcing that a bidder has no right to challenge tender conditions after participating in the process.

Conclusion:
The court concluded that the petitioner did not demonstrate how the conditions were introduced to eliminate competition or favor specific bidders. The court found no justification to interfere with the tender conditions and dismissed the petition as meritless, along with the pending application.

Final Order:
The writ petition and the accompanying application were dismissed.