2007 (11) TMI 708 - HC - Indian Laws

Summary

Issues Involved:
1. Legality of the tender process initiated by the Transport Department for the selection of a manufacturer to produce High Security Registration Plates (HSRP).
2. Validity of the corrigenda issued that altered the eligibility criteria for bidders.
3. Compliance with the Supreme Court's decision in Association of Registration Plates v. Union of India and Ors.
4. Requirement of Conformity of Production Certificate (COP) for participation in the tender process.
5. Allegations of arbitrariness, illegality, and discrimination in the tender process.

Issue-wise Detailed Analysis:

1. Legality of the Tender Process:
The petitioner challenged the tender process initiated by the Transport Department of the State for the selection of an eligible manufacturer to produce HSRP for all types of vehicles. The primary contention was that the corrigenda issued altered the eligibility criteria by insisting on the COP while deleting the requirements for experience, expertise, and turnover from HSRP business. The petitioner argued that these changes were contrary to the Supreme Court's decision in Association of Registration Plates v. Union of India and Ors. and the guidelines formulated by the Central Government.

2. Validity of the Corrigenda:
The corrigenda dated 26/12/2006, 6/1/2007, and 16/1/2007 made significant amendments to the tender conditions. These included the deletion of the requirements for experience, expertise, and turnover from HSRP business, and the introduction of the COP as a condition of eligibility. The petitioner asserted that these changes were arbitrary, illogical, and contrary to the law laid down by the Supreme Court. The State respondents argued that the changes were made to ensure wider participation and competitive pricing.

3. Compliance with the Supreme Court's Decision:
The Supreme Court in Association of Registration Plates v. Union of India and Ors. had upheld the conditions of experience and financial capability as essential for the selection of manufacturers for HSRP. The Court emphasized that these conditions were necessary to ensure that the selected manufacturer would be technically and financially competent to fulfill the contractual obligations. The petitioner argued that the deletion of these conditions in the corrigenda was in contravention of this decision.

4. Requirement of Conformity of Production Certificate (COP):
The corrigenda introduced the requirement of a COP as a condition of eligibility for participation in the tender process. The petitioner contended that this requirement was impractical and unrealistic, as the COP could only be issued after the commencement of the manufacture of HSRP. The State respondents clarified that the COP was not being insisted upon as a prerequisite for participation in the process. However, the Court noted that the amended definition of "Prime Manufacturer" and Annexure V to the IFB created an inconsistency that could mislead prospective bidders.

5. Allegations of Arbitrariness, Illegality, and Discrimination:
The petitioner alleged that the changes made by the corrigenda were arbitrary, illegal, and discriminatory, aimed at favoring certain bidders. The State respondents argued that the changes were made to ensure wider participation and competitive pricing. The Court observed that the deletion of the conditions of experience and turnover was a significant departure from the original tender conditions and the Supreme Court's decision. The Court held that the changes were not justified by any compelling reasons and were in breach of the process envisaged in the Supreme Court's decision.

Judgment:
The Court found that the impugned tender process, as it stood after the corrigenda, was opposed to the letter and spirit of the Supreme Court's decision in Association of Registration Plates v. Union of India and Ors. The Court held that the conditions of experience and business turnover in the manufacture and supply of HSRP were essential and could not be deleted without persuasive and convincing reasons. The Court adjudged the tender process to be illegal, unconstitutional, null and void, and non est in law.