2024 (2) TMI 947 - HC - Indian Laws

Rejection of technical bid submitted by petitioner - bid rejected only on the ground that the bidder has submitted unaudited balance sheet and profit loss account for financial year 2017-18 - HELD THAT - The undisputed fact is that the petitioner had participated in the NIT without any objection and only after his bid was declared disqualified, petitioner has filed this petition thereby directly / indirectly challenging the mandatory criteria of enclosing balance sheet and profit loss account of last five completed financial years duly audited by the Chartered Accountant. Whether petitioner after having failed in the NIT can challenge the conditions of NIT? - HELD THAT - This Court is of considered opinion that by participating in NIT and having failed to succeed, petitioner cannot take a somersault by challenging the condition of NIT - Under these circumstances, it is held that the petitioner is estopped from challenging the conditions of NIT. So far as the judgment relied upon by petitioner passed by Rajasthan High Court in the case of M/S RAM KHILADI GURJAR VERSUS RAJASTHAN STATE COOPERATIVE MARKETING FEDERATION LTD. (RAJFED) , REGISTRAR COOPERATIVE SOCIETIES, COOPERATIVE DEPARTMENT, SAHKAR BHAWAN, JAIPUR. 2018 (11) TMI 1954 - RAJASTHAN HIGH COURT is concerned, this Court with all humility at its command is not inclined to rely on the same - In the case of M/s Ram Khiladi Gurjar, doctrine of estoppel, jurisdiction of Court under Article 226 of Constitution of India in respect of contractual matter and the jurisdiction of this Court to modify the condition of NIT has not been taken into consideration at all. Whether the respondent/ Department is entitled to incorporate the condition in NIT as per their requirement or not and what is the scope of interference under Article 226 of Constitution of India? - HELD THAT - It is well established principle of law that a writ petition for enforcement of contract is not maintainable. The Supreme Court in the case of Surjeet Singh Sahni Vs. State of U.P. and Ors. 2022 (3) TMI 317 - SUPREME COURT has held No writ under Article 226 of the Constitution of India shall be maintainable and/or entertainable for specific performance of the contract. This Court is of considered opinion that disqualification of bid of the petitioner does not require any interference - Petition dismissed.

Summary

Issues Involved:
1. Rejection of Technical Bid
2. Estoppel Against Challenging Bid Conditions
3. Scope of Judicial Review in Contractual Matters

Summary:

1. Rejection of Technical Bid:
This petition under Article 226 of the Constitution of India challenges the order dated 20/06/2023, where the technical bid submitted by the petitioner was rejected. The petitioner argued that the mandatory criteria for the tender, which required enclosing audited balance sheets and profit & loss accounts for the last five financial years, was unfair. The petitioner's turnover for the financial year 2017-18 was less than Rupees One Crore, and thus, audited financial statements were not mandatory under Section 44AB of the Income Tax Act.

2. Estoppel Against Challenging Bid Conditions:
The court held that the petitioner, having participated in the NIT without objection and only challenging the conditions after being disqualified, is estopped from questioning the bid conditions. The Supreme Court precedents, such as D. Sarojakumari Vs. R. Helen Thilakom and others, and Ashok Kumar and Another Vs. State of Bihar and Others, establish that candidates who participate in a selection process cannot later challenge the conditions if they are unsuccessful.

3. Scope of Judicial Review in Contractual Matters:
The court emphasized that the Income Tax Act operates in a different field and does not bar the submission of audited balance sheets if turnover is less than Rupees One Crore. The requirement for audited financial statements in the NIT aims to prevent the submission of bogus documents and is within the respondents' prerogative. Citing Uflex Limited Vs. Government of Tamil Nadu and others, the court noted that judicial review in contractual matters is limited and should not interfere with the administrative decision unless it is arbitrary or irrational. The court also referenced Tata Cellular Vs. Union of India, affirming that the terms of the tender are not open to judicial scrutiny as they fall within the realm of contract.

Conclusion:
The petition was dismissed, with the court holding that the petitioner is estopped from challenging the conditions of the NIT and that the disqualification of the bid does not warrant judicial interference.