2022 (1) TMI 1453 - HC - Indian Laws

Challenge to Clause 1.12(V) of the tender document - permission / consent of private siding owner to operate the Vimla siding for dispatch of coal to TPS of Mahagenco - petitioner-Bidder submits that by introducing a private party in the matter of transportation of raw coal there is uncertainty in the manner in which the prospective bidders would be required to submit their bids, especially the financial aspect thereof - HELD THAT - The scope for interference in a challenge raised to the tender process and especially the terms of invitation to tender are quite limited as held in MEERUT DEVELOPMENT AUTHORITY VERSUS ASSOCIATION OF MANAGEMENT STUDIES ANR. 2009 (4) TMI 833 - SUPREME COURT . This is for the reason that an invitation to tender is in the realm of contract and limited judicial review would be available in cases where it is established that the terms of invitation to tender are so tailor-made to suit the convenience of any particular person with a view to eliminate all others from participating in the bidding process. In Michigan Rubber (India) Limited 2012 (3) TMI 512 - SUPREME COURT , it was observed that it would not be permissible for the Courts to interfere with the terms of the tender merely because the Court feels that some other terms in the tender document would have been fair, wiser or logical. The Principal inviting tender must have a free hand in stating the terms of the tender and it is only if any term is found to be arbitrary, discriminatory, mala fide or actuated by bias that the Court would interfere. The grievance of the petitioner is that the involvement of a private party in the form of the Private Siding Agent in the tender process has resulted in the tender no more being a public tender. It is apprehended that the rates for rendering services by a Private Siding Agent could differ from bidder to bidder thus making it unfeasible for a bidder to competitively submit its financial bid. The rates to be quoted by the petitioner would be governed by the service charges to be levied by the respondent no.2 over which the Principal had no control. This resulted in absence of a level playing field for the bidders. Since such involvement resulted in introducing arbitrariness, Clause 1.12(V) ought to be struck down. This apprehension expressed by the petitioner is found to be unjustified and not supported by any material whatsoever - A prudent bidder would have definitely enquired about such general terms and conditions that were applicable so as to take further steps but the same has not been done by the petitioner herein. It would have been a different matter had the petitioner come up with instances of different rates being applied by the Private Siding Agent to different bidders. That is not the case on record. The challenge as raised to Clause 1.12(V) by the petitioner also cannot be accepted - Presence of such clause does not render the tender document to be either arbitrary, unreasonable or resulting in violating the provisions of Articles 14 and 19(1)(g) of the Constitution of India. The Private Siding Agent having stated that all bidders would be treated equally while quoting the rates for the services to be rendered, we do not find any case whatsoever made out to interfere under Article 226 of the Constitution of India. Consequently, the challenge as raised fails. The writ petition is dismissed.

Summary

Issues Involved:
1. Challenge to Clause 1.12(V) of the tender document.
2. Allegation of arbitrariness and violation of Articles 14 and 19(1)(g) of the Constitution of India.
3. Involvement of a Private Siding Agent in the tender process.
4. Estoppel due to participation in the tender process.
5. Request for amendment of the writ petition.
6. Request for interim relief to restrain the Principal from awarding the work order.

Issue-wise Detailed Analysis:

1. Challenge to Clause 1.12(V) of the tender document:
The petitioner challenged Clause 1.12(V) of the tender document, which required bidders to have permission/consent from a private siding owner (respondent no.2) to operate the Vimla siding for coal dispatch. The petitioner argued that this clause was arbitrary, capricious, and violative of Articles 14 and 19(1)(g) of the Constitution of India. The court, however, found that the clause was not arbitrary or irrational, emphasizing that the Principal had justified the selection of the Private Siding Agent for ensuring uninterrupted coal transportation. The court noted that the Private Siding Agent's involvement was logistically feasible and had a clear nexus with the tender's objectives.

2. Allegation of arbitrariness and violation of Articles 14 and 19(1)(g) of the Constitution of India:
The petitioner contended that the inclusion of a private party in the tender process introduced uncertainty and potential arbitrariness in the financial bids. The court dismissed these concerns, noting that the Private Siding Agent had committed to charging uniform rates for all bidders, thereby addressing the petitioner's apprehensions about a lack of a level playing field. The court concluded that the clause did not violate Articles 14 and 19(1)(g) as it did not result in arbitrariness or discrimination.

3. Involvement of a Private Siding Agent in the tender process:
The court found that the involvement of the Private Siding Agent was justified by the Principal's need for uninterrupted coal transportation. The court noted that the Private Siding Agent's dedicated siding and logistical feasibility supported its inclusion in the tender process. The court also observed that the Private Siding Agent had communicated its willingness to issue the necessary no objection certificate to the petitioner, subject to general terms and conditions applicable to all siding users.

4. Estoppel due to participation in the tender process:
The respondent argued that the petitioner was estopped from challenging Clause 1.12(V) as it had participated in the tender process without reserving its rights. The court did not explicitly address this argument in detail but focused on the merits of the petitioner's challenge to the clause. The court ultimately found no merit in the petitioner's challenge, rendering the estoppel argument moot.

5. Request for amendment of the writ petition:
The petitioner sought to amend the writ petition to raise additional grounds of challenge and to strike down the revised Clause 1.12(V) through Corrigendum II. The court found the amendment request to be belated and without merit, noting that the petitioner had ample opportunity to seek clarification from the Private Siding Agent but failed to do so. The court denied the amendment request, emphasizing that the grounds proposed had no merit.

6. Request for interim relief to restrain the Principal from awarding the work order:
The petitioner requested interim relief to restrain the Principal from awarding the work order to the successful bidder for two weeks. The court refused this request, stating that there was no reason to accept it given the court's findings on the merits of the petitioner's challenge.

Conclusion:
The court dismissed the writ petition, finding no merit in the petitioner's challenge to Clause 1.12(V) of the tender document. The court held that the clause was not arbitrary, unreasonable, or violative of Articles 14 and 19(1)(g) of the Constitution of India. The court also denied the petitioner's requests for amendment and interim relief, emphasizing that the Private Siding Agent had committed to charging uniform rates for all bidders, thereby addressing the petitioner's concerns about a lack of a level playing field.