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2024 (10) TMI 213 - SC - Indian LawsInterpretation of the Clause 10 of the NIT dated 16.08.2023 - Rejection of Technical bid of the Appellant, while accepting the Technical bid of the Respondent no. 8, Company - Respondent no. 8, Company failed to comply with the mandatory requirement of submitting the important documents. Whether the Respondent Bharat Coking Coal Limited (BCCL) was justified in rejecting the Technical bid of the Appellant, while accepting the Technical bid of the Respondent no. 8 - Company, and declaring it to be successful bidder, though the Respondent no. 8 had not complied with the mandatory requirement of submitting the important documents relating to the qualification criteria as contained in Clause 10 of the Notice Inviting Tender (NIT) dated 16.08.2023, and thereby had failed to qualify the Eligibility criteria laid down therein? HELD THAT - From the bare perusal of the Clause 10, it clearly transpires that the Bidders were required to furnish the information and the scanned copies of the documents relating to qualification criteria particularly to substantiate their Financial capacity. For the purpose of substantiating Financial Capacity, the Bidders were obliged to submit the scanned copies (self-certified and notarised/certified) of the Audited Annual Reports for the last three financial years as chosen by the Bidder, comprising of the audited balance sheets and profit and loss accounts of the Bidder, along with other documents as stated therein. This was the mandatory requirement of the NIT, the same being related to the qualification criteria as also transpiring from Clause 2.2.5 of the RFB. Admittedly, the Respondent No.8 had not submitted the scanned copies of its audited Annual Reports for the last three financial years, at the time of submitting/uploading the bid documents, before the last date fixed i.e 01.12.2023 and the same were submitted on 17.04.2024 only when the clarification was sought from the Respondent No.8, after the Technical bids were opened on 04.12.2023. When the Technical bid of the Appellant was rejected by the Respondents on 06.05.2024 on the ground that it did not comply with the Clause 10 of the NIT namely Part I/ Cover I Other Important Documents (OID) Point No. 02 Appendix II (Power of attorney for signing of bid), there was no justification on the part of the Respondent authorities for accepting the Technical bid of the Respondent No.8, which clearly was not in compliance with the same mandatory Clause 10 of NIT. The Respondent BCCL has miserably failed to justify as to how the Technical bid of the Respondent no.8 was accepted when it had not submitted the requisite important documents related to the qualification criteria as mentioned in Clause 10 of the NIT. There cannot be any disagreement to the legal proposition propounded in catena of decisions of this Court relied upon by the learned counsels for the Respondents to the effect that the Court does not sit as a Court of Appeal in the matter of award of contracts and it merely reviews the manner in which the decision was made; and that the Government and its instrumentalities must have a freedom of entering into the contracts. However, it is equally well settled that the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. The impugned decision of the Respondent BCCL dated 06.05.2024 rejecting the Technical bid of the Appellant and further declaring the Respondent no.8 as successful bidder is set aside. Any action/ process undertaken or agreement entered into pursuant to the said decision also stand set aside. It shall be open for the Respondent BCCL to initiate fresh tender process for the Project and to process the same in question in accordance with law. Appeal allowed.
Issues Involved:
1. Whether the rejection of the Appellant's Technical bid by Bharat Coking Coal Limited (BCCL) was justified. 2. Whether the acceptance of the Technical bid of Respondent No. 8 despite non-compliance with mandatory requirements was justified. 3. Interpretation and application of Clause 10 of the Notice Inviting Tender (NIT). 4. Scope of judicial review in the award of government contracts. Detailed Analysis: 1. Rejection of the Appellant's Technical Bid: The primary issue was whether BCCL was justified in rejecting the Appellant's Technical bid. The Appellant's bid was rejected on the grounds that it did not comply with Clause 10 of the NIT, specifically regarding the Power of Attorney for signing the bid. The Appellant argued that the Power of Attorney was executed and notarized before the submission of the bid documents, thus complying with the NIT requirements. The court found that the Appellant had indeed complied with the requirements, as the Power of Attorney was executed on 07.11.2023, notarized on 14.11.2023, and the bid was submitted on 29.11.2023. The court concluded that there was no legal or justifiable ground to reject the Appellant's Technical bid, as the requirements of the NIT were met. 2. Acceptance of Respondent No. 8's Technical Bid: The acceptance of Respondent No. 8's Technical bid was challenged on the basis that it did not comply with the mandatory requirements of Clause 10 of the NIT. Respondent No. 8 failed to submit the necessary audited annual reports at the time of bid submission, which were provided only after a clarification was sought post the opening of Technical bids. The court determined that BCCL's acceptance of Respondent No. 8's bid, despite non-compliance with mandatory requirements, was arbitrary and illegal. It was noted that there was no justification for allowing Respondent No. 8 to submit missing documents after the bid opening, which was contrary to the NIT's stipulations. 3. Interpretation and Application of Clause 10 of the NIT: Clause 10 of the NIT required bidders to submit specific documents to substantiate their financial capacity, including audited annual reports. The court emphasized that compliance with Clause 10 was mandatory for all bidders. The Respondent No. 8's failure to submit these documents at the time of bid submission constituted non-compliance. The court highlighted that the NIT did not allow for post-submission rectification of such deficiencies, and the acceptance of Respondent No. 8's bid was therefore unjustified. 4. Scope of Judicial Review in Government Contracts: The court reiterated the principles governing judicial review of government contracts. It emphasized that while the court does not sit as an appellate body over administrative decisions, it can review the decision-making process to ensure it is free from arbitrariness, bias, or malafides. The court referenced established precedents, noting that government bodies must act fairly, reasonably, and transparently, especially in public contracts. The decision to reject the Appellant's bid and accept Respondent No. 8's bid was found to be arbitrary and discriminatory, violating Article 14 of the Constitution. Conclusion: The court set aside BCCL's decision to reject the Appellant's Technical bid and declare Respondent No. 8 as the successful bidder. It directed BCCL to initiate a fresh tender process, ensuring compliance with legal standards and fairness in the bidding process. The appeal was allowed, emphasizing the need for transparency and adherence to stipulated criteria in government contracting.
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