2019 (11) TMI 526 - HC - GST

Disqualification of the petitioner in respect of the tender issued by the respondents - supply, installation and commissioning of skid mounted, oil lubricated helium gas recovery compressor with essential spares - detailed and exhaustive reply has been filed in the matter and the respondents have stated that the petitioner did participate in the tender process, however, as the petitioner has deviated from the tender conditions and, therefore, the petitioner has been declared as disqualified - stand of the respondents is that the petitioner's bid was not in consonance with the terms and conditions of the tender document and as per the terms of the tender, after evaluation of part I techno commercial bid, the part II ie., price bid is opened. HELD THAT - The tender which was subject matter of the Writ Petition was issued ie., Tender No. 33227, for supply, installation and commissioning of skid mounted, oil lubricated helium gas recovery compressor with essential spares. The last date for submission of tender was 27/12/2018 and the petitioner has submitted his Techno Commercial and Price Bid on 22/12/2018. The respondents have stated that the contract was in respect of supply, installation, commissioning of skid mounted oil lubricated helium gas recovery compressor with essential spares and as per Part I ie., techno commercial bid, the bid was opened on 31/12/2018. It has been stated that the terms and conditions mentioned at Clause 45.1 of eDPS-0-103 version 2018-2, provides in case the bidder does not accept the terms and conditions stipulated in the NIT, their bid will be outrightly rejected . The petitioner himself has admitted his mistake while sending the e-mail communication to the answering respondents stating that the price quoted was inadvertently indicated as FOB instead of ex-works. The GST @ 18% indicated by the petitioner in their attachment to the techno commercial bid, is contrary to the terms and conditions of the NIT and as the petitioner has deviated from the terms and conditions of the NIT, the respondents have rightly disqualified the petitioner - the respondents have rightly rejected the petitioners tender. The scope of interference in the tender matters is quite limited. The apex Court has time and again dealt with the issue of interference in the matter of award of contract. The apex Court in the case of MANOHAR LAL SHARMA VERSUS NARENDRA DAMODARDAS MODI AND ORS. 2018 (12) TMI 1716 - SUPREME COURT where it was held that it is well settled preposition that matters pertaining to the award of contract, being essentially a commercial transaction, have to be determined on the basis of considerations that are relevant to such commercial decisions, and this implies that terms subject to which tenders are invited are not open to judicial scrutiny unless it is found that the same have been tailormade to benefit any particular tenderer or a class of tenderers. Petition dismissed.

Summary

Issues Involved:
1. Disqualification of the petitioner in respect of the tender.
2. Compliance with tender conditions.
3. Judicial review of administrative decisions in tender matters.

Issue-wise Detailed Analysis:

1. Disqualification of the petitioner in respect of the tender:
The petitioner, M/s. Indian Compressors Ltd., challenged the disqualification from Tender No. 33227 for the supply, installation, and commissioning of a helium gas recovery compressor. The petitioner submitted their bid on 22/12/2018, but was disqualified by the respondents on 06/03/2019 before the price bid was opened, citing deviations from the tender conditions. The petitioner argued that their bid was in line with the purchase manual of the Directorate of Purchase and Stores, Department of Atomic Energy, and claimed the disqualification was arbitrary and violated Article 14 of the Constitution of India.

2. Compliance with tender conditions:
The respondents contended that the petitioner deviated from the tender conditions, specifically Clause 45.1 of e-DPS-0-103 version 2018-2, which stated that non-acceptance of the terms and conditions would result in outright rejection. The price bid template instructed that GST should not be indicated in the price bid, and deviations such as indicating GST at 18% and specifying the price basis as ex-works led to the petitioner's disqualification. The petitioner admitted the mistake in an email dated 18/03/2019, explaining the oversight in indicating GST at 18% in the techno-commercial bid, contrary to the applicable 5% GST.

3. Judicial review of administrative decisions in tender matters:
The court emphasized the limited scope of interference in tender matters, referencing several Supreme Court judgments. The court cited the principles from cases like Manohar Lal Sharma vs. Narendra Damodardas Modi, Air India Ltd. vs. Cochin International Airport Ltd., Tata Cellular vs. Union of India, and Jagdish Mandal vs. State of Orissa, which underscore judicial restraint in commercial decisions and the necessity of evaluating the decision-making process for mala fides, unreasonableness, or arbitrariness. The court concluded that the respondents' decision to disqualify the petitioner was fair, reasonable, and in strict conformity with the tender conditions, and thus not arbitrary.

Conclusion:
The court dismissed the writ petition, affirming that the petitioner's disqualification was justified due to non-compliance with tender conditions. The decision-making process was not found to be arbitrary or mala fide, and the court reiterated the principle that judicial review in tender matters should be limited to ensuring the decision-making process was lawful and not to protect private interests at the expense of public interest. No order as to costs was made.