2021 (3) TMI 843 - HC - Indian Laws

Seeking quashment of the NIT (bid) open tender process with regard to Revised 3rd Call - Seeking direction to respondents-State to initiate the fresh tender process - It is alleged by the petitioner that the petitioner is presently working at a rate which comes to rupees 405 Crore annually for five years, whereas the respondent No.4 has submitted bid to the tune of ₹ 642 Crore annual for five years with a clause for increase every year depending upon inflation - HELD THAT - The petitioner has relied upon the judgments passed by the Supreme Court in the case of Shimnit Utsch India Pvt. Ltd. 2010 (5) TMI 944 - SUPREME COURT , wherein it has been held that State has administrative discretion to cancel entire tender process in public interest provided such action is not actuated with ulterior motive, arbitrariness, irrationality or is in violation of some statutory provisions - In the facts of the present case, there is no arbitrariness on the part of the respondents in finalizing the selection of respondent No.4, especially when the petitioner had not submitted any bid before the cut-off date. Since the petitioner has not participated, therefore, his argument that the respondents could have fatched better price has no merit. The petitioner got advantage of already extended one year in two phases of six months for one or another reason. The judgment in the case of STATE OF ASSAM ORS. VERSUS SUSRITA HOLDINGS PVT. LTD. 2014 (4) TMI 1138 - SUPREME COURT the Apex Court held that the sale may be either by public auction or private contract. In either case the trustee has to keep in mind that he must obtain the most advantageous price. In the facts of the said case the tender process was set aside and directions were issued for fresh tender but in the facts of the present case nothing has been brought by the petitioner to show in what manner the respondents have acted arbitrarily in finalizing the tender of the respondent No.4. In the present case the petitioner has failed to point out any arbitrariness on the part of the respondents in selection of respondent No.4. The petitioner has to blame himself for not participating in the tender process - There is no illegality or arbitrariness in decision making process of the respondents in finalizing the bid of the respondent No.4, especially when the petitioner himself has not participated in the tender process. Petition dismissed.

Summary

Issues:
Challenge to NIT open tender process for State Level Centralized Call Centre/ Dial-100 Project Phase-II (2020-2025) on Turn-Key Basis, Allegations of arbitrary exercise of powers, Malafide actions, Request for quashing the tender process and initiating a fresh one.

Analysis:
1. The petitioner, an existing contractor, challenged the NIT open tender process for a project, alleging arbitrary exercise of powers by the respondents. The petitioner claimed to have been forcefully restrained by a government agency during the bid submission period, affecting their ability to participate. Previous calls for tender had not attracted participants due to harsh payment terms, leading to a revised 3rd call. The petitioner highlighted their experience and infrastructure in similar projects across different states.

2. The history of the project revealed that the petitioner's firm had previously won a contract that expired in March 2020 but was extended twice until March 2021. Subsequent attempts to reissue the tender faced challenges as no participants came forward due to objections. The 3rd revised call was issued with modified conditions. The petitioner prepared a bank guarantee for the bid but was allegedly prevented from submitting it due to a raid by the Commercial Tax Department on the last submission date.

3. The petitioner raised concerns about the significant price difference between their annual rate and the bid submitted by another firm. Despite the technical bids of both parties being qualified, the petitioner's grievances were not addressed by the respondents. The petitioner argued that the entire tender process was conducted arbitrarily and with malice, leading to unfair outcomes.

4. The petitioner sought to quash the tender process and initiate a fresh one based on the alleged irregularities and unfair practices. Citing relevant judgments, the petitioner's counsel argued for setting aside the current process due to the perceived flaws and discrepancies in the selection of the winning bid.

5. In response, the respondents contended that their actions were not arbitrary, and the petitioner had failed to establish malafide intentions or unfair treatment. They argued that the petitioner had sufficient time to prepare and submit the bid but chose to do so at the last minute, coinciding with the raid by a different department. The respondents maintained that due process was followed in evaluating the bids and selecting the winning proposal.

6. The Court analyzed the facts and arguments presented by both parties. It noted the history of the project, extensions granted to the existing contractor, and the multiple attempts to reissue the tender. The Court found no merit in the petitioner's claims of unfair treatment or malice in the selection process. It emphasized that the petitioner had the opportunity to participate but failed to do so in a timely manner, leading to the acceptance of other bids.

7. Referring to relevant legal precedents, the Court concluded that the respondents had not acted arbitrarily in finalizing the winning bid. The Court highlighted that the petitioner's non-participation in the tender process weakened their argument for challenging the selection of the winning bid. Ultimately, the Court dismissed the writ petition, upholding the validity of the tender process and the selection of the winning bid.