Court’s Decision
The Bombay High Court dismissed a writ petition challenging the rejection of the petitioner’s bid and the subsequent allotment of land to the successful bidder in the Maharashtra Airport Development Company’s tender process. The Court found that the petitioner had failed to submit the mandatory Exhibit-IV in the prescribed format and was therefore rightly disqualified. It also rejected the petitioner’s allegations of fraud against the successful bidder, holding that no arbitrariness or irrationality was found in the tendering authority’s evaluation. The Court stated:
“Petitioner is found to have raised a false defence in rejoinder disentitling it from invoking discretionary jurisdiction of this Court under Article 226 of the Constitution of India.”
Facts
The Maharashtra Airport Development Company Ltd. initiated a tender process for leasing Plot No. 18, Sector 22 in MIHAN, Nagpur, for residential/commercial development. Initially, due to low response, the tender was cancelled and re-issued with revised conditions, including a corrigendum mandating submission of summary experience details in a new Exhibit-IV format. The petitioner submitted its bid but failed to comply with the revised Exhibit-IV format and was thus disqualified. The plot was ultimately allotted to Respondent No.3, who was declared technically qualified and the highest bidder among the eligible parties.
Issues
- Whether the rejection of the petitioner’s bid for failure to submit the summary information in Exhibit-IV format and lack of requisite experience was justified.
- Whether the petitioner, though disqualified, could challenge the eligibility of the successful bidder on grounds of alleged misrepresentation and forged certificates.
Petitioner’s Arguments
The petitioner contended that:
- Its bid was rejected on hypertechnical grounds as the information in the required Exhibit-IV format was available through supporting documents.
- It had inadvertently submitted the summary in the older format, and the Exhibit-IV requirement was not uploaded properly on the e-tender portal.
- It had the requisite experience, and the architect’s certificate supported this.
- Respondent No.3 had submitted a false architect certificate regarding project completion, and the tendering authority blindly accepted it.
- Its own financial bid was significantly higher (₹12,889/sq.m) than the successful bidder’s (₹8,407/sq.m), causing a public loss of ₹22 crores.
Respondent’s Arguments
Respondents (tendering authority and successful bidder) submitted that:
- The corrigendum clearly mandated the Exhibit-IV format for technical eligibility, and non-submission of the same warranted rejection.
- The petitioner selectively took advantage of the corrigendum’s extension of the bid deadline but suppressed its other requirements.
- The architect’s certificate was relied upon in good faith, and by November 2024, Respondent No.3 had indeed completed the claimed built-up area.
- Financial bids of disqualified applicants are irrelevant under the law and should not be a factor for setting aside a valid tender process.
Analysis of the Law
The Court analysed the tender conditions and clarified that:
- The corrigendum, incorporated into the tender document, made Exhibit-IV mandatory.
- Submission of summary experience data in the precise format was essential for fair and objective evaluation.
- Citing Central Coalfields Ltd. v. SLL-SML JV, West Bengal State Electricity Board v. Patel Engineering, and Nazir Ahmad, the Court reaffirmed that when a particular method is prescribed, deviation is not permitted.
- The petitioner’s claim that the Exhibit-IV format was ancillary lacked merit.
Precedent Analysis
- Central Coalfields Ltd. v. SLL-SML JV – Emphasised that deviations from prescribed bid formats are impermissible in commercial contracts.
- W.B. State Electricity Board v. Patel Engineering – Held that adherence to bid conditions is mandatory to preserve transparency.
- Nazir Ahmad v. King Emperor – Affirmed that statutory powers must be exercised strictly in the manner prescribed.
- Tata Cellular v. Union of India – Upheld the finality of the tendering authority’s interpretation of tender terms.
- Silppi Constructions v. Union of India – Reiterated judicial restraint in interfering with technical evaluations by expert bodies.
- Banshidhar Construction v. Bharat Coking Coal Ltd. – Distinguished as applicable only where similarly situated bidders are treated unequally; not relevant here.
- Poddar Steel Corp. and Shalby Ltd. cases – Held to be inapposite given the mandatory nature of the document in this case.
Court’s Reasoning
The Court held:
- The petitioner failed to comply with a clearly prescribed and mandatory requirement (Exhibit-IV).
- The false plea taken in the rejoinder about non-availability of the corrigendum showed lack of bona fides.
- The successful bidder’s project had progressed sufficiently by the date of bid submission, and the architect’s certificate was not fraudulent.
- Since the petitioner was disqualified, its financial bid was irrelevant.
Conclusion
The Court dismissed the petition, holding:
“Petitioner did not submit mandatory document in prescribed format of Exhibit-IV and has rightly been disqualified.”
No costs were awarded.
Implications
- This judgment underscores the non-negotiable nature of bid format compliance in government tenders.
- It reinforces that courts will not interfere in commercial tenders unless clear illegality or irrationality is shown.
- It highlights the importance of full and fair disclosure by bidders and honest pleadings in judicial review petitions.
FAQs
1. Can a bidder challenge disqualification due to minor format errors?
No, if a specific format is mandated in the tender, courts will uphold rejection of non-compliant bids to preserve transparency and fairness.
2. Does a disqualified bidder have the right to challenge the eligibility of a successful bidder?
Only in exceptional circumstances. Courts generally do not entertain such challenges if the petitioner is themselves ineligible.
3. Can a higher financial offer override technical disqualification in public tenders?
No, a bidder must first qualify technically. The financial bid is considered only for technically eligible parties.