Court’s Decision
The Bombay High Court dismissed the writ petition filed by the unsuccessful bidder challenging the award of the municipal solid waste collection contract in Jalgaon. The Court held that the petitioner failed to establish arbitrariness, mala fides, or illegality in the tender process. It reiterated that “judicial review of tenders is confined to the decision-making process, not the merits of the decision.” The petition by the successful bidder became infructuous since the work order had already been issued in its favour. Consequently, the Court allowed the successful bidder to continue executing the contract without hindrance
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Facts
The Jalgaon Municipal Corporation issued a tender on 13 December 2024 for door-to-door waste collection and transportation with segregation of wet and dry waste, requiring the deployment of 500 workers. A pre-bid meeting on 24 December 2024 clarified that the formula for identifying the lowest bidder (L-1) would be applied considering 500 workers. Three bidders participated: Watergrace Products, BVG India Limited, and Global Waste Management.
On 29 January 2025, all three were technically qualified, and BVG India Limited emerged as L-1. However, the Corporation delayed issuing a letter of acceptance. BVG India filed a writ petition seeking directions to award the contract. Meanwhile, Watergrace Products challenged the Corporation’s letter dated 25 February 2025 treating BVG India as L-1, alleging manipulation of the L-1 formula and suppression of blacklisting details. Negotiations with BVG India led to revised lower rates, and a work order was issued on 24 July 2025. Both writ petitions were heard together
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Issues
- Whether the Jalgaon Municipal Corporation arbitrarily altered the formula for determining L-1 after the tender process had begun, thereby favouring BVG India.
- Whether BVG India had suppressed its blacklisting history, warranting disqualification.
- Whether the writ jurisdiction under Article 226 should be exercised to interfere with the tender process despite an arbitration clause.
Petitioner’s Arguments
The petitioner (unsuccessful bidder) argued that as per the tender formula, it was L-1, but the Corporation altered the formula by introducing the “500 workers” factor, thereby illegally benefitting BVG India. This amounted to changing the rules mid-process. Further, it alleged that BVG India had falsely declared it was not blacklisted, despite being blacklisted by a public body at Raipur, rendering its bid invalid.
The petitioner contended that negotiations under the tender could not override the clear formula. Since the issue involved arbitrariness and discrimination under Article 14, the presence of an arbitration clause did not bar writ jurisdiction. It relied on Monarch Infrastructure Pvt. Ltd. v. Ulhasnagar Municipal Corporation (2000) 5 SCC 287 and Central Coalfields Ltd. v. SLL-SML (JV) (2016) 8 SCC 622, which held that the rules of the game cannot be changed mid-way or goalposts shifted
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Respondent’s Arguments
The successful bidder (BVG India) argued that all bidders, including the petitioner, had participated in the pre-bid meeting where it was agreed that the formula would be applied considering 500 workers. Having acquiesced, the petitioner could not later challenge it. It further contended that the Corporation was empowered to negotiate and accept the most beneficial bid, which was in public interest since its offer was the lowest.
On the blacklisting allegation, BVG India submitted that it was not blacklisted at the time of submitting its bid, and the Raipur blacklisting had been stayed by a competent court. A contrary interpretation would unfairly debar bidders for even temporary blacklisting.
The Corporation supported BVG India, emphasizing that BVG’s bid cost was ₹7.23 crores compared to ₹43.41 crores by the petitioner and ₹146.38 crores by the third bidder. Thus, BVG was clearly L-1 and the most economical choice, preventing loss to the public exchequer
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Analysis of the Law
The Court stressed that judicial review in tender matters is confined to examining whether the process was arbitrary, mala fide, or against public interest. Courts do not sit as appellate authorities to re-evaluate bids. Reliance was placed on Jagdish Mandal v. State of Orissa (2007) 14 SCC 517, which clarified that interference is warranted only when decisions are mala fide, arbitrary, or contrary to public interest.
The Court also referred to Air India v. Cochin International Airport (2000) 2 SCC 617, holding that a public body has discretion to negotiate and even relax conditions within the framework of tender terms. N.G. Products v. Vinod Kumar Jain (2022) 6 SCC 127 emphasized judicial restraint in commercial decisions, while Tata Motors Ltd. v. BEST (2023) 19 SCC 1 reiterated that restarting tenders after work orders cause public loss.
Division Bench rulings in Reutech Mining v. Union of India (2023) SCC OnLine Bom 36 and Sumitomo Chemical v. Union of India (2010) SCC OnLine Del 2479 further supported minimal interference.
Precedent Analysis
- Monarch Infrastructure (2000) 5 SCC 287 and Central Coalfields (2016) 8 SCC 622 were cited by the petitioner, but the Court distinguished them, holding this was not a case of changing rules after commencement since the pre-bid meeting was a legitimate clarification forum.
- Jagdish Mandal (2007) 14 SCC 517: Quoted extensively to stress limited judicial review in tenders.
- Air India (2000) 2 SCC 617: Recognized play in the joints for public authorities to negotiate.
- Tata Motors (2023) 19 SCC 1: Courts should not nullify tenders already underway as it burdens public exchequer.
- N.G. Products (2022) 6 SCC 127: Courts lack expertise to re-evaluate technical bids.
Court’s Reasoning
The Court found that the petitioner had attended the pre-bid meeting and agreed to the formula’s interpretation. Therefore, it could not claim that rules were changed mid-process. The clarification was binding, and the subsequent calculations by the Corporation were not arbitrary.
On blacklisting, the Court held that the requirement meant the bidder should not be blacklisted at the time of bid submission. Since BVG’s blacklisting had been stayed, its disclosure was not misleading.
The Court observed that BVG’s bid was substantially cheaper than others, saving significant public funds. It concluded that the Corporation’s decision was rational, beneficial to public interest, and not grossly arbitrary.
Conclusion
The High Court dismissed the writ petition of the unsuccessful bidder, holding no illegality or arbitrariness was proven. The successful bidder’s petition was disposed of as infructuous since the work order had already been executed. The interim stay on the work order ceased, allowing BVG India to continue with the contract
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Implications
This judgment underscores that in tender matters, courts prioritize public interest and financial prudence over private grievances of losing bidders. It reiterates that pre-bid clarifications bind all participants, and temporary blacklisting does not automatically disqualify bidders if stayed. The ruling reinforces judicial restraint in commercial contracts, ensuring that essential municipal services are not delayed by litigation.
FAQs
1. Can courts interfere in tender awards if a bidder claims bias or arbitrariness?
Yes, but only if the bidder proves mala fides, arbitrariness, or violation of public interest. Courts do not reassess bids or act as appellate bodies in commercial decisions.
2. Does temporary blacklisting disqualify a bidder from tender participation?
Not necessarily. If the blacklisting is stayed or expired, the bidder cannot be held guilty of misrepresentation, as held in this case.
3. What is the effect of a pre-bid meeting on tender interpretation?
Pre-bid meetings serve as binding clarifications. Bidders participating and agreeing cannot later challenge those clarifications as arbitrary changes.
