Court’s Decision
The Delhi High Court held that public procurement entities cannot alter or dilute tender conditions to accommodate specific bidders after the bidding process has begun. The Court emphasised: “A level playing field is the foundation of public tenders; once terms are fixed, they bind both procurer and bidder alike.”
The Court set aside the challenged award of contract in favour of the respondent bidder, holding that NTPC Vidyut Vyapar Limited (NVVNL) acted contrary to the tender’s express eligibility criteria. The decision reaffirms that tender clauses are sacrosanct and deviations after bid submission amount to arbitrariness.
Facts
NTPC Vidyut Vyapar Limited floated a tender for procurement of renewable energy through competitive bidding. The tender prescribed specific eligibility conditions — including minimum commissioned capacity requirements and financial criteria.
The petitioner, a competing bidder, challenged NVVNL’s decision to award the contract to another bidder who, according to the petitioner, did not meet the eligibility conditions on the bid submission date.
The dispute centred on NVVNL allegedly accepting documents and clarifications from the successful bidder after the bid deadline, thereby retrospectively validating its eligibility.
Issues
- Whether NVVNL could consider post-bid clarifications to cure an eligibility defect in a bidder’s submission.
- Whether altering or relaxing eligibility criteria post-submission violates Article 14 principles in public procurement.
- Whether the impugned award suffered from arbitrariness and was liable to be set aside under judicial review principles.
Petitioner’s Arguments
The petitioner contended that:
- Tender compliance must be as on the bid submission date; post-bid modifications violate the sanctity of the process.
- NVVNL’s acceptance of additional documents from the selected bidder amounted to “giving a second chance to one bidder while denying the same to others.”
- This conduct violated Articles 14 and 19(1)(g), the doctrine of legitimate expectation, and the fundamental principles of transparency in public contracts.
- Citing Central Coalfields Ltd. v. SLL-SML (Joint Venture), the petitioner argued that procurement authorities are bound by their own tender terms and cannot rewrite them mid-process.
Respondent’s Arguments
NVVNL and the successful bidder argued:
- The clarifications sought were merely procedural in nature and did not change the bidder’s substantive eligibility.
- Public interest demanded that renewable energy procurement not be stalled over “minor” procedural issues.
- Judicial review in tender matters is limited; commercial wisdom of the procurer should prevail unless there is clear mala fide or irrationality.
- They relied on Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. to assert that certain deviations can be condoned if they do not materially affect competition.
Analysis of the Law
The Court analysed:
- Article 14 in public contracts: Discretion in tender evaluation must be exercised in a non-arbitrary, transparent manner.
- Doctrine of Level Playing Field: Any relaxation post-bid inherently distorts fairness.
- Scope of Judicial Review: While courts avoid interfering in commercial decisions, they must intervene where procedural fairness is compromised.
- Tender Interpretation Principles: Clauses are to be construed strictly; procurers cannot waive conditions that form the “essence” of eligibility.
Precedent Analysis
- Central Coalfields Ltd. v. SLL-SML (Joint Venture) — Reiterated that tendering authorities are bound by the terms they set; deviations undermine transparency.
- Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd. — Clarified that minor, non-material deviations can be waived, but eligibility requirements are non-negotiable.
- Bakshi Security and Personnel Services Pvt. Ltd. v. Devkishan Computed Pvt. Ltd. — Stressed that evaluation must be based on bid submission date, not post-facto supplementation.
Court’s Reasoning
The Court found that NVVNL’s act of accepting additional documents after the bid deadline was not a mere procedural clarification but a substantive relaxation of eligibility. This change:
- Violated tender conditions that explicitly required compliance as of the submission date.
- Affected fairness by giving one bidder a post-deadline advantage unavailable to others.
- Broke the level playing field, contrary to constitutional equality principles.
The Court distinguished Afcons on facts, noting that in the present case, the deviation went to the heart of eligibility.
Conclusion
The Court quashed NVVNL’s award of the contract to the successful bidder and directed that bids be re-evaluated strictly in accordance with the tender conditions as of the bid submission date.
Implications
- Public procurers must strictly adhere to eligibility clauses; post-bid changes risk annulment.
- Bidders can challenge awards where authorities relax core requirements for select participants.
- Commercial urgency cannot override constitutional fairness in public procurement.
Note on Precedents Referred
- Central Coalfields — Applied here to stress that tender authorities are bound by their own terms.
- Afcons — Distinguished; deviations permitted there were non-material.
- Bakshi Security — Relied upon to hold that eligibility must be tested on bid submission date.
FAQs
Q1: Can a public authority accept missing eligibility documents after the bid deadline?
No. Core eligibility requirements must be met on the submission date; post-deadline supplementation violates fairness.
Q2: What is the “level playing field” doctrine in tenders?
It ensures all bidders are evaluated equally under the same terms without post-bid relaxations favouring any one participant.
Q3: Does commercial urgency justify relaxing tender conditions?
No. While urgency may affect timelines, it cannot permit changing fundamental eligibility requirements after bids are opened.