Court’s Decision
The Delhi High Court held that the technical disqualification of the petitioner’s bid by the Municipal Corporation of Delhi (MCD), on the basis that suspension was not formally revoked, was prima facie contrary to both the Manual for Procurement of Works, 2022 and Rules for Enlistment of Contractor in MCD-2024. The Court directed that the petitioner’s writ petition be treated as a representation, which must be considered afresh by the competent authority within a week. In the meantime, the contract shall not be awarded.
“Till such time that the representation is not disposed of, the contract shall not be awarded,” the Court directed.
Facts
The petitioner participated in two tenders (Tender IDs 2025_MCD_235067_1 and 2025_MCD_235067_2) floated via Notice Inviting Tender (NIT) dated 09.05.2025 by MCD. The technical bid submitted by the petitioner was disqualified on the ground that the petitioner’s prior suspension had not been revoked.
However, the petitioner contended that the suspension order dated 08.01.2024 was only for six months and had automatically lapsed by 08.07.2024. According to Clause 7.5(5)(i) of the Manual for Procurement of Works, 2022 and Clause 13.8 of the Rules for Enlistment of Contractor in MCD-2024, no separate revocation order is required once the suspension period has elapsed.
Issues
- Whether MCD’s rejection of the petitioner’s bid on the ground of non-revocation of suspension is in violation of Clause 7.5(5)(i) of the Manual for Procurement of Works, 2022 and Clause 13.8 of the Rules for Enlistment of Contractor in MCD-2024?
- Whether such disqualification is valid even after the lapse of the suspension period?
Petitioner’s Arguments
The petitioner argued that the rejection of their bid was arbitrary and unlawful, as Clause 7.5(5)(i) of the Manual clearly states that an order of debarment is automatically revoked after the specified period, and no formal revocation is required. The same provision is echoed in Clause 13.8 of the MCD Enlistment Rules.
The petitioner contended that despite these provisions being adopted by MCD itself, the rejection letter dated 30.05.2025 wrongly cited non-revocation as the reason for disqualification. It was argued that the respondent’s action was a direct violation of its own statutory framework, and deprived the petitioner of a fair opportunity.
Respondent’s Arguments
The MCD, through its counsel, informed the Court that while the financial bids of the three qualified bidders had already been opened, the petitioner’s bid had not. It was submitted that although the tender process was ongoing, no award of contract had been finalized.
The respondent did not directly dispute the applicability of the aforementioned clauses, but justified the action taken based on the interpretation that no revocation order had been issued in the petitioner’s case.
Analysis of the Law
The Court analysed both Clause 13.8 of the Rules for Enlistment of Contractor in MCD-2024 and Clause 7.5(5)(i) of the Manual for Procurement of Works, 2022, both of which state:
“An order for debarment passed shall be deemed to have been automatically revoked on the expiry of that specified period and it will not be necessary to issue a specific formal order of revocation.”
Additionally, both documents allow for revocation prior to expiry by the competent authority if circumstances warrant. The Court observed that both legal instruments clearly negate the requirement for a separate revocation order post expiry.
Precedent Analysis
No judicial precedents were cited or relied upon by the Court in this judgment. The Court confined its reasoning solely to the interpretation and application of the relevant clauses of the Manual for Procurement of Works, 2022 and MCD Rules for Enlistment.
Court’s Reasoning
The Court found that the action taken by the MCD—rejecting the petitioner’s bid on the basis that the suspension had not been formally revoked—was prima facie an infraction of the aforementioned clauses. It noted that:
“The impugned action taken by the Respondent vide the rejection letter dated 30.05.2025… prima facie, seems to be an infraction of the aforementioned Clauses.”
The Court emphasized that these provisions make it clear that suspension ends automatically upon the expiry of the period, making any requirement of formal revocation redundant.
Given that the financial bid had not yet been opened and the contract not yet awarded, the Court saw merit in allowing the matter to be reconsidered.
Conclusion
The Court disposed of the writ petition with the direction that:
- The petition shall be treated as a representation.
- The competent authority of the MCD must reconsider the petitioner’s technical and financial bid in accordance with the relevant clauses.
- The representation must be decided within one week.
- The petitioner must be granted a hearing and a reasoned written order must be issued.
- Until the representation is decided, the contract shall not be awarded.
“Needless to state that it will be open to the Petitioner to approach this Court in case the Petitioner is aggrieved by any order passed by the MCD/ Respondent under the directions of this Court.”
Implications
This order reinforces the principle that administrative actions must strictly conform to statutory and regulatory frameworks laid down by the authorities themselves. The judgment is a reminder to public bodies that arbitrary interpretation of procedural rules will be subject to judicial scrutiny. It ensures that contractors are not prejudiced due to non-existent procedural formalities like issuance of formal revocation orders when the suspension has already expired by operation of law.
