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SUPREME COURT OF INDIA
BELA M. TRIVEDI, SATISH CHANDRA SHARMA, JJ.
Banshidhar Construction Pvt. Ltd. – Appellant
Versus
Bharat Coking Coal Limited & Others – Respondents
Civil Appeal No. 11005 of 2024 (@ Special Leave Petition (Civil) No. 17383 of 2024)
Decided on : 04-10-2024
Government Contract – Tender – Rejection of Technical bid – Power-of-attorney was duly executed in favour of donee, signatory of documents, and was duly notarised before its submission along with other important documents required to be submitted as per NIT by Appellant, before last date of submission fixed by Respondent BCCL – There was no legal or justifiable ground to reject Technical bid of Appellant – Action of Respondent BCCL in rejecting Technical bid of Appellant on absolutely extraneous ground and accepting Technical bid of Respondent though submitted in utter non-compliance of mandatory requirement of Clause 10 of NIT, and subsequently calling upon Respondent to furnish shortfall of documents after opening of technical bids of Bidders, was totally arbitrary and illegal – Court does not sit as a Court of Appeal in the matter of award of contracts and it merely reviews manner in which decision was made – However, decision of Government/its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides – Public authorities have to ensure
that no bias, favouritism or arbitrariness are shown during bidding process and that entire bidding process is carried out in absolutely transparent manner – Impugned decision of Respondent BCCL was grossly arbitrary, illegal, discriminatory and violative of Article 14 of Constitution of India – Impugned decision of Respondent –BCCL rejecting Technical bid of Appellant and further declaring Respondent as successful bidder set aside – Any action/ process undertaken or agreement entered into pursuant to said decision also set aside – It shall be open for Respondent-BCCL to initiate fresh tender process for the Project and to process the same in question in accordance with law. [Section 2 of Power of Attorney Act, 1882] (Paras 19, 20, 21, 29 and 30)
Facts of the case:
Short question that falls for consideration before this Court is whether Respondent Bharat Coking Coal Limited (BCCL) was justified in rejecting Technical bid of Appellant, while accepting Technical bid of Respondent no. 8 - Company, and declaring it to be successful bidder, though Respondent no. 8 had not complied with mandatory requirement of submitting important documents relating to qualification criteria as contained in Clause 10 of Notice Inviting Tender (NIT) dated 16.08.2023, and thereby had failed to qualify Eligibility criteria laid down therein?
Findings of Court:
Any action/ process undertaken or agreement entered into pursuant to said decision also stand set aside. It shall be open for Respondent – BCCL to initiate fresh tender process for the Project and to process the same in question in accordance with law.
Result – Appeal allowed.
JUDGMENT :
BELA M. TRIVEDI, J.
1. Leave granted.
2. The short question that falls for consideration before this Court is whether the Respondent Bharat Coking Coal Limited (BCCL) was justified in rejecting the Technical bid of the Appellant, while accepting the Technical bid of the Respondent no. 8 - Company, and declaring it to be successful bidder, though the Respondent no. 8 had not complied with the mandatory requirement of submitting the important documents relating to the qualification criteria as contained in Clause 10 of the Notice Inviting Tender (NIT) dated 16.08.2023, and thereby had failed to qualify the Eligibility criteria laid down therein?
3. The Appellant-Banshidhar Construction Private Limited has assailed the Judgment and Order dated 18.07.2024 passed by the High Court of Jharkhand at Ranchi in Writ Petition (Civil) No. 2896 of 2024, whereby the High Court has dismissed the said writ petition, confirming the impugned decision dated 06.05.2024 of the Technical Bid Committee of the Respondent-BCCL rejecting the Technical bid of the Appellant.
4. The Respondent no.1- BCCL is a subsidiary of Coal India Limited and the Respondent Nos. 2-7 are the authorities/employees of the BCCL.
On 16.08.2023 the Respondent no. 1 floated a Tender bearing reference No. NIT no. BCCL/CMC/MDO-RS/SIMLABAHAL/BASTACOLLA Area/2023/318 for the project to “Re-open, salvage, rehabilitate, develop, construct and operate for excavation I extraction of coal from Amalgamated East Bhuggatdih Simlabahal Coal Mine and delivery thereof to the Authority at Bastacolla Area of BCCL” on revenue sharing basis, for a period of twenty-five years. The Appellant-company vide Board Resolution dated 07.11.2023 resolved to authorise its Director Lalti Devi for the purpose of participating in the said Tender and also executed a Power of Attorney in the prescribed format in her favour. The said Power of Attorney was notarized on 14.11.2023. Accordingly, the Appellant participated in the said Tender by submitting its bid on 29.11.2023.
5. The Technical bids of the said Tender were opened on 04.12.2023 and after the evaluation of the same, the Appellant was declared to be technically disqualified on 06.05.2024. As per the Tender Summary Reports dated 07.05.2024, the Technical bid of the Appellant was stated to have been rejected on the ground that it did not comply with the Clause 10 of NIT (Part I/Cover I other important documents (OID) Point No. 02 Appendix II (Power of Attorney for signing of bid.)
6. The Financial bids of the two technically qualified bidders were opened on 07.05.2024 and the Respondent no. 8-Company was declared to be the successful bidder. The Appellant being aggrieved by the said decision of the respondent-BCCL, had filed the Writ Petition before the High Court, which has been dismissed by the High Court vide the impugned order.
7. On 23.08.2024 the Court had issued Notices to the Respondents and the learned counsel appearing for Respondents on caveat, had orally assured the Court that they shall not proceed further with the project in question. In order to have clarity on the decision taken by the Tender Recommendation Committee of the BCCL on 06.05.2024, we had called for the original file in respect of the entire tender proceedings from the Respondents nos.1 to 7 vide the order dated 17.09.2024 and the same was produced for our perusal.
SUBMISSION BY THE LEARNED ADVOCATES: -
8. Learned Senior Advocate Mr. Ravi Shankar Prasad appearing for the Appellant vehemently submitted that the reason for rejecting the Appellant’s Technical bid was grossly arbitrary and discriminatory in as much as not only the bid of Respondent No. 8 was accepted though it was not accompanied by important documents, but it was allowed to subsequently file the said documents to make up the lack of eligibility. He further submitted that the Appellant had complied with all the conditions of the NIT, however The Technical bid of the Appellant was rejected on the extraneous ground
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