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2016 Supreme(Bom) 960
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.C. DHARMADHIKARI, SHALINI PHANSALKAR JOSHI, JJ.
High-G Transmissions Pvt. Ltd. – Appellant
Versus
Maharashtra State Road Development Corporation Ltd – Respondent
WRIT PETITION (L) NO. 2035 OF 2016
Decided On : 08-08-2016
For the Appellant :Mr. Dinyar Madon, Sr. Advocate a/w. Mr. Kunal hanage
For the Respondent: Mr. P. P. Chavan i/b Ms. Reshmarani J. Nathani Mr. U. S. Upadhyay, AGP
The main legal point established in the judgment is that the terms of the invitation to tender are not open to judicial scrutiny, except in cases where they are found to be arbitrary, discriminatory, mala fide, or actuated by bias. The court emphasized the importance of fairness, reasonableness, and non-discrimination in the terms and conditions of tender bids.
Headnote:
Tender Bid - Eligibility Criteria - Indian Telegraph Act, 1885 - Clause 2, Clause 3 - The court discussed the legality and validity of the terms and conditions of the tender bid, specifically focusing on Clause 2 and Clause 3. The court analyzed the discriminatory nature of the conditions and their impact on fair competition. The court referred to various legal provisions and judicial decisions to determine the scope of judicial review in such matters and concluded that the conditions were not arbitrary or discriminatory.
Fact of the Case:
The petitioner challenged the eligibility criteria of a tender bid, specifically Clause 2 and Clause 3, as discriminatory and designed to exclude new entities from participating in the bidding process. The petitioner argued that the conditions were contrary to the government's policy of promoting new startups and businesses.
Finding of the Court:
The court found that the conditions in the tender bid were not arbitrary or discriminatory. It held that the financial criteria and experience requirements were essential for the proper performance of the contract and did not encourage monopoly or cartel. The court dismissed the petition.
Issues: The main issue was the legality and validity of the eligibility criteria in the tender bid, specifically Clause 2 and Clause 3, and their impact on fair competition and new entrants in the field.
Ratio Decidendi: The court's decision was based on the analysis of the legal provisions and judicial decisions related to the scope of judicial review in matters of tender bids and the principles of fairness, reasonableness, and non-discrimination. The court concluded that the conditions were not arbitrary or discriminatory and were essential for the proper performance of the contract.
Final Decision: The petition challenging the eligibility criteria of the tender bid was dismissed by the court.
Shalini Phansalkar Joshi, J.
1. Rule. Rule made returnable forthwith. Heard finally with consent of the learned counsel for the parties.
2. This Writ Petition filed under Article 226 of the Constitution of India raises core question as to legality and validity of the terms and conditions of the tender bid offered by respondent No.1. The petitioner has challenged the same on the ground that particular term Nos.2 and 3 of the tender bid are highly discriminatory for ascertaining eligibility of bidders and hence those terms and conditions in the tender bid need to be quashed and set aside in their entirety or in the alternate to direct suitable modification of the said terms of eligibility, as deemed fit and proper by this Court.
3. Facts, giving rise to this writ petition can be stated, in brief, as under:
The petitioner is a private limited company incorporated and registered as "Infrastructure Provider" under Category-I for Telecom Service and is registered under Section VI of the Indian Telegraph Act, 1885. Respondent No.1 is the Maharashtra State Road Development Corporation Ltd., a State Public Sector Undertaking, primarily engaged in the work/activity relating to development and maintenance of roads, bridges, tunnels, etc in the State of Maharashtra. Respondent No.2 is the State of Maharashtra, through its Secretary, Ministry of Transport.
4. Respondent No.1 has, vide a public notice issued in July, 2016, declared that it would be inviting tenders for grant of permission to install BTS (Base Transceiver Station) equipment along various flyovers/subways of MSRDC in and around Mumbai for a period of 5 years on as is where is basis. The bid document was uploaded on its website from 15th July to 30th July, 2016 and was made available for viewing to general public.
5. The petitioner, being in exclusive business of providing infrastructure services in the mobile and telecom sector and since the scope of work as envisaged in the bid document was well within the petitioner's technical expertise as also its financial capabilities, the petitioner decided to bid for the said contract. However, after scrutinizing the eligibility criteria stipulating eight conditions for bidding to the said contract, the petitioner noticed that two of the conditions in the said tender document were such as to ensure that no new entity would be able to even think of entering the said sector, let alone bid for any contract for the same. Those two terms are contained in Clauses 2 and 3 of the Clause of Eligibility Criteria. Clause 2 of the Criteria provides that bidder should have annual turnover of minimum Rs.10 Cr within the last three years. Whereas Clause 3 provided that the project profile shall prove minimum three years similar accident free experience of installation, operation and maintenance of BTS equipment on 180 poles located along roads, flyovers, skywalks, subways, foot over bridges in Government/Semi Government/Local Bodies in Mumbai Metropolitan Region Area.
6. The petitioner along with many similarly placed potential bidders submitted a representation to respondent No.1 during the pre-bid meeting convened on 20th July, 2016 bringing to its attention the fact that the aforesaid two conditions are highly discriminatory and should be dropped as the same seem to defy any logical or valid reasoning, thus justifying their exclusion from the said tender and they shall serve no purpose in scope of the work envisaged under the tender. However, to the dismay of petitioner and numerous similarly placed other entities, respondent No.1 failed and neglected to delete and/or modify the said conditions without citing reasons for rejecting the representation of the petitioner.
7. The petitioner is, therefore, constrained to approach this Court invoking its extraordinary writ jurisdiction for quashing of the said conditions, inter alia, on the ground that they are highly discriminatory and they are tailor-made to suit the only well established entities i
