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2024 Supreme(Bom) 1129

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.S. Chandurkar, Rajesh S. Patil, JJ.
Bio Clean System India Pvt. Ltd. - Petitioner
Versus
The Commissioner, Sangli Miraj & Kupwad Municipal Corporation - Respondent
Writ Petition No. 18373 of 2024
Decided On : 10-12-2024

Advocates Appeared:
For the Petitioner: Mr. Amol A. Gatne
For the Respondent: Mr. Vikram N. Walawalkar a/w. Mr. Amey C. Sawant

Disqualification of a tender bidder must adhere to principles of natural justice, but can be justified based on credible complaints regarding past performance.

Headnote:(A) Tender Law - Disqualification of Bidder - The petitioner was declared disqualified for a tender to run a Bio-Medical Waste Treatment Facility based on complaints regarding unsatisfactory performance in a previous contract. The petitioner argued that disqualification violated principles of natural justice as no opportunity for a hearing was provided. (Paras 2, 5, 20)

(B) Principles of Natural Justice - The court emphasized that a party must be given an opportunity to be heard before disqualification. However, the respondent Corporation justified disqualification based on substantial complaints and prior unsatisfactory performance. (Paras 5, 20)

(C) Judicial Review in Tender Matters - The court reiterated that judicial review in tender matters is limited to ensuring no arbitrariness or violation of principles of natural justice. (Paras 16, 20)

Facts of the case:
The petitioner was disqualified from a tender for running a Bio-Medical Waste Treatment Facility due to complaints about previous unsatisfactory performance. The petitioner claimed to have been the second highest bidder in a prior tender and argued that the disqualification was unjust.

Findings of Court:
The court found that the respondent Corporation acted within its rights to disqualify the petitioner based on credible complaints regarding past performance.

Issues: The main issues included whether the disqualification violated principles of natural justice and whether the respondent Corporation acted arbitrarily.

Ratio Decidendi: The court held that the respondent Corporation's decision to disqualify the petitioner was justified based on substantial evidence of prior unsatisfactory performance and did not violate principles of natural justice.

Result: Writ petition dismissed.

JUDGMENT :

RAJESH S.PATIL, J.

The challenge raised in this writ petition is the action of the respondent Corporation in declaring the petitioner as disqualified/ineligible candidate the E Tender No. 15/2024 dated 3rd October 2024 floated by it for running common Bio-Medical Waste Treatment Facility.

2. In the writ petition, the petitioner’s case is that the respondent no.1 Corporation has floated tender for the running of Bio-Medical Waste Treatment Facility for a period of 10 years. As per the tender, the petitioner alongwith others participants, filed their technical bids for the said tender. The dates of declaring the eligible or ineligible bids and the auction date were extended and the last of such date for declaration of eligible candidates was 29th November 2024 and the auction date as 2nd December 2024. On 29th November 2024 the petitioner came to know through the Corporation’s portal that the petitioner was declared as disqualified/ineligible candidate. The reason for disqualification being a receipt of complaint by the respondent Corporation, informing that the performance of the petitioner for similar kind of work with Solapur Municipal Corporation, was unsatisfactory. It is further case of the petitioner that immediately on 29th November 2024, the petitioner addressed a letter to the respondent Corporation pointing out that the petitioner in fact was the second highest bidder in the tender floated by the Solapur Municipal Corporation, and it was neither black-listed nor any complaint was pending against the petitioner, hence they should be declared as qualified and be permitted to take part in the present auction for the tender floated by the respondent Corporation.

3. The present writ petition was circulated by the petitioner on 2nd December 2024 before us when we issued notice to the respondent and by an ad-interim direction we permitted the petitioner to participate in the e-auction which was scheduled on the same day i.e. 2nd December 2024 from 11:00 a.m. to 3:00 p.m. It was clarified that this participation, however, would be at risk of the petitioner and subject to further orders being passed in the present proceedings.

4. After the notices were served on the respondent Corporation, the respondent Corporation has filed their affidavit in reply and have opposed passing of any order in the present petition setting aside the disqualification of the petitioner.

5. Mr. Amol Gatne, learned counsel appeared on behalf of the petitioner and submitted that as per the tender document, a party can be disqualified if the bidder was black-listed by any Department of the Government of Maharashtra or the Corporation itself. He submitted that in the present proceedings, the petitioner is shown as disqualified on a receipt of some kind of a complaint. He submitted that only on the receipt of the complaint, the petitioner could not have been disqualified and the reason of such disqualification is beyond the scope of the terms and conditions of the tender. He further submitted that as far as the work of the petitioner with Solapur Municipal Corporation is concerned, the petitioner had successfully completed the period of 20 years of the tender period awarded by the Solapur Municipal Corporation, for running the common Bio-Medical Waste Treatment Facility in the year 2003. Further it was declared qualified to participate in the auction for fresh tender in the year 2023, wherein his bid was the second highest, and they are neither disqualified or black-listed by the Solapur Municipal Corporation. Therefore, there was no substance in the enormous complaint dated 28th November 2024 received by the respondent Corporation. He submitted that before disqualifying the petitioner, the respondent ought to have given an opportunity of hearing to the petitioner. Therefore, the disqualification of the petitioner, was infact violating the principles of natural justice. He submitted that therefore the present petition requires to be allowed and the d

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