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IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
Shampa Sarkar, J.
Chandan Sengupta - Appellant
Vs.
The State of West Bengal & Ors. - Respondent
WPA No. 16948 of 2024
Decided On : 09-07-2024
Tender - Cancellation of Tender - Section X of NIT - The court upheld the authority's decision to cancel the tender due to non-compliance with the requirement to quote a management fee, interpreting the provisions of the NIT as binding and reasonable.
Fact of the Case:
The petitioner, a contractor, challenged the cancellation of a tender for cleaning services at a hospital, arguing that the authority violated the NIT by not conducting a draw among L-1 bidders and improperly cancelling bids deemed null or negative.
Finding of the Court:
The court found that the authority's cancellation of the tender was justified due to the petitioner's failure to comply with the requirement to quote a management fee, which was a clear stipulation in the NIT.
Issues: Whether the cancellation of the tender was contrary to the NIT and if the retendering was permissible.
Ratio Decidendi: The court held that the authority acted within its jurisdiction to cancel the tender based on the petitioner's non-compliance with the NIT's requirements, particularly regarding the management fee.
Result: The court upheld the cancellation of the tender and the decision to retender.
JUDGMENT :
1. The petitioner is the existing contractor who has been providing cleaning and housekeeping staff to the Midnapore Medical College & Hospital in Paschim Medinipore, West Bengal. The respondent no. 7, i.e., the Medical Superintendent of the said hospital published a Notice Inviting Tender (NIT) (2nd call) inviting bids for cleaning/scavenging/housekeeping services from bona fide interested bidders to provide 208 workers and one supervisor totalling to 209, for three years subject to renewal at the end of each year on satisfactory performance by bidders. The petitioner participated in the said NIT No.2075 dated February 24, 2024 and was one of the L-1 bidders. The authority cancelled the tender vide order dated June 7, 2024 on the following ground:-
Henceforth, it has been decided by the TIA that in the 3rd call of the said e-Tender process, the null & negative percentage as well as the same or less financial bid value than the actual tender value shall not be entertained further or shall remain cancelled immediately as this e-Tender process is for the manpower selection and the tender value is related to the minimum wages for manpower.
Medical Superintendent cum Vice Principal
Midnapore Medical College & Hospital
Paschim Medinipur”
2. The petitioner has challenged such cancellation as also further action of the authority in issuing another tender notice vide NIT No. 6049 dated June 14, 2024. For the on-line bid submission, the closing date as per the 3rd NIT is July 9, 2024 at 4 pm. The petitioner is aggrieved by the cancellation on the following grounds:-
(b) The tender document clearly indicated that in case of tie, the successful tenderer would be selected by drawal of lots. Similar provision was also made in Clause 3.6 of Clause 3 of the said NIT.
(c) The bids could not be cancelled on the ground that the same were null, as no such provision was made in the NIT.
3. Mr. Pal, learned advocate appearing for the petitioner submits that the authority could not have gone beyond the provisions of the said NIT and added an additional clause to the existing clauses thereby deciding unilaterally to cancel the bids submitted. The ground that the bids were null and negative and could not be accepted, was de hors the NIT. It is further contended that the tender document does not contain any definition clause. What exactly the authority meant by null/negative, was not available from the tender document. The said expression was foreign to the NIT and has been imported by the authority only to cancel the bids, for mala fide reasons. It is next contended that in other contracts, the petitioner had been allowed to perform without any management fee. Such contracts were awarded by the Health and Family Welfare Department and the present tendering authority who had cancelled the NIT No. 2075 also belonged to the same department of the government. Only because the tendering authority was different, that should not itself be a reason for the respondent no. 7 to depart from the norms prevalent in by the Health Department. When the Chief Medical Officer of Health, Swasthya Bhawan permitted the petitioner to quote ‘zero’ management fee, there was no reason why the L-1 bidders who were successful in NIT No. 2075 could not be selected, on the basis of drawal of lots, even if they had quoted zero management fee. Reference is made to a decision of this court where the issu
The authority's interpretation of tender conditions is paramount, and non-compliance with explicit requirements justifies cancellation of bids.
Lowest bidder has no vested right to contract; authority may cancel tender for valid reasons like cartel without malice; tender conditions not judicially reviewable unless arbitrary.
Point of Law : Where the parties had executed lease deeds incorporating therein the rights, liabilities and obligations of the parties inter se, in the case in hand, the parties had not entered into ....
The tender inviting authority has the right to accept or reject any bid and to annul the bidding process at any time prior to the award of contract without assigning any reason.
A public authority's decision to cancel a tender must be reasoned and not arbitrary; failure to provide justifications exposes such decisions to judicial scrutiny.
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