The court emphasized the importance of adhering to eligibility criteria for participating in the tender process and the need for justifying the decision to resort to re-tendering.

SANJEEV SACHDEVA, J.

1. The petitioner has filed the present petition seeking quashing of the notice dated 17.03.2015 directing re-tendering of the tender and for a direction to the respondents to declare the petitioner as L-1.

2. In October 2013, the respondent no. 2 had invited a tender for Completion of Balance works for Construction of Dwelling Units including Allied Services for Officers, JCOs/ ORs at Kirkee (Army).

3. On 11.07.2014 in the first call of tender received by respondent no. 2, the rate quoted by the petitioner was the lowest at Rs. 172,96,22,487.35. The respondent no. 2, however, informed the petitioner that the rate quoted by him was on the higher side and as such, the respondent decided to go for re-tendering.

4. The tender was re-invited. As per Clause 2 of the prequalification document of the subject tender, a contractor who had completed a single work of 86.40 crores alone was entitled to receive the tender form and was eligible to apply.

5. Pursuant to the second press notice, the petitioner, respondent no. 3 and several other contractors submitted the prequalification documents. The respondent no. 3 gave an affidavit contending that he had completed a single work of approximately 88 crores.

6. After scrutiny of the prequalification documents, tenders were issued to the eligible contractors including the petitioner and respondent no. 3, entitling them to submit their financial bids.

7. On 17.12.2014, the financial bids submitted were opened and respondent no. 3 was declared as L-1 and petitioner was declared as L-2, the amounts being Rs. 152,79,75,049.28 and Rs. 162,97,67,120.25 respectively.

8. During the process of scrutiny of documents, the respondent no. 2 became aware that the respondent no. 3 who had been declared L-1, had submitted an incorrect affidavit and was not qualified, as he had not completed the single work of Rs. 88 crores. Accordingly, a show cause notice was issued to the respondent no. 3.

9. It is contended that the petitioner was informed by respondent no. 2 that his rates being reasonable, recommendations would be sent for acceptance of the tender of the petitioner. However, doubts had arisen as to whether the petitioner’s tender would be accepted and accordingly opinion advice was sought from Principal Controller of Defence Accounts, Pune (PCDA).

10. It is contended that the respondent no. 2 instead of accepting the bid of the petitioner issued the impugned press notice on 17.03.2015 once again calling for a fresh tender. It is contended that the calling of fresh tender was contrary to the policy of the respondent that re-tendering should not have been resorted to as a routine or with a view to get further reduced rates.

11. The petitioner contends that since respondent no. 3 was never qualified to participate in the tender, he was not eligible to submit the financial bids and as such the financial bids submitted by the respondent no. 3 should be ignored and the bids submitted by the petitioner in these circumstances being the L-1 should be accepted.

12. Respondent No. 1 and 2 filed their counter affidavit admitting that respondent no. 3 was not eligible to participate in the tender process but was permitted to participate only on account of the fact that he had submitted a false affidavit. It is contended that unless a bidder met the prequalification criteria, the tender form for submitting financial bids could not be issued to such a bidder. It is contended that a ban has been imposed on respondent no. 3 for a period of 5 years. However, the same has been challenged by the respondent no. 3. It is admitted that the petitioner in the first call stood lowest but the tender was recalled as rates quoted by the petitioner was on the higher side.

13. It is submitted that the re-tender has been invited on the premise that rates in subsequent call may further come down below the rates quoted by the petitioner in the subject tender. It is contended that though the PCDA has advised conclusion