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2016 Supreme(Del) 4038
IN THE HIGH COURT OF DELHI AT NEW DELHI
BADAR DURREZ AHMED and ASHUTOSH KUMAR, JJ.
TEXMACO RAIL & ENGINEERING LTD - Petitioner
Versus
UNION OF INDIA & ORS - Respondents
W.P.(C) 4026 of 2016 & CM Nos. 16980, 18565, 18819, 19827, 19828 of 2016
Decided On : 09-11-2016
For the Petitioner: Dr Abhishek Manu Singhvi and Mr. Rajiv Nayar, with Ms Saanjh Purohit, Mr. Tanuj Bhushan, Mr. Ishan Gaur and Mr. Sanyam Saxena.
For the Respondent/UOI: Mr. Sanjay Jain, with Ms Geetanjali Mohan, Ms Pallavi Shali, Ms Natasha Thakur and Ms Kanika Singh.
For the Intervener : Mr. Rajiv S. Bhatnagar with Mr. Aseem Chaturvedi and Mr. Vipul Joshi, Mr. K. Datta with Mr. Ashish Verma and Mr. Rahul Malhotra.
The decision to re-tender a contract should be based on valid reasons and in public interest, and should not be arbitrary or irrational. Judicial review of administrative action is intended to prevent arbitrariness, irrationality, unreasonableness, bias, and mala fides.
Headnote:
TENDER - BOXNS Wagons - 2016 RSI8TC - The court discussed the cancellation of the notice inviting tender for the supply of BOXNS wagons and the subsequent re-tendering. The court found that the decision to re-tender the BOXNS wagons was based on the objective to discover the true market price for the product, which was being tendered for the first time. The court also noted that the decision-making process was bona fide and not tainted by mala fides, unreasonableness, or arbitrariness. The decision to re-tender was found to be in public interest. The court held that no interference was warranted under Article 226 of the Constitution.
BADAR DURREZ AHMED, J.
1. In this writ petition cancellation of the notice inviting tender dated 02.05.2016 bearing No. 2016 RSI8TC for supply of BOXNS wagons has been sought. Primarily, the petitioner has sought a mandamus directing the respondents to award the NIT dated 04.12.2015 for procurement of 2000 BOXNS wagons in favour of the eligible bidders strictly in terms of the tender document without allowing any post tender modifications.
2. It is obvious that the prayer seeking cancellation of the NIT dated 02.05.2016 (‘the second NIT’) is predicated on the prayer with regard to award of the tender for BOXNS railway wagons, in respect of which the NIT was issued on 04.12.2015 (‘the first NIT’). The grievance of the petitioner is that it was L-1 in respect of BOXNS railway wagons under the first NIT. Yet, no award of contract was made in respect thereof. The initial price offering of the petitioner for BOXNS wagon, in respect of which it was L-1, was Rs 21,58,000/- per wagon. According to the petitioner, through several rounds of negotiations, this was reduced by the petitioner to Rs 14.50 lacs per wagon. Yet, the contract had not been awarded to the petitioner.
3. The respondents, however, contend that the final offer, after negotiations, which was made by the petitioner, was of Rs 14.75 lacs and not Rs 14.50 lacs, as alleged by the petitioner. It is the respondents’ case that the Tender Committee, after considering all the pros and cons, was of the view that the cost of BOXNS wagons should be less than the cost of BOXNHL wagons. It is an admitted position that the negotiated price of BOXNHL wagons got firmed up at Rs 14.50 lacs per wagon. Thus, according to the respondents, the price of BOXNS wagons, which had no earlier reference price, as it was a new type of wagon, ought to be less than Rs 14.50 lacs per wagon. This conclusion of the respondents was based on the deliberations of the Tender Committee which opined that there were several factors which would lead to a price reduction insofar as BOXNS wagons are concerned compared to BOXNHL wagons with which it was similar. Consequently, the respondents contend that the final offer of the petitioner, being Rs 14.75 lacs, was higher than the firmed up price of BOXNHL wagons and, therefore, this did not reflect the true market conditions. For this reason, it was decided to re-tender BOXNS wagons to discover the true price which, according to the respondents, would be less than the firmed up price for BOXNHL wagons. Consequently, the second NIT dated 02.05.21016 was issued.
4. As pointed out above, on 04.12.2015, the first NIT was issued. The said NIT was for supply of six categories of wagons. On 12.01.2016, inter alia, the petitioner submitted its electronic bids for the six categories of wagons, which included BOXNS wagons. The price bids were opened on the same day, that is, on 12.01.2016 and the price quoted by the petitioner was adjudged as L-1 for five out of six categories of wagons, including the BOXNS category. The Tender Committee deliberated on these rates in the course of a series of meetings held on 28.01.2016, 15.02.2016, 22.02.2016 and 23.02.2016.
5. From the minutes of the Tender Committee meetings held on 28.01.2016 and 15.02.2016, it appears that initially, it was recommended not to procure BOXNS wagons. Therefore, one round of price negotiations was recommended with the L-1 firms, that is, Cimmco Limited for BOXNHL and the petitioner (Texmaco Rail and Engineering Limited) for the other four types of wagons (viz., BOBRNHSM1, BRN22.9, BFNSM22.9 and BOBSN). No further negotiations were recommended insofar as BOXNS wagons were concerned as it had been recommended not to procure wagons of this type.
6. However, the Member Technical (Railway Board), who was the Tender Accepting Authority, noted on 19.02.2016 that the technical issues regarding the BOXNS
