The judgment establishes that the cancellation of a bid must be based on an appropriate and reasonable application of the conditions that govern the tender process, and unless there is procedural irregularity, illegality, or mala fides, the Courts would not interfere with the executive process.

S. RAVINDRA BHAT, J.

1. The petitioner is aggrieved by the rejection of its tender/bid for collection and transportation of municipal solid waste and street sweeping waste for the two zones of the respondent Municipal Corporation (hereafter called “the SDMC”), i.e. South and West Zone for eight years. The petitioner seeks a direction for the quashing of the tender process and a declaration that SDMC’s decision that it was ineligible is contrary to law.

2. The brief facts are that the SDMC, a Corporation set-up under the Delhi Municipal Corporation Act, 1957 issued a notice inviting tenders (NIT) eliciting bids from interested parties for proposal to collect and transport municipal solid wastes and related services for two of its zones, i.e. South and West. The duration of the contract to be awarded was eight years. In terms of clause 2.10.4 of the NIT, the bid was in three parts – i.e. the bids had to furnish Envelope A comprising Part-I, i.e. qualifying documents; Envelope B comprising Part-II Technical Bid and Envelope C, comprising Part-III Financial Bid. The last date of bid submission was 29.09.2016. Envelope A, i.e. the part containing qualifying documents was to be done on 29.09.2016. The due date for submission of bids was extended to 13.10.2016 by an addendum, dated 02.09.2016. Envelope A, including Part-I of the qualifying documents relating to bids was opened on 13.10.2016 at 12.30 PM. The petitioner relies upon its work accounts, including work done for the erstwhile unified municipal corporation on 31.01.2005 for the South and City Zones and in this regard relied upon a certificate dated 22.09.2016 issued by the SDMC stating that it handled 434 waste storage depots by utilizing its waste management fleet. As scheduled on 13.10.2016, Envelope A comprising Part I was opened. It is contended that certain observations were made regarding incomplete particulars of a few bidders. However, no observations were made with respect to the petitioner and the contesting Respondent nos. 2 to 7.

3. It is alleged that on 18.10.2016, unbeknown to the petitioner, Envelopes B and C which comprised the other parts of the two bids were opened by SDMC without intimation and the petitioner’s bid was categorized as unresponsive under Clause 4.2.2. Later, the second and third respondents were declared as successful bidders for South and West Zones of SDMC respectively.

4. The petitioner alleges that though clause 2.14 of the NIT authorizes SDMC to reject the bid without assigning reasons, the Corporation cannot take unilateral action without any cause as that would be arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution. The petitioner relies upon the previous instance of an NIT issued earlier but cancelled and discharged by the SDMC and submits that in that particular case, the SDMC evaluated all the bids to determine which was the best through a grading process. In the present case, however, the SDMC did not adopt any grading process and proceeded to reject the petitioner’s bid.

5. The SDMC, in response to this Court’s notice, filed an affidavit on 03.11.2016. Its justification for treating the petitioner’s bid as non-responsive is based upon clauses 2.1.13 to 2.1.15 of the NIT. It is urged that the NIT prescribed the procedure for opening bids and their evaluation. Under clause 4.1.3, the proposal is to be checked for responsiveness and only those deemed responsive could be evaluated for qualification. The SDMC contends that under clause 4.2.1 a bid is considered responsive if it meets certain conditions. One of them, i.e. clause 4.2.1(h) prescribes that the proposal is to be accompanied by a non-collusion and anti-bribery, corruption certificate and declaration with respect to litigation contained in clause 2.1.11, 2.1.12 and 2.1.13 in accordance with format provided in Appendix 4(A)(B), as well as Integr