Macpower CNC Machines Limited VS Union of India, Through Development Commissioner Ministry of Micro Small & Medium Enterprises (MSME)

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

IN THE HIGH COURT OF DELHI
VIPIN SANGHI, RAJNISH BHATNAGAR, JJ.
Macpower CNC Machines Limited - Appellant
Versus
Union of India, Through Development Commissioner Ministry of Micro Small & Medium Enterprises (MSME) - Respondent
W.P.(C). No. 3942 of 2020 & C.M. Nos. 14146, 24753 & 24756 of 2020
Decided on : 24-12-2020

Advocate Appeared:
For the Appellant :Amar Dave, Pradhuman Gohil, Ranu Purohit, Tanya Srivastava, Updendra Sai, Jasleen Bindra, Advocates.
For the Respondent: Vikas Mahajan, CGSC.

Headnote:(A) Public Procurement Guidelines - Clauses regarding Technical Specifications and Bid Evaluation - Petitioner’s technical bids for Lots 4, 5, and 6 held 'technically non-responsive' despite being the lowest bidders - The court found that the respondents acted arbitrarily by not allowing clarifications which were given to others, hence quashed the technical evaluation and directed fresh evaluation. (Paras 50-61)

(B) Judicial Review of Administrative Decisions - Standards and discretion - The respondents' discretion in bid evaluation must not be exercised arbitrarily; the decision-making process must be consistent and justifiable to maintain credibility in public procurement. (Paras 85-88)

Facts of the case:
The petitioner challenged the rejection of its bids for CNC machines in a project funded by the World Bank, despite quoting specifications that matched the tender requirements. The evaluation committee rejected the bids on various grounds, citing a lack of technical compliance. This raised concerns of procedural fairness.

Findings of Court:
The court found that the evaluation committee operated on an unfounded assumption regarding the petitioner’s technical specifications, leading to an unfair evaluation process. It also noted that similar standards were not applied uniformly to all bidders.

Issues: Key issues included the fairness of the bid evaluation process, the application of technical compliance standards, and whether the rejection of the bids was arbitrary.

Ratio Decidendi: The court ruled that a fair bidding process mandates consistent application of evaluation criteria, including permitting clarifications. The failure to engage with the petitioner’s offer of clarifications was found discriminatory.

Result: Writ petition allowed, with directions for re-evaluation.

Table of Content
1. petitioner's technical bids and relevant submission. (Para 1 , 2 , 3 , 4 , 5 , 6)
2. petitioner's arguments against technical non-responsiveness. (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
3. discriminatory treatment in bid evaluation process. (Para 18 , 19 , 21 , 22)
4. court's analysis on technical evaluation process. (Para 49 , 50 , 51 , 52 , 53 , 54)
5. court's order for re-evaluation of bids. (Para 91 , 92 , 93)

JUDGMENT :

Vipin Sanghi, J.

1. The petitioner has preferred the present writ petition to assail the Summary of Bid Evaluation of Package 41 dated 05.06.2020, whereby the petitioner’s technical bids in respect of Lots 4, 5 and 6 of Package 41 have been held to be “technically non-responsive but commercially responsive” and, consequently, the tender in question has not been awarded to the petitioner, despite the petitioner being the lowest bidder in respect of the said Lots. The petitioner seeks a direction that it be declared technically responsive in respect of its bids for Lots 4, 5 and 6, and for a direction that the respondents should award the tender to the petitioner in respect of Lots 4, 5 and 6. The petitioner has sought certain other reliefs consequential in nature to the main reliefs sought by it, as aforesaid.

Petitioner’s Submissions

2. The case of the petitioner is that the petitioner company is a reputed and one of the fastest growing Computer Numerical Control (CNC) Machine manufacturers in India. The petitioner claims that it is positioned at Number 1 amongst the top 5 manufacturers. The petitioner states that it has successfully delivered and commissioned various kinds of CNC machines to Government PSUs like DRDO, HAL, ISRO, CIPET etc. The petitioner manufactures CNC Turning Machines for purposes of training at heavy duty training centers, CNC Turnmill center with 5 Axis with Sub spindle, Vertical Turret Lathe (VTL), Vertical machining center (VMC), Horizontal machining center (HMC) and CNC grinding centre. The petitioner states that it has successfully bid for various projects, and has been awarded several projects by the Government in the past. The petitioner claims to have supplied approximately 5,000 machines till date in various industry segments such as Automobiles, Agriculture, Plastics, Defence, Heavy engineering, Tool Room, Education, Aeronautics etc. The petitioner has been granted the Highest Credit Worthiness rating by CRISIL of MSEI.

3. The petitioner states that the Government of India received financing from the International Bank for Reconstruction and Development (IBRD) in the form of a loan to meet the cost of a project called Technology Centre System Programme (TCSP). The Office of the Development Commissioner (MSME), Ministry of MSME, Government of India (which is the respondent) is the implementing agency for the project. A portion of the proceeds received from IBRD was intended to be utilised for making payments under the contracts, for which the respondents invited bids. The respondents issued an online General Procurement Notice for the aforesaid project on 07.07.2014, and the same was published on UNDB.

4. The petitioner states that on 28.02.2019, the respondent - which is the implementing agency, invited electronic bids for Package 41 from eligible and qualified bidders for “Supply of 12 Lots of Machines and Equipments required for training at New & Existing Technology Centres”. The petitioner states that the salient condition of the bidding process as per the bid document were the following:

ii. The bidding procedure provided for Instructions to Bidders (ITB), Bidding Data Sheet (BDS), Evaluation and Qualification Criteria and Bidding Forms.

iii. Bid price was to be provided by bidders and adjustment of price was not allowed subsequently as per ITB 14.

iv. Bid was to be supp

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Cases Referred (9)