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2022 Supreme(Del) 291
IN THE HIGH COURT OF DELHI AT NEW DELHI
Vipin Sanghi, Jasmeet Singh, JJ.
PKF Sridhar And Santhanam - Appellant
Versus
Airports Economic Regulatory Authority Of India - Respondent
W.P.(C) 12385/2021 & Cm Appl. 38924/2021
Decided On : 06-01-2022
Mr. R. Balasubramanian, Sr. Adv., Mr. Adhitya Srinivasasn, Mr. Kartikeya Jaiswal, Ms. Gunjan Swarup, Advs, for the Appellant, Mr. Jeevesh Mehta & Mr. Nihit Dalmia, Advs, for the Respondent.
The lowest qualified bidder does not have an enforceable right to be awarded the contract, and the tender-inviting authority reserves the right to reject proposals without assigning reasons.
Headnote:
Tender Cancellation - Assignment of Consultancy Services - RFP No. 01/2021-22 - [Clause 1.5, Selection Process] - [Summary of Acts and Sections]
Fact of the Case:
The petitioner challenged the cancellation of a tender for consultancy services for the Sardar Vallabhbhai Patel International Airport, Ahmedabad, after emerging as the L-1 bidder. The respondent had invited proposals for empanelment of consultants to assist in determining tariffs for aeronautical services at various major airports.
Finding of the Court:
The court found that the respondent's decision to cancel the tender was informed and founded upon germane considerations, as the rates quoted by the petitioner were found to be unreasonable and unjustified compared to rates prevailing in the industry.
Issues: The issues included the authority of the respondent to cancel the tender, the validity of post-tender negotiations, and the reasonableness of the rates quoted by the petitioner.
Ratio Decidendi: The court held that the mere emergence as the lowest qualified bidder did not vest an enforceable right to be awarded the contract, and the respondent reserved the right to reject all or any proposals without assigning reasons. The decision to cancel the tender was validated by the subsequent receipt of more competitive rates in the re-invited tendering process.
Final Decision: The court dismissed the petition, finding no merit, and left the parties to bear their respective costs.
JUDGMENT
Vipin Sanghi, J (Oral). - The petitioner has preferred the present writ petition being aggrieved by the cancellation of the tender in question vide the Public Notice No. 29/2021-22 dated 29.09.2021.
2. By the said Public Notice, the tender for Assignment-I of RFP No. 01/2021-22 issued by the respondent-Airports Economic Regulatory Authority of India, was cancelled.
3. Vide the RFP No. 01/2021-22 dated 24.06.2021, the respondent had invited proposals for "empanelment of consultants to assist the Airports Economic Regulatory Authority of India (i.e. the respondent) indetermination of tariffs for aeronautical services at various major airports for the control period 01.04.2021 to 31.03.2026. "
4. The bids were invited under two assignments. We are concerned with Assignment No. 1, which relates to tendering of consultancy services for the Sardar Vallabhbhai Patel International Airport, Ahmedabad. The petitioner had made its bid in respect of the said tender.
5. The case of the petitioner is that apart from the petitioner, one other bidder qualified in the technical assessment. The financial bids were opened by the respondent, and the petitioner emerged as the L-1 bidder. The petitioner claims that, even though, the petitioner was entitled to the Award of the contract straightaway in terms of the tender, the respondent, without any authority, sought to enter into negotiations with the petitioner, and demanded that the petitioner reduce its bid by 20%. However, the petitioner was not agreeable to the same and offered a 5% discount on the tender price. The respondent, rather than awarding the contract to the petitioner, proceeded to cancel the same by issuing the impugned communication. Consequently, the petitioner has preferred the present writ petition.
6. The submission of Mr. Subramanian, learned senior counsel for the petitioner, is primarily founded upon Clause 1.5, which stipulates the Selection Process. So far as it is relevant, the said clause reads as follows:
"1.5 SELECTION PROCESS:
AERA would adopt two Stage Selection process i.e. technical scrutiny and financial (collectively the "Selection Process") as detailed in Clause 3.1 in evaluating the Proposals for each Assignment(s). Accordingly, the Applicant would submit the bid in a sealed envelope containing financial bids along with technical proposal for each Assignment(s) the applicant intends to bid. In the first stage, a technical prerequisite scrutiny shall be carried out as specified in the Clause 3.1. In the second stage, based on the technical scrutiny, a list of short-listed applicants shall be prepared whose financial bids shall be opened for final selection of the Applicant for each assignment(s). The applicant for each Assignment(s) based on the lowest financial quote i.e. total financial quote of each assignment, shall be considered to be selected. If a bidder applies/ quotes for both the Assignment(s) and he becomes Lowest bidder (L-I) in both the Assignments, he will be awarded only one Assignment (consisting of all airports under that assignment) as per the preference opted and L-2 bidder will be required to match the quote ofL-1 bidder for award of second Assignment (consisting of all airports under second assignment) or so on. Further, in case, two or more applicants become Lowest Bidders, in that case the preference shall be given to award the assignment to the bidders who have more experience in tariff determination exercise in the airport sector.
However, the decision with respect to the assignment to be allotted to the Applicant shall vest solely with the AERA. " (emphasis supplied)
7. He further submits that the tender document does not postulate post-bid negotiations, but only provides for pre-bid conference in Clause 1.7. However, after opening of the financial bids, the respondent acted without authority by calling the petitioner for negotiations. His further grievance is that by cancelling the tender and re-inviting the bids, the respondent has p
