Back
IN THE HIGH COURT OF DELHI AT NEW DELHI
JASMEET SINGH, J.
CJDARCL Logistics Ltd. - Appellant
Versus
Rites Ltd & Ors. - Respondents
W.P.(C) 10369 of 2021 & CM Nos. 31899, 33396 of 2021
Decided on : 01-06-2022
TENDER - DISQUALIFICATION - BLACKLISTING - FALSE DECLARATION - DISGORGEMENT OF PROFITS - AIR POLLUTION - SMOG TOWER - [TENDER CONDITIONS - DISQUALIFICATION CRITERIA - FALSE DECLARATION - DISGORGEMENT OF PROFITS - AIR POLLUTION - SMOG TOWER]
Fact of the Case:
Petitioner, a company engaged in logistics and transportation, participated in a tender floated by respondent RITES Ltd. for engagement of freight forwarder for transportation of export project. Petitioner was declared L2 bidder, while respondent No. 3 was declared L1 bidder. Petitioner alleged that respondent No. 3 was liable to be disqualified as they were banned by the Ministry of Defence and Food Corporation of India, and had submitted a false declaration in the tender. Respondent No. 3 claimed that there was no obligation to disclose the banning orders and there was no suppression or misstatement. Respondent No. 1 defended its action, stating that the contract was already awarded to respondent No. 3 and clarifications were sought from respondent No. 3 on the objections raised by the petitioner. Respondent No. 3 produced three orders: order of this court staying the banning order of The Defense Ministry, order of the Andhra Pradesh High Court remanding the termination order of the Food Corporation of India, and order of the High Court of Andhra Pradesh permitting respondent No. 3 to participate in tenders other than the tender floated by the Food Corporation of India. Petitioner contended that respondent No. 3 had concealed multiple other instances of banning or termination of contracts, and that the declaration by respondent No. 3 that its business dealings were not banned or suspended was false and amounted to deliberate suppression and misstatement.
Finding of the Court:
The court found that respondent No. 3 had furnished false and self-serving undertakings in the declaration form, and that the furnishing of the correct information would have led to its disqualification in terms of Clause 2 of the qualification Criteria. The court held that respondent No. 3 could not have held back the material information regarding the blacklisting orders, and that doing so was a clear case of suppression and false statement on the part of respondent No. 3. The court also found that respondent No. 1 had not applied its mind for awarding the Tender to respondent No. 3 and had proceeded to award the contract to respondent No. 3 in an arbitrary and discriminatory manner.
Issues: Whether respondent No. 3 had furnished false and self-serving undertakings in the declaration form, and if so, whether the furnishing of the correct information would have lead to its disqualification in terms of Clause 2 of the qualification Criteria?
Ratio Decidendi: The court held that the tendering authority must comply with its own terms and conditions. Once respondent No. 1 learnt that respondent No. 3 was liable to be disqualified under the terms and conditions, it could not have proceeded to award the contract to respondent No. 3 in an arbitrary and discriminatory manner. The petitioner was found to be technically qualified. The respondent No. 1 could have proceeded to award the contract to the petitioner, but it could not have awarded the same to respondent No. 3.
Final Decision: The court directed respondent No. 3 to deposit Rs. 12.5 crores in the court within 4 weeks, which would be used to install a smog tower in Delhi to reduce air pollution. The court also directed respondent No. 1 to pay costs of Rs 25 lacs to the petitioner for improper due diligence in awarding the tender to respondent No. 3.
JUDGMENT :
1. The petitioner has preferred the present writ petition seeking directions to the respondent No. 1 to cancel the bids of the respondent No. 3 and, consequently, for awarding the tender to the petitioner on account of being the L1 bidder. The substantial payer from the Writ petition is here under:
2. The petitioner is a company engaged in the business of logistics and transportation of goods across India by Road and Rail.
3. The respondent No. 1 is RITES Ltd., a government of India Enterprise, and a company registered under Companies Act, 1956 that is directly under control of the Ministry of Railways, which is respondent No. 2 in the present petition.
FACTUAL MATRIX
4. Respondent No. 1 floated an E- Tender dated 30.08.2021, for engagement of freight forwarder for transportation of export project (cargo consisting of 34 nos. Passenger Coaches ex. MCF, Raebareli, UP and approx. 200 CBM of spares ex. MCF, Raebareli, UP/RITES Warehouse, Delhi via Mumbai Sea port to Maputo Sea Port, Mozambique on CIF basis).
5. The petitioner participated in the tender. The terms and conditions laid down in clause 2 of the tender document provided certain grounds for disqualification, even for those bidders who may otherwise meet the qualification criteria as laid down in the tender document. The grounds for disqualification read as follows:
Even though the Bidders may meet the above qualification criteria, they are subject to be disqualified if they have a) Concealed any information/document which may result in the Bidder's disqualification or if any statement/information/document furnished by the Bidder or issued by a Bank/Agency/Third party and submitted by the Bidder, is subsequently found to be false or fraudulent or repudiated by the said Bank/Agency/Third Party. In such a case, besides Bidder's liability to action under para 9 of Instructions to Tenderers, the Bidder is liable to face the penalty of banning of business dealings with him by RITES.
b) Records of any contract awarded to them, having been determined during the past three years prior to the deadline for submission of bids.
c) Been declared as Poor Performer by RITES and their name is currently in the 'Negative List' of RITES. d) Their business banned or suspended by any Central/State Government Department/Public Undertaking or Enterprise of Central/State Government and such ban is in force.
e) Non submission of all the supporting documents or not furnished the relevant details as per the prescribed format.
f) A declaration to the above effect in the form of affidavit on stamp paper of Rs. 10/-duly attested by Notary/Magistrate should be submitted as per format given in Proforma3 enclosed.”
6. The case of the petitioner is that the respondent No. 1, in an erroneous manner, first opened the commercial bids and subsequently the technical bids of the bidders, pursuant to which respondent No. 3 was declared as L1 bidder, while the petitioner company was declared L2 as bidder.
7. The case of the petitioner is that respondent No. 3 was liable to be disqualified, as they were banned by the Ministry of Defence vide letter dated 04.03.3021 for one year w.e.f 19.02.2021, and by PSU M/s Food Corporation of India, Vijayawada vide the banning order dated 30.03.2021 for a period of 5 years.
8. The petitioner stated that in order to win the tender, respondent No. 3 had deliberat
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
