IN THE HIGH COURT OF DELHI AT NEW DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
M/s Sudhakara Infratech Private Limited – Appellant
Versus
Executive Engineer (Slf)-okhla, Municipal Corporation of Delhi – Respondent
W.P.(C) 14732 of 2022 and CM Appl. 45253 of 2022 and W.P.(C) 15344 of 2022 & CM Appl. 47637 of 2022 & 56719 of 2022
Decided On : 13-01-2023
Tender - Participation of Society - Indian Companies Act1956/2013 - [Indian Companies Act1956/2013] - The court discussed the ambiguity in the tender document regarding the participation of a society in the tender process. It highlighted the discrepancy between Clause 2.2, which stated that only firms and companies were allowed to bid, and Clause 2.5, which mentioned 'societies' while referring to the financial capacity of potential bidders. The court found that the exclusion of societies from participating in the tender process was arbitrary and devoid of any policy considerations. It concluded that the ambiguity in the tender document allowed the petitioner to participate in the tender process, and the decision to exclude societies was not supported by any plausible reason.
Fact of the Case:
M/s. Sudhakara Infratech Private Limited filed a writ petition seeking direction to qualify for a tender process to dispose of waste. The petition challenged the disqualification based on the inclusion of a society in the joint venture, which was not explicitly allowed in the tender document. The court stayed the financial bidding process and later allowed the petitioner to participate.
Finding of the Court:
The court found that the exclusion of societies from participating in the tender process was arbitrary and devoid of any policy considerations. It concluded that the ambiguity in the tender document allowed the petitioner to participate in the tender process.
Issues: Ambiguity in the tender document regarding the participation of a society in the tender process, and the challenge to the disqualification of the petitioner based on the inclusion of a society in the joint venture.
Ratio Decidendi: The ambiguity in the tender document allowed the petitioner to participate in the tender process, and the decision to exclude societies was not supported by any plausible reason.
Final Decision: W.P.(C) No. 14732/2022 is allowed, and W.P.(C) 15344/2022 stands dismissed.
JUDGMENT
Subramonium Prasad, J. This judgment will dispose of WP (C) 14732/2022 filed by M/s Sudhakara Infratech Private Limited and WP(C) 15344/2022 filed by M/s Aakanksha Enterprises against the Municipal Corporation of Delhi (`Respondent No. 1'). As the fate of WP(C) 15344/2022 is dependent upon WP (C) 14732/2022, this Court shall deal with WP(C) 15344/2022 first.
2. WP(C) 15344/2022has been filed by one M/s. Sudhakara Infratech Private Limited seeking inter alia a direction that M/s. Sudhakara Infratech Private Limited technically qualifies for bidding for Tender Id No. 2022_EDMC_124663_1 floated by Municipal Corporation of Delhi to dispose of 30 Lakh MT of legacy waste at the Okhla dumpsite, New Delhi on 03.08.2022 (`Impugned Tender').
3. The Impugned Tender was floated with the aim of disposing 30 MT of legacy waste by bio-remediation and bio-mining processes at the Okhla dumpsite, Delhi. Purportedly, this Tender was to attract bidders who are firms and companies incorporated in India under the Indian Companies Act1956/2013 or abroad, as per Clause 2.2 of the Tender which enlisted the Checklist of documents as Pre-qualification Criteria for Eligible Bidder. For sake of convenience, the following criteria is reproduced below,
"The Bidder should be a firm incorporated in India under the Indian Companies Act1956/2013 or a company incorporated under equivalent law in India or abroad and operating from at least last five (05) complete Financial Years."
4. A perusal of the record reveals that after the Impugned Tender was floated, various entities participated in it. One such entity was the Petitioner herein, i.e. M/s. Sudhakara Infratech Private Limited, which formulated a Joint Venture with M/s. Jan Adhar Sevabhavi Sanstha and M/s. Balaji Industrial and Agricultural Casting Private Limited. This Joint Venture submitted their bid for the tender vide Bidder No. 469055.
5. However, vide office letters dated 13.10.2022 which revealed names of technically qualified candidates, M/s. Sudhakara Infratech Private Limited noticed that it was not found to be technically qualified on the ground that one of the members of the Consortium/Joint Venture, i.e. M/s Jan Adhar Sevabhavi Sanstha, is a society however, as per Clause 2.2 of the Tender Document only Companies registered under Companies Act or Partnership Firms or Proprietorship Firms are eligible to participate.
6. Aggrieved by such disqualification, and in order to stall the financial bidding process, M/s. Sudhakara Infratech Private Ltd. filed Writ Petition (C) No. 14732/2022.
7. In sum and substance, the case of M/s. Sudhakara Infratech Private Limited that the possibility of a `society' undertaking the work envisaged under the Impugned Tender is abundantly evident from the Tender document itself, as Clause 2.5 which deals with financial capacity categorically mentions a society.
8. Per contra, the Respondent No.1 in its counter affidavit stated that considering the scope and nature of work, Respondent No. 1 did not envisage the participation of societies in the Impugned Tender, as is evident from Clause 2.2. In light of this, Respondent No. 1 sought a dismissal of the instant petition.
9. The Writ Petition (C) No. 14732/2022 was first listed before this Court on 18.10.2022 on which date the Ld. Counsel appearing for the Petitioner drew the attention of this Court to Clause 2.5 of the NIT which dealt with the financial capacity of the bidders. Pertinently, this Clause applied to `societies' as well. For sake of convenience, Clause 2.5 of the NIT is reproduced below:
"2.5 Financial Capacity
For demonstrating the financial capacity ("the Financial Capacity"), the bidder has to comply with each of the following conditions:
i. Minimum average turnover of INR 85 Cr. (INR Eighty Five Crores Only) in the preceding 3 financial years from the due date of submission of this bid;
ii. Should have a Net Worth of at least INR 17 Cr. (INR Seventeen Cores Only) in the preceding financial year
A bidder's eligibility in a tender process is strictly governed by the conditions outlined in the tender documents, and failure to comply results in disqualification.
Tendering authorities' interpretations of eligibility criteria are upheld unless proven perverse; specific clauses direct applicability based on project value.
The eligibility of a partnership firm in tender processes can be established through the financial credentials of its individual partners, affirming courts' limited interference in administrative dec....
Disqualification of a tender bidder must adhere to principles of natural justice, but can be justified based on credible complaints regarding past performance.
Point of law: Court must exercise its discretionary power under Article 226 with great caution and should exercise it only in furtherance of public interest and not merely on the making out of a lega....
A bidder must be a legal entity in existence for over three years to qualify for tender participation; failure to meet this criterion renders the bid non-responsive.
Tender conditions requiring eligibility based on three years of legal existence must be strictly enforced; failure to comply invalidates contract awards.
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