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IN THE HIGH COURT OF DELHI
Satish Chandra Sharma, Subramonium Prasad, JJ.
Green Gene Enviro Protection and Infrastructure Pvt. Ltd. - Appellant
Versus
Municipal Corporation of Delhi - Respondent
W.P.(C) 11491 of 2022 and C.M. Nos. 33956-33957 of 2022 and W.P.(C) 11550 of 2022 and C.M. Nos. 34185-34186 of 2022
Decided On : 12-10-2022
A conditional acceptance in tender processes results in no binding contract, necessitating unconditional acceptance for enforceability.
Headnote:(A) Contract Act - Section 7 - Judicial review of tender - No concluded contract between parties when acceptance is conditional; a counter-proposal rather than acceptance is submitted. (Paras 15-18)
(B) Tender Jurisdiction - Court reviews decisions made by experts; does not substitute its own decisions unless there is illegality or arbitrariness involved. (Paras 8-12)
Facts of the case:
Petitioner companies sought a writ directing the Municipal Corporation of Delhi to execute an agreement for processing incinerable waste. Respondent issued a LOA with additional conditions, leading to Petitioner’s inability to comply.
Findings of Court:
Court ruled no valid contract existed due to conditional acceptance and that a writ of mandamus would not be issued to enforce the agreement.
Issues: Whether a binding contract arose from the LOA; whether the Respondents' actions were arbitrary or illegal.
Ratio Decidendi: Acceptance must be unconditional to form a valid contract; court has limited power to intervene in tender decisions based on expert recommendations.
Result: Petitions dismissed.
| Table of Content |
|---|
| 1. factual background regarding writ petitions. (Para 1 , 2) |
| 2. arguments regarding the validity of the bid process. (Para 3 , 4 , 5 , 6) |
| 3. court's review of tender principles. (Para 7 , 8) |
| 4. precedents on administrative decision-making. (Para 9 , 10 , 11) |
| 5. considerations for additional criteria in tenders. (Para 12 , 13 , 14) |
| 6. conditions for valid contract acceptance. (Para 15 , 16) |
| 7. judicial review scope in tendering process. (Para 17 , 18) |
| 8. final dismissal of petitions. (Para 19) |
JUDGMENT
1. The present Judgment will dispose of two Writ Petitions being W.P.(C) 11491 OF 2022 filed by one M/S Green Gene Enviro Protection & Infra and W.P.(C) 11550 OF 2022 filed by one M/s Recycling Solutions Pvt. Ltd. ("Petitioner/Petitioner Companies") seeking inter alia the issuance of the writ of mandamus directing the Municipal Corporation of Delhi ("Respondent No. 1") to execute the agreement dated 10.06.2022 to operate and maintain facilities to process minimum 1000 tonnes per day (hereinafter referred to as `TPD') of incinerable waste, fraction recovered from processing of 80,00,000 MT legacy waste to produce RDF and its subsequent transportation and disposal on daily basis.
2. The facts leading up to the filing of the present petitions are as follows:
a. On 08.03.2022, the Executive Engineer, Special Project Rohini Zone, on behalf of Respondent No. 1 issued a Notice Inviting Tender dated 08.03.2022 ("NIT") for "Design, finance, build, own, operate & maintain processing facility to process minimum 1000 TPD of incinerable waste fraction recovered from processing of legacy waste to produce RDF and its subsequent transportation and disposal on daily basis." ("Impugned Tender Process")
b. Thereafter, two addendums were circulated on 29.03.2022 and 08.04.2022.
c. On 2nd May 2022, as per a condition in Addendum-2, Respondent No. 2 asked the Petitioners to match the lowest bid of L-1. The director of the Petitioner companies vide emails dated 03.05.2022 communicated the acceptance of the lowest bid offer to Respondent Nos. 1 and 2 ("Respondents")
d. Pursuant thereto, on 10.06.2022, Respondent No. 1 issued a letter of acceptance ("LOA") in favour of the Petitioners. As per the said LOA, the agreement was to be executed within 15 days. Pertinently, the Respondents added additional criteria in the LOA i.e the vehicle transporting the waste should have a GPS tracking system. For ease of reference the condition is reproduced below:
"In order to ensure accounting of the waste transported, the vehicles to be used for transportation from the dump site to the place where it is consumed should have GPS Tracking System and the GPS data should be logged into MCD system electronically in real time basis. Further certificate from the agency consuming the incinerable waste shall be sought with respect to quantity received by it."
e. As a response to the LOA, the Petitioners gave their acceptance vide letter dated 20.06.2020. However, the Petitioners specifically mentioned that they would be unable to fulfil the above mentioned criteria i.e they would not be able to install a GPS tracking system in the vehicle.
f. Thereafter, the Respondents floated a fresh NIT to undertake the integrated work of Bio-mining of legacy waste including disposal of all the fractions recovered through bio-mining process viz., inert, RDF and C&D waste.
g. Vide letter dated 28.07.2022, the bids of the Petitioners were foreclosed. Aggrieved by the issuance of the fresh tender, and foreclosure of their bids, the Petitioners have filed the instant Writ Petitions.
3. In a nutshell, it has been argued on behalf of the Petitioners that the premature foreclosure of their bid is unjust, unfair, illegal, and arbitrary. Consequently, that this would cause undue delay in achieving the target for clearance of the MSW legacy dump.
4. Per contra, the Respondents have placed before this Court certain additional facts. It was brought to this Court's attention that the tend
