IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A.Y. Kogje, Samir J. Dave, JJ.
Patil Goods Transport & Ors. – Petitioners
Versus
Hindustan Petroleum Corporation Limited & Ors. – Respondents
R/Special Civil Application No. 11583 of 2023
Decided On : 29-08-2024
Tender - Allocation of Trucks - MSE Policy 2012 - Article 226 - The court examined the tender process and the application of the MSE Policy 2012, emphasizing the need for compliance with the tender conditions and the equitable distribution of contracts among eligible bidders.
Fact of the Case:
The petitioners challenged the selection of successful bidders for a tender issued by a corporation for truck supply, arguing that the tender process violated the MSE Policy 2012 by not allocating trucks proportionately to MSE bidders.
Finding of the Court:
The court found that while the tender process was largely compliant with the tender document and MSE Policy 2012, there was an illegal allocation of trucks to one bidder, necessitating a partial intervention to correct this anomaly.
Issues: Whether the allocation of trucks under the tender process complied with the MSE Policy 2012 and the tender conditions, particularly regarding the distribution of trucks among MSE bidders.
Ratio Decidendi: The court held that the interpretation of tender documents should defer to the authority that authored them, and any deviation from the tender conditions must be justified - however, it found an illegal allocation that required correction.
Result: The petition is partly allowed - the allocation of 15 trucks to one respondent is set aside, and the corporation must redistribute the trucks among eligible bidders.
JUDGMENT :
A.Y. KOGJE, J.
1. RULE. Learned Advocate Mr.Manan Bhatt waives service of Rule on behalf of respondent No.1 and learned Advocate Mr.Shrikar Bhatt waives service of Rule on behalf of respondent Nos.2, 3, 4,9 and 12.
2. This petition is filed under Article-226 of the Constitution of India with prayers as under:-
A1) That the Hon’ble Court be pleased to issue writ of or in the nature of the mandamus commanding Respondent No.1 to give a preference to newer trucks over older trucks and in the event that tender no.22000869-HD-10157 issued by Respondent No.1 is interpreted to be not giving preference to newer trucks over older trucks, be pleased to quash and set aside the said tender to the said extent;”
2.1 The case pertains to a Tender floated by the Respondent- corporation for allotment of Trucks of various capacity to be supplied for a specific time period for the purpose of maintaining uninterpreted supply of Gas cylinders from the respondent- Corporation to various destination for distribution.
3. Both sides request to take up the final hearing, as the Tender has already been allotted and operational through successful bidder. All the respondents are served and are represented by respective Advocates except for few, who, though served, have not appeared.
4. Learned Advocate for the petitioners has raised his main contention regarding allotment for Trucks in the reserved category for the M.S.M.E.
4.1 Learned Advocate for the petitioners has argued that the Tender Document specifically provided for Procurement Preference to M.S.E. Tenderer and for that purpose, the Policy under MSE Order 2012 providing guidelines to be followed.
4.2 It is argued that 25% of the total trucks were to be inducted from registered MSE and within allocated 25%, also there would be reservation for SC/ST and women category. According to learned Advocate, the respondents have not acted in accordance with this policy.
4.3 It is submitted that all the petitioners were MSE and the bids of all the petitioners was L1 and therefore, in MSE category, all the petitioners ought to have been allocated truck in proportion to the numbers of Trucks offered by the petitioners instead the respondents in MSE category allotted the trucks only to two MSE bidders. Learned Advocate for this purpose drew attention to the Affidavit in reply for specific allocation of Trucks made to successful Bidder.
4.4 Learned Advocate has also argued that the entire Tender process was required to be scrapped for several irregularities committed and the respondents acting against the very Tender Document. It is pleaded that the respondents have given preference to older trucks over the Newer Trucks. It is submitted that the tender provided for capping the maximum allocation of Trucks to 15 trucks and therefore, the bidder offering above 15 Trucks is of no consequence rather the respondents have favoured the bidder with lower number of offered trucks.
4.5 In the pleadings, though other grounds like pointing out individual disqualification of some of the qualified respondents are raised, but are not argued and in any case, these are the factual aspects, which may need leading of evidence.
4.6 Learned Advocate has argued that actions of the respondent-Corporation in disregarding petitioners as MSE is directly against the object for which the MSME Act and the Procurement Policy 2012 was passed. Therefore, against the spirit of Directive Principle of State Policy.
5. Learned
Afcons Infrastructure Ltd. v. Nagpur Metro Rail Corporation Ltd.
Agmatel India Pvt. Ltd. v/s. Resoursys Telecom and Ors. AIR 2022 SC 1103
Caretel Infotech Ltd. v/s. Hindustan Petroleum Corporation Limited and Ors.
The court emphasized the importance of adhering to tender conditions and equitable distribution under the MSE Policy, allowing for judicial intervention only in cases of illegality.
The court upheld the tender conditions allowing non-proportional allotment of work to MSMEs ranked as L1 without entitlement to proportionate distribution among qualified bidders.
The court upheld that 100% reservation for MSEs in public procurement is valid under the MSE Policy, rejecting claims of arbitrariness towards tender selection processes.
The court upheld that adherence to tender guidelines by public entities is essential, and allegations of impropriety must be substantiated for judicial intervention.
The rejection of a bid in a tender process should be based on merit consideration and qualification for allocation, and parties must plead and produce sufficient material to substantiate their case.
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