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IN THE HIGH COURT OF GAUHATI, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
HON’BLE THE CHIEF JUSTICE MR. VIJAY BISHNOI, HON’BLE MR. JUSTICE KARDAK ETE
M/s. Assam Supply Syndicate – Appellant
Versus
The Union of India, Represented by its Secretary to the Government of India, Ministry of Railways, Rail Bhawan, Rafi Marg, New Delhi and ors.- Respondents
WA/217/2024
Decided On : 25-07-2024
CONTRACT AWARD - TENDER EVALUATION - GeM Bid Terms, Article 226 of the Constitution of India - The court discussed the GeM bid terms regarding the minimum average annual financial turnover required for bidders, emphasizing the necessity for bidders to submit accurate documentation reflecting their status as either a proprietorship or partnership firm. The court interpreted the provisions to mean that failure to provide necessary documentation prior to the bid opening results in disqualification. The court also highlighted the principle of judicial restraint in contractual matters, affirming that the authority's interpretation of its own tender documents should be respected unless proven arbitrary.
Fact of the Case:
The appellant, a partnership firm, contested the rejection of its technical bid for a contract to supply cables, arguing that its prior status as a proprietorship should allow its turnover to be considered. The bid was rejected because the turnover documents submitted were from the proprietorship, not the partnership, leading to disqualification based on GeM bid terms.
Finding of the Court:
The court upheld the rejection of the appellant's bid, agreeing with the lower court that the appellant failed to clarify its status and provide necessary documentation before the bid opening. The court found no arbitrariness in the decision-making process of the respondents.
Issues: Whether the appellant's prior status as a proprietorship could be considered for the partnership's bid, and whether the rejection of the bid was arbitrary or unjust.
Ratio Decidendi: The court reiterated that bidders must submit complete and accurate documentation as per the tender requirements. It emphasized that the authority's discretion in interpreting its own tender documents should be respected, and judicial intervention is limited to cases of clear arbitrariness or mala fides.
Final Decision: The writ appeal was dismissed, affirming the lower court's decision to reject the appellant's technical bid.
JUDGMENT :
Vijay Bishnoi, C.J.
1. Though this writ appeal is listed for admission, however, looking to the fact that the matter pertains to award of contract and the stay order in respect of issuance of work order is in currency, we have decided to hear this writ appeal finally with the consent of counsel for the parties.
2. This writ appeal is filed by the appellant being aggrieved with the order dated 19.06.2024 passed by the learned Single Judge in WP(C) 3134/2024 whereby the writ petition filed by the appellant herein has been dismissed.
3. The brief facts of the case are that the respondent N.F. Railway has floated an NIT on 22.03.2024 and bid corrigendum dated 30.04.2024 for supply of 42000 meters of cable. One of the requisite conditions for the bidders, interested in participating in the bidding process, was that the prospective tenderer should have an average annual turnover of more than Rs.10 Crores in the last 3 financial years ending on 31.03.2023. The appellant has submitted its technical bid along with other bidders. However, the Tender Evaluation Committee has rejected the bid offered by the appellant on 10.06.2024 for the following reasons:
It would be apposite to quote para 1 of GeM bid and para 3 of GeM bid specific terms and conditions, reference of which are made while rejecting the technical bid of the appellant.
“1. The minimum average annual financial turnover of the bidder during the last three years, ending on 31st March of the previous financial year, should be as indicated above in the bid document. Documentary evidence in the form of certified Audited Balance Sheets of relevant periods or a certificate from the Chartered Accountant/Cost Accountant indicating the turnover details for the relevant period shall be uploaded with the bid. In case the date of constitution/incorporation of the bidder is less than 3 year old, the average turnover in respect of the competed financial years after the date of constitution shall be taken into account for this criteria.
3.Turnover
Bidder Turn Over Criteria: The minimum average annual financial turnover of the bidder during the last three years, ending on 31st March of the previous financial year, should be as indicated in the bid document. Documentary evidence in the form of certified Audited Balance Sheets of relevant periods or a certificate from the Chartered Accountant/Cost Accountant indicating the turnover details for the relevant period shall be uploaded with the bid. In case the date of constitution/incorporation of the bidder is less than 3 year old, the average turnover in respect of the competed financial years after the date of constitution shall be taken into account for this criteria.”
Immediately after knowing about the rejection of the technical bid, the appellant has filed a representation on 11.06.2024 before the respondent No.2 clarifying that the appellant firm was earlier registered as a proprietorship firm but later on, it was converted into a partnership firm with all assets and liabilities (including the income tax and GST) and therefore, this fact should be taken into consideration by the respondents. Along with the said representation, the appellant also produced certain documents, such as partnership deed, deed of declaration, CA certificate, death certificate and next of kin certificate. However, the said representation of the appellant came to be rejected by the respondents on 14.06.2024 and the respondents reiterated its decision of rejecting the technical bid of the appellant while treating it
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The court upheld the rejection of the petitioner's technical bid due to failure to meet registration requirements, emphasizing limited grounds for judicial review.
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