Tender evaluation must adhere strictly to the established criteria, and rejection based on erroneous interpretations undermines fairness and legality in public procurement processes.

Judgment :

Pranjal Das, J.

Heard Mr. P.D. Nair, learned counsel for the petitioner. Also heard Mr. N. Ratan, learned Additional Advocate General for the State of Arunachal Pradesh/respondent Nos. 1 to 4 and Mr. D. Soki, learned counsel for the respondent No. 5.

2. The instant writ petition under Article 226 of the Constitution of India has been filed by the petitioner firm, being aggrieved, by the order dated 02-05-2025 passed by the respondent authorities with regard to NIT dated 11-04-2025, whereby the bid of the petitioner firm was rejected and that of the respondent No. 5/private respondent was accepted. The petitioner firm, after passing the technical evaluation, emerged as the lowest bidder during the financial evaluation; but its bid was rejected as the bid amount was stated to be a minus 10 percent, which was above the justified rate fixed at 7.31%. It is stated that the petitioner firm is a registered Class-II contractor under the Arunachal Pradesh Enlistment of Contractors in Works Department Rules, 2008 and that it has a valid trading license as well as GST registration.

3. It is further stated that the respondent No. 4, being Project Director, Rural Development Department issued a notice inviting tender NIT dated 11-04-2025 inviting bids from eligible Class-II contractors for the supply and procurement of materials under MGNREGA 2025-26 in respect of CD Block Chetam, Upper Subansiri district /district: Daporijo. The estimated cost of the work was Rs. 5,36,45,700/- and period of completion was 12 months.

4. It is stated that the bids were to be submitted online by 4 p.m. on 29-04-2025 and technical bids were to be opened and evaluated on 30-04-2025 at 10 a.m. and the financial bids of the technically qualified bidders were to be opened on 01-05-2025. It was also provided that the last date of bid validity was 06-06-2025. The petitioner further stated that being interested in the contract, it participated in the tender process and 3 bidders including the petitioner submitted their bids and all of them were found to be technically qualified upon opening the technical bids on 30-04-2025.

5. It is further stated that on 01-05-2025, the financial bids of the 3 technically qualified bidders were opened and the petitioner firm was found to be the lowest bidder with a bid value of Rs. 4,82,81,129.93. The bid value of the second lowest bidder being of firm RRR Enterprises, respondent No. 5, was found to be Rs. 4,97,22,889.85. The petitioner further states that as the lowest bidder, it was in expectation of being issued the work order and the award of contract. But surprisingly, the respondents/authorities issued the impugned order dated 02-05-2025, whereby the bid of the petitioner was rejected for being 10% below the justified rate, whereas the rate quoted by the respondent No. 5 was approved as it was 7.31% below the justified rate. It is contended by the writ petitioner that the tender conditions did not provide for resorting to any justified rates and therefore, rejection of the petitioner's lowest bid on the ground of being lower than the justified rate amounted to resorting to a hidden criterion in the tender process and was therefore, arbitrary in nature and violative of Article 14 of the Constitution of India. It is contended that the CPWD manuals of 2014, 2019 and 2024, specifically provided that variations up to 10% of the justified rates can be accepted and only variations above 10% cannot be accepted and therefore, as the variation of the petitioner's bid was within the said 10%, it could not have been rejected on the state