Back
IN THE HIGH COURT OF JAMMU AND KASHMIR AND LADAKH AT JAMMU
MOKSHA KHAJURIA KAZMI, J.
M/s Green Earth Private Limited – Petitioner
Versus
UT of J&K and Others – Respondents
W.P. (C) Nos. 2668, 2669 of 2022, C.M. Nos. 7365, 7366 of 2022, C.M. Nos. 1955, 1956, 3788, 3789 of 2023
Decided On : 24-08-2023
Bid Rejection - Non-Responsive Grounds - Clause 4.4 B (a) III (e) - [Annual Turnover Certificate from Chartered Accountant for last five financial years (2017-18, 2018-19, 2019-20, 2020-21 and 2021-22) excluding current financial year bearing Unique Document Identification Number (UDIN) of Institute of Chartered Accountants of India with breakup of civil works and total works excluding GST/VAT in each financial year. Clause 4.4 of ITB. Without UDIN the certificate will not be entertained and the bid rejected], [Income Tax Returns for the last five financial years immediately preceding the bid due date i.e. for the financial year (2016-17, 2017-18, 2018-19, 2019-20 and 2020-21), Balance sheet for last five financial years, Profit and loss account for last five financial years, Company Audit Report (if applicable) for last five financial years, Audit Reports under Income Tax Act (3CA/3CB along with 3CD reports) (wherever applicable) for the last five financial years, TDS certificate/26AS form downloaded from income tax website for the last five financial years], The court found that the petitioner failed to strictly comply with the mandatory requirement of submitting Company Audit Reports for the last five financial years as per the tender document, leading to the rejection of the bid.
Fact of the Case:
The petitioner challenged the rejection of their bid for a contractual work due to non-compliance with the requirement of submitting Company Audit Reports for the last five financial years. The petitioner contended that they had uploaded all the necessary documents and that the rejection was arbitrary and mechanical.
Finding of the Court:
The court found that the petitioner failed to strictly comply with the mandatory requirement of submitting Company Audit Reports for the last five financial years as per the tender document, leading to the rejection of the bid. The court also noted that the petitioner's complaint was considered before the financial bid was opened, and no irregularity was found in the decision-making process.
Issues: The main issue was whether the rejection of the petitioner's bid was justified based on the non-compliance with the requirement of submitting Company Audit Reports for the last five financial years.
Ratio Decidendi: The court held that the satisfaction of whether a bidder satisfies the tender condition is primarily upon the authority inviting the bids. The court emphasized that no judicial review is permissible in commercial matters unless a case of arbitrariness, mala-fide, bias, or irrationality is made out. The court also highlighted the importance of strict compliance with essential tender conditions.
Final Decision: The court dismissed the writ petition, finding no merit in the petitioner's claim and upholding the rejection of the bid. The petitioner was granted liberty to challenge the decision taken by the respondents on the complaint, if cause survives.
JUDGMENT :
MOKSHA KHAJURIA KAZMI, J.
1. By this petition, the petitioner has challenged Order No. CEJ/PMGSY/25664 dated 05.12.2022, passed by respondent No. 2, whereby bid of the petitioner has been shown as non-responsive on the ground of submitting Company Audit Reports attached for two years instead of last five financial years which is not as per requirement of Standard Bid Document (SBD) Clause 4.4 B (a) III (e). The petitioner is further seeking direction upon the respondents to consider his representation dated 06.12.2022.
FACTUAL MATRIX:
2. Respondent No. 2 has floated a tender for the contractual work vide e-NIT No. CEJ/PMGSY/720 of 2022-23 dated 27.10.2022 wherein, the petitioner states that while uploading the documents on the portal in pursuance of the tender duly complied with each and every clause mentioned in the tender document and rather uploaded more documents than were required just to reflect the financial and the technical standing of the petitioner.
3. On 05.12.2022, vide impugned order, respondent No. 2 mentioned the following reasons for the petitioner being declared as non-responsive:
4. It is stated that the petitioner had uploaded all the documents including the company audit report for the required five years but the respondents deliberately chose to oust the petitioner arbitrarily after having found the petitioner eligible previously upon the same set of documents uploaded on the portal.
5. It is stated that the respondent have arbitrarily decided to oust the petitioner and have adopted an arbitrary and mechanical approach of reading the terms and conditions of the Standard Bidding Document (SBD). The respondents have cited Clause 4.4 B (a) III (e) for declaring the petitioner as non-responsive, after having declared the petitioner responsive with respect to the same work package previously with same set of documents. Clause 4.4 B (a) III (e) of the SBD is reproduced as under:
(a) Annual Turnover Certificate from Chartered Accountant for last five financial years (2017-18, 2018-19, 2019-20, 2020-21 and 2021-22) excluding current financial year bearing Unique Document Identification Number (UDIN) of Institute of Chartered Accountants of India with breakup of civil works and total works excluding GST/VAT in each financial year. Clause 4.4 of ITB. Without UDIN the certificate will not be entertained and the bid rejected.
(b) Income Tax Returns for the last five financial years immediately preceding the bid due date i.e. for the financial year (2016-17, 2017-18, 2018-19, 2019-20 and 2020-21).
(c) Balance sheet for last five financial years.
(d) Profit and loss account for last five financial years.
(e) Company Audit Report (if applicable) for last five financial years.
(f) Audit Reports under Income Tax Act (3CA/3CB along with 3CD reports) (wherever applicable) for the last five financial years.
(g) TDS certificate/26AS form downloaded from income tax website for the last five financial years.
(h) The successful bidder will have to provide the original documents (from a to g) duly certified by a Chartered Accountant before a work is allotted to him. Any certificate issued by the Chartered Accountant should mandatorily bear UDIN.
6. It is stated that the respondents, in passing the impugned order, failed to consider Clause (h) of the clause 4.4 B (a) III of the SBD and the fact that all the five year’s company audit report stands uploaded and because of technical glitch on the portal, the report of the petitioner of five years was not available on the portal. Since the impugned order dated 05.12.2022 was passed by the respondents without giving a chance of fair hearing to the petitioner, the petitioner tendered a representation on 06.12.2022, to consider th
The judgment emphasizes the importance of complying with tender conditions and the limited scope of judicial review in contractual and commercial matters.
The main legal point established in the judgment is the requirement for strict compliance with essential conditions in a tender, and the need for substantial compliance with the broader objectives of....
The court emphasized that strict adherence to financial criteria in tendering processes is necessary, and failure to comply can result in bid rejection.
The court emphasized the limited scope of judicial review in tender matters, the importance of punctilious and rigid enforcement of tender terms, and the uniform application of tender requirements to....
District Collector is not empowered to consider the aspect of alteration of any route or alignment except to remove difficulties faced by the licensee. As a result of this, even the request of altern....
Judicial review of tendering decisions is limited to assessing legality, with courts refraining from substituting the tender authority's decisions unless in cases of illegality or manifest arbitrarin....
A company is not required to disclose ongoing commitments of its directors that have not been officially transferred to it, as it constitutes a separate legal entity.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
