IN THE HIGH COURT OF ORISSA AT CUTTACK
Jaswant Singh, Murahari Sri Raman, JJ.
Nilendra Kumar Mahapatra – Appellant
Versus
Indian Oil Corporation & Ors. – Respondents
W.P.(C) No. 39451 of 2021 (in the matter of an application under Articles 226 & 227 of the Constitution of India, 1950)
Decided On : 13-09-2022
REJECTION - PETITIONER'S BID - Motor Vehicles Act 1988, Central Motor Vehicles Rules 1989, NIT Clause 1.4 - [22 of Motor Vehicles Act 1988, 48 of Central Motor Vehicles Rules 1989, NIT Clause 1.4]
Fact of the Case:
The petitioner, an unsuccessful tenderer, sought the quashing of the rejection of their bid by IOCL. The petitioner participated in the tender process for Road Transportation of Bulk Petroleum Products and submitted a bid for 6 tank trucks. The technical evaluation found favor with the petitioner's bid, but the financial evaluation rejected 5 out of 6 tank trucks. The petitioner challenged the rejection, citing the requirement of a valid registration certificate and Smart Card. The IOCL argued that the rejection was based on merit consideration and that the petitioner's bid did not qualify for allocation.
Finding of the Court:
The court found that the rejection of the petitioner's bid at the financial evaluation stage was correct. The court noted that the rejection was not solely based on the absence of a Smart Card, but on merit consideration. The court also observed that the petitioner's bid did not qualify for allocation based on the ranking method specified in the NIT.
Issues: The main issue was whether the rejection of the petitioner's bid at the financial evaluation stage was justified. The petitioner argued that the rejection was based on the absence of a Smart Card, while the IOCL contended that the rejection was due to merit consideration and lack of qualification for allocation.
Ratio Decidendi: The court held that the rejection of the petitioner's bid was based on merit consideration and lack of qualification for allocation, not solely on the absence of a Smart Card. The court also emphasized the importance of pleading and producing sufficient material to substantiate a case in tender matters.
Final Decision: The court dismissed the writ petition, finding that the rejection of the petitioner's bid at the financial evaluation stage was justified. All interim orders were vacated, and each party was ordered to bear their own costs.
JUDGMENT
Murahari Sri Raman, J. - This matter is taken up by virtual/physical mode.
2. The petitioner, an unsuccessful tenderer, has sought for the following reliefs:
'Under the circumstances the petitioner most humbly prays that this Hon'ble Court may be graciously pleased to issue notice of Rule Nisi calling upon the opposite parties to show cause as to why the rejection of petitioner's bid vide Annexure-1 should not be quashed as being illegal and arbitrary;
And upon the opposite parties not showing cause/or insufficient cause being shown, this Hon'ble Court be further pleased to quash Annexure-1 for being illegal and null and void and the opposite parties and more particularly opposite party No.2 be directed to consider the petitioner's tender on merits subject to the petitioner meeting the other terms and conditions of the notice inviting tender and award him the work of transportation of IOCLs bulk petroleum products ex-IOCLs Bhubaneswar terminal;
And pass such other and further orders as this Hon'ble Court may deem fit and proper.'
3. The impugned Annexure-1 is the communication dated 19th November, 2021 of Indian Oil Corporation (in short, 'IOCL') through e-mail indicating the following:
'Government electronic Procurement evaluation for the tender Indian Oil Corporation eProcurement portal/Date 19-Nov-2021
Sub: Financial evaluation for the tender-reg
Dear user,
With reference to your bid submission for the following tender
Tender Id : 2021-ERO-137817-1
Tender Reference No. : RCC/ERO/37/2021-22/PT-46
Organisation Chain : Indian Oil//Marketing//Easternn Region Office//Contract cell
You are informed that your bid for the above tender has been rejected during financial evaluation by the duly constituted committee for the reason No Allocation of TT in the respective category as per Evaluation Criteria mentioned in the Tender Document.
In case of any clarifications or feed back, you may contact Tender Inviting Authority (TIA).
Tender Inviting Authority'
4. Shorn off details, the case of the petitioner runs as follows:
i. The petitioner, a continuing transporter of petroleum products of IOCL by tank trucks (referred to as 'TT') ex- Bhubaneswar, participating in the tender process in the General Category, submitted his bid for 6 TT in the ratio of 2:4 [2 of 12-14KL capacity and 4 of 18-40KL capacity] in response to the Notice Inviting Tender (for brevity, 'NIT') for Road Transportation of Bulk Petroleum Products- Motor Spirit/High Speed Diesel/Branded Fuels with location: Bhubaneswar Terminal.
ii. Prior to financial evaluation, his technical evaluation did find favour with, communication of which is to the following effect:
'Government electronic Procurement evaluation for the tender
Indian Oil Corporation eProcurement portal/Date 01-Nov- 2021
Sub: Technical evaluation for the tender-reg
Dear user,
With reference to your bid submission for the following tender
Tender Id : 2021-ERO-137817-1
Tender Reference No. : RCC/ERO/37/2021-22/PT-46
Organisation Chain : Indian Oil// Marketing// Eastern Region Office// Contract cell
You are informed that your bid for the above tender has been accepted during technical evaluation by the duly constituted committee.
In case of any clarifications or feed back, you may contact Tender Inviting Authority (TIA).
Tender Inviting Authority'
iii. As per Clause-22 of 'Tender Terms & Conditions' appended to Notice Inviting Tender vide Annexure-2, 'the Court of Jurisdiction till the placement of LoA is High Court of Kolkata and thereafter the High Court of Cuttack during the contract period'. However, in the case of Ganesh Movers & Logistics Pvt. Ltd. Vrs. IOCL, WPA No.19365 of 2021, disposed of on 20.12.2021 challenge was laid before the High Court at Calcutta to the rejection of bid in respect of Jharsuguda Terminal on the fact of non- submission of Smart Card. The Single Bench of said Court held that 'The endorsement at the bottom o
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.
If two views are possible the Court should not impose the other view in the instant case.
Compliance with specific pre-qualification criteria and terms and conditions of a tender notice is crucial for the acceptance of a bid.
The court upheld that adherence to tender guidelines by public entities is essential, and allegations of impropriety must be substantiated for judicial intervention.
The authority issuing the tender has discretion in interpreting and enforcing tender requirements, and unless there is evidence of illegality, courts should exercise restraint in interfering with con....
Strict adherence to tender requirements, particularly for essential documents like NOCs, is mandated for eligibility, with judicial restraint applied in reviewing tender decisions.
The main legal point established in the judgment is that the rejection of tenders must be based on valid legal grounds and cannot be arbitrary or unfair. The court emphasized the importance of legal ....
Judicial review in tender matters is narrowly circumscribed. A court should only interfere if the procuring authority's action is arbitrary, irrational, or malafide. Mandatory tender conditions must ....
The Court emphasized the limited scope for interference in matters relating to tender/contract and the need for public interest and prudence in applying the principle of restraint.
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