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IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
Manoj Kumar Tiwari, ACJ., Vivek Bharti Sharma, J.
AD World, a partnership firm - Petitioner
Versus
Nagar Nigam, Dehradun - Respondent
Writ Petition (M/B) NO. 524 OF 2024
Decided On : 07-11-2024
(A) Uttarakhand Procurement Rules, 2017 - Rule 36 - U.P. Municipal Corporation Act, 1959 - Section 540 - Writ petition challenging tender notice and e-tender document - Petitioner contended that conditions in the tender violated procurement rules and the Indian Stamp Act - Court found that the tender conditions were in accordance with statutory rules for advertising rights, which override general procurement rules. (Paras 5, 11, 12)
(B) Tender Conditions - The court held that the conditions imposed in the tender document were not arbitrary or illegal, as they were backed by statutory provisions and aimed to safeguard the interests of the Municipal Corporation. (Paras 11, 12)
Facts of the case:
The petitioner, an advertising agency, challenged the tender notice and e-tender document issued by the Municipal Corporation, Dehradun, claiming that the conditions violated procurement rules and the Indian Stamp Act. The tender required a deposit of 10% of the reserve price as earnest money, which the petitioner argued was excessive.
Findings of Court:
The court found that the tender conditions were valid under the statutory rules governing advertising rights and did not violate any laws.
Issues: The main issues were whether the tender conditions violated the Uttarakhand Procurement Rules and the Indian Stamp Act, and whether the conditions were arbitrary.
Ratio Decidendi: The court ruled that the tender conditions were in accordance with the statutory rules and aimed to protect the interests of the Municipal Corporation, thus justifying their imposition.
Result: Writ petition dismissed.
JUDGMENT :
Manoj Kumar Tiwari, ACJ.
Petitioner is an advertising agency.
2. By means of this writ petition, petitioner has sought the following reliefs :
(ii) Issue a writ, order or direction in nature of certiorari quashing the term & condition stipulated in clause 3(3) of impugned e-tender document dated 27.10.2024 (Annexure No. 3 to this writ petition) issued in pursuance of impugned tender notice dated 26.10.2024 (Annexure No. 3 to this writ petition), as the same is in violation of the provisions contained under Indian Stamp Act, 1899.
(iii) Issue a writ, order or direction in the nature of certiorari quashing the term & condition stipulated in clause 4(10) of impugned e-tender document dated 27.10.2024 (Annexure No. 3 to this writ petition) issued in pursuance of impugned tender notice dated 26.10.2024 (Annexure No. 3 to this writ petition) to the extent of deposit of earnest money deposit (Tender Security) in violation of Rule 36 of the Uttarakhand Procurement Rules, 2017.
(iv) Issue a writ, order or direction in the nature of certiorari calling for entire records of the tender process in pursuance to impugned tender notice dated 26.10.2024 (Annexure No. 3 to this writ petition) and quashing all the actions taken and decisions made in pursuance of the same.”
3. Petitioner is aggrieved by Clause No. 4(10) of the e-tender document published on 27.10.2024. According to him, the condition contained in Clause 4(10) is contrary to provision contained in Uttarakhand Procurement Rules, 2017.
4. Clause No. 4(10) of the e-tender document is extracted hereunder :
^^4¼10½ fufonknkrk dks fufonk esa izfrHkkx djus ls iwoZ leLr rduhdh nLrkostksa dks LdSu dj bZ0 fufonk iksVZy ij viyksM djrs gaq, fufonk esa izfrHkkx djus dh vafre frfFk ls iwoZ fnukad 08-11-2024 dh lka; 4%00 cts rd :0& 71]51]870@& dh /kujkf'k dk;Z izfrHkwfr& lh0Mh0vkj0@ ,Q0Mh0vkj0 tks fd ofj"B foRr vf/kdkjh uxj fuxe nsgjknwu ds uke Iyst gksxh dks ewy esa rFkk leLr rduhdh nLrkostksa dh ewy izfr uxj fuxe dk;kZy; esa tek djuk vfuok;Z gSA nLrkost ,oa ewy esa izfrHkwfr&lh0Mh0vkj0@ ,Q0Mh0vkj tek u gksus dh n'kk esa fufonknkrk dks vlQy ekuk tk;sxkA
5. According to the petitioner, Municipal Corporation, Dehradun issued tender notice on 26.10.2024, inviting bids from persons interested in award of contract for advertising rights in certain areas within Municipal limits of Dehradun, and the reserve price for the said contract was fixed as Rs.7,15,18,700/-. He contends that as per Rule 36 of the Uttarakhand Procurement Rules, 2017, the amount required to be deposited by a bidder as tender security / earnest money should not be more than two per cent of the value of the contract subject to minimum of Rs. 75,000/- where the valuation of the contract is more than rupees 25 lacs. He further submits that the said provision further provides that earnest money to the extent of three per cent can be required to be deposited by the bidders, if the valuation of the contract is less than rupees 25 lacs. Thus, he submits that as, in the present case, valuation of the contract is more than rupees 700 lacs, therefore, the condition put in the e-tender document asking the bidders to deposit earnest money to the extent of ten per cent of the reserve price is unsustainable in the eyes of law.
6. Municipal Corporation, Dehradun was granted time to get instructions in the matter. Today, on instructions, learned counsel appearing for Municipal Corporation relies upon a Notification dated 16.02.2016, issued by the Government of Uttarakhand by invoking its rule making power under Section 540 of the U.P. Munic
Tender conditions set by Municipal Corporations for advertising rights, backed by statutory rules, are valid and do not violate general procurement laws.
The main legal point established in the judgment is that the tender conditions must adhere to the provisions of the Uttarakhand Procurement Rules 2017 and should not be arbitrary or illegal.
The tender process violated the Uttarakhand Procurement Rules, leading to its invalidation and disposal of the writ petition as infructuous due to the Zila Panchayat's lack of authority to collect th....
Judicial review of tender conditions is restricted to cases of arbitrariness or unreasonableness, reinforcing that the authority determining eligibility criteria has the discretion and expertise in c....
The court upheld the discretion of authorities in fixing EMD amounts for mineral auctions under amended rules, emphasizing limited judicial intervention in tender matters.
Lowest bidder has no vested right to contract; authority may cancel tender for valid reasons like cartel without malice; tender conditions not judicially reviewable unless arbitrary.
The formulation of tender conditions falls within the administrative domain of the authority, and judicial review is limited to preventing arbitrariness or favoritism. The courts cannot interfere wit....
The central legal point established in the judgment is the importance of adhering to government notifications and principles of natural justice in tender processes, while also highlighting the discre....
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