IN THE HIGH COURT OF MADHYA PRADESH
Sushrut Arvind Dharmadhikari and Prakash Chandra Gupta, JJ.
Pratham National Security (M/s.) v. State of M.P.
Writ Petition No. 25700 of 2022 (I); Decided on 26.6.2023
Tender -- tender relating to outsourcing of certain services -- process or decision cannot be termed as arbitrary or irrational only due to some technical errors -- cannot be interfered with unless public interest affected. (2007) 14 SCC 517 followed. [Paras 13 & 14]
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ORDER
Heard finally, with the consent of the parties.
1. In this writ petition under Article 226 of the Constitution of India, the petitioner has assailed the order dated 7.11.2022 by which the tender bid of Private Respondent No.6 has been accepted. In spite of various irregularities ignoring the fact that the petitioner is the L-1.
2. The brief facts of the case are that tender (NIT) was floated on 3.8.2022 by the respondent No.4 to grant annual contract of House Keeping Services, Support Staff Services and Computer Operation Services in District Dewas.
3. The petitioner as well as respondent No.6 participated in the Bid. After opening of the Bid, even though the petitioner being L-1 was not declared as successful bidder whereas, the respondent No.6 was declared as L-1.
4. That, no reasons were informed by the petitioner even though being L-1 was not awarded the tender. The petitioner also pointed out several irregularities in respect of bid of respondent No. 6 but no heed was paid to the grievance of the petitioner and the respondent No.6 has been wrongly awarded the tender. Being aggrieved, the petitioner has approached this Court seeking cancellation of tender awarded to respondent No.6. It is only after reply having been filed on behalf of respondent Nos. 1 to 5, the petitioner came to know the reason for rejection of tender. The reason assigned is that it was found that the rates quoted at the instance of the petitioner with respect to Total Monthly cost of Consumables was less than 10%. The petitioner at its own instance and as per its own accord had calculated the wages only for 26 days instead of 30 days.
5. The petitioner had pointed out various irregularities in respect of respondent No. 6 which are as follows:-
(1) The respondent No.6 submitted the tender document treating it to a “Proprietorship concern” (clear from the affidavits and seal affixed over on the document). As per the certificate, the respondent No.6 is incorporated as “Partnership concern”. The experience certificate annexed shows that the respondent No.6 is a “ Private Ltd. Company”. The same is not permissible as per eligibility criteria as mentioned in Clause No.5 of the Tender documents. In all these sub-clauses, different-different entities certificates have been annexed by the respondent No.6.
(2) Clause 5(10) of the Tender Document requires copy of valid registration certificate under the Contract Labor (Regulation and Abolition Act, 1970) but the registration certificate is of Private Ltd. Company. As per Tender Document, the Proprietorship Concern only was eligible to participate in the tender and, therefore, the documents submitted by the respondent No.6 ought to have been of the “Proprietorship Concern” only.
(3) As per Clause 5(11) provides that the requirement of Income Tax and other entitlement should be of Proprietorship Concern. However, the document submitted by the respondent No. 6 is of different concerns/entities having different names
(4) The respondent No. 6 did not fulfill the eligibility criteria in spite of that the tender has been awarded to respondent No.6.
6. The eligibility criteria is reproduced below:-
Eligibility Criteria:
All tenderer are compulsory required to do indexing of documents, starting from Eligibility criteria No.1 to No.15
1. The Tenderer should registered under Indian Proprietorship Registration Act 1908/ Indian Partnership Act 1932/Companies Act 1956, Societies/Trust registered under applicable statutes in India.
2. The copy of Firm's Registration/ Incorporation Certificate with relevant authority in India.
3. The Tenderer must have achieved minimum average turnover of Rs. 2 crore during last three financial years (2018-19, 2019-20 and 2020-21) and should be profit making.
4. Certificate Statement of average annual turnover of latest last three years (2018-19, 2019-20 and 2020-21), in support of eligibility criteria mentioned above,from a registered practicing Chartered Accountant with UDIN.
5. Certifica
The court upheld the authority's discretion in setting eligibility criteria for tenders, emphasizing that judicial review is limited to cases of arbitrariness or unreasonableness.
An unsuccessful bidder cannot challenge the award of a tender if disqualified in the technical evaluation, as they lack standing to do so.
Judicial review in public procurement is limited; courts refrain from interference unless clear evidence of arbitrariness or bad faith is established.
An unsuccessful bidder lacks standing to challenge the issuance of a Letter of Intent when disqualified for failing to meet mandatory requirements.
Tender - Eligible for participating and opening of price bid in tender proceeding - Respondent-State acted in extending undue favour to respondent No.6, which made the decision making process to be e....
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