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2023 Supreme(Online)(Mad) 100234

MADRAS HIGH COURT
R. Suresh Kumar, J
AMG. Vijaykumar v. General Manager (Contracts Cell) India Oil Corporation Ltd. Chennai
Writ Petitions No. 1234 of 2022



Advocates:
For the Appellants/Petitioners: Mr. Vijay Narayan
For the Respondents: Mr. M. S. Krishnan

The rejection of a technical bid based on minor documentation errors is arbitrary and undermines the principles of fairness and public interest essential for the tender process.

Headnote:(A) Tender Law - Arbitrary rejection of a technical bid - The rejection is deemed arbitrary and irrational as the petitioner’s endorsement stating the declaration is not applicable does not constitute a defect - The technical bid must be evaluated on merit - Penalizing minor technical errors undermines public interest as the tender process aims to secure the best deal. (Paras 20, 26, 28)

(B) Legal Principles - Procedural impropriety in administrative action - The impulsive rejection of the petitioner's bid shatters the principles of fairness and legality, justifying judicial intervention in tender processes. (Paras 24, 27)

Facts of the case:
The petitioner, a transport contractor, contested the rejection of his technical bid by the Oil Corporation for not submitting a certain declaration deemed unnecessary at the bidding stage, arguing it was arbitrary and counter to public interest.

Findings of Court:
The rejection based on a minor declaration error is arbitrary; the bid should not have been dismissed without fair consideration, and acceptance is essential for public interest in securing adequate transportation of petroleum products.

Issues: The court primarily examined whether the striking off of declaration - I as not applicable could substantiate the rejection of the technical bid on grounds of defect.

Ratio Decidendi: The endorsement of non-applicability by the petitioner reflects an understanding of the tender's requirements, affirming it should not constitute a basis for rejection, which must preserve fairness and legality.

Result: Writ Petitions allowed as prayed for.

Table of Content
1. challenge against technical bid rejection. (Para 1 , 2 , 3)
2. petitioner's arguments on the bid. (Para 4 , 5 , 6)
3. respondent's defense on bid rejection. (Para 7 , 8 , 9 , 10 , 11)
4. evaluation of the declaration's requirement. (Para 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19)
5. final determination of bid's rejection rationale. (Para 20 , 26)

1. The petitioner has challenged the rejection of its technical bid by the respondent / Oil Corporation under the impugned orders both dated 08.06.2022.

2. The petitioner is a transport contractor. He has submitted his bid in the auction conducted by the respondent / Oil Corporation for appointment of transport contractors. Under the impugned orders, the petitioner's bid has been rejected during technical evaluation by the respondent / Oil Corporation for the reason "Bidder has striked off declaration - I stating NA in the attachment - 11". According to the respondent / Oil Corporation, the said declaration submitted by the petitioner is invalid as the petitioner has erroneously struck of the declaration by stating it is not applicable.

3. The petitioner has challenged the impugned orders both dated 08.06.2022, which is in respect of two tenders rejecting the petitioner's bid on the following grounds:
a) the impugned order of the second respondent is arbitrary and against the principles of natural justice;
b) the second respondent failed to note that the declaration was filled up and uploaded;
c) the second respondent failed to note that the declaration sought in the query dated 02.05.2022 raised by the second respondent is a repetitive declaration, as the same has already been given by the petitioner. According to the petitioner, the inadvertent act of striking off is only an insignificant error and not grave enough to reject the technical bid of the petitioner. However, it is the case of the respondent / Oil Corporation that the declaration is an essential requirement as part of the tender documents. According to them, even if assuming the said declaration is trivial in nature, being a high value tender, the petitioner ought to have been careful while submitting the tender documents and cannot blame his consultant for the defect. They would also contend that after scrutiny of the tender documents of the petitioner, a query was raised by the respondent / Oil Corporation on 02.05.2022, requesting the petitioner to submit the declarations as required under the tender document which includes declaration - ''I'', ''II'' and ''III'' (attachment - 11), which was the reason for rejection of the petitioner's bid under the impugned orders during technical evaluation made by the respondent / Oil Corporation. According to the respondent / Oil Corporation, despite the said query, the petitioner has not submitted the necessary declaration but instead has made an endorsement that the said declaration is not applicable (NA);
d) if the petitioner's bid is now accepted after its rejection under the impugned orders, it will lead to great ramification, as other bidders whose bids have been rejected pursuant to the technical evaluation, will also challenge the rejection before the appropriate Court;
e) The respondent is an Oil Corporation and therefore, any delay in the appointment of transport contractors will not be in public interest, as it would lead to disruption of petroleum products supply to various petroleum retail outlets.





4. Heard Mr. Vijay Narayan, learned Senior Counsel for the petitioners and Mr. M. S. Krishnan, learned Senior Counsel for the respondent.

5. Mr. Vijay Narayan, learned Senior Counsel drew the attention of this Court to the impugned orders as well as to declaration - ''I'' (attachment - 11) which has been struck off by the petitioner as not applicable (NA). He would submit that the said declaration will come into effect only after the contract is awarded to the petitioner and therefore, according to him, the petitioner has rightly made an endorsement in the said declaration










































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