Tuesday 9 September 2014

Whether a prospective bidder can seek enforcement of his suggestion given to authority issuing tender?

 It is further well settled that the terms of invitation to tender
being in realm of contract, the same cannot be open to judicial scrutiny.
A bidder participating in the tender process has a right to equality and
fair treatment in the matter of evaluation of the bids submitted. In the
present case, the Petitioner No.1 was merely a prospective bidder
seeking acceptance of its suggestions given to the tender notice. That
one suggestion given by the Petitioner was accepted itself indicates that
the Corporation had exhibited an open approach on the suggestions
received from various prospective bidders. Merely because its other
suggestions were not accepted by the Corporation cannot lead to the
conclusion that the Corporation had not acted fairly while considering
such suggestions received by it. It is clear on a perusal of the minutes of
Pre-bid Meeting that the Corporation has given due thought to the
suggestions received from various bidders and has also placed on
record its remarks while not accepting a particular suggestion. Hence,
the submission made on behalf of the Petitioners that the Corporation
had acted irrationally in the above matter cannot be accepted.

 The Corporation was justified in requiring a manufacturer to
have experience of at least one year of operating and maintaining the
machine in question at any Government / Semi-Government
Organization. Such requirement can hardly be termed as arbitrary or
irrational. Merely because the Petitioner No.1 did not have aforesaid
experience would not be a ground to compel the Corporation to accept
the suggestion made by it. As held by the Supreme Court in the case of
Monarch Infrastructure (P) Ltd (supra), the Authority calling the
tender is the best judge as regards conditions prescribed in the tender.
In view of the aforesaid, there is no ground whatsoever made out by the
Petitioners warranting interference in writ jurisdiction under Article
226 of the Constitution of India. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION No. 2609 OF 2014.

TPS Infrastructure Limited and Anr ..Petitioners.
Versus
Thane Municipal Corporation and others ..Respondents.

CORAM : A.S. OKA AND A.S.CHANDURKAR,JJ.
DATE : 12TH JUNE, 2014.
Citation; 2014(4) MHLJ 551 Bom

1. The issue that arises for consideration in this writ petition
under Article 226 of the Constitution of India is whether a prospective
bidder can seek enforcement of suggestions/amendments given by him
to the authority issuing the bid.
2. The aforesaid issue arises in the backdrop of E-Tender
Notice dated 4th January,2014 issued by Respondent No.1 Thane

Municipal Corporation. By aforesaid E-Tender notice, the Corporation
intended to invite bids for supply, operation and maintenance of
vehicle mounted suction-cum-Jetting Machine with Recycling facility
for cleaning / desilting of sewer lines in Thane City area. The
petitioner No.1 claims to be a leading manufacturer of sewer lines
maintenance equipments. According to the Petitioners, after perusing
the E tender documents, they found certain technical specifications and
qualification criteria to be highly restrictive. Hence, on 20th January,
2014 the Petitioners gave some suggestions/amendments to the
Corporation which according to them were not suitable considering the
nature of work proposed to be done. A Pre-Bid Meeting was held on
21st January,2014 that was attended by the Petitioners as well as other
prospective bidders. After due deliberations the Corporation
considered the suggestions/amendments as suggested and thereafter on
1st February,2014 uploaded the remarks of the concerned department to
the suggestions/amendments as made. In so far as the suggestions
given by the Petitioner No.1 are concerned, out of three suggestions
given, one was accepted and two were not accepted. Being aggrieved
by the non acceptance of these two suggestions given by it the
petitioners have preferred present writ petition praying that the

suggestions as given by it be directed to be accepted and a fresh tender
be published in that regard.
3. Considering the nature of the controversy, we have heard
Shri Pradeep Havnur, learned counsel for the Petitioners and Mr Apte,
Senior Counsel for Respondent Nos. 1 to 3 and are deciding the
present writ petition finally.
4. The learned Counsel for the Petitioners Shri Havnur has
submitted that the suggestions/amendments as proposed by it were
with a view to have a fair competition amongst the bidders and said
suggestions were in the interest of the Corporation itself. It was
submitted that the fact that one of the suggestions given by the
Petitioners was accepted itself showed that the Corporation had
realized the effectiveness of said suggestions. However, with a view to
restrict the bidders, the other suggestions made by the Petitioners were
not accepted. It was submitted that the experience of a manufacturer
who had supplied the machines in question to private companies
working for Government bodies ought to have been recognised.
According to the petitioners, they had supplied similar machines to the
Delhi Jal Board and hence they had the necessary experience in that

regard. The learned Counsel therefore submitted that the Corporation
by not accepting all the suggestions / amendments as proposed by the
Petitioners had acted in an irrational mannner. It was, therefore, prayed
that a fresh tender be directed to be published after taking into
consideration all the suggstions / amendments as proposed by the
petitioners.
5. On the other hand, Shri R.S. Apte, learned Senior Counsel
for the Respondents with Shri N.R.Bubna submitted that the
Petitioners had no right whatsoever to insist for acceptance of the
suggestions / amendments as made by them. It was submitted that after
the pre-bid meeting held on 21st January,2014, the Respondent No.1-
Corporation had considered the various queries / suggestions received
from the four prospective bidders. While some suggestions were
accepted, others that were not found feasible were not accepted. The
learned Senior Counsel submitted that the allegation that the
Corporation did not intend to have a large number of bidders was
without any basis. There was no factual foundation in the pleadings in
the writ petition to substantiate said allegation. It was submitted that
by holding a pre-bid meeting and considering various
suggestions/amendments as received, the Corporation had acted in a

fair and transparent manner. In absence of any allegations of malafide,
it was urged that the writ petition deserves to be dismissed.
6. Before considering the issue as raised, it would be apposite
to keep in mind the following aspects as can be gathered from various
decisions of the Supreme Court of India.
(i) (1994) 6 Supreme Court Cases 651
Tata Cellular Vs. Union of India
(1) The modern trend points to judicial
restraint in administrative action.
(2) The court does not sit as a court of
appeal but merely reviews the manner in which
the decision was made.
(3) The court does not have the expertise to
correct the administrative decision. If a
review of the administrative decision is
permitted it will be substituting its own
decision, without the necessary expertise
which itself may be fallible.
(4)The terms of the invitation to tender cannot
be open to judicial scrutiny because the
invitation to tender is in the realm of contract.
Normally speaking, the decision to accept the
tender or award the contract is reached by
process of negotiations through several tiers.
More often than not, such decisions are made
qualitatively by experts.

(5) The Government must have freedom of
contract. In other words, a fair play in the
joints is a necessary concomitant for an
administrative body functioning in an
administrative sphere or quasiadministrative
sphere. However, the
decision must not only be tested by the
application of Wednesbury principle of
reasonableness (including its other facts
pointed out above) but must be free from
arbitrariness not affected by bias or
actuated by mala fides.
(6) Quashing decisions may impose heavy
administrative burden on the
administration and lead to increased and
unbudgeted expenditure.”
----
(ii) (2012) 8 Supreme Court Cases 216
Michigan Rubber (India) Limited
Vs State of Karnataka and others
“(c) In the matter of formulating conditions of a
tender document and awarding a contract, a
greater latitude is required to be conceded to the
State authorities unless the action of the tendering
authority is found to be malicious and a misuse of
its statutory powers, interference by courts is not
warranted;
(d) Certain preconditions or qualifications for
tenders have to be laid down to ensure that the
contractor has the capacity and the resources to
successfully execute the work;”

(iii) (2009) 6 Supreme Court Cases 171
Meerut Development Authority V. Association of
Management Studies and Anr
“A tender is an offer. It is something which invites
and is communicated to notify acceptance. Broadly
stated it must be unconditional; must be in the proper
form, the person by whom tender is made must be
able to and willing to perform his obligations. The
terms of the invitation to tender cannot be open to
judicial scrutiny because the invitation to tender is in
the realm of contract. However, a limited judicial
review may be available in cases where it is
established that the terms of the invitation to tender
were so tailor made to suit the convenience of any
particular person with a view to eliminate all others
from participating in the biding process.
The bidders participating in the tender
process have no other right except the right to
equality and fair treatment in the matter of evaluation
of competitive bids offered by interested persons in
response to notice inviting tenders in a transparent
manner and free from hidden agenda. One cannot
challenge the terms and conditions of the tender
except on the above stated ground, the reason being
the terms of the invitation to tender are in the realm
of the contract. No bidder is entitled as a matter of
right to insist the Authority inviting tenders to enter
into further negotiations unless the terms and
conditions of notice so provided for such
negotiations.”
---
(iv) (2000) 5 Supreme Court Cases 287
Monarch Infrastructure (P) Ltd. Vs.
Commissioner, Ulhasnagar Municipal
Corporation and others.

“The authority calling the tender is the best judge as
regards conditions prescribed in the tender”
7. As per the tender notice dated 4th January, 2014 a bidder was
required to be the manufacturer of vehicle mounted suction cum jetting
machine with sewage recycling facility or its authorized dealer. It was
further prescribed that the manufacturer should have manufactured and
supplied at least one recycling machine of similar or higher capacity
and should have also completed minimum one year's operation and
maintenance in the preceding five years at any Government/Semi
Government Organization.
8. The suggestion given by the Petitioners vide communication
dated 20th January, 2014 in this regard was that the experience of a
manufacturer who had supplied machines with recycling facilities to
private companies / service providers working for Government bodies
should be taken into consideration. This suggestion, however, was not
accepted. According to the Corporation, manufacturers who have
supplied machines to private companies were not acceptable to it. As
stated above, the other suggestion given by the Petitioners was duly
accepted by the Corporation.
9. According to the Petitioners, by not accepting the

suggestions with regard to the supply made to a private company /
service provider was with a view to do away with fair competition.
According to the Petitioners, the aforesaid suggestion was not accepted
with a view to restrict some of the bidders. The petitioners have termed
not acceptance of their suggestion as illogical and irrational. For the
purpose of considering the grievance of the Petitioners as regards
restricting certain bidders and avoiding fair competition, there are no
specific averments in the writ petition as regards the bidders who were
sought to be favoured by not accepting suggestions of the Petitioners.
Similarly, there are no details as regards the bidders who were
restricted from bidding on account of non-acceptance of said
suggestions. Except terming the decision of the Corporation of not
accepting its suggestions as illogical and irrational there is no material
on record to indicate that such was the case. Thus, in the absence of any
specific averments with regard to the allegation of favouritism, we are
not in a position to examine the same. Though the Court can examine
the allegation that the terms of invitation to tender were tailor made to
suit the convenience of a particular person with a view to eliminate all
others from participating in the bidding process, in the absence of any
material particulars, it is not possible to go into the said question in the

present matter. A mere vague allegation of favouritism without any
details cannot be accepted.
10. It is further well settled that the terms of invitation to tender
being in realm of contract, the same cannot be open to judicial scrutiny.
A bidder participating in the tender process has a right to equality and
fair treatment in the matter of evaluation of the bids submitted. In the
present case, the Petitioner No.1 was merely a prospective bidder
seeking acceptance of its suggestions given to the tender notice. That
one suggestion given by the Petitioner was accepted itself indicates that
the Corporation had exhibited an open approach on the suggestions
received from various prospective bidders. Merely because its other
suggestions were not accepted by the Corporation cannot lead to the
conclusion that the Corporation had not acted fairly while considering
such suggestions received by it. It is clear on a perusal of the minutes of
Pre-bid Meeting that the Corporation has given due thought to the
suggestions received from various bidders and has also placed on
record its remarks while not accepting a particular suggestion. Hence,
the submission made on behalf of the Petitioners that the Corporation
had acted irrationally in the above matter cannot be accepted.

11. The Corporation was justified in requiring a manufacturer to
have experience of at least one year of operating and maintaining the
machine in question at any Government / Semi-Government
Organization. Such requirement can hardly be termed as arbitrary or
irrational. Merely because the Petitioner No.1 did not have aforesaid
experience would not be a ground to compel the Corporation to accept
the suggestion made by it. As held by the Supreme Court in the case of
Monarch Infrastructure (P) Ltd (supra), the Authority calling the
tender is the best judge as regards conditions prescribed in the tender.
In view of the aforesaid, there is no ground whatsoever made out by the
Petitioners warranting interference in writ jurisdiction under Article
226 of the Constitution of India. It may also be observed that tender
notice is dated 4th January, 2014 and the work on the basis of the
aforesaid tender notice has been duly allotted by the Respondent –
Corporation as stated by its learned Senior Counsel. Thus, even in the
public interest, it would not be appropriate to set the clock back after
lapse of more than five months. Hence, there being no merit in the writ
petition, the same is dismissed with no order as to costs.
(A.S.CHANDURKAR,J). (A.S. OKA,J)

Print Page

No comments:

Post a Comment