Eurocoustic Products Ltd. v. Union Of India And Anr. - (High Court of Delhi) (30 Sep 2016)

When substantial public interest involved or transaction is malafide, only then Court can interfere in commercial transactions

MANU/DE/2691/2016

Commercial

Petitioner, a company engaged in business of supply and installation of modular furniture since 1993 and which had submitted its technical bid in response to the notice inviting e-tenders from eligible specialized agencies/manufacturers of modular furniture for supply and installation of modular workstation in PNB Main Branch in Delhi, is aggrieved by and seeks quashing of letter issued by Respondent no.2 whereby technical bid submitted online by it was rejected on ground of Petitioner not fulfilling the eligibility condition of similar work. In estimation of Petitioner, decision of rejecting technical bid is arbitrary, unreasonable and with sole object of favouring one of the other competitors, the awardee of the contract, which had quoted higher rate than the petitioner.

It is well-settled that only a limited judicial review is available in contract and tender matters, especially, where terms of invitation to tender is specified for suiting convenience of tenderer. The minimum eligibility criteria fixed in the present tender is similar work criteria with a specified turn over. The single agreement criterion has been further explained in the tender document to mean supply and installation of modular furniture under a single agreement. This requirement, could have been introduced for no other purpose except for testing and assessing the capability of a bidder of supplying modular furniture in one go, for which any supplier/vendor must possess necessary wherewithal. Falling short of such qualification would render bid of any prospective contractor irrelevant for purposes of being selected from the competitive bidders. That apart, a bidder participating in the tender process has no other right except the right to equality and fair treatment in the matter of evaluation of competitive bids offered by other interested persons. Since the respondents did not consider the work done by the petitioner to be under a single agreement with Bank of Baroda, they are justified in rejecting the proposal of the petitioner.

The terms of the invitation to tender has to be understood in its perspective as the tenderer only knows what it requires. In matters of public contract, the Government agency should have the freedom to take a decision with the only caveat of such decision being informed, practical, fair and in accord with the Wednesbury principle of reasonableness.

Unless there is substantial public interest involved and in cases where the transaction is malafide, only then the Court of law would be justified in interfering in commercial transactions. Court while dismissing the petition held that neither unfair treatment have been doled out to Petitioner nor any irrational approach adopted by Respondents in not selecting the petitioner at pre-qualification level.

Relevant : Tata Cellular vs. Union of India (1994) 6 SCC 651Raunaq International Ltd. vs. I.V.R Construction Ltd. & Ors.: (1999) 1 SCC 492Union of India & Anr. Vs. International Trading Co. & Anr.: (2003) 5 SCC 437

Tags : BID SELECTION PRE-QUALIFICATION LEVEL