CASE NAME- BANSHIDHAR CONSTRUCTION PVT. LTD. Vs. BHARAT COKING COAL LIMITED & OTHERS
CASE NO.- CIVIL APPEAL NO. 11005 OF 2024
DATE OF JUDGMENT- 04.10.2024
CORAM- JUSTICE BELA M. TRIVEDI, JUSTICE SATISH CHANDRA SHARMA
FACTS OF THE CASE-
The Appellant-Banshidhar Construction Private Limited has assailed the Judgment and Order dated 18.07.2024 passed by the High Court of Jharkhand at Ranchi in Writ Petition (Civil) No. 2896 of 2024, whereby the High Court has dismissed the said writ petition, confirming the impugned decision dated 06.05.2024 of the Technical Bid Committee of the Respondent-BCCL rejecting the Technical bid of the Appellant.
In August 2023, BCCL issued a tender for a coal mining project. The appellant participated in the tender but was later disqualified due to non-compliance with certain tender requirements. Another company was declared the successful bidder. The appellant filed a Writ Petition, which was dismissed by the High Court. In August 2024, the court issued notices to the respondents, and the project was put on hold. In September 2024, the court requested the original tender file for review.
ISSUE OF THE CASE-
- Whether the Respondent Bharat Coking Coal Limited (BCCL) was justified in rejecting the Technical bid of the Appellant, while accepting the Technical bid of the Respondent no. 8 – Company?
- Whether declaring respondent no. 8 as successful bidder, though the Respondent no. 8 had not complied with the mandatory requirement of submitting the important documents relating to the qualification criteria as contained in Clause 10 of the Notice Inviting Tender (NIT) dated 16.08.2023, and thereby had failed to qualify the Eligibility criteria laid down therein?
CONTENTIONS OF APPELLANTS-
Learned Senior Advocate Mr. Ravi Shankar Prasad appearing for the Appellant vehemently submitted that the reason for rejecting the Appellant’s Technical bid was grossly arbitrary and discriminatory in as much as not only the bid of Respondent No. 8 was accepted though it was not accompanied by important documents, but it was allowed to subsequently file the said documents to make up the lack of eligibility. He further submitted that the Appellant had complied with all the conditions of the NIT, however The Technical bid of the Appellant was rejected on the extraneous ground by the Technical Bid Committee of the Respondent-BCCI that the bid documents were signed on 13.11.2023, and other documents including Power of Attorney were notarized on 14.11.2023. According to him the bid documents were uploaded/filed on 29.11.2023 i.e. within the stipulated time, which complied with all the mandatory requirements of Clause 10 of the NIT.
Mr. Prasad has relied upon various decisions of this Court to submit that the decision of the Government and its instrumentalities must not only be tested by the application of Wednesbury principle of reasonableness but also must be free from arbitrariness. Invoking the Public Trust Doctrine, Mr. Prasad lastly submitted that Appellant’s bid was much more competitive and favourable (Rs. 700 crores approx.) to the Respondent BCCL, and by allotting the tender to the Respondent no. 8 which even otherwise was ineligible, a commensurate loss was caused to the public through the Respondent BCCL.
CONTENTIONS OF THE RESPONDENT-
However, the learned Solicitor General Mr. Tushar Mehta, learned senior counsel Mr. Anupam Lal Das and Mr. Vikramjit Banerjee, ASG appearing for Respondent no. 1 to 7 justifying the decision of Tender Evaluation Committee rejecting the Technical Bid of the Appellant, submitted that the Power of Attorney was dated 07.11.2023, which was notarized on 14.11.2023, whereas the mandatory bid documents were executed on 13.11.2023, which was not in consonance with clause 10 Part I/Cover 1 (OID) of NIT. According to them, the mandatory bid documents were executed on 13.11.2023, when the Executant had no authority to execute the said bid documents. A person submitting the bid was required to have a valid Power of Attorney in his favour at least on the date on which he was signing and executing the bid documents, and therefore the Appellant did not meet with the Eligibility criteria prescribed under the terms of the NIT.
They further submitted that during the course of evaluation the Respondent BCCL could seek shortfall documents from the Bidders, but could not permit them to replace the bid documents. So far as Respondent no.8 – Company was concerned, the Tender Committee had sought clarification on 09.04.2024 regarding the Audited Annual Reports, which approach and methodology of the Committee was consistent with the other bidders also who were similarly situated as the Respondent no. 8. The learned Counsels also submitted that as per the settled legal position the project being infrastructure project and of national importance, and the scope of judicial review in the matter of award of Contracts being very limited, the Court may not interface with the same, even if the Court finds that there was total arbitrariness or that the tender was granted in a malafide manner.
CONCLUSION-
The bench observed that “Government bodies/ instrumentalities are expected to act in absolutely fair, reasonable and transparent manner, particularly in the award of contracts for Mega projects. Any element of arbitrariness or discrimination may lead to hampering of the entire project which would not be in the public interest.”
The Supreme Court found that BCCL had arbitrarily rejected the technical bid of the appellant while accepting the bid of another respondent which had not complied with the conditions of the Notice Inviting Tender (NIT). The decision of the Tender Evaluation Committee of BCCL, which declared the other respondent as a successful bidder, was also set aside.
The Court rejected a “lame submission” made on behalf of BCCL that the Tender Evaluation Committee could call for the shortfall of documents and could not allow replacement of the documents. “Thus, the said action of the Respondent BCCL in rejecting the Technical bid of the Appellant on absolutely extraneous ground and accepting the Technical bid of the Respondent no.8 though submitted in utter noncompliance of the mandatory requirement of Clause 10 of the NIT, and subsequently calling upon the Respondent no.8 to furnish the shortfall of documents after the opening of technical bids of the Bidders, was totally arbitrary and illegal,” the Court remarked.
The Bench reiterated that “the decision of the government/ its instrumentalities must be free from arbitrariness and must not be affected by any bias or actuated by malafides. Government bodies being public authorities are expected to uphold fairness, equality and public interest even while dealing with contractual matters. Right to equality under Article 14 abhors arbitrariness. Public authorities have to ensure that no bias, favouritism or arbitrariness are shown during the bidding process and that the entire bidding process is carried out in absolutely transparent manner.”
Consequently, the Court set aside the impugned decision of BCCL for rejecting the Technical bid of the appellant and further declaring the other respondent as successful. Accordingly, the Court allowed the appeal.
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Written by- ALOK G. CHHAPARWAL
