Acting On Non-Advertised And Non-Publicized Tender Condition Amounts To Denial Of Opportunity To Eligible Bidders: Bombay High Court

The Bombay High Court recently observed that processing of tenders as per a tender condition which was neither publicized nor made part of the tender document amounts to denial of opportunity to eligible bidders and can be challenged under Article 226 of the Constitution.

The division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Arif S Doctor temporarily restrained the Pune Municipal Corporation ("PMC") from issuing work order, observing –

“...we are of the, prima facie, opinion that any tender condition not publicized and not made part of the tender document, if permitted to be acted upon at the time of processing the tenders, it amounts to denial of opportunity of participation of many eligible tenderers who otherwise would have been eligible but for altered tender condition.”

The relief came to be granted in a writ petition filed by M/s Siddhivinayak Enterprises, which challenged a tender issued by the PMC on June 21, 2023, inviting bids for the supply of contract labor for sweeping work in specific areas.

The petitioner pointed out that a specific condition in the tender, which mandated that bidders should have an average turnover of 75% of the tender amount in the last five years, was altered by the PMC to allow for a turnover equal to 75% of the tender value in any of the last five years. It was argued that this alteration was not duly reflected in the officially published tender document.

The petitioner highlighted that PMC had processed the tenders based on the altered condition, which was never officially communicated to potential bidders.

The PMC, in response, admitted to the decision of changing the tender condition on June 15, 2023 and conceded that the altered condition was not integrated into the tender document that was eventually published on June 21, 2023. It however countered the petition on the grounds of non-participation by the petitioner in the bidding process.

The court noted that the challenge was multifaceted, incorporating concerns such as non-publication of the altered tender condition and acceptance of documents post the tender submission deadline from another bidder.

While acknowledging that the petitioner might lack standing on certain grounds due to non-participation, the court opined that the challenge related to non-publicized tender condition could be raised under Article 226 of the Constitution of India.

The court expressed a prima facie opinion that acting upon a non-publicized tender condition amounted to a denial of opportunity for eligible tenderers, setting the stage for a detailed examination of the case.

While granting interim relief till next date of hearing, it directed PMC to conduct a review of the entire tender process and make an appropriate decision within two weeks.

“Thus, we provide that till the next date of listing no work order shall be issued by the Pune Municipal Corporation. We also direct the Pune Municipal Corporation to revisit the entire process and take an appropriate decision. Fresh decision, if any, shall be taken by the Corporation within two weeks”, the court directed.

The next hearing is scheduled for January 04, 2024.

Case no.: Writ Petition No. 12933 of 2023

Case Title: M/s. Siddhivinayak Enterprises v. State of Maharashtra and Ors.