Minimum Three Bidders, Not Three Technically Qualified Bidders Needed For Competitive Tender Process: Bombay High Court

A division bench of Chief Justice Devendra Kumar Upadhyaya and Justice Arif S Doctor reasoned that tendering authorities cannot predict the technical qualifications of bidders before evaluating their bids.

“As to whether participating tenders were technically qualified or not could be known to the tendering authority only after the bids are technically evaluated. The requirement of paragraph 4.4.3.1 is participation by minimum three bidders and not participation by three technically qualified bidders. If we read paragraph 4.4.3.1 to mean that it requires participation by minimum of three technically qualified bidders, such an interpretation will make the provision non-workable. The reason is very clear. No tendering authority can be said to be in know of the fact forehand as to whether the participating tenderer is technically qualified or not.”

The court dismissed a clutch of petitions challenging the exclusion of petitioners from participating in a tender process for the procurement of school uniform cloth material.

The tender notice, issued on January 25, 2024, aimed at procuring school uniform cloth material for distribution among students in Government schools across Maharashtra for the academic year 2024-2025. It stipulated a bid submission deadline of February 15, 2024, at 4:00 p.m. However, contention arose when the bidding portal closed at 3:00 pm on the said date, leading to the exclusion of certain petitioners from participating in the bid process.

The petitioners argued that this premature closure infringed their right to participate in the tender process and also violated provisions outlined in the Procurement Manual, as specified in a Government Resolution dated December 1, 2016.

Paragraph 4.4.3.1 of the Procurement Manual stipulates that a minimum of three bidders is required to ensure competitiveness.

The petitioners argued that the participation of certain bidders who were technically disqualified from the bidding process was merely a sham to meet the requirement of three bidders as mandated by the Procurement Manual. They contended that these disqualified bidders were aware of their ineligibility but participated in the bidding process regardless, solely to fulfil the numerical requirement.

However, the court rejected this argument, stating that the tendering authority could only ascertain the technical qualification of bidders after the bids were technically evaluated. Therefore, it was unreasonable to presume that the tendering authority knew beforehand which bidders would be technically disqualified.

Further, the court stated that tendering authorities cannot predict the technical qualifications of bidders before evaluating their bids. Thus, the court concluded that the provision aims to ensure a sufficient number of participants in the bidding process rather than a specific number of technically qualified bidders.

The court noted that while the tender notice specified a closing time of 3:00 pm, the tender document indicated a submission deadline of 4:00 pm on the same day. However, it was revealed that the petitioners had attended a pre-bid meeting where clarifications were provided, including a corrigendum addressing queries, thus indicating awareness of the submission deadline.

Moreover, the court observed that the petitioners' initial communication following their failed bid submission did not raise objections to the portal closure time. It was only later, after the financial bid of the technically qualified bidders was opened, that the petitioners contested the premature closure.

Ultimately, the court found the petitions lacking in merit, as they failed to establish any infringement of fundamental rights or procedural irregularities. The dismissal of the petitions was based on the conclusion that the exclusion of the petitioners was not attributable to state authorities but rather to their own negligence.

Additionally, stalling the procurement process would not be in the public interest, considering the end users—students from disadvantaged backgrounds—who rely on these uniforms, the court opined.

In light of these findings, the court dismissed the petitions, affirming the legality of the tender process.

Senior Advocate Ashish Kamat with advocates Mohit Khanna, Pranav Nair and Abhineet Sharma represented petitioners Kanchan India Ltd.

Advocate General Dr. Birendra Saraf, with Government Pleader P. H. Kantharia, Additional Government Pleader Vishal Thadani, and AGP Vikrant Parshurami represented the State.

Case no. – Writ Petition (L) No. 6277 of 2024

Case Title – Kanchan India Limited & Anr. v. Government of Maharashtra & Ors.