"Totally Misread The Judgment": SC Sets Aside Bombay HC Judgment That Dismissed A Writ Petition In A Tender Matter By Citing 'N. G. Projects Ltd.' Case

The Supreme Court set aside a Bombay High Court judgment which dismissed a writ petition by referring to observations made in M/s N. G. Projects Ltd. Vs. M/s Vinod Kumar Jain and others, 2022 LiveLaw (SC) 302.

We find that the High court has totally misread the Judgment of this Court, the bench comprising Justices Hemant Gupta and V. Ramasubramanian observed.

Background

A tender was published inviting offers for the construction of staff quarters of the Primary Health Center, Ewaleshwar, Taulka Mahur, District Nanded. Four bidders participated in the bid, including Jai Bholenath Construction and L.D. Constructions. Jai Bholenath Construction was found to be the lowest bidder but the Letter of Intent was not issued to it. Zila Parishad also decided that M/s L.D. Constructions  was excluded from the process and was declared it ineligible for non-compliance of the documents. However, later it was found that L.D Constructions was eligible and tender was allotted to it. 

Jai Bholenath Construction challenged cancellation of tender which was allotted to it and alleged that the same was granted instantly to the rival bidder. Though the High Court 'found several disputed issues', it took note of an order passed by a coordinate Bench which declined to interfere in the writ petitions in the light of a judgment in M/s N. G. Projects Ltd. Vs. M/s Vinod Kumar Jain and others, 2022 LiveLaw (SC) 302. Following this view, the High Court dismissed the writ petition. Thus Jai Bholenath Construction approached the Apex Court by filing an appeal.

Totally misread the Judgment of this Court

Taking note of the contentions raised in the writ petition, the Apex Court bench observed:

"We find that the High court has totally misread the Judgment of this Court. Respondent No. 4 was declared eligible in a flagrant violation of principles of natural justice and all fairness in the process of determining the eligibility of the tenderers. The bid of Respondent No. 4 was accepted when at the time of opening of technical bids, the said respondent was disqualified. Therefore, the manner in which the bid has been accepted, shows arbitrary exercise of the power."

Allowing the appeal, the court set aside the High Court judgment and directed the Zilla Parishad to process the matter further from the stage prior to issuance of corrigendum.

M/s N. G. Projects Ltd Judgment

The same bench had observed in M/s N. G. Projects Ltd as follows:

"If the Court finds that there is total arbitrariness or that the tender has been granted in a malafide manner, still the Court should refrain from interfering in the grant of tender but instead relegate the parties to seek damages for the wrongful exclusion rather than to injunct the execution of the contract. The injunction or interference in the tender leads to additional costs on the State and is also against public interest. Therefore, the State and its citizens suffer twice, firstly by paying escalation costs and secondly, by being deprived of the infrastructure for which the present-day Governments are expected to work."

Case details

Jai Bholenath Construction vs Chief Executive Officer, Zilla Parishad Nanded | 2022 LiveLaw (SC) 542 | CA 4140 OF 2022 | 18 May 2022

Headnotes

Constitution of India, 1950 ; Article 226 - Tender - High Court dismissed WPs challenging acceptance of tender following observations made in M/s N. G. Projects Ltd. Vs. M/s Vinod Kumar Jain and others, 2022 LiveLaw (SC) 302 - Appeal allowed - High court has totally misread the Judgment - Respondent was declared eligible in a flagrant violation of principles of natural justice and all fairness in the process of determining the eligibility of the tenderers.

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