Bidder/Tenderer Cannot Challenge Bid Condition/Clause Merely Because It Is Not Convenient To Him: Supreme Court

The Supreme Court observed that a bidder/tenderer cannot be permitted to challenge the bid condition/clause which might not suit him and/or convenient to him.

Owner should always have the freedom to provide the eligibility criteria and/or the terms and conditions of the bid unless it is found to be arbitrary, mala fide and/or tailor made, the bench comprising Justices MR Shah and BV Nagarathna observed.

In this case, the High Court dismissed a writ petition filed by a person challenging a tender qualifying condition. Maharashtra State Power Generation Company Ltd. had floated a tender inviting bids for transportation of raw coal against Road­cum­Rail allocation from various mines of Western Coalfields Limited to the Thermal Power Station to its Principal Power Station. One of the tender conditions was that bidder should have permission and consent of a private siding owner to operate the Vimla siding for dispatch of coal to TPS of Mahagenco.

Challenging the High Court order, the appellant - writ petitioner contended that he qualifying requirement in clause 1.12(V) of the tender was tailored to ensure that participation of a person in the tender was dependent on the will of the a private entity to give consent and claim service charges as it pleased from such person.

At the outset, the bench noted that the High court had granted an interim order in the writ petition. Deprecating such practice, the court said:

"We disapprove and deprecate the grant of such interim relief virtually allowing the writ petitions at an interim stage. The High Court ought to have appreciated that if by way of interim relief, a tenderer/petitioner is permitted to participate in the tender process without insisting upon the tender clause which was under challenge and subsequently the writ petition is dismissed what would be the consequences. In the present case itself subsequently the writ petition has been dismissed. The question may arise what will be the consequences of the interim order by which the petitioner was permitted to take part in the tender process without insisting upon the impugned requirement by obtaining NOC from Vimla. Therefore, no such interim relief could have been passed by the High Court."

Regarding the impugned clause, the bench noted that the said clause was to be applied to all the tenderers/bidders and thus it cannot be said that such clause was a tailor made to suit a particular bidder.

"Owner should always have the freedom to provide the eligibility criteria and/or the terms and conditions of the bid unless it is found to be arbitrary, mala fide and/or tailor made. The bidder/tenderer cannot be permitted to challenge the bid condition/clause which might not suit him and/or convenient to him. As per the settled proposition of law as such it is an offer to the prospective bidder/tenderer to compete and submit the tender considering the terms and conditions mentioned in the tender document"

Observing thus, the bench dismissed the special leave petition.

Headnotes

Tender - Owner should always have the freedom to provide the eligibility criteria and/or the terms and conditions of the bid unless it is found to be arbitrary, mala fide and/or tailor made. The bidder/tenderer cannot be permitted to challenge the bid condition/clause which might not suit him and/or convenient to him- It is an offer to the prospective bidder/tenderer to compete and submit the tender considering the terms and conditions mentioned in the tender document.

Constitution of India, 1950; Article 226 - Tender Jurisdiction - Interim order- disapprove and deprecate the grant of interim relief virtually allowing the writ petitions at an interim stage - If by way of interim relief, a tenderer/petitioner is permitted to participate in the tender process without insisting upon the tender clause which was under challenge and subsequently the writ petition is dismissed what would be the consequences.

Summary - SLP challenging High Court order dismissing the writ petition challenging a tender condition - Dismissed - The clause cannot be said to be arbitrary, mala fide and/or tailor made and the same shall be applicable to all the bidders/tenderers and there is justification also shown providing such a clause.

Case details

Balaji Ventures Pvt. Ltd. vs Maharashtra State Power Generation Company Ltd. | 2022 LiveLaw (SC) 295 | SLP(C) 1616/2022 | 11 Feb 2022

Coram: Justices MR Shah and BV Nagarathna

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