'Unsuccessful Bidders Making Mountains Out Of Molehills': J&K High Court Dismisses Plea Challenging Tender Of Rooftop Solar Schemes

Emphasising its determination to protect the tender process from such unwarranted interference a bench of Justice Wasim Sadiq Nargal observed,

“… Attempts by unsuccessful tenderers not fulfilling the criteria with imaginary grievances, wounded pride and business rivalry, to make mountains out of the molehills of some technical/procedural violation or some prejudice to self and persuade Courts to interfere by exercising power of judicial review, should be resisted.”

Background:

The case originated from a tender issued by the Jammu and Kashmir Energy Development Agency (JAKEDA) for the supply, installation, and commissioning of Grid-Connected Solar Rooftop Photovoltaic Power Plants on government buildings. The petitioner, an unsuccessful bidder, alleged that the tender's eligibility criteria were arbitrary, discriminatory, and lacked transparency, thereby excluding most local vendors and favouring a select few.

The petitioner argued that the minimum cumulative experience requirement of 2.5 MW was excessively stringent, excluding 31 out of 32 local vendors, including the petitioner, who had expertise in installing smaller rooftop solar systems.

The petitioner also contended that the tender did not adhere to the guidelines issued by the Ministry of New and Renewable Energy (MNRE), which recommended district-wise or division-wise vendor empanelment to ensure fair competition and comprehensive coverage.

On the other hand, JAKEDA defended the tender process, asserting that the eligibility criteria were designed to ensure that only competent vendors capable of handling large-scale projects participated, thereby ensuring timely and efficient completion of the project.

Court's Observations:

Adjudicating the matter Justice Wasim Sadiq carved out four important questions that emerged from the petition and made several critical observations while addressing them.

Scope of Judicial Review in Tender Matters

The court reaffirmed the principles laid down by the Supreme Court in "Tata Cellular vs Union of India (1994)," emphasizing judicial restraint in administrative decisions related to tenders. It highlighted that courts do not sit as appellate bodies in such matters but only review the decision-making process to ensure it is free from arbitrariness, irrationality, and bias.

“The Government and other public authorities have the freedom of contract and in the absence of manifest unreasonableness, patent arbitrariness or clear mala fide and bias, the Court should show due deference to the decision of the public authority. Consequently, the scope of interference by the Court in matters like these is exceptionally minimal”, the bench underscored.

Right of Ineligible Parties to Challenge Tender Terms

The court ruled that parties who do not meet the eligibility criteria do not have the right to challenge the terms of the tender. It observed that the terms and conditions of the tender cannot be modified at the behest of ineligible parties to suit their eligibility. The court cited the Supreme Court's ruling in Meerut Development Authority vs. Association of Management Studies and Anr. which states that limited judicial review is permissible only if the terms are tailor-made to eliminate competition unfairly.

“​Courts should not use a magnifying glass while scanning the tenders and make every small mistake appear like a big blunder and must not interfere, where such interference will cause unnecessary loss to the public exchequer”, Justice Nargal remarked.

Bifurcation of Tender Conditions

Addressing the issue of bifurcating the tender terms for financially weaker parties, the court referred to "Raunaq International Limited vs. I.V.R. Construction Limited, (1999) emphasizing that such bifurcation is impermissible when it risks the project's successful execution. The court noted that ensuring the capability of bidders to handle large-scale projects is crucial for the public interest.

“​The Court has no power to improve upon the instrument which it is called upon to construe, whether it be a contract, a statute or articles of Association. The Court cannot introduce terms to make it fairer or more reasonable as the Court is only concerned to discover what the instrument means”, the bench opined.

Scope of Interference by Constitutional Courts

The court reiterated the limited scope of judicial interference in tender matters, particularly when public interest is at stake. Citing "Jagdish Mandal v. State of Orissa, (2007)," the court emphasized that judicial review is intended to check the lawfulness of the decision-making process, not the soundness of the decision itself.

The court underscored that individual grievances should not override public interest and held, “ Another aspect which must be borne in mind before judicial interference is done in matters concerning tenders is the financial implication on the public exchequer that the State may have to meet with, if the Court directs afresh tender notice. To say the least, it would not be in public interest to set at naught the entire tender process”.

In alignment with these considerations, Justice Nargal ruled that the petition lacked merit and upheld the tender process conducted by JAKEDA.

Case Title: R6 Technologies Private Vs UT of J&K

Citation: 2024 LiveLaw (JKL) 222

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