Improper Assessment Of Technical Bids In Public Tender: Allahabad HC Stays Opening Of Financial Bids [Read Order]

In a petition filed by NCC Ltd., the Allahabad High Court has stayed opening of financial bids in tender for procurement of plant - design, supply and installation, floated by Purvanchal Vidyut Vitran Nigam.

This interim order, passed by the division bench of Justices Ramesh Sinha and Ajit Kumar, is quite exceptional as public tenders, being in the realm of contract, are not as such open to judicial interference.

The Tender document in the case at hand provided that all pending litigations and arbitrations filed against the bidder shall be treated as resolved against the bidder and the amount involved in those cases shall be deducted from their net worth.

NCC, having a net worth of Rs. 4,000 crore, had no litigation or arbitration pending against it so as a measure of caution it provided a list of cases filed at its own instance, except one in which there was a counterclaim. Thereafter, the company's technical bid was rejected as materially non-responsive on the ground stating that "...total pending litigation exceeds 50% of the company's net worth".

Senior Advocate Anoop Trivedi, assisted by Advocate Sudeep Harkauli contested the aforesaid order of rejection stating that the same was passed without affording any opportunity to clarify/ rectify the technical bid.

It was submitted that no technical assessment of the bids had taken place in as much as the cases filed by the company itself could not have been read against it for the purposes of deeming fiction of reduction and that the Respondent organization had proceeded on an unfounded presumption.

"…if the Technical Evaluation Committee had rendered its due application of mind, it would not have found the technical bid to be substantially non-responsive to non-suit the petitioner…

… it is a claim against the company that creates charge upon the assets if such claim is allowed but it is not the case in hand", they contended.

The Petitioner called for judicial review of the tender alleging that the procedure prescribed for evaluating technical bids was not followed and judicial interference was permissible in cases where technical bids were evaluated improperly.

Finding a prima facie case, the court accepted these arguments and deferred the opening of financial bid of all tenderers until further orders. 

Click here to download the Order